Occidental Petroleum Corporation, an international oil and gas exploration and production headquartered in Houston, has announced that it has entered into a binding agreement to sell Anadarko’s Algeria, Ghana, Mozambique and South Africa assets to Total S.A. for $8.8 billion.
Occidental however is in a bidding war with Chevron Corporation, another leading oil and gas exploration company to win control over Anadarko.
In an effort to win, Occidental petroleum on May 5 delivered a letter to the Board of Directors of Anadarko Petroleum Corporation containing the “terms of a revised and significantly enhanced superior proposal to acquire Anadarko for $76.00 per share comprised of $59.00 in cash and 0.2934 shares of Occidental common stock per share of Anadarko common stock”, the letter said.
The sale to Total is contingent upon Occidental entering into and completing its proposal to acquire Anadarko.
The assets that would be sold to Total are in Algeria, Ghana, Mozambique and South Africa. They would represent approximately 6% of Occidental’s pro forma expected net production and approximately 7% of the cash flow after capital expenditures for 2020.
“We are pleased to have secured this agreement with Total. The $8.8 billion value to be received for Africa represents an attractive value based on our extensive evaluation over the last 18 months. Given our long history of working together productively, I am confident we can execute this sale quickly and efficiently,” Vicki Hollub, president and chief executive officer of Occidental said in a statement.
“Total has extensive experience working in Africa and is well positioned to maximize value from these assets.”
Patrick Pouyanné, Chairman and CEO of Total also said concerning the potential acquisition of Anadarko, “These are world class assets with great upside, and we welcome the opportunity to leverage our expertise in LNG and deepwater developments as well as our long history of operating in Africa.”
“We have worked successfully with Occidental for many years and we are committed to execute smoothly this transaction.” He added.
The proceeds of the asset sales to Total would be used by Occidental to finance their offer for Anadarko. The transaction is structured as a 50-50 cash-stock deal.
The sale to Total would leave Occidental with Anadarko’s holdings in U.S. shale basins, the Gulf of Mexico and South America, as well as Western Midstream Partners, a fossil fuel transportation and processing company.
Occidental is primarily interested in Anadarko’s acreage in the Permian Basin, the top U.S. shale field stretching from western Texas to southeastern New Mexico.