Anadarko unloads midstream assets in $4 billion sale

Houston’s Anadarko Petroleum is unloading nearly all of its midstream assets in the Permian Basin in Texas and New Mexico and the DJ basin Colorado.

It’s selling them to its master limited partnership Western Gas Partners for $4.02 billion. The sale includes pipelines and Western Gas will  take over complete ownership of DBM Oil Services and APC Water Holdings.

Western Gas will also acquire 50 percent ownership of several gas plants in the Delaware basin of West Texas.

Why the sale?

“The size of this asset sale, along with the clear benefits of the simplification transaction, highlights the tremendous value of Anadarko’s midstream business,” said Al Walker, Anadarko Chairman, President and CEO. “This will enhance the read-through value of Anadarko’s midstream ownership through increased liquidity and a less complex structure.”

The two companies want to close the deal in the first quarter of 2019.

Under the terms of their merger transaction, WGP will acquire all of the outstanding publicly held common units of WES and substantially all of the WES common units owned by Anadarko in a unit-for-unit, tax-free exchange. WES will survive as a partnership with no publicly traded equity, owned 98 percent by WGP and 2 percent by Anadarko. WES will remain the borrower for all existing debt and future issuances and the owner of all operating assets and equity investments.