Apache Corp. is picking up 254,000 net acres in the Granite Wash, Tonkawa, Cleveland and Marmaton plays in Oklahoma and Texas with estimated proved reserves of 71.5 million boe through a $2.85 billion deal to acquire privately held Cordillera Energy Partners III LLC, the Houston-based company said Monday.

The properties have current net production of 18,000 boe/d. “…Cordillera has assembled a leading acreage position with significant resource potential including 14,000 potential drilling locations in liquids-rich Anadarko Basin plays,” Apache said, noting that the acreage to be acquired is characterized by high working interest and operatorship with about half held by production.

“This is an important growth step for Apache: a unique bolt-on opportunity that more than doubles Apache’s acreage in a highly liquids-rich fairway in the Anadarko Basin,” said Apache CEO G. Steven Farris. “Apache has been active in the basin for more than 50 years; the experience we have gained drilling 500 wells in the Granite Wash play, including 79 horizontals drilled since 2009, gives us an in-depth understanding of the geology and the operating environment and will enable us to hit the ground running.

“Multiple, stacked horizontal targets provide decades of potential drilling locations. Because 80% of revenue comes from liquid hydrocarbons production, this transaction provides compelling economics at current commodity prices.”

The acquisition is expected to be accretive to Apache’s earnings and cash flow beginning in 2012 with development drilling to be self-funding beginning in 2013.

The sellers, including EnCap Investments, other institutional investors and Cordillera management, are to receive about $600 million in Apache common stock subject to customary lock-up provisions. The balance of the consideration is to be paid in cash to be funded with debt. The effective date of the transaction is Sept. 1, 2011, with closing anticipated in the second quarter, subject to customary conditions.

As Apache has transformed itself, horizontal wells drilled in the last three years now account for about half of the company’s central region production, which totaled about 40,000 net boe/d at year-end 2011. “With this growth step, we expect to more than triple the pace of our operated activity in the multi-play fairway of combined Apache and Cordillera acreage during 2012,” Farris said.

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