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Anadarko Erases 'Silkwood' Uncertainty With $5 Billion Tronox Settlement
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Anadarko Erases 'Silkwood' Uncertainty With $5 Billion Tronox Settlement

Apr 3 2014, 5:27pm CDT | by

Great news for Anadarko Petroleum today as it announced a settlement in its long-running litigation over Tronox. Anadarko has agreed to pay $5.15 billion to plaintiffs. News of the settlement sent...

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16 weeks ago

Anadarko Erases 'Silkwood' Uncertainty With $5 Billion Tronox Settlement

Apr 3 2014, 5:27pm CDT | by

Great news for Anadarko Petroleum today as it announced a settlement in its long-running litigation over Tronox. Anadarko has agreed to pay $5.15 billion to plaintiffs. News of the settlement sent Anadarko shares soaring 14.5% in the last two hours of the trading day.

Tronox was a former subsidiary of Kerr-McGee — which Anadarko acquired in 2006. Kerr-McGee had set up Tronox as a kind of pit of despair into which it loaded up decades of toxic environmental liabilities and toxic tort claims, balanced them out with a handful of assets, then spun it out as a standalone public company.

Free of Tronox, Kerr-McGee had become far more attractive to suitors; Anadarko paid $16.4 billion in cash for the company, plus the assumption of what it initially estimated as $1.6 billion in debt and “other liabilities. “ It hadn’t counted on being haunted by those Tronox liabilities, which reared their head after Tronox filed for bankruptcy in 2009, and at one point were tallied up at $25 billion, encompassing more than 2,500 sites across the country. Kerr-McGee had an infamous environmental record; the movie “Silkwood” depicted the tragedy of employee Karen Silkwood, who claimed to have been exposed to deadly levels of radiation while working at on of the company’s uranium processing sites.

In December of last year a judge in the case ruled that Kerr-McGee had improperly spun off Tronox and that Anadarko could be on the hook for as much as $14 billion in cleanup and claims. Anadarko shares had plunged 9% on that news.

The Tronox settlement will erase a huge asterix that investors have had penciled in next to Anadarko for years. Shares in the company had doubled in the five years up today — well outpacing the likes of Apache Corp., Marathon Oil and Devon Energy. Yet Anadarko has been one of the most successful explorers in recent years, participating in vast discoveries offshore Mozambique and Ghana, while capitalizing on vast acreage holdings onshore U.S., especially in the Wattenberg of Colorado, Eagle Ford and Permian basin of Texas. Nicholas Pope, analyst with Cowen & Company, figures that Anadarko could have 20,000 potential drilling locations in the Wolfcamp shale of Texas.

In the Gulf of Mexico it is working on appraising the potential blockbuster Coronado discovery and is currently drilling the Deep Nansen well. Last year I visited the Texas shipyard building out the spar that will produce its Lucius field. Analyst Pope figures that Anadarko’s big offshore projects could add 180,000 bpd of new production by 2020. That would be a 23% boost to the company’s current run rate of roughly 775,000 barrels of oil and natural gas equivalents per day. The company has been living within its means, with expectations of $10 billion in discretionary cash flow this year funding just over $8 billion in capital spending.

Anadarko has for years been whispered about as a juicy takeover target with a lot of optionality for a global supermajor. The company most often mentioned as a buyer is Exxon Mobil. It may be no coincidence that Exxon decided to build its massive new office park just a couple miles from Anadarko headquarters in The Woodlands, just north of Houston. It’s unlikely that all the upside potential in Anadarko has already been taken.

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Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

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KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was told to ...
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Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk ...
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7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

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PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern states last month. ...
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Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

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KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in compensati ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minist ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

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JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an a ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

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PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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