Apache to Sell Assets to Riverstone for $3.75 Billion

July 19, 2013

Bloomberg reports that Apache Corp., the third-worst performer this year among a group of U.S. oil and natural gas producers, agreed to sell wells and acreage in the shallow waters of the Gulf of Mexico to private-equity firm Riverstone Holdings LLC for $3.75 billion in cash.

The sale to Riverstone’s Fieldwood Energy includes 1.9 million net acres with estimated reserves of 133 million barrels of oil and liquids and 636 billion cubic feet of gas, the Houston-based oil company said today in a statement. In addition to the cash, Riverstone will assume about $1.5 billion in future costs associated with shutting the wells. Apache will keep a 50 percent stake in certain blocks for future exploration.

In May, Apache doubled the amount of assets it planned to sell this year to $4 billion, saying it would use $2 billion to reduce debt and other proceeds to buy back as many as 30 million shares. Chairman and Chief Executive Officer Steve Farris said in a March interview that everything was up for review as Apache began to streamline operations after a $16 billion acquisition spree that began in 2010 and ended last year.

“This transaction is an important step toward rebalancing our portfolio,” Farris said in today’s statement. “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.”

Copyright: Bloomberg, 2013.