Apache Corp. has exited its Oklahoma shale position in divestitures with two private-equity backed E&Ps as the Permian Basin remains Apache’s primary focus in the U.S.

Last week, the Houston-based oil and gas company said it had completed the sale of noncore assets that reflected Apache’s exit from the Western Anadarko Basin and Scoop/Stack play. The divestitures were made through two separate transactions—one in May and the other in July—and comprised $612 million in net proceeds.

Though Apache didn’t reveal who purchased its assets, on July 23, Presidio Petroleum LLC revealed itself as the buyer of the company’s Western Anadarko position. According to a report by BMO Capital Markets, newly-formed Red Wolf Natural Resources LLC was the buyer of Apache’s earlier divestiture that closed in May.

In its first-quarter results release, Apache reported over $300 million worth of asset sales that CEO John Christmann said were mostly located in the company’s Scoop/Stack position. During the company’s earnings call on May 2, Christmann explained Apache’s decision to exit the Scoop/Stack was driven by a strategy of what’s going to attract capital in the long-term.

“We did not see the Scoop/Stack as an area where we would be putting capital,” he said, also noting that “if there’s an opportunity for somebody else to own those and create value by purchasing those, then we’re not afraid to do that.”

On July 18, Apache said production from the divested assets averaged 33 thousand barrels of oil equivalent per day (boe/d) in the first quarter of 2019, about 90% of which consisted of natural gas and NGL. The company anticipates reporting production of about 32,000 boe/d from the Midcontinent-Gulf Coast region for second-quarter 2019.

The acquisition from Apache marked Red Wolf’s first transaction since forming in February with an equity commitment from Dallas-based Pearl Energy Investments. The company’s purchase comprised of roughly 56,000 net acres and associated production in Oklahoma’s Scoop, Stack and Merge plays as well as the broader Anadarko Basin, according to a May press release by Red Wolf which is based in Oklahoma City.

BMO estimated the value of the Red Wolf transaction at $245 million.

Meanwhile, Presidio’s purchase represented its first add-on acquisition since Morgan Stanley Energy Partners’ initial investment in May 2018.

Headquartered in Fort Worth, Texas, Presidio has assets located in the Western Anadarko Basin of Texas, Oklahoma and Kansas. The company had previously acquired the western Anadarko position of Midstates Petroleum Co. Inc. for about $58 million last year.

Presidio’s purchase from Apache included oil and natural gas producing properties in the western Anadarko Basin of Texas, Oklahoma and Kansas. Apache’s field operations team will also join the Presidio team as part of the transaction, according to the company press release. 

Sidley Austin LLP represented Morgan Stanley Energy Partners and its portfolio company Presidio in the acquisition from Apache. The law firm’s deal team was led by partner Marc Rose. BMO acted as left lead arranger and administrative agent for Presidio on the transaction.

Emily Patsy can be reached at epatsy@hartenergy.com.

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