NEW YORK (TheDeal) -- Apache (APA) will exit Australia's energy sector later this year after agreeing to sell its remaining Australian gas and oil assets to a private equity consortium led by Macquarie Capital (MQBKY) and Brookfield Asset Management (BAM) for $2.1 billion.
The investors said on Thursday, April 9, they will buy Apache Energy and its subsidiaries, taking control of assets that produced about 49,000 barrels of oil equivalent per day in March.
The sale comes a week after Houston-based Apache closed the sale of a portfolio of liquefied natural gas assets in Australia and Canada to Woodside Petroleum (WOPEY) for $2.75 billion. Apache's only remaining Australian asset will be its 49% stake in fertilizer producer Yara Pilbara Holdings.
"Over the last five years, we have transitioned Apache's primary growth engine to North America onshore through the announcement or completion of approximately $17 billion of asset purchases and $17 billion of asset sales," Apache CEO and President John J. Christmann said in a statement. "Following the sale of our Australian assets, approximately 70% of Apache's production will come from North America onshore."
Sydney-based Macquarie and Toronto-based Brookfield will jointly manage and have equal ownership of the operations, which include Apache's operated interests in West Australia's Reindeer, John Brookes and Halyard-Spar gas fields as well as its stake in BHP Billiton's (BHP) Macedon field. The investors will also take over Apache's West Australian oil fields, gas processing operations and undeveloped acreage.
"This portfolio provides strong underlying cash flows via its contracted domestic gas portfolio," said Brookfield's Australian head of private equity, Len Chersky. The buyers said they plan to expand the operations both organically and through acquisitions.
They have already lined up a new client. Alcoa's (AA) Australian aluminum joint venture has agreed to a 12-year deal, beginning in 2020, to buy gas. Alcoa owns 60% of the West Australian alumina refining operation, with Alumina (AWCMY) owning the rest. The partners will make a prepayment of $500 million to secure the contract, including a first installment of $300 million once the asset sale to Macquarie and Brookfield closes.
Apache's asset sale is the latest in a series of big deals that is reshaping Australia's energy sector. It comes a day after Royal Dutch Shell (RDS.A) agreed to buy BG (BRGYY) for $70 billion, a deal that would give Shell a significant stake in new gas developments in Queensland. In late March, Chevron (CVX) pulled out of Australia when it sold its 50% stake in Australia's biggest oil refiner Caltex Australia (CTXAY) in an off-market share sale worth $3.6 billion.
Shares in Apache closed Wednesday at $65.25, down $0.19, or less than 1%, on their Tuesday close. The stock was up 1.6% in Thursday morning trading to $66.30.