U.S. energy firm
) declared the closure of its asset divestment in Argentina.
Apache sold the properties to Argentina-based integrated energy
firm YPF SA (YPF), for a consideration of roughly $852.0 million.
Of the total, $800.0 million was in cash while YPF assumed $52.0
million debt of Apache.
APACHE CORP (APA): Free Stock Analysis Report
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In Argentina, Apache had reserves of roughly 540.0 billion cubic
feet of natural gas equivalent as of Dec 30, 2013. Moreover, the
company generated 256.0 million cubic feet of gas equivalent per
day in the nation in 2013.
The asset sale represents Apache's strong focus on North American
assets. The exploration and production (E&P) company expects
to generate considerable output from upstream operations in North
American acreage and hence is expected to earn significant cash
flow for its shareholders. Apache added that the recent asset
sale also completes the company's divestment program started in
Houston, Texas-based Apache is one of the world's leading
independent energy companies engaged in the exploration,
development and production of natural gas, crude oil and natural
We like Apache's geographically-diversified reserve base, its
balanced exposure to natural gas and crude oil, and multiyear
trends in reserve replacement and production growth. This allows
management to allocate resources to high-return projects.
However, the company'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.
Apache currently retains a Zacks Rank #3 (Hold), implying that it
is expected to perform in line with the broader U.S. equity
market over the next one to three months.
Meanwhile, one can look at better-ranked players in the oil and
gas E&P industry like
Range Resources Corporation
Warren Resources Inc.
Clayton Williams Energy Inc
). Range Resources and Warren Resources sport a Zacks Rank #1
(Strong Buy), while Clayton Williams Energy carries a Zacks Rank