APA Corp. is looking to sell around 212,000 net acres of oil and gas producing land in southeast Texas' Eagle Ford and Austin Chalk shale basins, according to a document seen by Reuters.
The sale could fetch APA between $450 million and $500 million, two sources close to the bidding process estimated. However, they cautioned the valuation was susceptible to commodity price volatility and that APA could ultimately retain the asset if it did not receive a suitable offer.
The sources requested anonymity as the sales efforts are confidential. A spokesperson for APA, formerly known as Apache Corp., said the company does not respond to market rumors.
The potential sale of the properties, which is being administered by an investment bank and is a small fraction of APA's total U.S. production, comes as the company pivots back to western Texas, where it is beginning to see benefits from its investments in a remote part of the Permian basin.
For November, APA expects oil and gas production of around 15,000 boe/d from the acreage on sale.
Oil and gas prices remain elevated, after surging to multi-year highs earlier in 2022 in the wake of Russia's invasion of Ukraine, which has led to sanctions on Moscow and disruption of global crude supply routes.
These price levels have encouraged public companies to divest non-core assets and use the cash to invest in better locations or reward shareholders.
APA last week reported a third-quarter profit above Wall Street expectations, helped by "excellent Permian basin performance," and said it expects to return at least $1.6 billion of cash to investors this year.
In August, the company said it had purchased West Texas properties abutting its existing land for $505 million, adding production of between 12,000 boe/d and 14,000 boe/d through the rest of the year.
The company produced almost 219,000 boe/d from the United States in the third quarter.
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