$1.3 Billion Deal to Buy SemGroup by Energy Transfer

Energy Transfer LP will buy SemGroup Corp for $1.35 billion and plans to build a 75-mile oil pipeline to strengthen its oil transportation, terminaling and export operations, Energy Transfer said on Monday.

After the purchase, Energy Transfer will gain control of SemGroup’s crude oil terminal on the Houston Ship Channel. The company plans to construct a pipeline between SemGroup’s crude oil terminal and Energy Transfer’s Nederland, Texas terminal.

Energy Transfer will also add SemGroup’s crude oil gathering assets in the DJ Basin in Colorado and the Anadarko Basin in Oklahoma and Kansas, as well as crude oil and natural gas liquids pipelines connecting the DJ Basin and Anadarko Basin with terminals in Cushing, Oklahoma.

The transaction is expected to close in late 2019 or early 2020. Including SemGroup’s debt, the enterprise value of the deal is $5 billion. The deal, which includes $6.80 in cash and 0.7275 shares of Energy Transfer for each outstanding share of SemGroup, represents a premium of 65.4% to SemGroup’s Friday close.


Oxy Wins Anadarko, Chevron Opted to Walk Away

Occidental Petroleum wins the nearly $40 billion bidding war for Anadarko Petroleum, while Chevron said it will bow out and doesn’t want to overpay. Oxy was determined to acquire Anadarko and its assets in West Texas' booming Permian Basin. The win will make Oxy as the Permian's top producer for the foreseeable future.

Initially Anadarko agreed to be bought by Chevron for $33 billion bid at $65 per share, but Oxy kept sweetening the deal until Anadarko could no longer say no for an offer of about $38 billion at $76 per share. Oxy critically increased the cash portion of its cash-and-stock bid from 25 percent to nearly 80 percent in order to assuage the concerns of many investors and to avoid a shareholder vote.

"Winning in any environment doesn't mean winning at any cost," said Chevron Chief Executive Michael Wirth. "Cost and capital discipline always matter, and we will not dilute our returns or erode value for our shareholders for the sake of doing a deal."

"We look forward to signing a merger agreement with Anadarko and realizing value for our shareholders as soon as possible," Oxy said Thursday in a prepared statement after Chevron backed out. Chevron walks away with a $1 billion breakup fee.


Occidental’s Bid Picked by Anadarko Pressuring Chevron to Respond

Anadarko Petroleum said on Monday that it is going with the acquisition offer offered by Occidental Petroleum's jilting Chevron. Now Chevron has four days to up its offer or walk away with the $1 billion breakup fee negotiated in its earlier merger agreement with Anadarko.

Chevron and Anadarko previously agreed to a deal with Anadarko valued at $65 per share and Chevron offered $33 billion to buy Anadarko, but Occidental offered about $38 billion at $76 per share.

"Oxy seems desperate to get this deal done," said Jennifer Rowland, an energy analyst with the financial services company Edward Jones. "They're like a pit bull that bites on and just won't let go."

Comparing to Chevron, Occidental is much smaller, but Occidental has proven itself determined to complete a deal it has pursued for nearly two years. Anadarko have extensive holdings in the Permian Basin oil field in West Texas, where both Occidental and Chevron are leading producers.


Anadarko Bid Pushing Occidental Investors to Vote Against Board

T. Rowe Price Group Inc, Occidental’s sixth largest shareholder with 21.1 million shares of the oil company intends to vote against the Occidental Petroleum Corp board of directors at the annual meeting on Friday.

Occidental will not allow shareholders to vote on its bid for Anadarko Petroleum Corp which shareholders oppose. On Sunday Occidental increased the cash component of its $38 billion bid to acquire Anadarko, which led Anadarko on Monday to name Occidental’s $76-a-share offer as superior to that submitted by Chevron Corp, requiring Chevron by Friday to revise its offer or walk away.

The company also removed a requirement for Occidental shareholders to approve the deal. “We don’t feel we have any choice,” said fund manager John Linehan, portfolio manager at T. Rowe Price. “We really struggle to understand the logic of not putting a transformational deal to your shareholder base.”

“The decision to increase the cash portion of the offer was designed to address Anadarko’s need for greater certainty the deal would go ahead,” said Occidental Chief Executive Officer Vicki Hollub on Monday.


Anadarko and Occidental to Enter Merger Talks Despite Chevron's Merger Agreement

Anadarko announced on Monday that it will enter merger talks with Occidental Petroleum (OXY).

