U.S. energy firm Apache Corp. (APA) announced the sale of its Western Canada oil and gas producing properties for a consideration of $374 million. The transaction is expected to close on or around Apr 30, with an effective transaction date of Jan 1, 2014.
The assets under sale include dry gas producing acreage in the Deep Basin area of western Alberta and British Columbia. These properties are spread across 328,400 net acres in Ojay, Noel and Wapiti. However, Apache will keep all its rights in Montney and other deeper horizons in the Wapiti area. The properties under sale had per day production of 101 million cubic feet of natural gas and 1,500 barrels of liquid hydrocarbons last year.
Apache mentioned that the proceeds from this sale would be used to repurchase shares under the 30-million share repurchase program approved by the board in 2013.
The company is rebalancing its portfolio to facilitate greater focus on the liquids-linked assets in North America and the sale of these natural gas properties is in sync with its strategy. Other firms like Encana Corp. (ECA) are also shifting base to the oil-based assets to avoid the weak natural gas pricing scenario. Apache also stated that the Argentinean asset sale and the Gulf of Mexico and Egypt divestments were all part of its portfolio rebalancing strategy.
Houston, Texas-based Apache is one of the world's leading independent energy companies engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids.
Apache currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, one can consider better-ranked players in the oil and gas E&P industry like Range Resources Corporation (RRC) and Clayton Williams Energy Inc (CWEI). Both stocks currently sport a Zacks Rank #1 (Strong Buy).