Apache to pay $2.85 billion for privately held Cordillera
By Michael Erman
(Reuters) - Oil and gas producer Apache Corp (APA.N: Quote) will buy privately held Cordillera Energy Partners III for $2.85 billion in cash and stock, expanding its holdings in one of the most lucrative emerging oil and gas fields in the United States.
It is the largest U.S. deal so far in 2012, according to Thomson Reuters data, and the second-largest deal worldwide.
Cordillera is owned by private equity firm EnCap Investments L.P. and other investors who will receive about $2.25 billion in cash and $600 million of Apache common stock for the assets.
The deal will double Apache's acreage in the energy-rich Anadarko basin, a shale formation in western Oklahoma and the Texas panhandle in which the company has been drilling for more than 50 years.
Apache is particularly interested in Cordillera's acreage in the Granite Wash geological formation within the Anadarko basin, which holds tight gas and natural gas liquids trapped in its sandstone.
"Because 80 percent of (Cordillera's) revenue comes from liquid hydrocarbons production, this transaction provides compelling economics at current commodity prices," Apache CEO Steven Farris said in a statement.
As technological advances have made drilling for gas and oil possible in the Granite Wash and other unconventional opportunities like shale formations, energy companies have poured billions of dollars to buy North American acreage with access to those resources.
But with natural gas prices plunging, they have focused on assets that produce more oil and natural gas liquids, which trade at higher prices than so-called dry natural gas. Continued...