HOUSTON, Nov. 8, 2018 /PRNewswire/ -- Anadarko Petroleum
Corporation (NYSE: APC) today announced a transaction to sell
substantially all of its remaining midstream assets for
$4.015 billion to Western Gas
Partners, LP (NYSE: WES), with $2.0075
billion cash proceeds, and the balance to be paid in new
Western Gas equity. Concurrently WES announced it has entered into
a merger agreement with Western Gas Equity Partners, LP (NYSE:
WGP), which will result in a simplified midstream structure. The
sale is expected to close in the first quarter of 2019,
concurrently with the closing of the merger. The closing of the
asset sale and merger is subject to the parties obtaining
regulatory approvals and other customary closing conditions. The
closing of the merger is subject to obtaining WES unitholder
approval.
BENEFITS FOR ANADARKO
- Generates more than $4 billion in
net proceeds to Anadarko, including more than $2 billion of cash plus new Western Gas equity
units
- Results in expected 2019 cash distributions paid to Anadarko
totaling more than $600 million,
which is an increase of almost 50 percent versus prior
expectations
- Maintains operating control of one of the largest midstream
master limited partnerships (MLP), with approximately 55.5 percent
pro-forma ownership of the combined entity
- Reduces future midstream capital funding requirements
associated with the divested assets
"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. Further,
it supports our durable strategy of returning value to Anadarko's
shareholders, as we expect to continue prioritizing the use of cash
and free cash flow to repurchase shares, reduce debt, and increase
the dividend over time."
TRANSACTION HIGHLIGHTS
Under the terms of the asset sale transaction, WES will acquire
substantially all of Anadarko's remaining midstream assets, which
are largely associated with Anadarko's two premier U.S. onshore oil
plays in the Delaware and DJ
basins. The acquired assets include DBM Oil Services (100-percent
interest), APC Water Holdings (100-percent interest), the Bone
Spring Gas Plant (50-percent non-operated interest), and the MiVida
Gas Plant (50-percent non-operated interest) in the Delaware Basin of West Texas. In the DJ Basin of northeast
Colorado, WES will acquire
Anadarko's 100-percent interest in both the DJ Basin Oil System and
the Wattenberg Plant. Additional Anadarko midstream assets to be
acquired by WES include equity stakes in the Saddlehorn Pipeline
(20-percent non-operated interest), the Panola Pipeline (15-percent
non-operated interest), and the Wamsutter Pipeline (100-percent
interest).
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.
Barclays Capital Inc. acted as financial and structuring advisor
to Anadarko, WES and WGP. Goldman Sachs & Co. LLC acted as
financial advisor to the Anadarko board of directors. Vinson &
Elkins L.L.P. served as transaction counsel to Anadarko, WES and
WGP.
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Anadarko Petroleum Corporation's mission is to deliver a
competitive and sustainable rate of return to shareholders by
exploring for, acquiring and developing oil and natural gas
resources vital to the world's health and welfare. As of year-end
2017, the company had 1.44 billion barrels-equivalent of proved
reserves, making it one of the world's largest independent
exploration and production companies. For more information about
Anadarko and APC Flash Feed updates, please visit
www.anadarko.com.
Important Information for Investors and Unitholders
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval.
In connection with the proposed simplification transactions, WES
will file with the Commission a registration statement on Form S-4,
which will include a prospectus of WGP and a proxy statement of
WES. WES and WGP also plan to file other documents with the
Commission regarding the proposed simplification transactions.
After the registration statement has been declared effective by the
Commission, a definitive joint proxy statement/prospectus will be
mailed to the unitholders of WES. INVESTORS AND UNITHOLDERS OF WES
ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING
ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS
RELATING TO THE PROPOSED MERGER THAT WILL BE FILED WITH THE
COMMISSION CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED MERGER. Investors and unitholders will be able to obtain
free copies of the joint proxy statement/prospectus and other
documents containing important information about WES and WGP once
such documents are filed with the Commission, through the website
maintained by the Commission at http://www.sec.gov. Copies of the
documents filed with the Commission by WES and WGP will be
available free of charge on their internet website at
www.westerngas.com or by contacting their Investor Relations
Department at 832-636-6000.
