Anadarko Petroleum

Anadarko Petroleum Corporation
Public company
Traded as NYSE: APC
S&P 500 Component
Industry Petroleum industry
Founded 1959
Headquarters Allison Tower
The Woodlands, Texas, U.S.
Key people
 R. A. Walker, Chairman, President, & CEO
Robert G. Gwin, Executive Vice President & CFO[1]
Products petroleum, natural gas, and natural gas liquids
Production output
 836 thousand barrels of oil equivalent (5,110,000 GJ) per day[1]
Revenue Decrease US$ 8.698 billion
Decrease -US$8.809 billion (2015)[1]
Decrease -US$6.812 million (2015)[1]
Total assets Increase US$46.414 billion (2015)[1]
Total equity Decrease US$15.457 billion (2015)[1]
Number of employees
 5,800 (2015)[1]
Website Anadarko.com
Allison Tower, the headquarters of Anadarko Petroleum Company.

Anadarko Petroleum Corporation is an American petroleum and natural gas exploration and production company headquartered in The Woodlands, Texas.[2] The company is headquartered in two skyscrapers in The Woodlands, Texas: the Allison Tower and the Hackett Tower, both named after former CEOs of the company. The buildings were completed in 2014.[3]

The company has been the subject of multiple environmental cases, including the largest environmental contamination settlement in American history - the 2014 settlement related to the former Tronox subsidiary of Kerr McGee, a company purchased by Anadarko in 2006.[4][4]

Current Operations

In addition to exploration and production, the Company engages in the gathering, processing, and treating of natural gas, and the transporting of natural gas, crude oil, and natural gas liquids. The Company also participates in the hard minerals business through its ownership of non-operated joint ventures and royalty arrangements.[1]

As of December 31, 2015, the company had approximately 2.06 billion barrels of oil equivalent (1.26×1010 GJ) of proved reserves, 52% of which were liquids and 48% of which were natural gas. In the fourth quarter of 2015, the company produced 836 thousand barrels of oil equivalent (5,110,000 GJ) per day.[1]

United States

The company’s operations in the United States accounted for 89% of total sales volumes during 2015 and 90% of total proved reserves at year-end 2015.[1]

In the United States, the company has major holdings in the:

International Operations

The company’s international operations accounted for 11% of total sales volumes during 2015 and 10% of total proved reserves at year-end 2015.[1]

The company has holdings in:

History

Anadarko was formed in 1959 as a subsidiary of Panhandle Eastern Corporation Pipe Line Company after the discovery of large amounts of natural gas in the Anadarko Basin, which underlies the Texas Panhandle and Oklahoma Panhandle, and southwest Kansas.

In 1986, Panhandle Eastern Corporation distributed its interests in Anadarko to its shareholders via a corporate spin-off in 1986.[5]

In 1999, the company announced that it would purchase a 7.5-acre (30,000 m2) tract in The Woodlands, Montgomery County, Texas from the Woodlands Land Company and build an 800,000-square-foot (74,000 m2), 32-story headquarters building, on the site.[6] In 2012, the company announced that it would construct another office tower adjacent to its headquarters.[7] The company announced that it will name its two office towers after former CEOs.[8]

In 2000, the company acquired Union Pacific Resources in a $4.4 billion transaction.[9][10]

In 2001, the company acquired Berkeley Petroleum Corporation for C$1.2 billion plus the assumption of C$400 million in debt.[11]

In 2003, the company announced that Robert J. Allison, Jr. was resigning as chief executive officer and would be replaced by James T. Hackett, previously the chief operating officer of Devon Energy.[12]

In 2006, the company completed the acquisition of Kerr-McGee for $16 billion in cash.[13][14]

In 2006, the company also purchased Western Gas Resources in a $5.3 billion cash transaction.[15]

In 2007, the company sold assets in Oklahoma and Texas for $860 million.[16]

In 2012, the company announced a major natural gas find offshore Mozambique.[17]

In 2015, the company made an offer to acquire Apache Corporation, but the offer was rejected.[18]

In 2016, the company sold its interest in the Springfield oil and gas gathering system, near the Eagle Ford shale, for $750 million to Western Gas Partners.[19] In March 2016, the company announced layoffs affecting 1,000 employees, or 17% of its staff. The layoffs were the result of weak commodity prices.[20]

