Apache Corp. late Thursday pulled off what many analysts had not thought probable, selling a one-third operational stake in strife-torn Egypt for $3.1 billion in cash to China's Sinopec International Petroleum Exploration and Production Corp.

The transaction launches a "global strategic partnership to pursue joint upstream oil and gas projects," the Houston operator said. Apache said the partnership resulted following several months of "joint offers."

Sinopec's "technical expertise complements our 20 years of experience operating in Egypt and creates an alliance that will continue to explore and deliver the tremendous hydrocarbon resources in the Western Desert," said Apache CEO G. Steven Farris.

The operator had planned to sell about $4 billion in assets this year to concentrate more money and effort in North America's onshore. However, it's already done that and more. Apache in July sold most of its industry-leading Gulf of Mexico (GOM) shallow water assets for about $5.25 billion to a Riverstone Holdings affiliate (see Daily GPIJuly 19). In August it sold about 530,000 net acres in Western Alberta for $214 million to privately held Ember Resources Inc. (see Daily GPIAug. 16).

Once the sale to Sinopec is completed, as well as the GOM portfolio, Apache's pro forma 2Q2013 production from the North American onshore would have been 55% of total production, while the Egypt portfolio would have comprised about 15%, Farris said. In 2010, onshore North America contributed 31% of Apache's overall production, Egypt represented 25% and the GOM Shelf represented 17%.

During the second quarter, Apache's production in the Permian and Anadarko basins was 42% higher (see NGIAug. 26).

"Our successful exploration and development programs in Egypt have been an important contributor to both growth and cash flow for many years," Farris said. "At the same time, we are taking meaningful steps to rebalance our portfolio to better deliver the full potential of our deep North America onshore resource inventory."

Net production from Apache's Egypt operations in 2012 averaged 100,000 b/d of oil and 354 MMcf/d of natural gas. It said its exploration and production operations "in remote, unpopulated areas, remain unaffected by political events in the region."

The market had been looking for Apache to reduce the risks in its Egyptian portfolio. Tudor, Pickering, Holt & Co. said the transaction was a positive and about 6% accretive to analysts' proved, probable and possible net asset value, because they had "ascribed little upside to the asset beyond proved reserves." Acceleration in North America is "likely rewarded over time."

 Wells Fargo said the sale was "very impressive," considering the turmoil in the region and will prove a positive "as most if not all on the Street doubted Apache's ability to monetize Egypt...Apache still needs to execute in coming quarters and will need to deliver a solid outlook during its upcoming analyst day," said Wells Fargo's David Tameron. "But this asset should help allow investors to turn attention toward Apache's execution of their onshore U.S. assets over the coming quarters."