Apache Closes on Acquisition of Anadarko Gulf of Mexico Producing Properties for $525.4 Million

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Apache Closes on Acquisition of Anadarko Gulf of Mexico Producing Properties for $525.4 Million

October 25, 2004 at 12:00 AM EDT
Apache Closes on Acquisition of Anadarko Gulf of Mexico Producing Properties for $525.4 Million HOUSTON, Oct. 25 /PRNewswire-FirstCall/ -- Apache Corporation (NYSE, Nasdaq: APA) announced today that it has closed on the previously announced acquisition of Gulf of Mexico Shelf properties from Anadarko Petroleum Corporation (NYSE: APC) for $525.4 million in cash, plus assumed liabilities, after adjustments for the exercise of preferential rights by third parties. The effective date of the transaction is October 1.

The acquisition includes 74 fields on 232 offshore blocks (approximately 664,000 net acres), including 89 undeveloped blocks, and 104 platforms. Apache will operate 49 of the fields with 70 percent of the production and 75 percent of the net reserves. Apache will book proved reserves of approximately 60 million barrels of oil equivalent (MMboe) of which 50 percent is natural gas. Apache estimates the properties' probable reserves at an additional 23 MMboe.

Morgan Stanley Capital Group Inc. acquired an overriding royalty interest in the properties for $645.7 million prior to the Apache transaction. Apache has booked an $83 million liability associated with producing and delivering 20 MMBoe to Morgan Stanley (Apache will not book these reserves) and a $27 million liability associated with previously hedged production.

"Most of the properties are in areas where we already operate, so we can easily and economically integrate them into our existing operations," said Apache CEO and President G. Steven Farris.

Apache's share of the acquired production is estimated to average 47 million cubic feet (MMcf) of natural gas and 3,300 barrels of liquid hydrocarbons per day in the current-year fourth quarter. Production is anticipated to rise to an annual average of 65 MMcf of natural gas and 6,600 barrels of liquid hydrocarbons per day as the Tarantula field in South Timbalier 308 comes on stream in early 2005. There has been minimal impact on production from these properties due to Hurricane Ivan; essentially all production is back on line.

Apache funded the acquisition with commercial paper.

Apache Corporation is a large oil and gas independent with core operations in the United States, Canada, the United Kingdom North Sea, Egypt and Australia.

This news release contains certain "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995 including, without limitation, expectations, beliefs, plans and objectives regarding Apache's reserves, production, exploration potential, and capital expenditures. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions and uncertainties. There is no assurance that Apache's expectations will be realized, and actual results may differ materially from those expressed in the forward-looking statements.

CONTACT: Apache Corporation
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