Apache Corporation, the energy giant based in Texas, is selling its Australian oil and gas arm, Apache Energy, for $US2.1bn ($A2.7bn). The deal will see Apache repositioning its activities. Post-sale, 70% of the firm’s production will come from North American onshore.
However, Apache is not withdrawing from offshore completely. Chief executive officer and president, John J. Christmann, IV, said ‘Our robust North American position is complemented by our North Sea and Egyptian regions, which have an extensive inventory of prospects and assets that generate free cash flow.’
The transaction, however, does see Apache exiting the Australian exploration and production market. On 2 April, it finalised the sale of its Wheatstone LNG and Balnaves oil interests to Australian oil and gas company Woodside for US$2.817bn. Apache’s only remaining Australian asset will be a 49% stake in Yara Pilbara Holding, a producer of fertiliser.
Apache Energy and its subsidiaries produced approximately 49,000 barrels of oil of equivalent in March. The buyer of the assets is a consortium of private equity funds managed by Macquarie Capital Group Limited and
Brookfield Asset Management Inc. They bought the Apache assets for $2.1bn in cash. The deal is subject to government and regulatory approval, but should close by the middle of this year. It is reported that the funds have already entered a 12-year agreement to supply natural gas to the Australian arm of aluminium giant, Alcoa.
The sale comes shortly after appraisal results confirmed that Apache’s August 2014 oil discovery offshore Western Australia contained some 300 MMbbl of oil.