U.S. energy firm
) recently announced that it will be offering $2.0 billion of
notes. The offering is divided into two parts - $1.2 billion
2.625% notes due 2023 and $800 million 4.25% senior notes due
APACHE CORP (APA): Free Stock Analysis Report
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DEVON ENERGY (DVN): Free Stock Analysis
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The public offering will fetch approximately $1.97 billion after
deducting underwriting discounts and offering expenses. The net
proceeds from this offering will be utilized for the repayment of
outstanding commercial paper borrowings and other corporate
Apache expects the proceedings to be complete on December 3,
2012, subject to the fulfillment of customary closing conditions.
Apache Corporation ended the third quarter of 2012 with long-term
borrowings of $10,670 million. The debt-to-capital ratio was
25.8% at quarter end. With the issuance of $2.0 billion of debt,
the debt-to-capital ratio will increase to 29.2%.
Founded in 1954, 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 gas liquids.
Apache is noted for growing through acquisitions and the
development of existing reserves. Its long-term production growth
visibility improved significantly following the recent
) asset acquisition; the purchase of a portion of
Devon Energy Corporation
) Gulf of Mexico assets and the deal to acquire Mariner Energy.
These new acreage positions further complement the company's
diversified asset base.
However, the company's long-term production and reserve growth
primarily depend 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.
Apache holds a Zacks #3 Rank, equivalent to a Hold rating for a
period of one to three months. Longer term, we maintain our
Neutral recommendation on the stock.