Anadarko to sell assets to cut debt

Anadarko Petroleum Corp., the U.S. oil and natural gas producer said Tuesday it will sell two Louisiana oil fields to Exco Resources Inc. as it continues with its campaign to cut debt, Anadarko will give over the fields to Exco for $1.6 billion in cash.

Houston based Anadarko bought Kerr-McGee and Western Gas Resources Inc. in August and is now selling assets to pay off the debt which amounts to roughly $26 billion. According to chief executive officer Jim Hackett the company wants to focus on projects that are more attractive.

"This divestiture is an important step in refocusing the portfolio following our acquisitions of Kerr-McGee and Western Gas Resources in August," said Hackett.

The Vernon and Ansley gas fields, which are located in Jackson Parish, La., produce about 190 million cubic feet of gas a day from about 350 wells and have six drilling rigs and four workover rigs, which are used to restore or increase production.

"Hackett wants Anadarko to be the fastest-growing production company and is trying to improve his hand," said Fadel Gheit, an analyst at Oppenheimer & Co. in New York. "He's not willing to keep any asset that doesn't have enough growth potential."

Dallas-based Exco will finance the deal with a new revolving credit facility and a bridge loan from banks. The deal is expected to close in the first quarter of 2007.

Shares of Anadarko went up 56 cents, or 1.3 per cent, to $42.70 yesterday on the New York Stock Exchange. The stock has plunged more than 9 per cent this year. While Exco shares leaped $1.06, or 6.3 per cent, to $17.90 and have gained 38 per cent since the initial offering.