APA Corporation Finalizes $950 Million Sale of Non-Core Assets

Author: Riley Hayes Updated: 09-10-2024 05:00 PM

APA Corporation Completes $950 Million Asset Sale

APA Corporation has entered into an agreement for the impressive sale of its non-core producing properties within the Permian Basin for $950 million. This bold move aims to enhance the company’s financial position as it transitions towards a more focused asset base. The assets, located primarily in the Central Basin Platform, are projected to yield approximately 21,000 barrels of oil equivalent per day, with a significant percentage being oil.

Impact of the Sale on Company Operations

The CEO of APA Corporation, John J. Christmann IV, emphasizes that the proceeds from this transaction will primarily be utilized to reduce existing debt, showing a strategic alignment with the company’s financial goals. The sale is set to take effect from an agreed date, while closing is expected in the latter part of the year.

Strategic Benefits of the Transaction

By selling off these non-core assets, APA Corporation is refining its focus on its more valuable assets, ensuring that it maintains a competitive edge in the oil and gas industry. This decision is backed by a robust increase in onshore U.S. production, directly benefiting the overall growth of the company’s portfolio.

Expansion in U.S. Production Capacity

Through various transactions executed this year, APA has seen a notable enhancement in its U.S. production capacity, now standing at approximately 66,000 barrels of oil equivalent per day in 2024. This change points to a larger trend in the company’s strategy to foster growth while managing liabilities effectively.

Future Projections and Goals

The company’s fourth-quarter production guidance anticipates an output of 307,000 barrels of oil equivalent per day, promising a 34% increase when compared to the previous year. This projection showcases APA’s commitment to growth and operational excellence.

Market Comparisons

Christmann elaborated on how APA’s focused acquisition strategy and its operational strength position the company favorably against other like-sized firms in the region. The refined portfolio not only augments production capabilities but also optimizes transport and marketing arrangements.

Diverse Geological Portfolio

In addition to the unconventional assets in the Permian, APA’s extensive portfolio provides a mix of geographic and geological advantages. This diversity allows the company to navigate market fluctuations better and continue exploring new opportunities in various regions.

Advisors Involved in the Transaction

The sale benefited from the expertise of RBC Richardson Barr as the lead financial advisor, with Truist Securities also playing a prominent role as an advisor, while Bracewell LLP provided essential legal support. Their collective contributions highlight the transaction's complexity and the importance of strategic financial planning.

About APA Corporation

With operations spanning the United States, Egypt, and the United Kingdom, APA Corporation remains committed to exploring and producing oil and natural gas. The company’s dedication to effective management and strategic growth is evident in its proactive measures to enhance its operational framework.

Frequently Asked Questions

What is the total amount for the asset sale announced by APA Corporation?

The total sale amount of the non-core properties in the Permian Basin is $950 million.

How will the proceeds from the sale be utilized?

The proceeds from the sale will primarily be used to reduce the company's existing debt.

What is the expected increase in APA's U.S. production capacity?

APA Corporation expects to increase its U.S. production capacity by approximately 66,000 barrels of oil equivalent per day in 2024.

Who served as the financial advisors for this transaction?

RBC Richardson Barr served as the lead financial advisor, with Truist Securities also providing advisory services.

What types of assets does APA Corporation focus on after this sale?

After this sale, APA Corporation continues to focus on its valuable and productive assets in the unconventional Midland and Delaware Basins.

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