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Industry Brief

Apache Corp. has completed its previously announced acquisition of nine Permian Basin oil and gas fields with current net production of 3,500 boe/d from Marathon Oil Corp. (see Daily GPI, May 1). Apache paid $181.1 million, reflecting closing adjustments based on the Jan. 1 effective date of the transaction. Apache acquired Marathon's company-operated assets located in Lea County, NM, and Reagan, Howard and Sterling counties in Texas, as well as Marathon's interests in the Chenot/Putnam area in Pecos County, TX. The properties have a current net production of 10 MMcf/d of natural gas, 1,332 b/d oil and 524 b/d of natural gas liquids. "Of the acquired properties, approximately 75% of the proved reserves and 61% of the current production directly offset the Apache-operated Northeast Drinkard Unit in Lea County, NM," said John Crum, president for North America. When Apache started downsizing well-spacing at the Northeast Drinkard Unit from 16 wells per square-mile section to 32 wells per section, field production grew from 700 b/d to 2,000 b/d. The newly acquired properties have 16 wells per section. Prior to the acquisition, Apache's net production in the Permian Basin was 34,500 b/d of oil and 86 MMcf/d of gas.

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