Anadarko Petroleum Corporation has entered a definite agreement to acquire the deep water Gulf of Mexico (GOM) assets belonging to Freeport McMoRan Oil & Gas for US$2 billion (£1.5 billion).
With this transaction, Anadarko doubles its ownership in the Lucius development to approximately 49% while adding around 80,000 barrels of oil equivalent per day (boepd) to its acreage, more than 80% of which is oil.
“This immediately accretive, bolt-on transaction strengthens our industry-leading position in the Gulf of Mexico and is a catalyst for the company’s oil-growth objectives, with quality assets being acquired at an attractive price to create significant value,” Anadarko Chairman, President and CEO, Al Walker, said.
Anadarko Petroleum Grabs GOM Assets Worth $2bn
The transaction, expected to close before the end of the year, will see Anadarko expand its operated infrastructure across the GOM area, generating an estimated US$3 billion (£2.25 billion) of incremental GOM free cash flow over the next five years.
“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. 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 per day collectively from these two basins over the next five years,” Walker added.
Anadarko Production Platform operating in the Gulf of Mexico
The CEO explained further that, within a $50 to $60 oil price environment, the increase in activity may lead to a 10 to 12% compounded annual growth rate in oil volumes.
Anadarko Boosts Gulf of Mexico Acreage
As well as this, the transaction will add to Anadarko’s inventory of low-cost, subsea tieback opportunities.
At the Lucius development, Anadarko was able to increase the estimated ultimate recovery of the field to more than 400 million boe from the previous 300 million, after posting a strong reservoir performance and productivity.
With the increase of its working interest in the play, Anadarko expects to further capitalise on additional future value-adding opportunities at Lucius.