Image source: Anadarko Petroleum Corporation.

What: Units of Western Gas Equity Partners (NYSE:WPG) slumped on Tuesday, down 10% by 2:30 p.m. EDT. Fueling the sell-off was the announcement of an equity offering from the company's limited partner, Western Gas Resources, which is a subsidiary of Anadarko Petroleum (NYSE:APC).

So what: The Anadarko Petroleum-controlled entity is selling at least 12.5 million units of Western Gas Equity Partners in a public offering. That offering is expected to raise $481 million, all of which will be going to the Anadarko Petroleum entity, not Western Gas Equity Partners. It's that combination of a big sale by its largest unitholder, with none of the proceeds going to Western Gas Equity Partners, that's fueling today's selling.

Anadarko Petroleum has been steadily selling down its interest in Western Gas Equity Partners since it formed the entity. Last year around this time, the company sold 2 million common units along with 6.5 million of its tangible equity units to raise cash. Even with that sale, Anadarko Petroleum was left with an 87.4% stake in the entity, which will decline a bit more with its most recent offering.

Now what: As it does from time to time, Anadarko Petroleum is cashing out some of its large stake in Western Gas Equity Partners in order to raise cash for its own balance sheet. That's to be expected given that the entity was largely created to serve as an ATM for the oil and gas giant, meaning investors can bank on additional selling pressure from Anadarko for years to come.

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