The news comes as Occidental made a hostile takeover offer for Anadarko with a cash-and-stock bid value of nearly $57 billion. Oil giant Chevron’s bid valued the company 20% less. The bidding war for Anadarko reflects the intense desire for oil companies to acquire the best shale assets in America.

Anadarko and Occidental had been in merger talks prior to Chevron’s takeover deal. Acquiring Anadarko's Permian assets would lift Occidental's output in that shale oilfield to 533,000 barrels per day, further solidifying their spot as the number one producer in the Permian. The combined company would be worth about $100 billion and produce about 1.4 million barrels of oil per day.

"We believe our signed agreement with Anadarko provides the best value and the most certainty to Anadarko's shareholders," Chevron said on Monday.

Anadarko cautioned that there "can be no assurance" that talks with Occidental will result in a better deal than the one already reached with Chevron.

Despite the new negotiations with Occidental, Anadarko said the Chevron merger agreement remains in effect. The Anadarko board reaffirmed its recommendation in favor of the Chevron deal "at this time."

Chevron certainly has the firepower to increase its bid. But Chevron must also guard against overpaying for Anadarko.

If Anadarko goes with Occidental, Chevron won't be left empty-handed. Under the terms of their merger agreement, Anadarko would owe Chevron a break-up fee of $1 billion if it reaches a takeover deal with another company.


Chevron and Anadarko Merging in $30+ Billion Deal

Chevron announced on Friday morning that they will acquire Anadarko Petroleum in a cash and stock deal valued at $33 billion.

The deal is expected to enhance Chevrons shale, deepwater, and natural gas operations.

“This takes a great company and makes it even better,” Chevron’s Chairman and CEO Michael Wirth told CNBC as the news broke.

“As our company has strengthened its financial situation over recent years, we’re always looking to make our portfolio even stronger.”

The deal represents the 11th biggest deal in the history of energy and power company acquisitions, Refinitiv reported.


Cheniere Energy Requests Permission to Bring Billion Dollar Midship NatGas Pipeline in Oklahoma Into Service

Cheniere Energy Inc asked U.S. energy regulators on Friday for permission to start working on their $1.025 billion Midship natural gas pipeline in Oklahoma.

The company asked the FERC for authorization to start building the proposed 234-mile pipeline in three segments. The project is expected to be complete by early 2019, Cheniere said.

Midship is designed to deliver 1.44 billion cubic feet per day (bcfd) of gas from the Anadarko basin to existing pipelines near Bennington, Oklahoma to transport liquefied natural gas to Gulf Coast and Southeast markets.

Expectation of total U.S. LNG export capacity should rise to 8.3 bcfd by the end of 2019 and 9.6 bcfd by the end of 2020 from 3.8 bcfd now.

Most of the U.S. LNG export terminals are located or being built along the Gulf of Mexico in Louisiana and Texas


CenterPoint to Acquire Velocity Midstream for $442 Million

CenterPoint Energy’s pipeline company has agreed to acquire Oklahoma’s Velocity Midstream for around $440 million as they grow their crude oil pipeline gathering and processing network.

Velocity holds a large network in Oklahoma’s Anadarko Basin, which expands into the Texas Panhandle, as well as in the SCOOP and Merge shale plays in Oklahoma.

Enable also said it plans to expand its crude oil and water pipeline gathering systems in North Dakota with the uptick in activity in the region and a large number of drilled but uncompleted wells that have not yet produced oil.

"Today's announcements continue Enable's strategy of extending our reach across the midstream value chain by significantly expanding our crude business," said Enable Midstream President and CEO Rod Sailor.

Last month, Enable announced its plan to build a 165-mile gas pipeline from northwestern to southwestern Louisiana along the Texas state line. Gas would be taken from the Haynesville Shale and other regions to new liquefied natural gas export terminals in Louisiana and Texas.

That project is estimated at around $550 million.

Houston Chronicle

Lawsuit Claims Anadarko Cut Safety Budget, Staff Before Fatal Colorado Explosion

A shareholder lawsuit claims Anadarko Petroleum cut its safety budget and staff just months before a fatal house explosion in Colorado that was linked to an Anadarko well.

The lawsuit alleges that Anadarko was staying focused on keeping oil and gas flowing from older wells and was not focused on fixing any potential safety problems.

Anadarko's actions caused stock prices to fall, which hurt investors, according to the lawsuit that is being lead by the pension fund for the Philadelphia Iron Workers union. The pension fund owns Anadarko stock.

The fatal explosion killed two people and injured one in April 2017 in Firestone, Colorado. The explosion was caused by odorless, unrefined natural gas that seeped into the home's basement from a severed gathering line.

