WGP to buy Anadarko’s midstream assets in $4-billion deal

Nov. 8, 2018
Western Gas Partners LP (WGP) has agreed to acquire from Anadarko Petroleum Corp. substantially all Anadarko’s remaining midstream assets in a deal totaling $4.015 billion. Concurrently, WGP has agreed to a merger with Western Gas Equity Partners LP (WGEP), simplifying its midstream structure.

Western Gas Partners LP (WGP) has agreed to acquire from Anadarko Petroleum Corp. substantially all Anadarko’s remaining midstream assets in a deal totaling $4.015 billion. Concurrently, WGP has agreed to a merger with Western Gas Equity Partners LP (WGEP), simplifying its midstream structure.

Under terms of the asset sale, WGP will acquire midstream assets largely associated with onshore oil plays in the Delaware and DJ basins. Assets in the Delaware basin include DBM Oil Services (100% interest), APC Water Holdings (100% interest), the Bone Spring gas plant (50% non-operated interest), and the MiVida gas plant (50% non-operated interest). In the DJ basin of northeast Colorado, WGP will acquire Anadarko’s 100% interest in both the DJ Basin Oil System and the Wattenberg plant. Additional Anadarko midstream assets to be acquired include equity stakes in the Saddlehorn Pipeline (20% non-operated interest), the Panola Pipeline (15% non-operated interest), and the Wamsutter Pipeline (100% interest).

Under the terms of their merger transaction, WGEP will acquire all outstanding publicly held common units of WGP and substantially all of the WGP common units owned by Anadarko in a unit-for-unit, tax-free exchange. WGP will survive as a partnership with no publicly traded equity, owned 98% by WGEP and 2% by Anadarko. WGP will remain the borrower for all existing debt and future issuances and the owner of all operating assets and equity investments.

With the transactions, Anadarko maintains operating control of one of the largest midstream master limited partnerships, with 55.5% proforma ownership of the combined entity and reduces future midstream capital funding requirements associated with the divested assets. Net proceeds for Anadarko include more than $2 billion of cash plus new WGP equity units.

The sale is expected to close in first-quarter 2019, concurrently with the closing of the merger, both subject to regulatory approvals and other customary closing conditions. The closing of the merger is subject to WGP unitholder approval.