Houston-based APA Corp. has clinched agreements to sell some natural gas-weighted assets across Texas for more than $700 million.
Subsidiary Apache Corp., which oversees exploration and production activity, is divesting properties in the Upper Eagle Ford Shale, which is generally in East Texas. It also is selling properties in West Texas within the Permian Basin’s Midland formation.
Combined, average production was 13,000 boe/d during the first quarter. “Slightly more” than 33% of the overall output mix was petroleum-weighted, Apache noted.
“These transactions are consistent with our active management of the portfolio, and we will continue to look for opportunities to exit assets that are unlikely to compete for capital within our portfolio or to monetize noncore assets at attractive prices,” APA CEO John J. Christmann IV said.
APA during the first quarter curtailed about 35 MMcf/d of natural gas “in response to weak or negative Waha hub prices.” Last year, as gas and liquids prices surged, activity resumed in APA’s gas-rich Alpine High asset, which is in the Permian’s Delaware sub-basin.
Early this year, the company then fortified its oil-weighted position in the Permian with the $4.5 billion, all-stock takeover of Callon Petroleum Co. Pro forma Permian production from the combined firm is about 500,000 boe/d.
In one deal, private equity-backed WildFire Energy I LLC agreed to buy Eagle Ford assets in East Texas. The deal includes 237,000 net acres and stakes in 465 wells. With the transaction, WildFire would operate more than 2,000 gross wells on 850,000-plus net acres.
The East Texas assets that WildFire is buying had average output of 11,000 boe/d in the first quarter. Pro forma, WildFire said its production would surpass 50,000 boe/d.
WildFire, based in Houston, began to build an East Texas portfolio in 2021 with the takeover of Hawkwood Energy LLC. The following year it acquired MD America Energy LLC. And last year WildFire bought a package of Eagle Ford assets in East Texas from Chesapeake Energy Corp.
"This acquisition of adjacent assets presented us with a strategic opportunity to continue consolidating the basin," WildFire COO Steve Habachy said of the APA deal. The transaction, set to be completed by the end of September, would make the company “the largest operator in the entire Eagle Ford trend."
Meanwhile, Apache also is selling nearly 24,000 net royalty acres across several counties in the West Texas portion of the Midland. The mineral and royalty interests “were primarily nonoperated properties,” it noted. The properties produced around 2,000 boe/d net during 1Q2024.
Proceeds from the asset sales are to be used “primarily to reduce nearer-term borrowings.” APA said. APA assumed Callon’s debt in that takeover, which was around $1.9 billion at the end of 2023.
