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Apache Pays $300 M for Properties in Texas

Apache Pays $300 M for Properties in Texas

Living up to a commitment to make 2000 the "year of the drill bit," Apache Corp. said last week it will acquire long-lived producing properties in the Permian Basin and South Texas for more than $300 million in a definitive agreement with Collins & Ware Inc., based in Midland, TX.

The assets have proved reserves of nearly 502 Bcfe, of which one-third is liquid hydrocarbons, and probable reserves are estimated at 151 Bcfe. Current net production is 40 MMcf/d of natural gas and 4,000 B/d of liquid hydrocarbons. The properties have nearly 214,000 net acres, and 153,000 of them are undeveloped. The assets also include nearly 1,928 square miles of 3-D seismic data.

"This negotiated purchase complements Apache's core areas and is expected to add immediately to per-share earnings and cash flow," said Roger Plank, executive vice president of the Houston company. Plank said that with this transaction, Apache has purchased or has under contract total reserves of 126 million boe (70% gas), which represent an estimated full-year 2000 reserve replacement of 136% at an average cost of less than $4 per barrel of oil equivalent.

"Rising production and strong product prices enable the cost of these acquisitions, plus planned capital expenditures, to fall within Apache's currently projected fee cash flow.

Lisa Stewart, Apache's executive vice president for business development and E&P, called the properties "excellent," and said that more than 90% of the production is operated. "These assets are tailor made for the kind of exploitation activity at which our people excel," she said.

Carolyn Davis, Houston

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