As part of its portfolio rebalancing strategy, Houston-based oil and gas company Apache Corp is selling oil-and-gas-producing assets in Canada worth $374 million.
Seeking to shift more towards crude oil and liquids production, Apache is divesting dry gas assets covering 622,600 gross acres in the Ojay, Noel and Wapiti areas in Alberta and British Columbia.
The fields averaged a combined daily production of 101 million cubic feet of natural gas and 1,500 barrels of liquid hydrocarbons in 2013.
Apache said it will retain rights to the liquids-rich Montney shale formation and other deeper horizons.
No buyer has yet been named, but the deal is expected to close in late April.
Apache chairman and CEO Steven Farris said that the rebalancing would enable Apache to focus on growing liquids production in North America.
"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," he said.
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 its board.
Apache announced it would begin rebalancing its portfolio in 2013-after years of acquisitions--and since then has sold off assets in the Gulf of Mexico, Argentina and Egypt. Additionally, in September last year, Apache announced two separate deals to sell dry gas-weighted assets in Alberta and Saskatchewan for $112 million.
The company is also looking to lower its 50% stake in the Kitimat liquefied natural gas (LNG) export project in British Columbia, where it is in partnership with Chevron. The Kitimat LNG project was originally intended to begin construction this year, but does not yet have final approval, and Apache is divesting due to rising project costs, alongside its portfolio rebalancing.
By Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com More