Anadarko Petroleum's board of directors said on Monday that Occidental Petroleum's buyout offer is superior to its agreement to sell its business to Chevron, putting the deal with the oil giant in jeopardy. The reversal marks the latest twist in a rare bidding war in the oil and gas sector. Chevron now has four days to counter Occidental's latest bid for Anadarko, an oil and gas driller with prized assets in the U.S. Permian Basin, the Gulf of Mexico and Africa. Shares of Occidental Petroleum were down slightly in after hours trading, while Chevron's stock price ticked higher. Anadarko's shares were roughly flat after jumping 3.8% on Monday. Chevron reached an agreement last month to buy Anadarko for $33 billion, or $65 a share. Shortly after, Occidental offered $38 billion, or $76 a share. Occidental on Sunday sweetened its bid by offering to pay mostly cash for Anadarko, after earlier structuring the transaction as a 50-50 cash-and-stock deal.

Anadarko's board of directors on Monday unanimously decided that the revised offer is a "Superior Proposal" under the terms of its agreement with Chevron. The board intends to cancel the deal with Chevron and enter into a definitive agreement to sell its business to Occidental. "We have long been convinced that a strategic combination with Anadarko represents a compelling opportunity for the shareholders of both Occidental and Anadarko, and we are pleased that Anadarko's Board has determined that our May 5, 2019 offer is a 'Superior Proposal,'" Occidental said in a statement. According to that agreement, Chevron has the right to put another offer on the table through Friday. Chevron's merger agreement with Anadarko is structured as 75% stock and 25% cash. If Chevron does not make a counter offer, or if its revised proposal is rejected, Anadarko must pay Chevron a $1 billion breakup fee. Many analysts previously said Chevron likely didn't have to match Occidental's higher bid — or at least come close — because it is the favorite to take over Anadarko. Chevron's global operations better dovetail with Anadarko's portfolio, and with a far larger balance sheet than Occidental boasts, the oil major can more easily digest an acquisition of this size. However, some analysts believe Chevron will now have to match Occidental's bid after the company secured financing for the transaction and removed obstacles to closing the deal.