Apache Corp. (APA:US), the fourth-largest U.S. independent oil and natural gas producer by market value, is weighing a sale of its deep-water assets in the Gulf of Mexico, according to a person familiar with the matter.
The company may begin a sale process as early as next week, said the person, who asked not to be identified because the matter is private. Only its deep-water assets in the U.S. Gulf would be part of the sale, the person said.
Apache spent more than $16 billion buying offshore and onshore assets from 2010 to 2012, boosting holdings in the U.S., Canada, Egypt and the North Sea. On Feb. 14, Apache said it planned to sell holdings worth about $2 billion after its three- year buying spree, with some proceeds possibly helping to pay down debt. John Roper, a spokesman for Houston-based Apache, said he was unable to comment on the specifics of the asset sale.
“We are actively exploring several different alternatives toward reaching that goal but it is very early in the process,” he said.
A sale of its deep-water Gulf assets would represent a reversal of strategy for the oil and gas producer, which was seen as making its entry into the deep Gulf with its 2010 acquisition of Mariner Energy Inc. for $2.7 billion. The purchase, at a 45 percent premium over Mariner’s closing price the day before the deal was announced, made Apache “a player” in the deep-water Gulf, Scott Hanold, an analyst at RBC Capital Markets, said at the time.
Apache also obtained drilling acreage in the Permian Basin of West Texas with the deal.
Apache at year-end owned 900,000 gross acres in the Gulf Of Mexico deep-water region, according to the company’s annual report released March 1. The region contributed 2 percent of its total oil and gas production in 2012, according to its annual report. Apache planned to invest $400 million drilling seven new wells and undertaking other projects in the region in 2013, the filing states.
Plains Exploration & Production Co. last year paid BP Plc $5.55 billion for deep-water oil fields in the Gulf. When announcing that deal in September, Plains reported that those fields produced the equivalent of 59,500 barrels of oil per day.
Apache’s deep-water fields in the the gulf produced close to the equivalent of 18,000 barrels of oil per day in the fourth quarter, according to the company’s website.
The company is now seeking growth from onshore projects in North America, such as in the Permian Basin. Apache said last year it planned to boost the percentage of output that comes from U.S. onshore properties to 41 percent in 2016 from 21 percent in 2011.
ConocoPhillips (COP:US), Anadarko Petroleum Corp. (APC:US) and EOG Resources Inc. (EOG:US) are the largest U.S. independent oil and gas producers by market value, meaning they don’t have refineries or chemical units.
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