Occidental's Bid for Anadarko Would Put More than 280 U.S. Plants Under One Tent

Researched by Industrial Info Resources (Sugar Land, Texas)--Occidental Petroleum Corporation (NYSE:OXY) (Houston, Texas) stunned observers of the Oil & Gas Industry this week when it offered to acquire producer Anadarko Petroleum Corporation (NYSE:APC) (The Woodlands, Texas) for $76 per share, besting last week's $65-per-share bid from industry behemoth Chevron Corporation (NYSE:CVX) (San Ramon, California). Industrial Info is tracking progress at 171 Occidental plants and 112 Anadarko plants, all of which are in the U.S. and almost 70% in Texas.

Click on the image at right for a map of Occidental and Anadarko plants tracked by Industrial Info across the U.S.

Industrial Info's Occidental and Anadarko plant reports include 705 and 845 functional management contacts, respectively. In an interview with CNBC, Occidental Chief Executive Officer Vicki Hollub said her company was a better fit for Anadarko's assets for one big reason: the Permian Basin. "We have a lot more experience there," she said on Squawk Box. "We are performing really, really well, and what hasn't been talked about very much is that the upside in this deal is the shale play, is the shale development."

Hollub was armed with statistics: 75% of Anadarko's value lies in its Permian assets across western Texas and eastern New Mexico, she told CNBC, but Occidental's oil wells in the Permian's crowded Delaware Basin perform about 74% better than Anadarko's wells in the same area.

Anadarko's facilities include 13 plants in the cities of Mentone, Midland and Orla, Texas, which sit at the heart of the Permian Basin. Anadarko is weighing a proposed, estimated $150 million third train at its natural gas processing plant in Mentone, which would bring the plant's total capacity from 400 million to 600 million standard cubic feet per day. Anadarko brought the $100 million second train online earlier this month. For more information, see Industrial Info's project reports on the third and second trains.

Occidental's facilities in the Permian show a stronger presence than Anadarko in southeastern New Mexico, where Occidental is considering an estimated $35 million second train at its Indian Basin NGL Plant in Carlsbad. The 50 million-standard-cubic-foot-per-day unit would bring the facility's total capacity to 340 million standard cubic feet per day. For more information, see Industrial Info's project report.

Earlier this year, Hollub said in an earnings-related conference call that Occidental's Permian projects will account for $2.6 billion of its $4.5 billion capital budget in 2019, although this projection did not cover any potential acquisition-related spending. "We plan to operate six to seven rigs in New Mexico which will primarily develop the high return Bone Springs and Wolfcamp formations," Hollub said; both formations are near the Indian Basin plant.

Both companies have active U.S. projects elsewhere. Anadarko is putting the finishing touches on a $45 million subsea tieback at its Lucius Spar Platform in the Gulf of Mexico, in Keathley Canyon block 875, while Occidental is considering an estimated $10 million debottlenecking at its Slaughter Gasoline and Natural Gas Processing Plant near Sundown, Texas, which is expected to boost capacity from 62 million to 70 million standard cubic feet per day. For more information, see Industrial Info's reports on the Lucius Spar and Slaughter projects.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.