Anadarko Petroleum doubled its stake in the Lucius development on Monday after acquiring assets from Freeport McMoRan Oil & Ga for $2 billion.

Houston-based Anadarko has entered into a definitive agreement to acquire Freeport’s deepwater Gulf of Mexico assets.

The transaction doubles Anadarko’s ownership in the offshore Lucius development to 49 percent, up from the company’s previous stake of 23.8 percent.

Anadarko said that its operated Lucius facility in the deepwater Gulf of Mexico “continues to achieve strong reservoir performance and facility productivity.”

The strong performance prompted Anadarko to boost its estimated ultimate recovery for the Lucius field to more than 400 million barrels of oil equivalent, up from its previous estimate of over 300 million barrels of oil equivalent.

Gross oil sales volumes through the Lucius facility recently surpassed 100,000 barrels of oil per day, the company added.

The acquisition will add about 80,000 net barrels of oil equivalent per day, with oil accounting for more than 80 percent of that production.

The deal will also expand Anadarko’s operated infrastructure throughout the Gulf of Mexico and generate an estimated $3 billion of incremental Gulf of Mexico free cash flow over the next five years at current strip prices.

Anadarko said the transaction will enable accelerated investment in its Delaware and DJ basin assets.

The acquisition and development cost of the acquired properties, excluding $300 million of materials inventory and seismic, is about $13.50 per barrels of oil equivalent for the estimated proved reserves being acquired in the deal.

The transaction is effective as of August 1, 2016 and is expected to close before the end of the year.

Anadarko expects to boost to its 2016 full-year capital guidance, not including the acquisition, to a range of $2.8 to $3.0 billion, primarily reflecting increased activity in the Delaware and DJ basins.

“Our current plans are to add two rigs in each play later this year, and to increase activity further thereafter, with an expectation of more than doubling our production to at least 600,000 BOE per day collectively from these two basins over the next five years,” Anadarko chairman, president and CEO Al Walker said.


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