Apache Corp to Buy Mariner Energy for $2.7 Billion (APA)

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Independent energy company Apache Corporation ( APA ) on Thursday announced it would buy Mariner Energy for $2.7 billion in a cash/stock deal.

Apache said the deal would further expand its deepwater projects in the Gulf of Mexico. Earlier this week, Apache announced it would buy Deven Energy's ( DVN ) assets in the Gulf.

G. Steven Farris, Apache's CEO, said that "It's the right time [to expand into the Gulf] because recent advances in seismic technology and continued enhancements in facilities design have reduced the risks in one of the world's most prolific oil exploration basins."

The deal calls for Apache to pay around $26.22 per share for Mariner Energy, which represents a 45% premium over the company's Wednesday closing price. Apache will also assume $1.2 billion of Mariner's debt.

Apache shares fell $3.76, or -3.5%, in premarket trading Thursday.

The Bottom Line
We had removed shares of APA from our recommended list back on Aug.4, when the stock was trading at $106.72. Shares of APA have a dividend yield of .56%, based on last night's closing stock price of $108.06. The stock has technical support in the $98-$100 price area. If the shares can firm up, we see overhead resistance around the $114 price level. We would remain on the sidelines for now.

Apache Corporation ( APA ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Created by Dividend.com

This article appears in: Investing , Stocks

Referenced Stocks: APA , DVN



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