Apache has been trying to rationalize its portfolio for a couple of years now. The company acquired more than $16 billion in assets over the past three years and said in May that it plans to sell off $4 billion in assets by the end of this year. The oil and gas company plans to use half the receipts from the projected $4 billion in asset sales to pay down debt and the other half to repurchase stock.
In the company’s second quarter, Apache’s Egyptian production accounted for 19% of its total 790,000 barrels of oil equivalent daily global production. Egyptian production is about 56% oil, and the company reported that oil production was down by about 2,500 barrels a day in the second quarter due to increasing water cuts in some areas. Having a deep-pocketed partner can help Apache make new discoveries that will take up the slack from slower production at existing wells. All in all, Apache did a smart thing.
Shares trading up about 7.5% in Friday’s premarket at $84.50 in a 52-week range of $67.91 to $94.87.
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