NEW YORK ( TheStreet) -- The volatility in commodity-driven industries like oil and gas can disrupt the sleep of even the most seasoned investor. Sleep can be even tougher for investors in Apache ( APA), which has had significant exposure to politically volatile Eqypt.
Like peers Chesapeake Energy ( CHK) and Anadarko Petroleum ( APC), Apache has been a respected name in the energy space because of a willingness to grow by acquiring assets at good prices.
Apache has generated significant value with some of its deals, but lately the Street has punished the company. What analysts once described as "strategically branching out," they now describe as management's "scattered ambitions."
It's true that Apache's production growth profile diminished. But this was also the case for Anadarko, Chevron (CVX) and Exxon Mobil (XOM). The Street wasn't honest in providing the real reason for its bearish thesis on Apache, which is the company's reliance on Egypt.
Egypt's political upheaval created more risk than the Street was willing to tolerate, which is why Apache stock plummeted earlier this year.
Egypt, however, has been a consistent growth contributor, generating more than 30% of the company's cash flow and 20% of its total production.
Even so, the risk as perceived by the Street was not lost on Apache management.
In a decision that I believe was too hasty, the company sold one-third of its interest in Egypt for $3.1 billion in cash to Sinopec (SNP). The cash generated from this deal is impressive, but I don't believe it was worth management giving in to Wall Street pressure.