Anadarko Petroleum Corp. (APC - Analyst Report) struck a deal with an unnamed entity to sell 12.75% of its interest in the Heidelberg development program located in the deepwater Gulf of Mexico (GoM). Despite the part monetization, Anadarko will retain its majority stake of 31.5% in the Heidelberg play. The transaction is expected to fetch the company roughly $860.0 million.
The agreement is anticipated to close by Apr 2013 and is subject to current preferential rights, contingencies and customary closing clauses. Other operators carrying working interest in the Heidelberg prospect are Exxon Mobil Corp. (XOM - Analyst Report), Apache Corp. (APA - Analyst Report), Eni Spa (E - Analyst Report) and Statoil ASA.
The Heidelberg project located 140 miles offshore Louisiana is situated 5,300 feet in water and comprises of five Green Canyon Blocks. The prospect is developed using truss spar platform, presently underway and is designed similar to the Lucius Spar, which has a maximum capacity of 80,000 barrels of oil per day. Heidelberg has an estimated capacity of 400 million barrels of recoverable reserves.
Anadarko’s strategy of working on two blocks on the same platform will lead to substantial cost savings as well as shorten the development cycle of this large scale project. The gains procured from the part divestment will be ploughed back by the company in the project thereby speeding up the execution process and helping Anadarko to accrue returns.
Previously, the company had struck a deal with an undisclosed party to sell 7.2% of its interest in the Lucius development in GoM for $556.0 million. Anadarko will continue to be a major operator with ownership interest of 27.8%.
Recently, the company collaborated with Videocon of India for the auctioning of its 20% stake in a natural gas prospect in Mozambique. The sale is expected to bring in approximately $4.5 billion. The resource-rich area has immense development potential in the hands of large industry operators.
We believe Anadarko’s several exploration programs in West Africa and sizable reserve volumes will bode well for future growth goals.
However, moderate oil prices globally and political instability in Africa could hurt the company’s operations, going forward. Anadarko currently carries a Zacks Rank #3 (Hold).
Headquartered in The Woodlands, TX, the company engages in the exploration, development, production, and marketing of natural gas, crude oil, condensate, and natural gas liquids (NGLs) in the United States and internationally.