Oxy Selling Stake in Plains All American for $650 Million

Occidental Petroleum is in the process of cutting costs and focusing on debt reduction after buying Anadarko Petroleum for $30 billion and is now planning to sell its stake in Plains All American Pipeline for $650 million.

The company previously agreed to sell Anadarko's Africa assets to the French energy major Total for $8.8 billion, including a massive liquefied natural gas development and export project in Mozambique. It is also considering to sell assets in the deepwater Gulf or in Colorado's DJ Basin, where Anadarko was the leading producer, energy analysts said.

Oxy is taking on roughly $40 billion in debt to complete this deal, including loans and Anadarko's existing debt load, while making a bet on relatively healthy oil prices going forward. Anadarko is also considering selling at least a stake in Anadarko's pipeline spinoff firm, Western Gas Partners and Oxy's stake in Western is estimated at $7 billion or so.


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.


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.


Houston Pipeline and Storage Company Gets Investment from Former Moda and Lotus Investors

Houston-based Candor Midstream LLC, a pipeline and storage company, announced on Tuesday that it received a $200 million equity commitment from San Antonio-based investment firm EnCap Flatrock Midstream.

Candor Midstream’s President and CEO was a former executive with Crestwood Midstream Partners LP and Enbridge. The newly invested money could be used to acquire existing assets or to start new projects.

EnCap Flatrock Midstream also funded two Houston energy firms that spent $2.6 billion on assets owned by Occidental Petroleum, also known as Oxy. Oxy sold its crude oil export Ingleside Energy Center Terminal to Moda Midstream and its Centurion pipeline system from West Texas to Cushing, Oklahoma to Lotus Midstream. Both Moda and Lotus are backed by EnCap FlatRock Midstream.

Occidental was expanding its Ingleside export terminal to handle greater volumes, resulting in the sale. Oxy has been focusing on oil and gas production in West Texas’ Permian Basin oil field, and has been selling other assets.

Houston Chronicle

Oxy to Sell Ingleside and Crude Oil Infrastructure to Moda and Lotus Midstream

Moda Midstream, LLC announced on Wednesday that it has entered into a definitive agreement to acquire the Oxy Ingleside Energy Center (IEC) and certain crude oil and LPG infrastructure form Occidental Petroleum Corporation. The transaction is expected to close in the third quarter of 2018, subject to customary closing conditions.

Strategically located in Ingleside, Texas, IEC resides near the mouth of Corpus Christi Ship Channel with minimal transit times to the Gulf of Mexico.

Oxy is also selling the Centurion pipeline system to Lotus Midstream. The pipeline extends from the Permian to an oil storage and transportation hub in Cushing, Oklahoma.

The combined $2.6 billion transaction are part of an effort for Oxy to focus on its growing production in the Permian. Oxy is easily one of the largest producer’s in the Permian.

Chief Executive Vicki Hollub emphasized the company’s focus on the Permian

“The Permian is now the foundation and the growth of our company,” Hollub said. “The bulk of our growth capital will continue to go to the Permian Resources business.”

The transactions by Moda and Lotus are the largest in their companies’ history.

Houston Chronicle
World Pipelines

Cleanup Underway After Centurion Pipeline Oil Spill in Oklahoma

Cleanup is underway in Yukon, Oklahoma after a pipeline burst on Sunday, spilling an estimated 1,000 barrels of crude oil into a private pond.

The spill occurred from a pipe owned by Centurion Pipeline, a subsidiary of Occidental Petroleum Corp. The company said the release has been contained.

The EPA told local reporters that hundreds of dead fish are being removed from the private pond as cleanup continues.

Centurion sent local reporters an updated statement Monday saying the company has made significant improvements in removing oil from the pond and that it will conduct an investigation to determine the cause of the incident.

News 9

Update: Centurion Pipeline Spilled 15,800 Gallons of Oil

A leak that occurred last Tuesday from a Centurion Pipeline oil pipeline in Oklahoma spilled 377 barrels, or 15,800 gallons of oil before repairs began the following day, according to the Oklahoma Public Utilities Commission.

The oil ran into a dry creek bed about 30 miles north of Cushing, Oklahoma and was considered a "relatively large" spill that will take until at least the middle of next week to clean up, said a spokesperson for the Oklahoma Corporation Commission.

The leak last Tuesday was caused by a Plains All American Pipeline contractor who was excavating for another pipeline.

Centurion's pipeline has since returned to normal service.