Apache to acquire South, West Texas properties

Apache Corp., Houston, on Wednesday announced plans to buy natural gas producing properties in South Texas and the Permian basin from Collins & Ware Inc. of Midland, Tex., for $300 million. The properties are producing 40 MMcfd of gas and 4,000 b/d of liquid hydrocarbons, and over 90% of the production is operated.


Apache Corp., Houston, on Wednesday announced plans to buy natural gas producing properties in South Texas and the Permian basin from Collins & Ware Inc. of Midland, Tex., for $300 million. The properties are producing 40 MMcfd of gas and 4,000 b/d of liquid hydrocarbons, and over 90% of the production is operated.

The assets hold proven reserves of 502 bcfe, one third of which is liquids. Probable reserves are estimated at 151 Bcfe.

These properties include 214,000 net acres, 153,000 of which are undeveloped. Also included are 1,928 sq miles of 3D seismic data.

"This negotiated purchase complements Apache's core areas and is expected to add immediately to per-share earnings and cash flow," says Roger Plank, executive vice-president and CFO. Including this purchase, Apache so far this year has purchased or is under contract to acquire total reserves of about 126 million boe, 70% of which is gas. These reserves represent an estimated full-year 2000 reserve replacement of 136% at an average cost of less than $4/bbl of boe.

"Rising production and strong product prices enable the cost of these acquisitions, plus planned capital expenditures, to fall within Apache's currently projected free cash flow," says Plank.

"We have declared 2000 'the year of the drill bit' at Apache, and we've made a number of sizable discoveries," said Lisa Stewart, Apache's executive vice-president for business development and E&P services. " But we also remain committed to our parallel exploitation strategy in the United States. We continue to look for acquisition opportunities, such as this one, that complement our existing operations and add production and reserves at a reasonable price."

The acquisition is set to close by June 30.

More in Companies