Apache to sell Gulf of Mexico shelf assets for $3.75 billion


Apache to sell Gulf of Mexico shelf assets for $3.75 billion

HOUSTON -- Apache has agreed to sell its Gulf of Mexico shelf operations and properties to Fieldwood Energy LLC for $3.75 billion in cash, as the U.S. oil and gas company looks to pay down debt.

The Houston company said the sale to Fieldwood, an affiliate of New York private-equity firm Riverstone Holdings Ltd., is in line with a shift in focus to onshore production in North America.

Apache in May said it planned to sell $4 billion in assets this year, saying narrowing its focus to onshore production would be likely to provide the best return. The company has said it plans to use the proceeds to pay down debt and to buy back shares.

The move comes as some energy producers, including Chesapeake Energy, that expanded aggressively during the recent energy boom are scaling back.

"At the end of this process, we expect Apache to have the right mix of assets to generate strong returns, drive more predictable production growth, and create shareholder value," said Chief Executive G. Steven Farris.

The properties sold to Fieldwood include more than 500 blocks and 1.9 million net acres. As of year end in 2012, total proved reserves in the properties were 239 MMboe, including more than 55% oil. Current daily production exceeds 95,000 barrels of oil equivalent.

Apache will keep a 50% stake in all exploration blocks and in developed blocks where high-potential plays are being tested.

Fieldwood will also assume all retirement obligations for the properties, estimated at a discounted value of around $1.5 billion.

The effective date of the sale was July 1, and sale is expected to close on Sept. 30.

Fieldwood has agreed to employ "substantially all" Apache's Gulf of Mexico employees, the companies said.

Apache shares were up 2.2% after hours to $85.40. Through the close, the stock was up 6.5% since the start of the year.

Dow Jones Newswires

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