Western Midstream Operating L.P. Ratings Placed On CreditWatch Positive On Announced Acquisition Of Andarko By Chevron


  • Chevron Corp. (CVX) and Anadarko Petroleum Corp. (APC) announced today that CVX will purchase APC, including its midstream limited partnership Western Midstream Operating L.P. (Western Midstream; formerly Western Gas Partners L.P.).
  • Given our materially stronger credit rating on CVX (AA/Watch Neg/A-1+) compared with our rating on APC (BBB/Watch Pos/A-2), we think that there is a more than one-in-two chance that Western Midstream will receive enhanced group support following the close of the transaction, which would lead us to raise our rating on the company.
  • Therefore, we are placing our 'BBB-' issuer credit rating and 'BBB-' issue-level ratings on Western Midstream on CreditWatch with positive implications.
  • We expect to resolve the CreditWatch placement upon the close of the acquisition, at which point we could raise our rating on Western Midstream depending on the level of importance we think the partnership has in CVX's long term strategy.
NEW YORK (S&P Global Ratings) April 15, 2019--S&P Global Ratings today took the rating actions listed above. The CreditWatch positive placement follows the announcement that CVX will purchase APC and its subsidiaries, including its master limited partnership Western Midstream. The transaction, which we think will close in 2019, is subject to regulatory approvals, a vote by APC's shareholders, and other customary closing conditions.
The resolution of the CreditWatch positive placement will depend on whether the companies are able to successfully close the transaction as contemplated. Our rating on Western Midstream will depend on our analysis of the combined entity, including its financial and operating strategies and pro forma credit measures, and our view of Western Midstream's strategic importance to CVX.
We expect to resolve the CreditWatch listing when the acquisition closes, which we anticipate will occur in the second half of 2019.
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