The announcement confirms rumors of an Oxy bid that were circulating when the Chevon deal was announced. Occidental has formally announced a $57 billion bid for Anadarko, coming in over the top of Chevron’s$50 billion offer made two weeks ago.
The proceeds of the asset sales to Total would go towards funding the cash part of Occidental’s offer for Anadarko. The announcement on Sunday offers some clarity on how Occidental would fund its cash-and-stock purchase of Anadarko. Vicki Hollub, president and chief executive officer of Occidental Petroleum Corp., speaks during the 2017 CERAWeek by IHS Markit conference in Houston, Texas. The following two tabs change content below. Occidental Petroleum bids $76 a share for Anadarko Petroleum in a half-cash, half-stock offer that values the oil and gas driller at $57 billion.
“Occidental may still face a fight at its annual general meeting from some investors opposed to the deal,” Mr. Aitken said, referring to the company’s shareholders meeting on Friday in Houston. “It’s an extraordinary journey for a company that started with a few gas wells in the Central Valley of California to have found its destiny as a world-class company in the center of the most dynamic place in the entire global oil industry,” said Daniel Yergin, author of “The Prize: The Epic Quest for Oil, Money and Power.”. 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. Occidental is competing with Chevron to acquire Anadarko.
“It is rare to see a competitor come out publicly with a competing bid once a deal is announced, and wethink this move by Occidental speaks to the quality of Anadarko’s asset base,” said Drillinginfo M&Aanalyst Andrew Dittmar.
Ms. Hollub has insisted that Occidental can make Anadarko’s Permian fields much more productive and profitable. Moody’s, the credit ratings firm, said that the deal could increase Occidental’s debt by $40 billion and that the company could struggle to sell assets, reduce costs and effectively integrate Anadarko, which would significantly increase the company’s operations. The transaction is structured as a 50-50 cash-stock deal. But in recent decades, Occidental retrenched and has increasingly focused on the Permian Basin, which recently became the world’s most productive oil field. The announcement on Sunday offers some clarity on how Occidental would fund its cash-and-stock purchase of Anadarko. Chevron said it would use the $1 billion breakup fee to buy back shares.
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Occidental is competing with Chevron, a much larger rival, to take over Anadarko. From 1957 to 1990, the company was led by Armand Hammer, who made big, risky deals in Libya and around the developing world to turn Occidental into a big-name oil producer. But not everyone connected with Occidental is happy with Ms. Hollub’s move. Beyond the Permian, Occidental gets just under 40% of its output from the Middle East fitting Anadarko’s operations there, while Anadarko’s Gulf of Mexico and LNG assets are perhaps less of an obvious fit than in the Chevron portfolio. “Total has extensive experience working in Africa and is well positioned to maximise value from these assets.”. The asset-management firm T. Rowe Price, one of Occidental’s largest shareholders, has threatened to vote against the board at the annual meeting. by Enverus | Apr 24, 2019 | Blog | 0 comments. In not engaging with Occidental’s earlier, higher bids, Anadarko was implicitly signaling that they perceive higher potential value in Chevron’s equity likely in part because of Chevron’s Gulf of Mexico and LNG experience.”. “Winning in any environment doesn’t mean winning at any cost,” Michael Wirth, Chevron’s chairman and chief executive, said in a statement. Occidental “will have to move fast to complete its divestment plan and integrate the newly acquired business” to allay investors’ concerns about the deal, Mr. Aitken said. For two years, the company sought to expand its presence in the basin by quietly courting Anadarko, which has identified 10,000 drilling locations in the field that are near Occidental’s operations. The Anadarko acquisition closed in August, months before an oil price crash sapped the cash flow Occidental needed to pay the debt taken with … Anadarko’s global footprint is widely seen by analysts as a better fit with Chevron’s portfolio, particularly the former’s Mozambique liquefied natural gas project. Will the ECB signal a step up in bond buying is on the horizon? The deal consists of 78 percent cash and 22 percent stock, with Anadarko shareholders receiving $59 in cash and 0.2934 shares of Occidental common stock per Anadarko share. Chevron had until Friday to increase its offer. Occidental has formally announced a $57 billion bid for Anadarko, coming in over the top of Chevron’s $50 billion offer made two weeks ago. Chevron … “Given our long history of working together productively, I am confident we can execute this sale quickly and efficiently,” Occidental CEO Vicki Hollub said in a statement. When Chevron said on Thursday that it would not raise its bid for Anadarko Petroleum, it was not only the end of a fierce monthlong takeover battle with Occidental emerging as the winner. To blunt talk that the company did not have Chevron’s deep pockets, Ms. Hollub and her lieutenants fortified their bid by securing a $10 billion investment from Warren E. Buffett’s holding company, Berkshire Hathaway. The announcement by Anadarko’s board, a day after Occidental sweetened its bid with more cash, is far from a final decision. Investors applauded Chevron’s decision, with the company’s shares climbing more than 3 percent on Thursday. Occidental Announces Early Termination of Hart-Scott-Rodino Waiting Period Business Wire HOUSTON -- June 4, 2019 Occidental Petroleum Corporation (“Occidental” or … For years Occidental was a rumored takeover target for companies aiming to expand in the Permian, like Royal Dutch Shell. 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Occidental said the sale of the Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa to Total would also reduce the challenges of integrating the two drillers. Occidental is competing with Chevron to acquire Anadarko. 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The company’s shares dropped more than 6 percent on Thursday as some Wall Street analysts panned the acquisition as too expensive. All data and information are provided “as is”. Occidental had said it would seek to sell $10 billion to $15 billion worth of assets to … Occidental Petroleum’s deal with French oil giant Total is contingent on the former reaching an agreement to buy Anadarko Petroleum.
Occidental and Chevron are already the top two producers in the Permian, and whichever comes out on top in the struggle for Anadarko will claim the top spot.
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