Apache Corporation (NYSE:APA) has decided to offload its Western Australian oil and gas properties to a syndicate of private equity funds run by Brookfield Asset Management and Macquarie Capital for $US2.7 billion. With the formal declaration of its sale, the US Energy Group is fully departing from the Australian oil exploration and production market. The transaction is said to be completed by the middle of the year.
The consortium that acquired assets is a combined partnership between Sydney-based Macquarie Capital and Toronto-originated Brookfield, each of which will own a 50% share in the new venture.
Elaborating the details of the deal, Apache’s Chief Executive, John Christman said that the latest announcement marks a significant direction towards the company’s tactical portfolio repositioning. Corresponding to the deal, nearly 70% of Apache’s production needs will be supplemented by North America onshore.
However, the deal is subject to the clearance of the government and regulatory authorities and routine post-closing adjustments.
The divestment strategy is part of Apache’s endeavor to concentrate on the U.S. and Canada. Currently, it is a booming time for the Oil and Gas production as more upgraded technology facilitates drillers to dig out previously inaccessible reserves.
At the same time, Apache Corporation (NYSE:APA) will continue possessing 49% ownership interest in chemical and fertilizer producer Yara Pilbara Holdings. Earlier, Apache announced the sales of its Wheatstone LNG Project and natural gas assets to Woodside Petroleum for a price of $2.8 billion.
In recent times, the properties of Apache and its subsidiaries averaged production of nearly 49,000 barrels of oil equivalent per day in March.
Apache’s asset deal is the most recent in a series of huge deals that is rebuilding Australia’s energy sector.
Market insiders observe that in the prevalent market conditions, selling production assets is a brave exercise, and private equity is a logical buyer. Considering the plunge in oil prices, obtaining $5 billion for the two sales of Apache’s Australian assets is an outstanding price, opined the market experts.
The company has a significant operation base in the U.S., the UK, Egypt, and Canada.