Apache Corp., Houston, (NYSE, Nasdaq: APA) closed its acquisition of nine Permian Basin oil and gas fields in New Mexico and West Texas from Marathon Oil Corp., Houston, (NYSE: MRO) for $181.1 million.
Assets include operated production in Lea County, New Mexico, and Reagan, Howard and Sterling counties in Texas, as well as Marathon’s interests in the Chenot/Putnam area in Pecos County, Texas. Current net production is 10 million cubic feet of gas, 1,332 barrels of oil, and 524 barrels of gas liquids per day for a total 3,500 BOE per day. The newly acquired properties have 16 wells per section.
“Apache has a long track record of increasing production from mature fields in the Permian Basin,” says John Crum, Apache co-chief operating officer and president-North America. He adds that 75% of the proved reserves and 61% of the current production directly offset the Apache-operated Northeast Drinkard Unit in Lea County, New Mexico.
Prior to the acquisition, Apache’s net production in the Permian Basin was 34,500 barrels of oil and 86 million cubic feet of gas per day. The effective date is Jan. 1.
Separately, an undisclosed buyer plans to acquire Marathon’s remaining operated assets and a portion of the outside-operated assets in the Permian Basin for approximately $114 million. Together with the Apache acquisition, the assets include 100% of Marathon’s interests in Indian Basin Field and the Indian Basin gas plant, as well as Marathon’s company-operated properties in Burton Flats and Travis fields in Eddy County, New Mexico; 100% of Marathon’s interests in company-operated Permian Basin assets in Lea County, New Mexico, and in Reagan, Howard and Sterling counties in Texas; and all of Marathon’s interests in the Chenot/Putnam area in Pecos County, Texas.
Total net production of Marathon assets being sold in the two deals averaged 8,150 BOE per day in first-quarter 2009.
Marathon president and chief executive Clarence P. Cazalot Jr. says, “We have announced asset sales with transaction values totaling approximately $1.6 billion since launching our asset review and divestiture program in March 2008. It’s anticipated this program will generate $2 billion to $4 billion on a pretax basis, with additional announcements expected by mid-2009.”
In April, Marathon completed the sale of subsidiary Marathon Oil Ireland Ltd. to PSE Ireland Ltd., a subsidiary of Petroliam Nasional Berhad (Petronas), for $180 million.
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