Chevron bows out; Oxy wins Anadarko

[Elderberry]

Houston Chronicle by  Jordan Blum May 9, 2019

Chevron said Thursday it will bow out and allow the smaller Occidental Petroleum to win the nearly $40 billion bidding war for Anadarko Petroleum.

Houston-based Oxy's dogged determination allowed it to acquire The Woodlands oil and gas producer and its prized assets in West Texas' booming Permian Basin, a move that should keep Oxy as the Permian's top producer for the foreseeable future.

Chevron's decision culminates an operatic takeover battle between the California supermajor and Oxy that is unprecedented in the energy sector this century. Anadarko initially agreed to be bought by Chevron, spurning Oxy's bigger officer in the process, only for Oxy to keep sweetening the deal until Anadarko could no longer say no.

Chevron simply said it didn't want to overpay and opted to walk away.

More: https://www.houstonchronicle.com/business/energy/article/Chevron-bows-out-Oxy-wins-Anadarko-13831735.php

[Hoodat]

Chevron simply said it didn't want to overpay and opted to walk away.

Smart move.

[thackney]

Occidental to offload Anadarko’s Africa interests to Total if bid is successful
https://www.offshore-mag.com/articles/2019/05/occidental-to-offload-anadarko-s-africa-interests-to-total-if-bid-is-successful.html

otal has reached an accord with Occidental to acquire Anadarko’s E&P interests in Africa for $8.8 billion, if Occidental succeeds in its bid for Anadarko.

The offshore assets include a 27% stake in the Jubilee field and 19% in the TEN fields offshore Ghana, which last year delivered gross production of 143,000 b/d; a 26.5% operated interest in Area 1 off Mozambique containing more than 60 tcf of proven deepwater gas resources, of which 18 tcf will be developed under an initial two-train project 12.8 MM metric ton/yr (14.11 MM tons/yr) LNG project, set to come into production by 2024; and exploration licenses offshore South Africa, close to Total’s recent deepwater Brulpadda gas/condensate discovery.

Overall, these assets, plus Anadarko’s field interests onshore Algeria, represent around 1.2 Bboe of 2P reserves, with 2018 equity production of 96,000 boe/d which is likely to grow to around 160,000 boe/d by 2025.
“If completed, the acquisition of Anadarko by Occidental offers us the opportunity to acquire a world class portfolio of assets in Africa, further enhancing our position as the leading IOC on the continent,” said Patrick Pouyanne, Total’s chairman and CEO....

[IsailedawayfromFR]

Ironically Chevron, the greatest acquirer in oil industry history (most recently Gulf, Texaco, Unocal) could not muster up to the determination of Oxy.

Did Oxy overpay?  The markets seem to think so; however, time will tell whether the move is a shrewd move or not.

Sufficiently High Prices in the next several years will certainly bail out an overpayment

In the meantime, Chevron's need for added exposure in its overlooked Permian basin remains unfilled.  It could either continue the search for another viable candidate or simply swallow up the Oxy/Anadarko company. 

The latter would be indeed be a bold move.