U.S. energy firm
) has announced the completion of sale of its interests in
deepwater Gulf of Mexico projects to an oil and gas subsidiary of
the mineral explorer,
Freeport-McMoRan Copper & Gold Inc.
). The sale was valued at $1.4 billion. The company had previously
mentioned that the transaction was effective from May 1.
Apache has sold its non-operated interest in the Lucius and
Heidelberg development projects, in addition to 11 deepwater
exploration blocks. Freeport-McMoRan has acquired 51.2% of Apache's
11.7% interest in the Lucius oil development project and full 12.5%
working interest in the Heidelberg development project.
Houston, TX-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 gas liquids.
Apache's large geographically-diversified reserve base, balanced
exposure to natural gas and crude oil, and its multiyear trends in
reserve replacement and production growth are positives for the
company. Additionally, a strong balance sheet helps the company to
capitalize on investment opportunities and strategic acquisitions,
thereby further improving growth.
However, there is limited upside potential for the stock, given
Apache's sensitivity to gas/oil price volatility, its drilling
results, geo-political risks and project timing delays.
In keeping with these views, 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 one to three
Meanwhile, one can consider better-ranked players from the oil and
gas exploration and production industry like
). Both these stocks sport a Zacks Rank #1 (Strong Buy).
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