Apache to Acquire Permian Basin Interests from Anadarko

Apache Corporation said that it is acquiring controlling interest in 28 oil and gas fields in the Permian Basin of West Texas from Anadarko Petroleum Corporation for $1 billion.

Apache will book net reserves of 70 million barrels of oil equivalent (57 million barrels of oil and 78 billion cubic feet of natural gas). In 2007, the fields are forecasted to produce approximately 9,000 barrels of oil and 19 million cubic feet (MMcf) of gas per day net to Apache.

The transaction will be effective the earlier of closing or March 31, and is subject to standard regulatory and other requirements. Apache intends to fund the acquisition with debt. Apache and Anadarko are entering into a joint-venture arrangement to effect the transaction.

"Anadarko's Permian Basin divestiture is an excellent opportunity for Apache to operate high-working-interest fields that have a long reserve life and are a close fit with Apache's existing Permian production," said G. Steven Farris, Apache's president and chief executive officer. "The transaction is additive to per-share results, but -- as with any transaction -- the ultimate benefit will best be measured after we have operated and added value to these properties."

The transaction's value is concentrated in eight operated fields comprising 81 percent of the proved reserves and 72 percent of the expected 2007 net production.

Apache's current Permian Basin operations have net daily production of 29,000 barrels of oil and 79 MMcf of gas.

"Acquiring control of these assets in the Permian is another step in evolving Apache's portfolio to facilitate continued growth," Farris said.

"We have good geographic balance, designed for consistent growth, with no region contributing more than 25 percent of reserves or production," he said. "With our strong balance sheet and diverse portfolio, Apache is in an excellent position to continue to deliver competitive growth and returns in a volatile environment."

Upon completion of the transaction, Apache's debt will remain below 30 percent of total capitalization.

Apache Corporation discovers and produces oil and gas in the United States, Canada, the United Kingdom sector of the North Sea, Egypt, Australia and Argentina.