[Editor's note: This story was updated at 10:22 a.m. CDT April 29. Check back for updates on this developing story.]

Anadarko Petroleum Corp. intends to resume negotiations with Occidental Petroleum Corp., The Woodlands, Texas-based company said April 29 now calling the recent Occidental takeover offer a potentially “superior” bid.

Anadarko previously entered a merger agreement with Chevron Corp. on April 12 in a $65 per share offer comprising 75% stock and 25% cash. Including debt, Chevron’s offer is valued at about $48 billion.

RELATED: US SEC Obtains Asset Freeze Over Suspected Illegal Trading In Anadarko

Last week, however, Occidental upped the stakes with its 50-50 cash and stock offer of $70 per share valued at roughly $57 billion, based on Occidental’s closing price on April 23 and including the assumption of net debt and book value of non-controlling interest.

The acquisition of Anadarko—one of the world’s largest independent E&P companies—includes deepwater projects offshore Africa and in the U.S. Gulf of Mexico plus U.S. onshore unconventional assets such as the prized Permian Basin. The company’s position in the top U.S. shale field covers nearly 600,000 gross acres in the Delaware Basin.

Both Occidental and Chevron are betting on huge synergies by combining their portfolios with Anadarko.

Occidental said April 24 it identified $3.5 billion in synergies through its proposed combination with Anadarko. Meanwhile, Chevron had previously said it expects to generate roughly $2 billion of synergies annually as a result of its merger.

On April 29, Anadarko said its board of directors has unanimously determined that Occidental’s takeover offer could “reasonably be expected to result in a superior proposal.”

The Chevron merger agreement still remains in effect, though. The Anadarko board also reaffirmed its existing recommendation of the transaction with Chevron “at this time,” the company release said.

During Chevron’s earnings call on April 26, CEO Mike Wirth said the company remained confident that the Anadarko merger will be completed. Although, analysts have questioned whether Chevron will raise its current offer for Anadarko in response to the unsolicited bid from Occidental.

Based on calculations by RBC Capital Markets, Chevron could afford an additional $9 per share in cash for each Anadarko share while still maintaining its capex commitments, current dividend and ongoing buyback program on an organic basis, said Biraj Borkhataria, energy research analyst with the firm.

“While this is not the optimal outcome for Chevron given the opportunistic bid, we think it could likely be defended given that in our view potential synergies are likely to be [greater than] $2 billion over time,” Borkhataria said in a research note on April 24.

Citing unnamed sources, Reuters reported Anadarko had asked Chevron on April 28 whether it wanted to raise its bid, which Chevron declined.

RELATED: Occidental Petroleum Kicks Off Anadarko Bidding War With Chevron

Evercore and Goldman Sachs & Co. LLC are financial advisers to Anadarko for the transaction. Wachtell, Lipton, Rosen & Katz is Anadarko’s legal adviser.

Emily Patsy can be reached at epatsy@hartenergy.com.

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