UPDATE 3-Apache to quit gas projects in Australia and Canada
(Adds detail from conference call)
By Anna Driver
HOUSTON, July 31 (Reuters) - U.S. oil and gas company Apache Corp, under pressure from activist investor Jana Partners, said on Thursday it plans to sell interests in two liquefied natural gas (LNG) projects as it sharpens the focus on developing North American shale fields.
The move, a significant pullback from the LNG market, relieved investors worried about the potential project costs. Apache shares rose to their highest level in more than two years.
Apache reported that profits fell in the second quarter, but still topped expectations.
Apache said it intends to completely exit LNG projects - in which it partners with Chevron Corp - in Wheatstone in Australia and Kitimat in Canada. Apache is also evaluating its international assets for a potential spinoff to shareholders, outright sale or other options, Chief Executive Officer Steve Farris told analysts on a conference call.
"In our opinion, it makes sense that we reduce the size of our international assets," Farris said, noting that the company's North American and international units "are two different businesses."
Jana, which disclosed in June it had a $1 billion stake in Apache, has urged the Houston-based company to exit the Canadian and Australian projects and focus on drilling onshore in the United States.
Over the last year, Apache has sold $10 billion worth of assets to focus its drilling on more profitable and predictable shale oil wells in places like the Permian Basin and the Eagle Ford in South Texas. Continued...