Apache Closes on $845-Mln Acquisition of BP Properties

Apache Corp. said Wednesday that it has closed or is in the process of closing on the previously announced acquisition of BP's remaining producing properties on the Outer Continental Shelf of the Gulf of Mexico for approximately $845 million, with an effective date of April 1.

The properties--13 fields, nine of them operated--have net proved reserves of approximately 19.5 million barrels of liquid hydrocarbons and 148 billion cubic feet (Bcf) of natural gas. Apache has identified 50 drilling locations on the properties and another 4 million barrels of liquids and 26 Bcf of natural gas in probable and possible reserves. Average 2006 net production of the properties is estimated at approximately 3,650 barrels of liquids and 85 million cubic feet (MMcf) of gas per day; approximately 97 percent of the production will be operated by Apache.

The company has hedged essentially all of the production volumes through 2008 at prices that protect its acquisition economics, while preserving upside potential from higher prices.

Apache financed the purchase with commercial paper. With the acquisition, the company's debt-to-capitalization ratio remains below 23 percent.