Apache Exits Canadian Gas E&P
US independent Apache is exiting Canada through three separate divestments.
It announced the sale July 6 of its Apache Canada subsidiary, which owns gas fields in Alberta and British Columbia, to Paramount Resources. Separately, it disclosed that it agreed last month to sell both its Provost assets in Alberta to an undisclosed privately-owned company, and its Midale and House Mountain interests in Saskatchewan and Alberta to Calgary-based Cardinal Energy.
Production from Apache's Canadian operations averaged some 300mn ft3/d equivalent in 2Q 2017, of which two-thirds natural gas. Aggregate proceeds from the three transactions are approximately $713mn (C$927mn) and will be used to reduce debt and fund some of Apache's 2017-2018 investments.
"Today's announcement is consistent with Apache's objective of streamlining our portfolio and focusing on assets in the US, UK North Sea and Egypt,” said Apache CEO John J. Christmann IV late July 6, adding that it would reallocate resources towards the Permian Basin: "With our decision to exit Canada, Apache's resulting global portfolio is more streamlined and our resources more focused."
The Cardinal deal closed late June; the other two are expected to close by end-August 2017. In 2013, Apache sold a one-third interest in its Egypt upstream gas business to China’s Sinopec for $3.1bn, while last year it divested its UK North Sea gas midstream business.
Paramount to merge with Trilogy
Separately Calgary-based Paramount said that, following its acquisition of Apache Canada, it would merge with fellow Canadian firm Trilogy Energy.
Paramount said this would mean it becomes a Montney, Duvernay and Deep Basin focused intermediate exploration and production company with the financial strength to accelerate the development of a portfolio of top-tier resource plays, unlocking the value of the underlying resources. "The integration of the three companies will generate operational synergies, optimise cost structures, offer financial flexibility and provide economies of scale," it said.
Paramount-Trilogy's 4Q2017 production is expected to exceed 90,000 barrels of oil equivalent/d of which 35% liquids, and proved plus probable reserves of 600mn boe. Paramount already owns 15% of Trilogy, which was formed through a spinout of assets from Paramount in April 2005.
Mark Smedley