Houston oil and gas explorer Apache Corp. (APA) , which has been pressured by activist investor Jana Partners LLC to shed its international assets, said Monday, Dec. 15, it agreed to sell its interest in liquefied natural gas projects and their related oil and gas reserves in Australia and Canada to Woodside Petroleum Ltd. for $2.75 billion.
The company will also be reimbursed for net expenditures on the projects between June 30 and closing, which is expected to bring in another $1 billion.
Apache will sell its equity ownership in its Australian unit, Apache Julimar Pty Ltd., which owns 13% of the Wheatstone project and 65% of the WA-49-L block, including the Julimar/Brunello offshore gas fields and the Balnaves oil development. It's also selling its 50% stake in the Kitimat project and related exploration and production acreage in the Horn River and Liard natural gas basins in British Columbia, Canada.
Apache thinks net proceeds will reach $3.7 billion. The sale will trigger an estimated $650 million cash tax liability, $600 million of which is associated with the income tax due on Apache's overall foreign loss account balance. Apache expects that it will have the flexibility to repatriate cash generated from foreign operations and future international strategic transactions with minimal U.S. cash tax impact.
"Today's announcement marks the successful completion of one of our primary strategic goals of exiting the Wheatstone and Kitimat LNG projects," Apache chairman, CEO and president G. Steven Farris said in a statement. "I am proud of Apache's legacy in advancing the Wheatstone and Kitimat LNG projects and I am confident that Woodside's participation will have a positive impact in seeing these world-class LNG facilities through to first production."