Linus Unah – Fourth Estate Contributor
Houston, TX, United States (4E) – North American oil and gas exploration and production company Apache Corp has announced that it would leave Canada upon the completion of three recent transactions.
Apache said in a news release that it has agreed to sell its Canadian subsidiary — Apache Canada Ltd. – to Paramount Resources Ltd.
The deal includes properties located principally in the provinces of Alberta and British Columbia.
In a separate transaction signed in June, Apache agreed to sell its Provost assets in Alberta to an undisclosed privately-owned company.
Also in June, Apache sold its assets at Midale and House Mountain, located in Saskatchewan and Alberta, to Calgary-based Cardinal Energy Ltd.
Production from Apache’s Canadian operations averaged about 300 million cubic feet of gas equivalent per day for the second-quarter 2017, according to the company.
The company estimates proceeds from the three transactions are about $713 million.
The Houston-based energy company said it would use the proceeds from the deals to fund a portion of its 2017-2018 capital program, to reduce debt, or to improve overall liquidity.
“Today’s announcement is consistent with Apache’s objective of streamlining our portfolio and focusing on assets in the United States, United Kingdom North Sea and Egypt. This strategic decision will enhance the company’s resource allocation to its primary growth areas, particularly within the Permian Basin,” said John J. Christmann IV, Apache’s chief executive officer and president.
Upon completion of its exit from Canada, Apache said it would realize a “significant” reduction in asset retirement obligations and annual overhead costs.
Apache further noted that it budgeted $125 million of capital expenditures to Canada for 2017 and 2018.
The Cardinal transaction closed in late June, and the remaining two are expected to close by the end of August this year.
“With our decision to exit Canada, Apache’s resulting global portfolio is more streamlined and our resources more focused. Our strong positions and enhanced focus in our core areas will drive improvements to overall returns on capital invested going forward,” Christmann added.
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