Anadarko Looks to Divest Venezuela Assets in 2007

HOUSTON (Dow Jones)

Anadarko Petroleum Corp. (APC) expects to sell its Venezuela operations in 2007 as part of its strategy to pay for the recent acquisition of Kerr-McGee Corp. and Western Gas Resources.

"Sometime in the course of 2007 we hope to get out of our investment in Venezuela," Anadarko Chief Financial Officer Al Walker said at the company's webcast analyst meeting.

Anadarko, an independent oil and gas producer based in The Woodlands, Texas, is seeking to raise between $11 billion and $15 billion in after-tax proceeds from asset sales in order to reduce debt incurred during the take-over. The sale of international properties - including Venezuela - could generate between $400 million and $600 million, according to an Anadarko presentation.

The company is also seeking to sell between $2.7 billion and $4.9 billion in onshore U.S. assets in western Texas and northern Louisiana.

"We expect to have an announcement later this month" regarding these properties, Walker said.

Anadarko is "currently in the market" selling a partial interest in the U.S. Gulf of Mexico's deepwater K2 field, he said. Including the recent sale of Genghis Khan, Knotty Head and other deepwater properties, the company expects to raise between $3.7 billion and $4.4 billion from Gulf properties, Walker said.

If asset sales bring Anadarko $14 billion in after-tax proceeds - the upper range of its estimate - the company will not be required to issue equity, Walker said.

"We don't think it's very likely we're going to issue equity," Walker said. "We believe the asset market will stay strong."

Once the divestitures are completed, the company expects to see its $26 billion debt reduced to $12 billion by the end of 2007.

The company budgeted between $4 billion and $4.2 billion in capital spending for 2007, less than the approximately $5.3 billion spent in 2006. The reduction is a consequence of the restructuring process, Walker said.

"We don't have a huge capital plan in mind," he said. "We want to have some good free cash flow."

Once the divestiture and debt-reduction process is over, "over time we will feed our capital programs a little bit more aggressively than we have this year," Walker said.

Anadarko Chief Executive Officer Jim Hackett said that the acquisition of Kerr-McGee and Western Gas Resources incremented the company's proved reserve base "by very little," but largely increased potential reserves.

Unbooked resources have increased to more than 7 billion barrels of oil equivalent from 2.3 billion barrels of oil equivalent previous to the merger, Hackett said.

Anadarko's compounded annual output growth estimate for the next five years also remained unchanged at a 5% to 9% range, but the company is now more confident in reaching those targets, Hackett said.

"We were having a tough time reaching the bottom end of that target range," said Hackett.

Copyright (c) 2006 Dow Jones & Company, Inc.

For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Project Controls Specialist
Expertise: Project Management
Location: Minneapolis
Business Development Manager
Expertise: Business Development|Construction Manager|Sales
Location: West Sacramento, CA
Business Development Manager
Expertise: Business Development|Construction Manager|Sales
Location: Denver, CO
search for more jobs

Brent Crude Oil : $50.79/BBL 1.30%
Light Crude Oil : $49.96/BBL 1.10%
Natural Gas : $2.77/MMBtu 2.12%
Updated in last 24 hours