The lawsuit cites one former employee who claims Anadarko was aware that there was something unusual about the well because it should have been emitting methane but was not. The company kept the well in operation anyway, according to the former employee.

The lawsuit was filed last year in Texas, which is where Anadarko is based. The company said it does not comment on pending lawsuits.

Fuel Fix

Tallgrass Energy Partners Announces Open Season for Cheyenne Connector Pipeline

Tallgrass Energy Partners announced on Tuesday its launch of an open season to transport natural gas on its proposed 70-mile Cheyenne Connector pipeline, which is designed to run from the Denver Basin to markets across the country.

Cheyenne Connector has signed agreements to transport 600 million cubic feet per day of natural gas with affiliates of Anadarko Petroleum Corp and DCP Midstream.

The Cheyenne Connector will be operated by Tallgrass, which is jointly developing the pipeline with Western Gas Partners and DCP Midstream.

The Cheyenne Connector will have initial capacity of at least 600 million cubic feet per day and significant capability for expansion.

The pipeline is expected to be in service by the third quarter of 2019.

PR Newswire

Anadarko Petroleum Says 99% of its Gas Lines Passed Tests after Fatal Colorado Blast

Anadarko Petroleum, which owns a natural gas pipeline linked to a fatal home explosion in Colorado, said more than 99 percent of its pipelines tested after the incident showed no signs of leaks.

The pipelines that did fail the tests are being repaired and retested, the company said Friday. Anadarko tested more than 4,000 of its active flow lines and reported that 99.6 of them passed.

Colorado regulators required energy companies to test all pipelines within 1,000 feet of occupied buildings after a natural gas pipeline exploded in Firestone, Colorado in April, killing two people.

Friday was the deadline for the pipeline tests, after which about 9,700 test results were made public. The vast majority indicated that the pipelines passed.

The Colorado Oil and Gas Conservation Commission also required energy companies to identify and report the locations of all pipelines near building and to make sure any inactive pipelines were disconnected, sealed, and buried.

Houston Chronicle

Cheniere Energy Achieves Regulatory and Financial Goals for Midship Pipeline Project

Proposed map for Midship Project (Cheniere Energy)

Proposed map for Midship Project (Cheniere Energy)

Cheniere Energy announced that it has achieved significant regulatory and financial milestones related to its 200-mile natural gas Midship Project pipeline.

Cheniere filed an application for a Certificate of Public Convenience and Necessity with FERC relating to the Midship Project and hopes to receive authorization in early 2018. It also estimates an in-service date of the pipeline in late 2018 or early 2019.

Cheniere has also entered into agreements with investment funds managed by EIG Global Energy Partners under which EIG has committed to invest up to $500 million in the pipeline project.

The Midship Project is designed to create pipeline capacity of up to 1,440,000 dekatherms per day of transportation to connect production from the STACK and SCOOP resource plays in the Anadarko Basin in Oklahoma to markets in the Gulf Coast and Southeast.

PR Newswire

ConocoPhillips Discovers Potentially 300 Million Barrels of Oil in Alaska

A map of northern Alaska; the dotted line shows the southern boundary of the North Slope. The National Petroleum Reserve -Alaska is to the West, the Arctic National Wildlife Refuge to the east, and Prudhoe Bay is between them. Red lines are pipelines. By USGS (http://energy.usgs.gov/images/alaska/NPRA_F1lg.gif) [Public domain], via Wikimedia Commons

A map of northern Alaska; the dotted line shows the southern boundary of the North Slope. The National Petroleum Reserve -Alaska is to the West, the Arctic National Wildlife Refuge to the east, and Prudhoe Bay is between them. Red lines are pipelines. By USGS (http://energy.usgs.gov/images/alaska/NPRA_F1lg.gif) [Public domain], via Wikimedia Commons

Houston-driller ConocoPhillips discovered an oil vein in Alaska that may hold 300 million barrels of oil.

The discovery was found 90 miles west of the prolific Prudhoe Bay Field in the state's National Petroleum Reserve and could become a multibillion-dollar project, according to the company.

ConocoPhillips says this "Willow" discovery could potentially produce 100,000 barrels of crude oil a day sometime within the next ten years and that pumping from the area could begin in 2023.

The project development could cost billions of dollars and take several years, potentially creating thousands of Alaskan jobs and bringing in significant state revenues.

Anadarko Petroleum Corp has a 22 percent stake in the discovery while ConocoPhillips has the remaining 78 percent.

Fuel Fix