Aug. 29, 2013
/PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) and Sinopec International Petroleum Exploration and Production Corporation today announced they have launched a global strategic partnership to pursue joint upstream oil and gas projects. As the first step in this partnership, Apache will receive
in cash, subject to customary closing adjustments, in exchange for Sinopec gaining a 33 percent minority participation in Apache's
oil and gas business. Apache will continue to operate its
upstream oil and gas business.
The Apache-Sinopec partnership
G. Steven Farris
, chairman and chief executive officer of Apache, said: "We are pleased to launch a global partnership with Sinopec, and to welcome them into our business in
. Their technical expertise complements our 20 years of experience operating in
and creates an alliance that will continue to explore and deliver the tremendous hydrocarbon resources in the Western Desert. Sinopec is an ideal partner for us, and we look forward to the growth and value generation ahead for both companies through the expansion of our collaboration to other projects."
Given the sustained growth of its operations in
, Apache has conducted an extended evaluation of a strategic partnership to ensure its ability to continue to deliver growth opportunities there while enhancing Apache's portfolio balance. The partnership announced today results from several months of joint efforts between Apache and Sinopec.
partnership is subject to customary governmental approvals and is expected to close during the fourth quarter, with an effective date of
January 1, 2013
Portfolio rebalancing progress
Apache continues to rebalance its portfolio toward assets with predictable growth rates and attractive rates of return. Pro forma for the partnership with Sinopec and the sale of
Gulf of Mexico
shelf assets, Apache's second-quarter 2013 production from North American onshore assets and from
would have comprised approximately 55 percent and 15 percent, respectively. In 2010, onshore
contributed 31 percent of Apache's overall production,
represented 25 percent and the
Gulf of Mexico
shelf represented 17 percent.
"Our successful exploration and development programs in
have been an important contributor to both growth and cash flow for many years. With today's partnership, we are ensuring they can continue this contribution in the future," Farris said. "At the same time, we are taking meaningful steps to rebalance our portfolio to better deliver the full potential of our deep
onshore resource inventory."
As part of its portfolio rebalancing process, Apache has set out several capital allocation priorities with respect to the use of proceeds from strategic steps. As previously announced, the company intends to pay down debt in order to maintain its current credit ratings and buy back shares under a 30-million share repurchase authorization, as well as fund future capital expenditures including international projects.