Apache Corp., Denver, will more than double its hydrocarbon reserves and production with the planned purchase of Amoco Production Co. oil and gas assets.
Apache will pay $515 million plus 2 million shares of its common stock for net proved reserves of about 63 million bbl of oil and 288 bcf of gas. The transaction, expected to close by midyear, will be underwritten by a loan from First Chicago Corp. and Chemical Bank.
Separately, Apache has sold most of its natural gas properties in the Texas and Oklahoma panhandles to Maxus Energy Corp. for $51 million cash. The deal entails interests in about 300 wells, mostly in Ochiltree and Lipscomb counties, Tex., and Beaver County, Okla. Their recent net production averaged 25 MMcfd of natural gas and 550 b/d of condensate.
APACHE-AMOCO DEAL
The 285,000 net developed acres and 730,000 net undeveloped acres covered by the Apache-Amoco deal are mainly onshore on the Gulf Coast, Anadarko and Permian basins, North Dakota, South Dakota, Montana, Wyoming, Nevada, Utah, Colorado, and New Mexico.
The purchase includes interests in wells that produced an average 28,000 b/d of oil and 117 MMcfd of gas in 1990. Amoco currently operates 74% of the production. Apache estimates total proved and probable reserves of the properties to be 133 million bbl of oil equivalent (BOE). Apache's oil reserves after the purchase will account for about 40% of total oil equivalent reserves compared with 21% currently. In its annual report, Apache estimated its 1990 proved liquids reserves at 22.74 million bbl and average production at 9,241 b/d and its proved gas reserves at 500 bcf and average production at 259.2 MMcfd.
The package also includes secondary and tertiary recovery projects in all the regions, four gas processing plants--two in Winkler County, Tex., one near Spindle field near Weld County, Colo., and one near Little Knife field in McKenzie County, N.D.--and access to some of Amoco's proprietary seismic and well data. Apache Chairman Raymond Plank said the purchase provides his company access to horizontal drilling and enhanced oil recovery opportunities as well as buoying profit margins with a better balance of oil and gas reserves. Amoco Production Pres. Patrick J. Early noted the properties sold represent less than 5% of Amoco's proved U.S. oil equivalent reserves and less than 10% of its U.S. production.
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