2. Acquisitions, Divestitures, and Assets Held for Sale

Acquisitions In November 2014, WES acquired Nuevo Midstream, LLC (Nuevo), which owns and operates gathering and processing assets in the Delaware basin in West Texas, for $1.554 billion. Following the acquisition, WES changed the name of Nuevo to Delaware Basin Midstream, LLC (DBM). This acquisition constitutes a business combination and was accounted for using the acquisition method of accounting. This acquisition aligns the Company’s gas gathering and processing capacity with future industry production growth plans in the Delaware basin. The following summarizes the preliminary fair value of assets acquired and liabilities assumed at the acquisition date, pending the acquired entity’s final financial statements:



millions
Current assets	$	46
Properties and equipment	441
Other intangible assets	836
Accounts payable	(13		)
Accrued expenses	(25		)
Deferred income taxes	(1		)
Asset retirement obligations	(9		)
Goodwill	279
Total assets acquired and liabilities assumed	$	1,554

Fair-value measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and thus represent Level 3 inputs. The fair value of properties and equipment is based on market and cost approaches. Intangible assets consist of customer contracts, the fair value of which was determined using an income approach. Deferred tax assets (liabilities) represent the tax effects of differences in the tax basis and acquisition-date fair values of assets acquired and liabilities assumed. All of the goodwill related to this acquisition is amortizable for tax purposes. The assets acquired and liabilities assumed are included within the midstream reporting segment.

Results of operations attributable to this acquisition are included in the Company’s Consolidated Statements of Income from the date acquired. The amounts of revenue and earnings included in the Company’s Consolidated Statement of Income for the year ended December 31, 2014, and the amounts of revenue and earnings that would have been recognized had the acquisition occurred on January 1, 2014, are not material to the Company’s Consolidated Statements of Income.

2. Acquisitions, Divestitures, and Assets Held for Sale (Continued)

There were no other material acquisitions made during 2014. The following summarizes acquisitions made during 2013:



millions, except percentages	Percentage Acquired		Cash Paid
Certain oil and gas properties and related assets in the Moxa area of Wyoming	100	%	$	310	⁽¹⁾
Gas-gathering systems in the Marcellus shale in north-central Pennsylvania	33.75	%	135
Joint venture formed to design, construct, and own two fractionators located in Mont Belvieu, Texas	25	%	78
Intrastate pipeline in southwestern Wyoming	100	%	28

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⁽¹⁾	Includes $306 million that represents the fair value of the oil and gas properties acquired.

Divestitures and Assets Held for Sale The following summarizes the proceeds received and gains (losses) recognized on divestitures for the years ended December 31:



millions	2014		2013			2012
Proceeds received	$	4,968	$	567		$	657
Gains (losses) on divestitures, net	1,891		(470		)	(71		)

Divestitures The 2014 proceeds and net gains were primarily related to assets included in the oil and gas exploration and production reporting segment. The Company sold a 10% working interest in Offshore Area 1 in Mozambique for $2.64 billion, recognizing a gain of $1.5 billion. In addition, the Company sold its Chinese subsidiary for $1.075 billion, recognizing a gain of $510 million; sold its interest in the nonoperated Vito deepwater development, along with several surrounding exploration blocks in the Gulf of Mexico, for $500 million, recognizing a gain of $237 million; and sold its interest in the Pinedale/Jonah assets in Wyoming for $581 million. These gains were partially offset by losses of $456 million discussed under Assets Held for Sale below.

The 2013 sales proceeds were primarily related to the Company’s divestiture of its interests in a soda ash joint venture and certain U.S. onshore and Indonesian oil and gas properties. Net losses were primarily related to the Company’s sale of the Pinedale/Jonah assets discussed under Assets Held for Sale below, partially offset by the Company’s divestiture of its interests in the soda ash joint venture and certain U.S. oil and gas properties. The 2012 sales proceeds were primarily related to U.S. oil and gas properties and net losses were primarily related to Indonesian oil and gas properties.

2. Acquisitions, Divestitures, and Assets Held for Sale (Continued)

Assets Held for Sale During the fourth quarter of 2014, Anadarko considered certain U.S. onshore assets from the oil and gas exploration and production reporting segment to be held for sale. These assets were remeasured to their fair value using a market approach and Level 2 fair-value measurement, and the Company recognized a loss of $456 million. Gains and losses on assets held for sale are included in gains (losses) on divestitures and other, net in the Company’s Consolidated Statements of Income. Volatility in the current commodity-price environment has reduced the probability that the assets will be sold within one year and the assets are therefore no longer considered held for sale at December 31, 2014. At December 31, 2014, the balances of assets and liabilities associated with assets held for sale were not material.

During the fourth quarter of 2013, the Company began marketing certain other domestic properties from the oil and gas exploration and production reporting segment to redirect its operating activities and capital investments to other areas. These assets were remeasured to their fair value using a market approach and Level 2 fair-value measurement. In 2013, the Company recognized losses of $704 million primarily related to the sale of the Pinedale/Jonah assets in Wyoming, which closed in 2014. At December 31, 2013, the Company’s Consolidated Balance Sheets included long-term assets of $616 million and long-term liabilities of $27 million associated with assets held for sale.

Property Exchange In 2013, the Company exchanged certain oil and gas properties in the Wattenberg field with a third party. The properties exchanged were measured at the Company’s historical net cost with no gain or loss recognized. Anadarko paid $106 million in cash as part of the exchange, which is included as an addition to properties and equipment on the Company’s Consolidated Statement of Cash Flows.