UPDATE 1-Apache spending bulk of 2014 budget on North America wells

Wed Feb 26, 2014 3:10pm EST
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* E&P capex seen at $8.5 billion

* Apache to sell down stake in Kitimat

* Global production seen growing 5 to 8 percent

By Anna Driver

HOUSTON, Feb 26 (Reuters) - Apache Corp said on Wednesday it will spend two-thirds of its exploration and production budget drilling more oil wells onshore in North America as it aims to improve returns and show steady production growth.

Inconsistent oil and gas output and exposure to political risk in Egypt has weighed on the company's shares and depressed the Houston company's valuation.

To sharpen its focus on high growth, higher margin shale oil drilling in North America, Apache has sold assets in the Gulf of Mexico and Argentina and in August sold a stake in its Egyptian oil and gas business to China's Sinopec Group.

Investors have so far embraced Apache's plan, but recognize much more work remains to be done. Shares of Apache fell 3 percent following a meeting with investors in Houston on Wednesday.

"It's a fairly large (exploration and production company), so the remake of the company won't happen over night," said Ted Harper, fund manager and senior research analyst at Frost Investment Advisors, LLC.   Continued...