Apache (APA) To Exit Canada, Eyes Prospects In Other Regions
Zacks Investment Research | Jul 06, 2017 09:57PM ET
US energy explorer Apache Corporation (NYSE:APA) is set to exit Canada following its latest deal with local oil producer Paramount Resources Ltd. Through the deal worth C$459.5 million ($354 million), Apache is divesting its Canadian unit. This is the company’s third sell-off in the last two months in Canada.
Investors should know that so far Apache's Canadian assets have produced around 300 million cubic feet of gas equivalent per day in the fiscal second quarter of 2017, almost 67% of which was natural gas.
Deal Details
Paramount Resources will pay the stipulated amount along with working capital and other monetary adjustments. The deal, expected to be completed by Aug 2017, will add 1.6 million acres to the acquirer's portfolio of which 185,000 acres have good prospects and 45,000 acres are yet to be developed. Apache Canada's assets are mainly located in the provinces of Alberta and British Columbia.
Apache's Motive
The deal is in line with Apache's plan to streamline its portfolio and shift focus from Canada to its assets in the US, UK North Sea and Egypt. This strategy will help the company to manage its resources efficiently and engage in high growth areas, especially in the Permian Basin.
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