On November 20, Apache Corp. (ticker: APA) announced its intentions to sell non-core assets in southern Louisiana and certain parts of the Anadarko Basin for approximately $1.4 billion in two separate deals with unnamed buyers.
In southern Louisiana, Apache agreed to sell its working interest in approximately 90,000 net acres. These mature fields, which are characterized by high decline rates and short reserve lives, produced approximately 21,000 BOEPD (62% gas and NGLs) net to Apache during Q3 2014. Apache will retain its 275,000 mineral acres in South Louisiana.
In a separate transaction in the Anadarko Basin, Apache agreed to sell approximately 115,000 net acres in a portion of its Stiles Ranch field in Wheeler County, Texas, and in its Mocane-Laverne and Verden fields in western Oklahoma. Net production from these properties averaged 26,000 BOEPD (83% gas and NGLs) during Q3 2014.
Both transactions have an effective date of October 1, 2014, and are expected to close before the end of the year.
While Apache has been selling off non-core assets, it has also picked up an additional 300,000 acres of leasehold in its key plays. The company reported that it increased its drilling inventory in the Eagle Ford and Canyon Lime plays of Texas to more than 3,000 and 800 locations, respectively.
Source: Apache Corp.
G. Steven Farris, Apache’s chairman, chief executive officer and president, said: “We have made great progress in strategically positioning our North American onshore portfolio for high growth and high returns. We continue to focus on growing liquids production from our deep inventory of North American resource locations. Proceeds from today’s [Nov. 20] asset sales will be used primarily to fund our 2014 leasehold acquisition program, which has added significant acreage within our primary focus areas.”
Apache forecasts 2015 North American onshore liquids growth of 12% to 16% when adjusted for 2014 asset sales. On a BOE basis, the company projects 2015 North American onshore production growth of 8% to 12%. The forecast assumes a preliminary North American onshore exploration and production capital budget of approximately $4 billion.
Apache has an enterprise value of $41.1 billion, and a trailing twelve month production rate of 650.2 MBOED. The company’s 2013 proved reserves are 2.6 MMBOE, 46% gas and 54% oil. The company’s debt as of the quarter ending Sep. 30, 2014 was $10.9 billion.
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