Apache Completes Cordillera Acquisition
Apache Corporation announced Tuesday it has completed its previously announced acquisition of Cordillera Energy Partners III, LLC, a privately held company with operations and acreage across the prolific Granite Wash, Tonkawa, Cleveland and Marmaton plays in western Oklahoma and the Texas Panhandle.
With additional drilling and acreage acquired since the transaction was announced, Apache paid approximately $2.5 billion in cash and 6.3 million shares of Apache common stock that were issued to the sellers, including EnCap Investments, other institutional investors and Cordillera management.
Cordillera's leasing activity in the highly liquids-rich fairway in the Anadarko Basin since January brought the total to 312,000 net acres, up from 254,000 acres. In April, net production from the Cordillera assets averaged approximately 21,900 barrels of oil equivalent, up 22 percent from January. At year-end, estimated proved reserves totaled 71.5 million boe.
"This transaction more than doubles Apache's acreage in the fairway," said G. Steven Farris, Apache's chairman and chief executive officer. "With this additional acreage, we expect to more than triple the pace of activity on the combined Apache and Cordillera acreage during 2012."
The acquisition is expected to be accretive to Apache's earnings and cash flow beginning in 2012. The cash consideration was paid from the proceeds of a debt offering.
A wash, including the Granite Wash, consists of a series of thick, multi-layer, liquids-rich sandstones and conglomerates. The Granite Wash possesses reservoir properties superior to typical shale resource plays, and responds well to horizontal drilling with multi-stage fracturing completions. A typical producing column in the acreage fairway is more than a mile thick with up to five liquids-rich Granite Wash targets and five additional oil-bearing tight sandstone targets. Approximately 50 percent of the hydrocarbon stream consists of condensate and natural gas liquids.
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