Apache Corp to Expand Australian Oil and Gas Operations

on Aug 13, 2013

iNVEZZ.com, Tuesday, August 13th: US energy producer Apache Corp (NYSE:APA) will expand its oil and gas operations in Australia over the next three years, the Wall Street Journal (WSJ) has reported. Apache’s investment plans Down Under, which involve spending billions of dollars, coincide with the company’s decision to divest $4 billion (£2.6 billion) of assets by year-end. Apache’s share price yesterday closed marginally down in New York.

**Apache Corp to Invest in Western Australia Operations**
The WSJ yesterday quoted Faron Thibodeaux, Apache’s managing director for Australia, as saying that the Texas-based company would spend $1.9 billion in 2013 in Western Australia, and a similar or slightly higher amount next year on rolling out new projects. While next year’s amount is not yet specified, it is likely to be between $1.8 billion and $2.1 billion.

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Last month, Apache announced the Bianchi natural gas discovery, part of its ongoing exploration programme across the Carnarvon Basin of Western Australia. Apache said it was assessing potential commercial opportunities for Bianchi alongside the Zola discovery announced in 2011.
And while considering stepping up investment Down Under, Apache Corp last month sold its Gulf of Mexico shelf business for $3.75 billion to private equity group Riverstone Holdings LLC, with the deal expected to close at the end of September. In May, Apache announced a plan to divest $4 billion in assets by the end of 2013, with the proceeds from the divestments intended for reducing debt and enhancing financial flexibility.

**Wheatstone LNG Plant**
Apache Corp is also a minority partner to US energy giant Chevron Corp (NYSE:CVX) in the Wheatstone liquefied natural gas (LNG) plant in Western Australia. California-based Chevron has been reported as continuing talks with third-party gas suppliers for a potential expansion of the plant.
!m[US Energy Producer Pushing ahead with Investment Down Under](/uploads/story/4766/thumbs/pic-1_inline.jpg)

The WSJ quoted Apache’s Thibodeaux as noting that the Wheatstone plant was one development opportunity being considered for the Bianchi and Zola discoveries, along with the energy producer’s domestic gas facilities.
“We have the luxury of having options,” Thibodeaux added. “Where it ends up will purely be what makes the most commercial sense, as well as being able to deliver into either one of those two markets.”

**Apache Q2 Earnings Update**
On August 1, the company reported earnings of $1 billion or $2.54 per diluted common share for the second quarter, up from $337 million or $0.86 per diluted common share in the prior-year period.
“We have increased our drilling activities in Texas and Oklahoma to boost production and accelerate cash flow from our crude oil and liquids-rich assets,” G. Steven Farris, Apache’s chairman and chief executive officer, said in a statement. The company’s North American production jumped 42 percent year-on-year to 175,000 barrels per day for the second quarter.
Apache’s share price closed 0.60 percent lower at $82.70 in New York on 12 August 2013.
Chevron’s share price closed 0.57 percent down at $121.80 on 12 August 2013 but rose 0.12 percent to $121.95 in after-hours trading.


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