Anadarko Petroleum Co. (NYSE: APC) and Sonatrach, Algeria’s national oil company, have reached an agreement in a long-standing dispute over the way Sonatrach applied Algeria’s excess profits tax beginning in 2006.
From Anadarko’s press release:
The agreement, based on reciprocal concessions, provides for delivery to Anadarko of additional crude oil volumes in the amount of approximately $1.8 billion over a period of 12 months from the effective date. Additionally, the parties have agreed to amend the existing Production Sharing Agreement (PSA) to provide that Anadarko will receive a higher volume of profit barrels. The effect of the amendment will, using current commodity prices and discounted at 10 percent, provide Anadarko with approximately $2.6 billion of additional net present value over the remaining term of the PSA. The amendment also confirms the term for each development license granted under the PSA will be extended, in accordance with the terms of the PSA, and as a result, will now be 25 years from the original effective date.
Anadarko’s shares are up about 3.5% in the pre-market, at $83.61 in a 52-week range of $57.11-$88.70.
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