Anadarko Petroleum Corp.
) inked a definitive agreement to divest 10% of its interest in
the Mozambique liquefied natural gas ("LNG") prospect to ONGC
Videsh Ltd., an operating wing of India's Oil and Natural Gas
Corporation (ONGC) Limited. The transaction is priced at $2.64
billion and will be concluded by late 2013.
The deal is subject to existing preferential rights,
governmental approvals and other customary closing conditions.
Despite the divestment, Anadarko Petroleum will continue to be
the majority interest holder (26.5%) and operator of the
Mozambique offshore Area 1 field.
Besides Anadarko Petroleum, Mitsui E&P Mozambique
Area 1, Limited carries a 20% working interest followed by BPRL
Ventures Mozambique B.V. (10%), Videocon Mozambique Rovuma 1
Limited (10%) and PTT Exploration & Production Plc. (8.5%).
Empresa Nacional de Hidrocarbonetos also has a 15% stake in the
field through the exploration phase.
The Area 1 block comprises the Prosperidade and Golfinho/Atum
natural gas complexes with a projected 35 to 65-plus trillion
cubic feet of recoverable natural gas resources. The first LNG
shipments are anticipated in 2018.
Anadarko Moçambique Area 1 Limitada is operating the Area 1
field situated in Mozambique's deepwater Rovuma basin. Anadarko
Petroleum and its partners along with
) are collaborating with the Mozambique government for the
advancement of the LNG facility.
The company intends to plough back the sale proceeds to its
domestic high-growth drilling opportunities - the Wattenberg
field, Eagleford Shale, Permian and Powder River basins, as well
as the Gulf of Mexico.
The proceeds from the sale will boost Anadarko's operating
cash flow. The company will thus be able to step-up its more
mature U.S. onshore drilling programs in the near term. We note
that the Mozambique natural gas drilling program is still in its
To take advantage of the high oil prices, Anadarko Petroleum
is gearing up to bolster its drilling activities in the
resource-rich onshore U.S. basins. The company is targeting to
spend $5.5 billion in 2013. These expansion initiatives will act
as key catalysts for Anadarko Petroleum.
In addition to development and exploration activities,
Anadarko Petroleum also strives to maintain a healthy dividend
payout on the back of its successful exploration and development
activities, thus boosting wealth for its shareholders. However,
growing political instability in Africa will remain a concern.
Anadarko Petroleum at present retains a Zacks Rank #3 (Hold).
Other better placed exploration operators are Zacks Ranked #1
Abraxas Petroleum Corp.
Range Resources Corp.
ANADARKO PETROL (APC): Free Stock Analysis
ABRAXAS PETE/NV (AXAS): Free Stock Analysis
ENI SPA-ADR (E): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis
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