Anadarko Petroleum, the largest independent U.S. oil and natural-gas producer by market value, rose the most in a month after announcing an Algerian tax settlement that will increase revenue by $1.8 billion in the first year. Bloomberg reported that Anadarko values the settlement at $4.4 billion, including revisions to its production-sharing agreement and tax liability.
The agreement with Sonatrach, Algeria’s state-run oil producer, increases Anadarko’s share of crude from Algerian wells and extends the production-sharing agreement to 25 years. Upon the settlement's approval, Anadarko said all arbitration proceedings between the parties will be dismissed.
Under the terms of the settlement, Algeria will supply Anadarko with $1.8 billion in crude oil over the next 12 months. In addition, Anadarko and Algeria extended their existing production sharing agreement to provide Anadarko with a higher volume of oil that is worth about $2.6 billion over the life of the contract.
Commenting on the news, Anadarko's COO Al Walker stated, “We are very pleased to have reached a fair and balanced resolution that will return significant value to Anadarko.”
Anadarko Petroleum (APC : NYSE : US$85.25), Net Change: 1.64, % Change: 1.96%, Volume: 6,288,634