Occidental Petroleum (OXY) are about to announce they are taking over Apache Corporation in a deal thought to be worth at least $25 Billion. Apache Corporation are expected to announce the takeover to their staff shortly.
Occidental Petroleum (OXY) is a US-based oil & gas company producing over 650,000 barrels of oil equivalent per day (boe/d). The company is unique; it has a dominant domestic position in the Permian Basin and holds other large producing assets in the Middle East and Latin America.
In 2015, 67% of the company’s revenue came from oil & gas production and 33% came from its chemicals and midstream and marketing businesses. The company owns a large network of midstream gathering and transportation pipelines in the heart of the Permian Basin through its subsidiary Centurion Pipeline.
Apache is a perfect fit for OXY as they look to focus on the North American market. The companies have a similar production profile in terms of liquids production.
Apache Corporation, incorporated on December 6, 1954, is an independent energy company. Both domestically in the US and internationally, the Company explores for, develops and produces natural gas, crude oil and natural gas liquids. The Company has exploration and production interests in four countries: the United States, Canada, Egypt, and the United Kingdom (North Sea). Apache also pursues exploration interests in other countries.
North America
Apache’s North American assets are primarily located in the Permian Basin, the Anadarko basin in western Oklahoma and the Texas Panhandle, Gulf Coast and the offshore Gulf of Mexico areas of the United States, and in Western Canada. The Company has access to liquid hydrocarbons across its approximately 10.7 million gross acres onshore in the United States and Canada. Approximately 55% of this acreage is undeveloped. Additionally, 58% of Apache’s production and over 72% of its estimated proved reserves are in the United States and Canada onshore regions. Its Permian region controls over 3.3 million gross acres with exposure to various plays across the Permian Basin. Apache has approximately 14,300 producing wells in over 160 fields, including over 60 waterfloods and over seven carbon dioxide (CO2) floods. Apache’s MidContinent/Gulf Coast region holds approximately 2.8 million gross acres and includes over 3,400 producing wells primarily in western Oklahoma, the Texas Panhandle, and south Texas.
Apache drilled or participated in drilling approximately 130 wells. Apache is active in the Woodford-SCOOP play in Central Oklahoma targeting the Woodford formation, where the Company drilled or participated in drilling over 30 wells. The Company holds over 3.6 million gross acres across the provinces of British Columbia, Alberta, and Saskatchewan. Its Canadian region provides approximately 13% of Apache’s production and holds approximately 280 million barrels of oil equivalent (MMboe) of estimated proved reserves. Apache primarily markets its North American crude oil to integrated oil companies, marketing and transportation companies, and refiners.
International
Apache’s international assets are located in Egypt and offshore of the United Kingdom in the North Sea. Its international assets contribute approximately 40% of its production. Approximately 28% of its estimated proved reserves are located outside North America. The Company holds over 6.7 million gross acres in over 20 separate concessions. Approximately 73% of its acreage in Egypt is undeveloped. The Company drilled approximately 100 development and over 20 exploration wells. Apache has made two discoveries in the area, the K and Corona discoveries. The K discovery encompasses multiple commercial zones across over three distinct fault blocks, including one fault block. The Corona discovery logs approximately 225 feet vertical depth net pay in reservoir-quality sandstone. Apache has working interests in K and Corona.
November 2015 – Anadarko Bids for Apache
Apache has been approached by an acquirer before; in November 2015, it was disclosed that Anadarko Petroleum (APC) was in preliminary talks to acquire Apache. As APA shares rose 35% to $50 per share, the offer was rejected and Anadarko withdrew its bid, claiming APA was now fairly valued. The rise in share price did not come from the takeover rumour. In reality, the results from Apache’s tier one offshore play in the North Sea were what pushed the share price.
A spokesperson for Apache would only comment to say: “Apache does not comment on M&A market rumors”. Given the opportunity to deny our reports the spokesperson advised us that we could use the above comment.
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