By Dow Jones Business News,
February 12, 2014, 07:17:00 PM EDT
By Taos Turner
BUENOS AIRES---Argentina's leading oil company, YPF SA, agreed on Wednesday to pay $852 million for all of Apache
Corp's. oil and gas operations in the South American country, as part of an effort by the state-owned company to
increase gas output.
Apache has been selling assets around the world to improve its balance sheet after years of aggressive acquisitions.
Last year, the Houston-based company said it planned to raise around $4 billion through asset sales.
In a statement, Apache said it has brought in more than $7 billion from assets sales over the past two quarters and is
using that money for investment, debt reduction and stock buybacks, among other things.
Apache said its estimated reserves in Argentina total around 540 billion cubic feet of natural gas equivalent. Last
year, the company produced an average of 256 million cubic feet of gas a day.
The acquisition will allow YPF to boost its own oil and gas reserves by around 14%, while raising gas output by about
15%, YPF said.
"This is an excellent opportunity to add important operations in both conventional gas and unconventional resources to
YPF's assets," said Miguel Galuccio, YPF's chief executive. The transaction comes as the Argentine government entrusted
Mr. Galuccio with increasing energy output, and thus reduce the country's need for imported fuel.
Mr. Galuccio said YPF would immediately increase the number of drilling teams operating at Apache's current fields to
raise gas production.
As part of the deal, YPF agreed to take 1,240 kilometers of exploration and production rights and sell them to
Argentine energy company Pluspetrol SA for $217 million. Mr. Galuccio said that Pluspetrol was the only company in
Argentina apart from YPF to reverse declining oil production last year.
Apache has around 350 employees working in the provinces of Neuquen, Rio Negro and Tierra del Fuego in southern
YPF is currently involved in talks with Argentina's government and the Spanish energy company Repsol to compensate
Repsol for the expropriation of its majority stake in YPF in 2012. The parties reached a preliminary deal in November in
which Argentina agreed to pay Repsol $5 billion in government bonds.
--Tess Stynes contributed to this article.
Write to Taos Turner at email@example.com
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