In 2016, the company cut its quarterly dividend from 27 cents per share to 5 cents per share.[21]

Environmental record

Deepwater Horizon Oil spill involvement

Anadarko owned a 25% non-operating minority interest in the Macondo Prospect, which was owned 65% by and operated by BP and was affected by the Deepwater Horizon oil spill.[22]

Settlement with BP

In early 2010, BP billed Anadarko more than $272 million as a partial payment for its share of cleanup and response costs in the Gulf, according to a bill that was sent by BP and obtained by Talking Points Memo. Anadarko publicly suggested that it will not pay for costs associated with the oil disaster, claiming in a statement that BP was guilty of gross negligence or willful misconduct. Under the joint operating agreement, Anadarko was required to pay its 25% share of costs related to any incident—unless that incident was caused by its partner's gross negligence or willful misconduct.[23]

In May 2011, MOEX Offshore, a subsidiary of Mitsui and owner of a 10% non-operating ownership interest in the Macondo Prospect, settled claims with BP for $1.07 billion.[24]

In October 2011, Anadarko settled all claims with BP for $4 billion. Anadarko also transferred its 25% stake in Mississippi Canyon Block 252 (Macondo Prospect) to BP and was indemnified by BP for all costs related to the oil spill, including those arising under the Oil Pollution Act of 1990.[25][26]

Fine under the Clean Water Act

In December 2015, U.S. District Judge Carl Barbier ordered Anadarko to pay a civil fine under the Clean Water Act of $159.5 million, or $50 per barrel of oil spilled as a result of the Deepwater Horizon drilling rig explosion.[22] The judge stated Anadarko was not at fault for the spill, but the company's 25% ownership stake made it responsible. Barbier wrote that the $159.5 million fine "strikes the appropriate balance between Anadarko's lack of culpability and the extreme seriousness of this spill."[22] The fine came after BP and Anadarko had unsuccessfully appealed to the U.S. Supreme Court to reject Judge Carl Barbier's finding of negligence in the Deepwater Horizon accident.[27]

Tronox litigation and settlements

In April 2014, Anadarko settled with the U.S. Department of Justice and the Environmental Protection Agency to pay $5.15 billion to clean up environmental waste sites around the country. It was the largest environmental contamination settlement in American history.[28]

The environmental contamination sites were inherited by Anadarko after it purchased Kerr-McGee in 2005. As background, Kerr-McGee had spun off its Tronox subsidiary to offload 70 years of environmental dumping of toxic waste across 22 states beginning in the 1920s. The environmental damages included polluting Lake Mead in Nevada with rocket fuel, leaving behind radioactive waste piles throughout the territory of the Navajo Nation and dumping carcinogenic creosote in communities throughout the East, Midwest and South at its wood-treating facilities.[4] According to one report, "Kerr-McGee, rather than pay for the environmental mess it created, decided to shift the liabilities between 2002 and 2006 into Tronox. Kerr-McGee, meanwhile, kept its valuable oil and gas assets."[4] Anadarko then purchased the "clean" portion of Kerr-McGee free of its legacy of environmental dumping.

Lawsuit from Tronox shareholders

In 2009, shareholders of Tronox sued Anadarko, as successor to Kerr-McGee, for having misled investors about the large environmental and other debts Tronox would inherit from Kerr-McGee.[29][30]

Lawsuit from the Environmental Protection Agency and Department of Justice

The U.S. Department of Justice, on behalf of the Environmental Protection Agency, sued Anadarko for $25 billion.[31]

In April 2014, the U.S. Department of Justice, on behalf of the Environmental Protection Agency, reached a $5.15 billion settlement with Anadarko in the largest environmental contamination settlement in American history.[28][4]

