Anadarko Petroleum has expressed its interest in the recently offered $57bn takeover bid from Occidental Petroleum and is set to resume negotiations with the latter.
Image: Anadarko Petroleum received $57bn bid from Occidental Petroleum. Photo: courtesy of Philcomanforterie/Wikipedia.org.
The board of directors of Anadarko Petroleum unanimously came to the conclusion that the Occidental Petroleum’s proposal could reasonably be superior compared to its pending acquisition by Chevron.
Furthermore, the company said that Occidental Petroleum’s proposal reflects significant improvement in terms of indicative value, terms and conditions, in addition to closing certainty, in comparison to the past proposals from the same company.
Anadarko Petroleum’s proved reserves, as of the end of 2018, were 1.47 BBOE with the company having operations in offshore and onshore US, Africa and South America.
Last week, Occidental Petroleum proposed to acquire Andarko Petroleum for $76 per share, which includes $38 in cash plus 0.6094 of its shares, in exchange of each of Anadarko Petroleum’s shares. The amount includes assumption of Anadarko Petroleum’s net debt.
Earlier this month, Chevron offered to pay $65 per share, comprising $16.25 in cash and 0.3869 of its shares, to the Texas-based oil and gas company, which comes to a consideration of $33bn plus assumption of net debt.
Anadarko Petroleum stated: “The Anadarko board’s determination allows Anadarko to resume negotiations with Occidental in accordance with the Chevron Merger Agreement. The Chevron Merger Agreement remains in effect and accordingly the Anadarko board reaffirms its existing recommendation of the transaction with Chevron at this time.
“There can be no assurance that negotiations with Occidental will result in a transaction that is superior to the pending transaction with Chevron.”
Occidental Petroleum is pursuing the acquisition to enhance its position as the largest producer in the Permian Basin with a total of 533 thousand Boe/d of production. The company expects the merger to combine leading assets and best-in-class economics to accelerate its value-driven strategy in the US onshore sector.
For Chevron, the acquisition of Anadarko Petroleum will enhance its portfolio across a diverse set of asset classes in shale and tight, deepwater and LNG areas. In particular, the merger will create a 121km-wide corridor in the Delaware basin, to help Chevron consolidate its position as a Permian Basin producer.