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Apache to Buy Outstanding Notes With $1B Notes Offering

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Apache Corporation APA announced the pricing of notes, with an aggregate principal amount of $1 billion. The notes are likely to carry an interest rate of 4.375% and are expected to get matured by 2028.  

The company is anticipated to conclude the offering by Aug 23, 2018, which awaits customary closing conditions. From the notes offering, Apache estimated the net proceeds at $992 million that excludes the underwriting discount and includes expenses related to the offering.

The net proceeds will likely be allocated by Apache in purchasing part of senior notes that are outstanding. Part of the proceeds is also expected to be spent for normal corporate activities.

Based in Houston, TX, Apache is among the leading oil and natural gas explorers, with operations over the United Kingdom, Egypt and the United States. Since oil comprises more than 51% of Apache’s total production, the massive crude price recovery is favoring the company’s overall businesses.

To tap the improving oil price, the company is planning to boost daily oil equivalent volume by third-quarter 2018. In fact, the daily production volume for the third quarter will likely be more than the preceding two quarters.

However, the company’s pricing chart is not impressive. Over the past year, the stock has gained 5.7%, significantly underperforming 20% collective increase of the stocks belonging to the industry.

Currently, Apache carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are McDermott International, Inc. MDR, Petroleo Brasileiro S.A. or Petrobras PBR and Helix Energy Solutions Group, Inc. HLX. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

McDermott’s earnings surpassed the Zacks Consensus Estimate in the last four quarters, the average positive surprise being 101.7%.

Petrobras beat the Zacks Consensus Estimate in three of the past four quarters, the average positive earnings surprise being 10.4%.

Helix Energy’s bottom line surpassed the consensus mark in three of the last four quarters, the average positive earnings surprise being 66.7%.

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Petroleo Brasileiro S.A.- Petrobras (PBR) : Free Stock Analysis Report
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