APA Corp. said it would sell assets Central Basin Platform, Texas and New Mexico Shelf and Northwest Shelf assets that average 21,000 boe/d, 57% oil, to an undisclosed buyer. (Source: Shutterstock.com)
APA Corp. has entered into an agreement to sell non-core producing Permian Basin assets to an undisclosed buyer for $950 million, before customary closing adjustments.
APA said on Sept. 10 that it is selling Central Basin Platform, Texas and New Mexico Shelf and Northwest Shelf assets with an estimated net production averaging 21,000 boe/d, of which approximately 57% is oil.
APA is engaged in a divestiture campaign after buying Callon Petroleum for $4.5 billion on April 1. As part of the deal, APA took out term loans totaling about $2 billion. The company owes an additional $4.8 billion in debt, according to Ben C. Rodgers, the company’s senior vice president of finance and treasurer.
“We've already made progress on paying those off with over $1 billion of asset sales this year,” Ben C. Rodgers, the company’s senior vice president of finance and treasurer, said in August at a Denver conference. He added that there was “more to come.”
APA said that, pro-forma for the deal, fourth-quarter U.S. production guidance is 307,000 boe/d, which is 34% above the company’s fourth-quarter 2023 production.
John J. Christmann IV, APA’s CEO, said that through multiple transactions completed this year, “we have high graded and focused our U.S. asset base.”
“Our remaining Permian position has scale and balance in the unconventional Midland and Delaware Basins,” Christmann said. “The net impact of our acquisition of Callon Petroleum and the follow-on asset sales is that APA has increased its onshore U.S. production by approximately 66,000 boe/d in 2024 and continued to add economic unconventional inventory, with no material change in net debt levels compared to year-end 2023.”
Christmann continued, “The company’s more focused unconventional Permian asset base and advantageous transport and marketing positions compares favorably with like-sized, pure-play peers in the region, while APA’s conventional global portfolio also provides geologic, geographic and price diversification as well as differential exploration upside.”
RELATED
APA Executive: After Recent Divestitures, ‘More to Come’
Exxon Mobil Corp. is exploring a sale of select conventional assets in the Permian Basin.
XTO is reportedly marketing packages of assets in the Permian’s Central Basin Platform that could fetch approximately $1 billion in a sale, depending on oil prices. The Central Basin platform is a legacy part of the Permian Basin focused on conventional production.
Exxon Mobil’s shale subsidiary XTO Energy, “is exploring market interest for select conventional assets in West Texas and Southeast New Mexico,” the Texas-based supermajor said in a statement.
RELATED
Exxon Explores Sale of Conventional Permian Basin Assets
RBC Richardson Barr served as the lead financial adviser to APA and Truist Securities also served as financial advisers; Bracewell LLP provided legal counsel to APA.
Recommended Reading
No End in Sight: Biden’s Pause Has Far-reaching Consequences
2024-09-17 - Biden’s LNG pause is raising costs for LNG export projects, and its effects are far and wide in the U.S. LNG industry.
US LNG Export Market Share Reaches 21%, Despite Biden Pause
2024-09-09 - Despite the Biden administration’s pause on LNG export facilities, the U.S. took the spot as global LNG exporter in 2023, overtaking Australia, Qatar and Russia, according to the International Gas Union.
Cove Point LNG Poised for Restart After Maintenance
2024-10-10 - Cove Point LNG is set to come back online soon, Rystad Energy said Oct. 10, as natural gas futures rose 1% on forecasts for higher demand and the return of the facility to operational status.
Fitch Downgrades New Fortress’ Default Rating, Citing Refinancing Risk
2024-08-14 - New Fortress Energy’s issuer default rating and senior secured debt were downgraded by Fitch, which cited a “highly constrained liquidity position,” as a reason behind its rating actions.
US Natural Gas Prices Hold Near 12-week High on Rising Outages
2024-09-24 - U.S. natural gas futures held near a 12-week high as some Gulf Coast oil and gas producers cut output ahead of a possible hurricane.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.