Apache to buy UK North Sea assets from ExxonMobil for $1.75 billion

Apache North Sea Ltd., a subsidiary of Houston independent Apache Corp., has agreed to acquire ExxonMobil Corp.’s Mobil North Sea LLC assets, which includes Beryl field and related properties, for $1.75 billion.

The fields have current net production of 19,000 bbl of oil and natural gas liquids and 58 MMcfd of natural gas. At yearend 2010, estimated proved reserves totaled 68 million boe.

The transaction, with a planned close at yearend, is expected to increase Apache's North Sea production by 54% and proved reserves by 44%, the company said.

The assets to be acquired include operated interests in the Beryl, Nevis, Ness, Nevis South, Skene, and Buckland fields;

operated interest in the Beryl-Brae gas pipeline and the SAGE gas plant; nonoperated interests in Maclure, Scott, and Telford fields; and Benbecula (West of Shetlands) exploration acreage.

“These major legacy assets will expand Apache's presence in the North Sea. They bring us significant remaining life, high production efficiency and quality reservoirs—the best North Sea assets we've evaluated since acquiring the Forties field in 2003,” said G. Steven Farris, Apache's chairman and chief executive officer. “There is a portfolio of low-risk exploitation projects, and we believe the complex structural setting holds reserve upside.”

Since acquiring Forties field, Apache has drilled about 100 development wells, invested $3.2 billion, produced 161 million boe, and added an estimated 171 million boe in new reserves.

Second-quarter 2011 net production from Forties averaged 56,985 bo/d, up from 33,000 bo/d in second-quarter 2003, after Apache assumed operations.

Apache said it will take on the ExxonMobil employees currently supporting the former Mobil North Sea assets.

The transaction is subject to regulatory approvals and preferential rights. Apache intends to fund the acquisition with cash.