Occidental Petroleum Corp. is continuing its push to acquire Anadarko Petroleum Corp., raising the cash portion of its bid in a revised offer following an agreement struck with Total SA to sell Anadarko’s Africa assets for $8.8 billion, contingent on Oxy closing the deal with Anadarko.
In a letter to Anadarko’s board May 5, Oxy outlined a revised offer to increase the cash component of its unchanged $76/share bid for the company to $59/share of Anadarko from the $38/share offer made in the Apr. 24 bid (OGJ Online, Apr. 24, 2019). The cash portion of the revised offer includes 78% cash, up from 50%, eliminating an Oxy shareholder vote.
If completed, the announced deal between Total and Oxy would cover a portion of the cash consideration to fund the proposed acquisition of Anadarko and reduces the overall integration demands of the acquisition, Oxy said in a press statement.
In the agreement, Oxy agreed to sell Anadarko’s Algeria, Ghana, Mozambique, and South Africa assets to Total, representing 6% of the expected net production and 7% of the cash flow after capital expenditures of Oxy in 2020 pro forma for the acquisition of Anadarko.
In Algeria, the assets include 24.5% participating interest and operatorship of blocks 404a and 208 (Hassi Berkine, Ourhoud, and El Merk fields) in the Berkine basin in which Total owns 12.25%. These fields represented a gross production of 320,000 boe/d in 2018.
In Ghana, Total would acquire 27% participating interest in the Jubilee field and 19% participating interest in the TEN fields. These fields represented a gross production of 143,000 b/d in 2018.
In Mozambique, the assets include 26.5% participating interest and operatorship in Area 1 where a 12.8 million-tonne/year LNG project is largely derisked and close to sanction. Area 1 contains more than 60 tcf of gas resources, of which 18 tcf will be developed with the first two train project which is expected to come into production by 2024.
In South Africa, Total would acquire exploration licenses close to its recent Brulpadda discovery.
Overall, these assets represent 1.2 billion boe of 2P reserves, of which 70% is gas, plus 2 billion boe of long-term natural gas resources in Mozambique. Equity production in 2018 was 96,000 boe/d and is expected to rise to 160,000 boe/d by 2025.
Oxy said its revised agreement responds to all points raised by Anadarko’s counsel over the course of the past week. A request for three seats on Oxy’s board was not included in the revised proposal. The $1-billion breakup fee included in Chevron Corp.’s agreement to acquire Anadarko would be borne by the Oxy-Anadarko combine should a deal be completed (OGJ Online, Apr. 12, 2019).
Contact Mikaila Adams at [email protected].
