Apache Will Pay $2.85B For Cordillera Energy Partners
Apache (NYSE: APA), the largest U.S. independent oil and natural gas producer, said it will pay $2.85 billion for privately held Cordillera Energy Partners III LLC, a transaction that will bolster Apache's presence in the Anadarko Basin of Texas and Oklahoma.
Cordillera has substantial operations that include approximately 254,000 net acres in the prolific Granite Wash, Tonkawa, Cleveland and Marmaton plays in western Oklahoma and the Texas Panhandle, according to a statement.
Texas-based Apache said Cordillera has 14,000 potential drilling locations in the Anadarko Basin and proved reserves of 71.5 million barrels of oil equivalent and current net production of 18,000 barrels of oil equivalent per day.
Apache has been active in the Anadarko Basin for over 50 years. The acquisition is expected to be accretive to Apache's earnings and cash flow beginning in 2012, according to the statement.
Cordillera and its investors will receive $600 million in Apache shares and the rest of the deal price will be paid in cash funded by debt. The effective date of the transaction is Sept. 1, 2011, with closing anticipated in the second quarter, Apache said in the statement.
Goldman Sachs (NYSE: GS) and Tudor, Pickering, Holt & Co. advised Apache on the deal.
Apache said its central region production was about 40,000 net barrels of oil equivalent per day at year-end 2011 and that the Cordillera acquisition could triple that number this year. The development drilling program is self-funding beginning in 2013 and Cordillera will continue buying acreage in the region on Apache's behalf until the deal is completed.
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