APA inks $70-million Alaska acquisition
APA Corp., Houston, has agreed to pay $70 million for Savant Alaska LLC, which owns midstream, pipeline, and field infrastructure adjacent to APA acreage on the North Slope.
The assets included in APA’s deal comprise Badami infrastructure that have capacity to produce about 40,000 b/d and come with supporting infrastructure as well as the Nutaaq Pipeline that connects to the Trans-Alaska Pipeline System and has about 80,000 b/d of capacity. Also included in the purchase are more than 92,000 net acres in the Badami and Grey Owl units. APA executives expect to close on the acquisition, which includes incentive payments tied to future development, by yearend.
Adding the Savant assets will grow APA’s position on the eastern North Slope to about 487,000 gross acres. The company also is a partner in a joint venture with entities owned by Armstrong Oil & Gas and Santos that controls more than 300,000 acres. Through that entity, it plans to run a two-well drilling program this winter that will build on successful tests earlier this year in the Sockeye-2 field.
“As we continue to appraise and de-risk our resource base, ownership of this infrastructure provides greater flexibility and optionality in future development planning and represents a key step toward unlocking the potential of our position in Alaska,” John Christmann IV, chief executive officer of APA, said in a statement.
Word of the Savant acquisition comes about 5 weeks after Christmann told analysts and investors that the APA team is “very, very excited about Alaska.” Speaking on a May 7 conference call after APA reported its first-quarter results, Christmann said APA hit the pause button on its Alaska efforts this past winter to reassess its seismic data there.
“Taking the results from Sockeye and King Street and integrating those into the new reprocessed seismic was really, really the right thing to do,” Christmann said. “We, us and our partners, are all thrilled that we took that pause. It now looks like we did not drill Sockeye even in the thickest place. And we will be coming back this winter with a two-well program.”
Shares of APA (Ticker: APA) were up more than 5% to $38.50 in midday trading June 10. Year to date, they have risen nearly 60%, growing the company’s market capitalization to about $13.6 billion.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.