US energy company Apache is to sell off its Gulf of Mexico operations for £2.5billion.
The company, which operates in the North Sea Forties field, has agreed a deal to sell off its operations and assets in the gulf – where it had been one of the largest oil producers – to equity firm Riverstone.
The move brings to an end Apache’s 30-year run producing in the region, where it had currently been generating around 100,000boed.
Under the terms of the deal, Apache will keep 50% of its ownership interest in the exploration blocks, and in horizons below production in developed blocks.
“Apache has had a great run on the Gulf of Mexico shelf over the last 30 years, and the shelf region and staff have played a vital role in making Apache the company it is today,” said Apache chief executive G Steven Farris.
“As our company has evolved, however, so have our investment priorities. Since 2010 we have increased our focus in North America on capturing and developing a deep inventory of onshore assets, where we have been generating exceptional production growth at attractive rates of return.
“The shallower horizons in the shelf have matured to the point that dependable production growth is more difficult to achieve than from our onshore liquids plays.
“We remain excited about the potential associated with the emerging plays under existing salt domes, which is why we retained 50 percent of the deep rights on 406 blocks held by production and 50 percent of all rights in 146 primary term blocks.”
The deal will also see Riverside assume the asset retirement obligations for the fields, which the company estimated at around $1.5billion in value.
The move comes after Apache ran foul of shareholders, who voted down a proposal to raise pay for the company’s chief executives following recent stock price falls.
Earlier this year it revised growth targets from 6-9% to 3-5%.
“This transaction is an important step toward rebalancing our portfolio,” acknowledged Farris
“At the end of this process, we expect Apache to have the right mix of assets to generate strong returns, drive more predictable production growth, and create shareholder value.”
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