Throughout the financial crisis, I kept wondering when Apache
As it turns out, Apache waited until 2010 to really make it rain. In April, the company bought Devon Energy's
Speaking of the catastrophe, on Tuesday afternoon Apache announced an even bigger deal with corporate persona non grata BP
The first chunk is BP's entire Permian Basin business, which Apache is buying for $3.1 billion. This purchase will double Apache's acreage in the area (which spans western Texas and southeastern New Mexico) and increase production by 44%. Apache is paying quite a bit less on a per-flowing barrel basis than SandRidge Energy
In western Canada, Apache is picking up all of BP's natural gas assets for $3.25 billion. This production should plug in nicely to the company's planned liquefied natural gas (LNG) export facility in British Columbia at Kitimat. In May, EOG Resources
The final and smallest acquisition is in Egypt's Western Desert, where Apache is picking up around 400,000 acres for $650 million. Apache has had tremendous success in this area, and you can count on the company's doing a lot more with BP's assets by applying advanced exploration and exploitation techniques like 3-D seismic and waterfloods to these development leases.
These sorts of acquisitions are Apache's bread and butter. The company acquires producing assets, applies additional capital and technology, and squeezes out a lot of incremental value. Shareholders should be very pleased with this announcement.