Apache Corp. sells Australian operations for $2.1 billion

HOUSTON -- Apache Corp. has signed an agreement to sell its Australian subsidiary, Apache Energy Limited, to a consortium of private equity funds managed by Macquarie Capital Group Limited and Brookfield Asset Management for a cash payment of $2.1 billion.

Assets of Apache Energy Limited and its subsidiaries averaged production of approximately 49,000 boed in March. With the announcement of this sale, Apache is fully exiting its E&P business in Australia, but will retain its 49% ownership interest in fertilizer producer Yara Pilbara Holdings. On April 2, Apache announced the completion of sale of its Wheatstone LNG project and related oil and natural gas properties to Woodside Petroleum for $2.8 billion.

This acquisition will form the foundations of a new intermediate oil and gas producer established by the Brookfield and Macquarie Capital Consortium. Brookfield and Macquarie Capital will jointly manage and each will initially hold a 50% investment in the new vehicle.

The business will continue to have a strong focus on developing and supporting the growth of the Western Australian domestic gas market and consistent with this, a long-term gas supply agreement for the initial supply of 120 terajoules per day of natural gas, commencing in 2020 has been entered into with Alcoa of Australia.

The assets being acquired by the Brookfield and Macquarie Capital Consortium through the transaction include:

• Apache’s interest in operated gas fields of Reindeer, John Brookes and Halyard-Spar and the non-operated interest in the BHP Billiton operated Macedon field;
• Apache’s interest in operated oil fields at Coniston-Novara, Van Gogh and Stag and the non-operated interest in the BHP Billiton operated Pyrenees area;
• Interests in gas processing facilities and associated infrastructure at Devil Creek, Varanus Island and Macedon; and
• All of Apache’s upstream acreage in the Carnarvon, Exmouth and Canning basins along with related hydrocarbon reserves, resources and production.

John J. Christmann, IV, CEO and president of Apache Corp., said, "The announcement represents a notable step in Apache's strategic portfolio re-positioning. Over the last five years, we have transitioned Apache's primary growth engine to North America onshore through the announcement or completion of approximately $17 billion of asset purchases and $17 billion of asset sales. Following the sale of our Australian assets, approximately 70% of Apache's production will come from North America onshore. Our robust North American position is complemented by our North Sea and Egyptian regions, which have an extensive inventory of prospects and assets that generate free cash flow."

The transaction is expected to close in the middle of 2015. The effective date of the sale is Oct. 1, 2014.