Houston’s Apache Corp. said yesterday that its recent equityoffering has raised net proceeds of $433.9 million to fund thisyear’s acquisitions, including Occidental Petroleum’s interests inthe Gulf of Mexico. So far, the company has announced or completedcash acquisitions totaling $860 million this year alone.

Apache issued 9.2 million shares of common stock for $49 pershare. Merrill Lynch & Co., Goldman Sachs & Co., CreditSuisse First Boston and Salomon Smith Barney managed theunderwriting.

“We continue to look for opportunities to grow Apache for thebenefit of our shareholders,” said CEO Raymond Plank. “Ourcontrarian strategy is paying off in a big way, with recordproduction volumes coming at a time of high oil and gas prices.”

Plank said that annualizing the company’s first-half resultssets Apache on track to record an 18% return on equity forshareholders. “While prices are not predictable, with theseacquisitions, Apache’s production growth is assured through 2001.”

In July, Apache announced a two-part structured agreement toacquire an Occidental Petroleum subsidiary that owns interests on theOuter Continental Shelf of the Gulf of Mexico, and to acquire thatsubsidiary’s natural gas production for $385 million, a portion ofwhich will be paid in future years (see Daily GPI, July 21). Closing is expected by themiddle of this month.

In June, Apache agreed to pay Collins & Ware Inc. $300 millionfor long-lived producing properties in the Permian Basin and SouthTexas (see Daily GPI, June 15). Thoseassets have proved reserves of nearly 502 Bcfe, with one-third inliquid hydrocarbons. Probable reserves are estimated at 151 Bcfe, andcurrent net production is 40 MMcf/d of natural gas and 4,000 B/d ofliquid hydrocarbons. Earlier this year, Apache acquired someproperties in Oklahoma and the Texas Panhandle from CrescendoResources, an oil and gas producer.

Last week, the independent oil and gas producer reported thatits second-quarter earnings had more than quadrupled, reflecting anincrease in production and higher oil and gas prices. Net incomerose to $140.4 million, or $1.19 per diluted share, up from $29.6million, or $0.28 for the same period in 1999. Revenues rose to$448 million from $246 million. Frost Securities Inc. analyst LewisKreps said in late June that Apache was on track to “generateearnings growth of 31% over the next three years.”

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