NEW YORK (Reuters) - U.S. oil and gas exploration and production company Anadarko Petroleum Corp APC.N has approached Apache Corp APA.N with a potential acquisition as low crude oil prices prompt companies to seek merger partners, according to a person familiar with the matter.
The prolonged slump in crude oil prices has stirred talk of consolidation among U.S. shale companies, however so far no mega deals have been struck as bids and offers remain wide apart and financing is still available for most producers as they try to stay independent.
On Sunday, Bloomberg News reported that Houston, Texas-based Apache, which has operations in Egypt, the North Sea and Texas, had rejected a takeover approach and hired investment bankers from Goldman Sachs Group Inc GS.N for advice.
Representatives for Apache and Anadarko declined to comment on the matter.
Anadarko’s investors panned a potential combination, sending shares down nearly 7 percent, or $4.52, to $63.38 in afternoon New York Stock Exchange trading. Apache shares fell 1.3 percent to $53.23.
Analysts at Bernstein told clients that there were three potential motivations for Anadarko to explore a deal with Apache.
Anadarko wants Apache’s 3 million acres in the Permian, Anadarko needs scale in the downturn and may believe it can get better value for assets in the public market, the research firm speculated. ”We see this deal as somewhat a defensive move,“ said Bernstein, noting that any transaction would likely be a stock-for-stock deal.”
Anadarko Chief Executive Officer Al Walker told investors at Bank of America Merrill Lynch’s energy conference that his company was interested in adding acreage in the Permian Basin and DJ Basin in Colorado, where it already has operations.
Walker said Anadarko is frequently outbid for assets by private equity companies who have raised billions to invest in the sector. He was not asked about a potential tie-up with Apache.Anadarko, based a 30-minute drive from Houston in The Woodlands, Texas has a market capitalization of nearly $35 billion while Apache’s market value is around $20 billion.
Additional reporting by Ernest Scheyder in Williston, North Dakota; Writing by Anna Driver and Mike Stone; Editing by Terry Wade and David Gregorio