Apache Seals Deal With Occidental
Keeping with the company's self-imposed completion date, Houston-based
Apache closed the deal on its previously announced $385 million acquisition
of an Occidental Petroleum subsidiary (see NGI, Aug.
The subsidiary which owns interests on the Outer Continental shelf of
the Gulf of Mexico will be financed under a two-part agreement. Part of
the cost will be paid up front, and the remaining cost will be paid for
in future years. Included in the sale, are properties in 32 fields, half
of them operated, on 93 blocks with total proved reserves of 56.8 million
barrels of oil equivalent.
Net production of the properties through yearend are expected to yield
an average of 107 MMcf/d and 7,800 bbl of oil a day. The proved reserves
have an estimated six year reserve life. Also included are proprietary
3-D seismic data on 113 blocks that cover about 1,022 square miles.
"These are excellent assets with upside potential we can realize
through the drill bit," said G. Steven Farris, Apache's president.
He said most of the acreage is "near or adjacent to Apache blocks
and complements our existing 3-D seismic data and operations."
Apache says that it has "protected the economics of the transaction
with ``collar'' hedges, which preserve the potential for significantly
higher gas-price realizations." The purchase of Occidental's interests
is expected to add immediately to Apache's per-share earnings and cash
The independent oil and gas producer will pay Occidental $341 million
for the properties this year, then pay $11 million a year for the next
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