Anadarko Petroleum Corp. announced Thursday that it agreed to sell almost all of its remaining midstream assets to affiliate Western Gas Partners for $4.015 billion.
The price includes roughly $2 billion in cash and $2 billion in stock. Western Gas Partners also announced it would merge with Western Gas Equity Partners to simplify its structure.
Three Texas law firms were involved in getting the transactions done.
Vinson & Elkins was transaction counsel to Houston-based Anadarko, Western Gas Equity Partners and Western Gas Partners.
Others in the group were partner Ryan Carney (tax); partner David D’Alessandro and associate Austin Light (executive compensation/benefits); counsel Larry Pechacek (environmental); and senior associate Winston Skinner (energy regulatory).
Bracewell represented Western Gas Partners’ special committee. The corporate lawyers included Troy Harder, Gary Orloff, Lytch Gutmann and Andy Monk with Timothy A. Wilkins weighing in on environmental matters.
Richards Layton & Finger aided Western Gas Equity Partners’ special committee.
Anadarko’s general counsel is Amanda M. McMillian, who replaced Robert Reeves in August. Reeves has been serving as executive vice president and chief administrative officer since then but plans to retire at year-end.
McMillian previously was general counsel of Western Gas Holdings, a unit of Anadarko and general partner of Western Gas Partners. Before that, the Duke University law graduate practiced at Akin Gump Strauss Hauer & Feld.
Western Gas’ general counsel is Philip Peacock, who previously was at Andrews Kurth. He has a law degree from the University of Virginia.
Barclays was financial and structuring advisor to Anadarko, Western Gas Partners and Western Gas Equity Partners. Goldman Sachs was financial advisor to Anadarko’s board.
Citi was the financial advisor to the special committee of Western Gas Equity Partners. Goldman Sachs is financial advisor to Anadarko’s board.
Western Gas Partners unitholders will receive 1.525 units of Western Gas Equity Partners for each unit they own, a 7.6 percent premium over Western Gas Partners’ closing price Nov. 7.
The simplification transaction won’t be taxable to unitholders of Western Gas Partners or Western Gas Equity Partners.
The parties expect it to close in the first quarter of next year if it clears Western Gas Partners’ stockholders and regulators. The asset sale will close at the same time.
Analysts at Tudor, Pickering, Holt were positive on the Western Gas simplification transaction – which was expected by the markets – as well as the asset sale, which will give Anadarko cash to buy back its shares, cut debt and boost its dividend.
Anadarko chairman, CEO and president Al Walker said in a statement that the transactions will enhance the read-through value of the company’s midstream ownership through increased liquidity and a less complex structure as well as return value to shareholders.
The assets being sold are mostly associated with Anadarko’s onshore oil plays in the Delaware basin in West Texas and the DJ basin in northeast Colorado. TPH estimates they will generate $420 million in EBITDA next year.