Participants in the Solicitation
Anadarko, WES, Western Gas Holdings, LLC ("WES GP"), WGP,
Western Gas Equity Holdings, LLC ("WGP GP") and each of the
respective directors and certain of the executive officers of
Anadarko, WES GP and WGP GP may be deemed to be participants in the
solicitation of proxies from the unitholders of WES in connection
with the proposed simplification transactions. Information about
the directors and executive officers of Anadarko is set forth in
Anadarko's Definitive Proxy Statement on Schedule 14A which was
filed with the Commission on March 23,
2018 and APC's Annual Report on Form 10-K which was filed
with the Commission on February 15,
2018, respectively. Information about the directors and
executive officers of WES is set forth in WES's Annual Report on
Form 10-K which was filed with the Commission on February 16, 2018. Information about the
directors and executive officers of WGP is set forth in WGP's
Annual Report on Form 10-K which was filed with the Commission on
February 16, 2018. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials to be filed with
the Commission when they become available. Free copies of these
documents can be obtained using the contact information above.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains forward-looking statements. For
example, statements regarding future financial performance, future
competitive positioning and business synergies, future acquisition
cost savings, future market demand, future benefits to shareholders
and unitholders, future economic and industry conditions, the
proposed merger (including its benefits, results, effects and
timing) and whether and when the simplification transactions will
be consummated, are forward-looking statements within the meaning
of federal securities laws. Anadarko, WES, WES GP, WGP and WGP GP
believe that their expectations are based on reasonable
assumptions. No assurance, however, can be given that such
expectations will prove to have been correct.
A number of factors could cause actual results to differ
materially from the projections, anticipated results or other
expectations expressed in this communication. Such factors include,
but are not limited to: the failure of the unitholders of WES to
approve the proposed merger; the risk that the conditions to the
closing of the proposed simplification transactions are not
satisfied; the risk that regulatory approvals required for the
proposed simplification transactions are not obtained or are
obtained subject to conditions that are not anticipated; potential
adverse reactions or changes to business relationships resulting
from the announcement or completion of the proposed simplification
transactions; uncertainties as to the timing of the proposed
simplification transactions; competitive responses to the proposed
simplification transactions; the inability to obtain or delay in
obtaining cost savings and synergies from the proposed
simplification transactions; unexpected costs, charges or expenses
resulting from the proposed simplification transactions; the
outcome of pending or potential litigation; the inability to retain
key personnel; uncertainty of the expected financial performance of
WGP following completion of the proposed simplification
transactions; and any changes in general economic and/or industry
specific conditions.
Anadarko, WES and WGP caution that the foregoing list of factors
is not exclusive. Additional information concerning these and other
risk factors is contained in Anadarko's, WES's and WGP's most
recently filed Annual Reports on Form 10-K, subsequent Quarterly
Reports on Form 10-Q, recent Current Reports on Form 8-K, and other
Commission filings, which are available at the Commission's
website, http://www.sec.gov. All subsequent written and oral
forward-looking statements concerning Anadarko, WES, WGP, the
proposed simplification transactions or other matters attributable
to Anadarko, WES and WGP or any person acting on their behalf are
expressly qualified in their entirety by the cautionary statements
above. Each forward looking statement speaks only as of the
date of the particular statement. Except as required by law,
Anadarko, WES, WES GP, WGP and WGP GP undertake no obligation
to publicly update or revise any forward-looking statements.
Anadarko Contacts
MEDIA:
John
Christiansen, john.christiansen@anadarko.com,
832.636.8736
Stephanie Moreland,
stephanie.moreland@anadarko.com, 832.636.2912
INVESTORS:
Robin
Fielder, robin.fielder@anadarko.com, 832.636.1462
Andy Taylor,
andy.taylor@anadarko.com, 832.636.3089
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SOURCE Anadarko Petroleum Corporation