Houston-based Apache Corp.will sell all of its Gulf of Mexico Shelf operations and properties to Fieldwood Energy LLC (Fieldwood), an affiliate of Riverstone Holdings, for US $3.75 billion.
Operations include wells that are producing about 100,000 boe/d.
Apache’s shelf properties up for sale include more than 500 blocks, with proved reserves of 133 million barrels of oil and natural gas liquids, and 636 billion cu ft of natural gas.
Fieldwood will also assume all asset retirement obligations for these properties, which are estimated at about $1.5 billion. Apache said it will retain 50% of its ownership interest in all exploration blocks and in horizons below production in developed blocks, where high-potential deep hydrocarbon plays are being tested.
"This transaction is an important step toward rebalancing our portfolio," said G. Steven Farris, chairman and CEO of Apache. "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.
The company said it will use the proceeds from the sale of the Gulf assets first to pay down debt and buy back shares.
"Apache has had a great run on the Gulf of Mexico Shelf over the last 30 years, and the Shelf region and staff have played a vital role in making Apache the company it is today,” said Farris. “As our company has evolved, however, so have our investment priorities. The shallower horizons in the Shelf have matured to the point that dependable production growth is more difficult to achieve than from our onshore liquids plays.”
In May 2013, Apache hired Goldman Sachs for advisement on the sale of its Gulf of Mexico assets. The sale is expected to close September 30, 2013.
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