U.S. energy firm
) reported the closure of its previously announced divestment
plan of Gulf of Mexico (GoM) Shelf assets. Apache sold the
properties to Fieldwood Energy LLC, a subsidiary of a private
equity firm Riverstone Holdings, for a cash consideration of
roughly $3.75 billion. The properties span over 1.9 million
acres, with proved reserves of 133.0 million barrels of liquids
and 636.0 billion cubic feet of natural gas.
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Moreover, Fieldwood will take care of all the future obligations
related to the asset retirement, which is estimated to be roughly
$1.5 billion. However, Apache will hold 50% stakes in all the
Apache also declared the completion of the sale of oil and gas
plays in western Alberta, Canada. Apache divested the assets to
privately held Canadian natural gas producer, Ember Resources,
for a consideration of $214 million.
We view the asset disposal as Apache's attempt to focus on core
operations. Considering Apache's recent sale of oil and gas
properties in Gulf of Mexico, Canada and Egypt, the company's
year-to-date divestment proceeds now stand at around $7.0
billion. Apache plans to use the realizations to increase its
financial flexibility, trim down debt, to buy back shares and
generate funds for investment in projects with high growth
Houston, Texas-based Apache, which is engaged in the exploration,
development and production of gas and liquids, currently holds 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
Meanwhile, one can look at better performing oil and gas
exploration and production firms like
Anadarko Petroleum Corp.
Matador Resources Co.
Stone Energy Corp.
) that offer value. All the stocks sport a Zacks Rank #1 (Strong