U.S. energy firm
) recently claimed 14 leases in the central region of the U.S.
Gulf of Mexico (GoM) in an auction under the U.S. Bureau of Ocean
Energy Management. The addition will fortify its already
significant foothold in the region.
Apache was apparently the highest bidder in nine shallow water
blocks and five deepwater blocks in the lease sale. The auction
took place in New Orleans and received 407 bids from 52 companies
on 320 tracts.
Among the nine shallow water blocks, Apache formed joint ventures
on seven in the Main Pass area as an operator and held 75%
working interest in the same. Apache holds 100% working interest
in the remaining two shelf leases.
In each of the five deepwater blocks - which were acquired in
DeSoto Canyon, Green Canyon and Mississippi Canyon lease areas -
Apache holds 50% working interest.
The company spent $2.2 million for the shelf and $24.6 million
for deepwater blocks. With this addition, Apache will get hold of
over 500 leases in the GoM region in total.
Apache currently carries a Zacks Rank #3 (Hold), implying that it
is expected to perform in line with the broader U.S. equity
market over the next 1 to 3 months.
We think Apache is in a better position to weather the current
uncertain environment than many of its peers in the exploration
and production space, given its solid production growth outlook,
strong financial health and diversified asset base.
However, Apache's long-term production and reserve growth
primarily depends on its acquire-and-exploit model. Apache may
find it difficult to complete accretive transactions in the
future, which could negatively impact its growth rate.
Meanwhile, there are other energy explorers that offer value and
are worth buying now. These include
Range Resources Corp.
EPL Oil & Gas Inc.
Plains Exploration & Production Company
). All these firms sport a Zacks Rank #1 (Strong Buy).
APACHE CORP (APA): Free Stock Analysis Report
EPL OIL&GAS INC (EPL): Free Stock Analysis
PLAINS EXPL&PRD (PXP): Free Stock Analysis
RANGE RESOURCES (RRC): Free Stock Analysis
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