July 18, 2013
/PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) announced today it has agreed to sell its Gulf of Mexico Shelf operations and properties to Fieldwood Energy LLC (Fieldwood), an affiliate of Riverstone Holdings, for cash proceeds of
. In addition, Fieldwood will assume all asset retirement obligations for these properties, which, as of
June 30, 2013
, Apache estimated at a discounted value of approximately
. Apache will retain 50 percent of its ownership interest in all exploration blocks and in horizons below production in developed blocks, where high-potential deep hydrocarbon plays are being tested.
"This transaction is an important step toward rebalancing our portfolio," said
G. Steven Farris
, chairman and chief executive officer. "At the end of this process, we expect Apache to have the right mix of assets to generate strong returns, drive more predictable production growth, and create shareholder value.
"Apache has had a great run on the Gulf of Mexico Shelf over the last 30 years, and the Shelf region and staff have played a vital role in making Apache the company it is today. As our company has evolved, however, so have our investment priorities," Farris said. "Since 2010 we have increased our focus in
on capturing and developing a deep inventory of onshore assets, where we have been generating exceptional production growth at attractive rates of return. The shallower horizons in the Shelf have matured to the point that dependable production growth is more difficult to achieve than from our onshore liquids plays. We remain excited about the potential associated with the emerging plays under existing salt domes, which is why we retained 50 percent of the deep rights on 406 blocks held by production and 50 percent of all rights in 146 primary term blocks."
Apache previously announced plans to divest
in assets by year-end 2013 as part of its ongoing portfolio assessment and to focus on more recently acquired properties. The company intends to use proceeds to reduce debt and enhance financial flexibility and to repurchase Apache common shares under a 30-million-share repurchase program authorized by the Board of Directors earlier this year.
Transaction Terms and Closing Conditions
The effective date of the transaction is
July 1, 2013
. The sale is subject to customary regulatory approvals and closing conditions and is projected to close
September 30, 2013
. Apache will operate the properties during a transitional period.
Fieldwood has agreed to offer employment to substantially all of Apache's GOM Shelf employees.