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Anadarko Petroleum Signs Long-Term SPA with JERA and CPC

Zacks Equity Research

Anadarko Petroleum Corporation APC recently announced that Mozambique LNG1 Company Pte. Ltd. has signed a Sale and Purchase Agreement for 17 years for ex-ship supply of 1.6 million tonnes per annum (MTPA)with JERA Co., Inc (JERA) and CPC Corporation, Taiwan (CPC). Mozambique LNG1 Company is the jointly-owned sales entity of the Mozambique Area 1. Apart from Anadarko, the co-venturers in Area 1 include six other entities.

The company is on track to complete the Mozambique LNG project and making a final investment decision in the first half of 2019, post securing final approvals. The deal brings company’s total long-term agreements to 11.1 MTPA.

LNG Development

The company’s international operations include oil, natural gas and NGL production in South America and Africa. The company’s asset portfolioincludes a natural-gas discovery in Mozambique.

Anadarko Petroleum is developing Mozambique's first onshore LNG facility that comprises two initial LNG trains with a capacity of 12.88 MTPA to support the development of Offshore Area 1.

Strong Asset Portfolio

The company’s asset portfolio is positioned to deliver long-term value to stakeholders. The company’s premium shale properties, which include the Delaware and Denver-Julesburg basins, the Deepwater Gulf of Mexico and Powder River basin are boosting production volumes.To focus on high-return domestic assets and achieve capital efficiency, Anadarko Petroleum has been systematically selling non-core properties since 2004.

The strong asset base of Anadarko Petroleum in the Permian Basin made it a prime acquisition candidate for the companies that are trying to expand operation in the United States resource rich onshore basin. Initially, Chevron Corp. CVX had made its bid for the company, but when Occidental Petroleum OXY raised its bid, Chevron decided to move out with $1-billion breakup fee.

Anadarko’s international operation in Africa that includes the Mozambique holdings will eventually move to TOTAL S.A. TOT. TOTAL has entered into a binding agreement with Occidental to acquire Anadarko’s assets in Africa (for a consideration of $8.8 billion) post the successful completion of the bid for Anadarko.

Zacks Rank & Price Movement

Anadarko Petroleum currently sports a Zacks Rank #1 (Strong Buy). You can see  the complete list of today’s Zacks #1 Rank stocks here.

 

The shares of the company have increased 4.4%, against the industry’s decline of 31.9% in the past 12 months.

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