Apache selling deep-water Gulf projects for $1.4 billion

HOUSTON — An Apache Corp. subsidiary will sell its non-operated interest in the massive Lucius and Heidelberg deep-water Gulf of Mexico developments as part of a $1.4 billion deal with Freeport-McMoRan Copper & Gold subsidiary, according to a Thursday morning announcement from Apache.

Houston-based Apache also will sell 11 other deep-water exploration blocks that are in their primary term, the early period of well drilling.

In a written statement, Thomas E. Voytovich, Apache’s chief operating officer for offshore and international operations, said the company is shifting its focus to discoveries on the Gulf shelf. He said that Apache has about 650 blocks in the Gulf of Mexico and that the company will pursue joint ventures and other opportunities to monetize its deep-water projects.

“We have combined our deepwater and shelf technical teams to focus on subsalt and other deeper exploration opportunities in water depths less than 1,000 feet, which have been relatively untested by industry,” Voytovich said. “Discoveries on the shelf have quicker cycle times, require less capital, and provide more options to bring oil and gas to market.”

The deal with Freeport McMoRan is expected to close by June 30, according to Apache.

Apache has an 11.7 percent working interest in the Lucius unit, which includes Keathley Canyon blocs 874,875,918 and 919. The company has a  12.5 percent working interest in Heidelberg, which includes Green Canyon blocks 859,903, 904, and 948.

Apache did not specify the location of the other 11 affected blocks, but said its interest in those ranges from 16.7 percent to 60 percent.

Separately on Thursday, Apache reported net earnings of $236 million for the first quarter, a decline of 66 percent from the same period a year ago. Those earnings were down largely due to the sale of a project in Argentina.

The company said its North American liquid production of 198,500 barrels per day in the first quarter was up 21 percent compared to the same quarter a year ago.

The company’s stock closed closed Thursday at $88.03 per share, up $0.27.


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