References

  1. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Anadarko Petroleum Corporation 2015 Form 10-K Annual Report
  2. ↑ Anadarko Petroleum: Office locations
  3. ↑ "Anadarko towers symbolize business growth in The Woodlands". Chron. June 25, 2013.
  4. 1 2 3 4 5 Eric Tucker (April 3, 2014). "US reaches $5.15 billion environmental settlement". Associated Press. Retrieved April 3, 2014.
  5. ↑ "Panhandle Plans Anadarko Spinoff". New York Times. August 21, 1986.
  6. ↑ "Anadarko to Build New Headquarters in the Woodlands" (Press release). PRNewswire. February 9, 1999.
  7. ↑ "Anadarko building new office tower". Houston Business Journal. January 19, 2012.
  8. ↑ "Deal of the week: Anadarko towers carry names of two past CEOs". Houston Chronicle. June 22, 2013.
  9. ↑ "Anadarko to Merge With Union Pacific Resources Group" (Press release). PRNewswire. April 4, 2000.
  10. ↑ "ANADARKO TO BUY UNION PACIFIC RESOURCES". New York Times. April 4, 2000.
  11. ↑ "Anadarko Completes Berkley Acquisition" (Press release). Business Wire. March 19, 2001.
  12. ↑ "Anadarko Names James T. Hackett President and CEO" (Press release). Business Wire. December 3, 2003.
  13. ↑ "Anadarko Completes Kerr-McGee Acquisition; Combination Creates Leading Positions in Two of North America's Most Prolific Producing Regions; Portfolio to Be Optimized Through Asset Sales" (Press release). Business Wire. August 10, 2006.
  14. ↑ "Anadarko Acquires Kerr-McGee, Western Gas Resources in Deals Totaling About $20B". Associated Press. June 23, 2006.
  15. ↑ "Western Gas Resources, Inc. Agrees to be Acquired By Anadarko Petroleum Corporation for $61.00 Per Share in Cash" (Press release). Business Wire. June 23, 2006.
  16. ↑ "Anadarko Announces Sale of Natural Gas Assets in Oklahoma and Texas" (Press release). Business Wire. February 2, 2007.
  17. ↑ "Anadarko hits major Mozambique gas find". Houston Business Journal. January 17, 2012.
  18. ↑ "Anadarko Withdraws Offer to Buy Apache After Terms Were Rejected". Bloomberg L. P. November 11, 2015.
  19. ↑ "Western Gas Announces Acquisition And Fourth-Quarter And Full-Year 2015 Results" (Press release). PRNewswire. February 24, 2016.
  20. ↑ "Anadarko Petroleum to lay off big chunk of its workforce". Denver Business Journal. March 10, 2016.
  21. ↑ "Anadarko Declares Reduced Dividend" (Press release). PRNewswire. February 9, 2016.
  22. 1 2 3 Jonathan Stemple (December 1, 2015). "Anadarko ordered to pay $159.5 million fine for 2010 Gulf spill". Reuters. Retrieved December 2, 2015.
  23. ↑ Slajda, Rachel (June 30, 2010). "Exclusive: BP Bills Anadarko $272 Million In Gulf Spill Response". Talking Points Memo.
  24. ↑ "BP announces settlement with Moex/Mitsui of claims between the companies related to the Deepwater Horizon accident" (Press release). May 20, 2011.
  25. ↑ Daniel, Robert (October 17, 2011). "Anadarko and BP settle Deepwater Horizon dispute". MarketWatch. Retrieved 2011-10-17.
  26. ↑ "BP announces settlement with Anadarko Petroleum Company of claims related to Deepwater Horizon accident" (Press release). October 17, 2011.
  27. ↑ Lawrence Hurley (June 29, 2015). "U.S. Supreme Court rejects BP, Anadarko over Deepwater Horizon spill penalties". Reuters.
  28. 1 2 "Case Summary: Settlement Agreement in Anadarko Fraud Case Results in Billions for Environmental Cleanups Across the Country". Environmental Protection Agency.
  29. ↑ "Shareholder Class Action Filed on Behalf of Purchasers of Tronox, Inc. by the Law Firm of Barroway Topaz Kessler Meltzer & Check, LLP". PRNewswire. August 12, 2009. Retrieved 2009-10-06.
  30. ↑ Tronox Inc. wants day in court with Kerr-McGee Corp., The Journal Record (Oklahoma City), May 14, 2009, by Marie Price
  31. ↑ Tiffany Kary (May 1, 2012). "Anadarko Fights Ailing Preacher in $25 Billion EPA Toxic Lawsuit". Bloomberg L.P.

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