Apache Corp. and its partner Shell Overseas Holdings Ltd. expectto close on their acquisition of New Zealand-based FletcherChallenge Energy by the end of this month after winning theoverwhelming approval of Fletcher’s shareholders in a specialmeeting Tuesday. In the deal, Houston-based Apache will acquireFletcher’s Canadian and Argentina assets for about $630 million.

Apache COO G. Steven Farris said the acquisition, when complete,will be additive to the company’s earnings per share and cash flowper share. “It builds upon our strategic position in western Canadaand provides Apache an entr‚e into South America,” he said. Whenthe acquisition closes, Shell will become New Zealand’s dominantenergy producer.

With the Fletcher properties, Apache would add 713 Bcfe of naturalgas, or about 12% to Apache’s current proven reserve base (see DailyGPI, Oct. 12, 2000). Nearlythree-quarters of the proven Canadian reserves are natural gas, and athird of those reserves rest in the Hatton field, which now produces35 MMcf/d.

Overall, current production from the new Canadian propertiesaverages 130 MMcf/d, 670 b/d of natural gas liquids, and 12,200 b/dof oil. In the Hatton field alone, Apache expects to drill nearly100 wells a year for the next few years.

The approval yesterday followed a late February bid by PeakPetroleum Co. of New Zealand Ltd., a consortium of investors thatinclude Penn West Petroleum Ltd., Greymouth Petroleum Mining Co., andinvestment houses FR Partners Ltd. and Guinness Peat Group Plc (seeDaily GPI, Feb. 28). Peak had an offeron the table to outbid Shell and Apache by about 4%, but Fletcherofficials thought the offer held no water because no monetary deal hadactually been put together.

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