2011-03-31-2011-03-22
To purchase 93% WI in Wattenberg Processing Plant in Adams County, which has capacity to process 195 MMcf/d & 15,000 BOE/d.
WGR Asset Holding Co. LLC, an affiliate of Anadarko Petroleum Corp., Houston, (NYSE: APC) plans to purchase BP America Production Co.'s 93% interest in the Wattenberg Processing Plant for approximately $575.5 million.
The Wattenberg Plant, located in Adams County in northeastern Colorado, has the capacity to process approximately 195 million cubic feet per day (MMcf/d) of natural gas and 15,000 barrels per day of natural gas liquids and gas condensate. Upon closing, Anadarko will operate and have 100% ownership of the plant.
"With Anadarko volumes representing about 70% of the current throughput, the Wattenberg Plant is a strategic acquisition that further aligns our midstream and upstream assets in one of our expanding core areas," says Chuck Meloy, Anadarko senior vice president, worldwide operations.
"We are the largest producer in Wattenberg Field, with current sales volumes of approximately 63,000 BOE (barrels of oil equivalent) per day, and our early efforts in the emerging horizontal Niobrara play are very encouraging. With the anticipated growth in the DJ Basin, we expect this acquisition to improve field recoveries, allow for future expansion and capture efficiencies that enable us to reduce operating expenses."
Meloy continues, "The Wattenberg Plant, when combined with Western Gas Partners LP's (NYSE: WES) ownership position in the Fort Lupton Plant and the recently acquired Platte Valley Plant, gives Anadarko and other area producers exceptional midstream options for development within Wattenberg Field and growth in the greater DJ Basin. Given our flexibility to offer this asset to WES, it is possible that we will recapture the initial and subsequent capital investments in the future, while continuing to benefit from operational improvements in the basin."
Anadarko has approximately 900,000 net acres in the DJ Basin, and the company expects to be running a total of nine operated rigs, including three horizontal rigs, in the basin by the end of March.
The transaction is expected to close by mid-year.
Gardere Wynne Sewell LLP represented BP America Production Co. The Gardere Houston team was led by energy mergers and acquisitions partner Douglas K. Eyberg, with assistance from corporate partner Jane Hammond, tax partner John T, Woodruff, real estate partner Randall Jones, and corporate associates Eunice Song and Rex G. Baker IV.
Anadarko was represented by Vinson & Elkins, whose team was led by partner James H. "Rell" Tipton Jr. and associate Brian C. Brantley.