Apache Corp. (NYSE, Nasdaq: APA) and its subsidiaries have an agreement to sell producing oil and gas assets in the Deep Basin area of western Alberta and British Columbia, Canada, for US$374 million.
Incremental to Apache's earlier $2 billion share repurchase announcement, the company plans to use the proceeds of this transaction to buy back Apache common shares under the 30-million-share repurchase program that was authorized by Apache's board of directors in 2013.
Apache is selling primarily dry gas-producing properties comprising 622,600 gross acres (328,400 net acres) in the Ojay, Noel and Wapiti areas in Alberta and British Columbia. In the Wapiti area, Apache will retain 100% of its working interest in horizons below the Cretaceous, retaining rights to the liquids-rich Montney and other deeper horizons. During 2013, production from the fields to be sold averaged 101 million cubic feet of natural gas and 1,500 barrels of liquid hydrocarbons per day.
The effective date of the transaction is Jan. 1, and it is expected to close on or about April 30.
"This transaction is part of Apache's portfolio rebalancing, which was undertaken last year to enable Apache to focus on growing liquids production from a deep inventory of crude oil- and liquids-rich opportunities in North America," said G. Steven Farris, Apache's chairman, CEO, and president. "The sale of these natural gas assets – and other Canadian gas-producing properties sold last year – will permit Apache's Canada Region to concentrate on liquids-rich opportunities that can provide more attractive rates of return and more predictable production growth."
Since the rebalancing was announced in 2013, Apache also divested operations on the Gulf of Mexico Shelf and in Argentina, and sold a one-third interest in its Egypt operations.