There's more than a patch of oil in Apache's portfolio. Apache is an oil and gas exploration and production company with onshore and offshore operations in North America and in Argentina, Australia, Egypt, and the UK North Sea. The company has estimated proved reserves of more than 2.9 billion barrels of oil equivalent, mostly from five North American regions: the Gulf of Mexico, the Gulf Coast of Texas and Louisiana, the Permian Basin in West Texas, the Anadarko Basin in Oklahoma, and Canada's Western Sedimentary Basin. Royal Dutch Shell is Apache's largest customer, accounting for 15% of its oil and gas production revenues in 2010.
The company bounced back from a sup-par 2009 when the global recession, low commodities prices, and a slump in demand suppressed its revenues.
While the US represents more than one third of the company's production and reserves, Apache is well aware that growth in the region could not come from drilling more wells in its existing mature and declining fields. With that in mind, Apache sought domestic and international expansion through acquisitions. In 2010 it seized on one such opportunity, buying Gulf of Mexico shelf assets from Devon Energy (which is shedding assets to raise cash) for $1 billion. The acquisition added some 41 million barrels of proved reserves and some 477,200 acres to Apache's asset base.
It also acquired Mariner Energy for $2.7 billion (including Mariner Energy's debt of $1.6 billion), giving the company an entry into the deepwater Gulf of Mexico. Mariner's deepwater portfolio includes 125 blocks, seven discoveries under development, and more than 50 prospects. The deal is a natural extension of Apache's commitment to develop the Gulf of Mexico as a primary area of production, and anticipates a rebounding economy and an increasing demand for oil.
With BP looking to raise cash to defray the cost of its rig disaster in the Gulf of Mexico, in 2010 Apache took the opportunity to buy BP assets in Canada, Egypt, and the US (Permian Basin) for about $7 billion. The deal boosted Apache's estimated proved reserves by 385 million barrels of oil equivalent.
In Canada the company moved in 2010 to expand its supply base, buying 51% of a proposed liquefied natural gas (LNG) export terminal in British Columbia operated by Kitimat LNG Inc.
Boosted by its acquisitions, in 2010 the company reported a strong growth in revenues. Its net income was also up dramatically (Apache's 2009 results were negatively impacted by an almost $2 billion after-tax write-down of the carrying value of proved property).
The company grew its North Sea assets further in 2012, buying Exxon Mobil's Beryl field and other assets for about $1.75 billion.
Growing its unconventional assets in the US, that year the company agreed to acquire Cordillera Energy Partners for $2.85 billion. The privately held company owns 254,000 net acres of tight sand plays in Oklahoma and Texas. In 2012 it also bought 49% of Burrup Holdings, an ammonia fertilizer plant in Western Australia, for $439 million. The deal with one of the world's largest ammonia plants secures a long-term market for Apache's natural gas production in the region.
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