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Anadarko Exits Eagle Ford

Fracking operations

Anadarko has struck a deal to sell its assets in the Eagle Ford shale play to Sanchez Energy Corp. and Blackstone group for US$2.3 billion. The divestment, according to Anadarko chief executive Al Walker, is part of the company’s shift towards higher-return operations elsewhere in the shale patch, and more specifically the Delaware Basin, part of the Permian shale play, and the DJ Basin in Wyoming, as well as the Gulf of Mexico.

The Permian has lately turned into the star of the shale plays and the focus of much investor attention, both from the energy industry and from private investment companies because of its low production costs and still abundant resources. A couple of months ago, the U.S. Geological Survey said the Wolfcamp Basin, also part of the Permian, holds the biggest recoverable reserves discovered in the country so far: 20 billion barrels of crude.

Anadarko’s assets in Eagle Ford that are subject to the deal with Blackstone and Sanchez Energy span 155,000 net acres and produce a daily 45,000 barrels of hydrocarbon liquids plus 131 million cu ft of natural gas. The transaction should close by the end of March. Anadarko will retain control of its midstream operations in Eagle Ford.

The Eagle Ford divestment follows another sale of Anadarko’s upstream and midstream assets in another shale play, Marcellus. That deal’s size was US$1.24 billion.

Anadarko, which was named the best employer in oil and gas by a survey from job site Indeed, had a debt load of US$15.7 billion as of last September, and the large-scale divestiture deals are part of efforts to tackle this load. The focus on higher-return projects is another part of the company’s strategy.

In its latest quarterly financial report for July to September 2016, Anadarko reported revenues of US$1.89 billion and loss per share of US$1.61. Loss per share for the first nine months of the year stood at US$5.

By Irina Slav for Oilprice.com

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