Apache Acquires BP's Permian Basin Assets for $3.1B

Apache has completed the acquisition of BP's oil and gas operations, acreage and infrastructure in the Permian Basin of West Texas and New Mexico.

Apache acquired 10 Permian field areas with estimated proved reserves of 141 million boe (65 percent liquids), first-half 2010 net production of 15,110 barrels of liquids and 81 MMcf of gas per day, and two operated gas processing plants. The transaction also included 1.7 million gross acres – including 405,000 net mineral and fee acres – in prospective areas of the basin with substantial opportunities for new drilling.

Apache paid $3.1 billion for the Permian properties, including a $1.5 billion deposit paid July 30 and the balance paid on closing. Some of the properties are subject to certain preferential rights. The effective date of the transaction was July 1. BP will continue to operate the properties on Apache's behalf through Nov. 30.

The Permian transaction is one element of Apache's previously announced agreement to acquire all of BP's oil and gas operations, acreage and infrastructure in the Permian Basin and Egypt's Western Desert and substantially all of BP's upstream natural gas business in western Alberta and British Columbia in Canada. Net production from the properties in the first half of 2010 was approximately 28,000 barrels of liquid hydrocarbons and 331 million cubic feet of gas (MMcf) per day, or a total of approximately 83,000 boe per day.

Completion of Apache's acquisition of BP assets in Canada and Egypt is subject to customary regulatory approvals and conditions. Apache is financing the acquisitions with proceeds from its recently completed equity offerings, debt and cash on hand.