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This year energy takeovers, mergers, and acquisitions fell to their lowest level since 2004, but things are expected to pick up again next year when it is likely that Anadarko Petroleum Corp. will lead the list of attractive prospects. This is due to the fact that Anadarko’s stock price has fallen 19 percent to below $80 in the last couple of months, wiping $9 billion from its market value, mostly because of an ongoing lawsuit that might force the company to pay as much as $14 billion in damages.
David Neuhauser, the Managing Director of Livermore Partners, said that multinational oil companies have seen declining production for years, and acquisitions of well-placed companies with strong assets would help to turn this around.
Anyone willing to fork out around $40 billion, or more, would receive assets in some premium fields where few majors actually have a presence; such as, the Niobrara formation in Colorado, Texas’s Eagle Ford shale basin, and offshore Africa.
Amy Myers Jaffe, the executive director of energy and sustainability at the University of California, explained to Bloomberg that Anadarko “are now a much more likely, much more digestible target for a takeover. Anadarko is a company that’s been discussed on Wall Street for a long time as a company that a larger supermajor could take over.”
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Anadarko has been enjoying a lot of success in recent years as it has worked to expand its deep-water offshore assets in Africa and the Gulf of Mexico, as well as growing production in the mainland US. The company has just recently stated that it is targeting to increase compound annual production by 5-7 percent over the next ten years.
Robert L. Christensen Jr., an analyst at Canaccord Genuity group Inc., told Bloomberg that “the company has a boatload of high quality assets around the world. There’s tremendous raw material here for an interested party.”
Near the end of last year Anadarko was actually tipped as a takeover target for Exxon Mobil, who had just been surpassed as the world’s largest producing company after OAO Rosneft bought TNK-BP for $55 billion. A deal never actually materialised, but Anadarko once again seems a good prospect, and it would certainly make a good fit for Exxon.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com