With a view to focus more on North American assets, oil and gas major Anadarko Petroleum Corporation (APC) decided to shed its Chinese subsidiary. The subsidiary earmarked for sale holds Anadarko's non-operating interest in the Bohai Bay field, offshore China.
In 2013, Anadarko's net oil sales volumes from the Bohai Bay averaged around 11,000 barrels per day. Anadarko will divest the unit to a wholly owned subsidiary of Brightoil Petroleum (Holdings) Limited for $1.075 billion. The deal is expected to close this year.
Anadarko is currently following a very simple strategy, concentrating more on the lucrative onshore and offshore assets in North America and high profile international assets. At the same time, the company is disposing of some of its international assets to fund ongoing exploration and exploration activities. In 2013, Anadarko entered into agreements to sell assets worth $4.5 billion.
The company’s performance in 2013 was driven by solid contribution from its North American assets. In 2013, Anadarko’s U.S. onshore operating areas achieved a 25% year-over-year increase in oil volumes. The company plans to bring the Lancaster plant and the Front Range pipeline online during the first quarter of 2014 further strengthening its existing onshore assets.
In addition, Anadarko’s deepwater exposure in the Shenandoah basin, Gulf of Mexico could further expand its oil and gas reserves. Anadarko is a prime operator in the Shenandoah basin having ownership in all three discoveries of the basin. The company will ramp up its development activities in this region to strengthen the existing position.
We also expect Anadarko’s existing exposure in Mozambique, the Ten development in Ghana (expected to come online in 2016) and EL Merk development in Algeria to further its global production portfolio.
Anadarko currently has a Zacks Rank #3 (Hold).Some better-ranked stocks in the same industry are Matador Resources Co. (MTDR), Athlon Energy Inc. (ATHL) and Clayton Williams Energy, Inc. (CWEI). All these stocks hold a Zacks Rank #1 (Strong Buy).
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