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Apache Sells Deep Basin Package for $375M

Houston's Apache Corp. is casting off more assets, the latest a $374 million deal for a package of primarily dry natural gas properties in the Deep Basin of Canada.

The properties, to be sold to an undisclosed buyer, comprise 328,400 net (622,600 gross) acres in the Ojay, Noel and Wapiti areas. In the Wapiti, Apache would retain 100% of its interests in horizons below the Cretaceous, rights to Montney Formation liquids and other deeper horizons.

In 2013, the fields marketed produced on average 101 MMcf/d of natural gas and 1,500 b/d of liquids.

"This transaction is part of Apache's portfolio rebalancing, which was undertaken last year to enable Apache to focus on growing liquids production from a deep inventory of crude oil- and liquids-rich opportunities in North America," CEO G. Steven Farris said (see Daily GPI, May 10, 2013).

"The sale of these natural gas assets -- and other Canadian gas-producing properties sold last year -- will permit Apache's Canada Region to concentrate on liquids-rich opportunities that can provide more attractive rates of return and more predictable production growth."

Since Apache began to rebalance its assets last year, it has sold close to $8 billion in properties, including all of its Gulf of Mexico Shelf holdings, as well as those in Argentina. It also sold a one-third interest in its Egypt operations.

The Deep Basin sale is set to close by April 30 with an effective date of Jan. 1, 2014. Proceeds would be used as part of a $2 billion share repurchase program authorized last year by the board of directors.

In February, Farris said Apache would sell its half ownership in the proposed liquefied natural gas (LNG) export project, Kitimat LNG, that is to be sited on British Columbia's West Coast (see Daily GPI, Feb. 27; Dec. 26, 2012).

"In 2014, we need to right-size it for us," Farris said of Kitimat. "This is not a project Apache can afford..."

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