Anadarko Petroleum Corp., The Woodlands, Tex., has agreed to acquire the deepwater Gulf of Mexico assets belonging to Freeport McMoRan Oil & Gas (FMOG), a subsidiary of Phoenix-based mining firm Freeport-McMoRan Inc., for $2 billion.
Effective Aug. 1 and expected to close before yearend, the deal will double Anadarko’s ownership in its operated Lucius deepwater development to 49% and add 80,000 boe/d, 80% of which is oil, to the firm’s sales-volume guidance.
The acquisition comes as Anadarko lifts Lucius field’s estimated ultimate recovery to more than 400 million boe from the previous 300 million boe given “strong reservoir performance and facility productivity.”
Gross oil sales volumes through the Lucius facility recently surpassed 100,000 b/d. Accounting for the newly acquired assets, Anadarko’s gulf position will have net sales volumes of 155,000 boe/d, 85% of which will be oil.
Al Walker, Anadarko chairman, president, and chief executive officer, noted the deal expands the firm’s gulf infrastructure, adds to its “inventory of low-cost, subsea tieback opportunities, and bolsters optionality with new exploration prospects.”
Lucius field lies on Keathley Canyon Blocks 874, 875, 918, and 919 about 240 miles south of Louisiana’s coast in 7,100 ft of water. Production from the facility began in early 2015 (OGJ Online, Jan. 19, 2015).
“We expect these acquired assets to generate substantial free cash flow, enhancing our ability to increase US onshore activity in the Delaware and DJ basins,” Walker said. Excluding the acquired assets, Anadarko is expected to increase its full-year capital guidance to $2.8-3 billion, primarily reflecting the increased activity in those onshore basins.
“Our current plans are to add two rigs in each play later this year, and to increase activity further thereafter, with an expectation of more than doubling our production to at least 600,000 [boe/d] collectively from these two basins over the next 5 years,” he said.
Walker expects the rise in activity over that time period to result in a companywide 10-12% compounded annual growth rate in oil volumes in a $50-60/bbl oil-price environment.
Meanwhile, Freeport McMoRan recently restructured FMOG into an operating division (OGJ Online, Apr. 6, 2016). With the latest divestment, Richard C. Adkerson, FMOG president and chief executive officer, said the firm now has completed $6 billion in asset sales for the year as part of its effort to slash debt and direct resources to its copper business.
Contact Matt Zborowski at [email protected].