Apache Corp., which has been pretty quiet over the last year, on Thursday stepped into the spotlight, announcing it will spend $1 billion to acquire controlling interests in 28 oil and natural gas fields in the Permian Basin. The assets, purchased as part of a joint venture agreement with Anadarko Petroleum Corp., are expected to produce 9,000 b/d of oil and 18 MMcf/d of natural gas net to Apache this year.

The fields now have about 3,950 wells in operation on 143,000 net acres, and nearly 90% of the properties are operated by Anadarko. More than 70% of the production is oil, primarily produced through water-flood enhanced oil recovery operations.

Apache expects to book 70 MMboe of net reserves in the deal, including 57 million bbl of oil and 78 Bcf of gas. The properties complement Apache’s current Permian Basin operations, which have net production of 29,000 b/d of oil and 79 MMcf/d of gas. Most of the production is concentrated in eight operated fields, which consist of 81% proved reserves and 72% of the expected 2007 net production. Apache is paying about $14.27/boe for the proved reserves and $13.65/boe for the proved and probable reserves.

“Anadarko’s Permian Basin divestiture is an excellent opportunity for Apache to operate high-working-interest fields that have a long reserve life and are a close fit with Apache’s existing Permian production,” said Apache CEO G. Steven Farris. “The transaction is additive to per-share results, but — as with any transaction — the ultimate benefit will best be measured after we have operated and added value to these properties.”

The acquisition, he said, “is another step in evolving Apache’s portfolio to facilitate continued growth. We have good geographic balance, designed for consistent growth, with no region contributing more than 25% of reserves or production.”

The transaction is expected to close by March 31, its effective date. Apache intends to fund the acquisition with debt. When the purchase is completed, the company said its debt will “remain below” 30% of total capitalization.

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