Apache Corp. said Tuesday it has acquired producing properties in South Louisiana valued at $260 million from an undisclosed private company, a move it predicts will boost its domestic natural gas production by more than 10%.

The transaction, which went into effect Dec. 1, includes 135 producing wells on 234,000 net acres, with net proved reserves of 178 Bcf of gas equivalent, of which 88% is natural gas, according to the Houston-based oil and gas independent producer. Net daily production from the properties is expected to be more than 55 MMcf of gas and 2,100 barrels of oil, it said.

The acquisition gives Apache a “significant opportunity” to expand its domestic drilling activities, said President and CEO G. Steven Farris. “We own 100% of both the mineral and surface rights on 212,000 of the acquired acres, improving the economics over a normal working interest position. Couple that with the proximity to Henry Hub, which commands the highest netback gas prices in the country, and the current outlook for natural gas prices, and we have added potential for boosting our cash flow on increased gas production.”

Apache said the acquisition is accretive to per-share cash flow and earnings. The company noted it has protected the economics of the transaction with “collar” hedges, which preserve the potential for significantly higher gas price realizations.

The purchase is financed with commercial paper with a current interest rate of under 1.5%, the producer said. Apache’s debt-to-capitalization is expected to end the year at below 35%, including the purchase.

The acquired acreage, located primarily in Terrebonne and Lafourche parishes in Louisiana, provides immediate exploitation and exploration potential, with 23 prospects already identified, the producer noted.

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