S&P Keeps Anadarko Petroleum (APC) on CreditWatch Positive

Standard & Poor's Ratings Services said its ratings on The Woodlands, Texas-based Anadarko Petroleum (NYSE: APC), including the 'BBB-' corporate credit rating, remain on CreditWatch, where they were placed with positive implications on April 7, 2014.

We placed our ratings on Anadarko on CreditWatch with positive implications on April 7, 2014, following the company's announcement that it had settled its long-running Tronox Adversary Proceeding to resolve all claims stemming from subsidiary Kerr McGee Corp.'s alleged actions before its acquisition by Anadarko in 2006. The settlement will result in a complete release of all claims against Kerr McGee and provides protection from third parties seeking reimbursement for potential environmental liabilities at more than 4,000 sites. The settlement agreement remains subject to recommendation by the U.S. Bankruptcy Court, approval by the U.S. District Court, and the issuance of an injunction barring similar claims from being asserted by third parties.

Anadarko has agreed to pay $5.15 billion gross, or $4.6 billion net of estimated tax benefits. At the end of March 2014, the company had $5.9 billion in cash and full availability under its $5 billion secured revolving credit facility maturing in 2015.

"We intend to resolve the CreditWatch listing around the time of the settlement approval and payment, which we expect in the third quarter of 2014. At that time, we anticipate an upgrade of one notch, to 'BBB', based on our assessment of Anadarko's strong business risk and significant financial risk profiles," said Standard & Poor's credit analyst Carin Dehne-Kiley.

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