2011-03-31-2011-03-21
To enter JV in Maverick Basin assets in South Texas Eagle Ford, acquirring 80,000 net acres in condensate window & approximately 16,000 additional prospective net acres for deeper dry-gas Pearsall shale.
In a joint-venture with Houston-based Anadarko Petroleum Corp. (NYSE: APC), Korea National Oil Corp., or (KNOC), plans to earn approximately one-third of Anadarko's interest in its Maverick Basin assets in the South Texas Eagle Ford shale play for approximately $1.55 billion.
Under the terms of the agreement, KNOC's $1.55-billion investment will be made entirely in the form of a drilling carry, funding approximately 100% of Anadarko's 2011 post-closing capital costs in the basin, and up to 90% thereafter until the carry is exhausted, which is expected to occur by year-end 2013. KNOC will also reimburse Anadarko for net cash outflows, relative to their acquired interest, subsequent to the effective date, which are expected to be approximately $50 million.
KNOC will receive approximately 80,000 net acres in the condensate window of the Eagle Ford shale play; and approximately 16,000 additional prospective net acres for the deeper dry-gas Pearsall shale.
KNOC may also elect within 30 days post-closing, to participate as a partner with an approximate 25% working interest in the associated gathering systems and facilities.
"This transaction demonstrates the substantial embedded value of our Eagle Ford acreage position assembled primarily in the higher-margin condensate window of the play, while further enhancing our capital efficiency in a tax-effective manner," says Anadarko president and chief operating officer Al Walker.
"We have expanded our midstream infrastructure and established various service agreements concurrent with our drilling pace in the Eagle Ford shale, leading Anadarko to become the largest producer in the play during the fourth quarter of 2010. As a result, almost all of our completed wells are on line, with approximately 75% of our sales volumes comprised of liquids."
In February, Anadarko announced it would further accelerate the value of the Eagle Ford by increasing its operated rig count from nine to 10 during the second quarter.
The deal is expected to close during second-quarter 2011. The effective date is Jan. 1. Jefferies & Co. Inc. and Deutsche Bank Securities Inc. are advisors to Anadarko.