HOUSTON, Dec. 15, 2014 /PRNewswire/ -- Apache
Corporation (NYSE, Nasdaq: APA) today announced it has agreed to
sell its interest in two LNG projects, Wheatstone LNG
and Kitimat LNG, along with accompanying upstream oil and gas
reserves, to Woodside Petroleum Limited (ASX: WPL) for a purchase
price of $2.75 billion. Apache will
also be reimbursed for its net expenditure in the Wheatstone and
Kitimat LNG projects between June 30,
2014, and closing which is estimated to be approximately
$1 billion.
Under the terms of the agreement, Apache will sell its equity
ownership in its Australian subsidiary, Apache Julimar Pty Ltd,
which owns a 13-percent interest in the Wheatstone LNG project and
a 65-percent interest in the WA-49-L block which includes the
Julimar/Brunello offshore gas fields and the Balnaves oil
development. The transaction, which has an effective date of
June 30, 2014, will also include
Apache's 50-percent interest in the Kitimat LNG project and
related upstream acreage in the Horn River and Liard natural gas
basins in British Columbia,
Canada.
Based on current estimates, Apache's net proceeds upon closing
are expected to be approximately $3.7
billion. Receipt of proceeds from this transaction will
trigger an estimated $650 million
cash tax liability, approximately $600
million of which is associated with the income tax due on
Apache's Overall Foreign Loss account balance. Upon incurring this
income tax liability, Apache estimates that it will have the
flexibility to repatriate cash generated from foreign operations
and/or future international strategic transactions with minimal
U.S. cash tax impact.
"Today's announcement marks the successful completion of one of
our primary strategic goals of exiting the Wheatstone and Kitimat
LNG projects. Apache recognizes the contribution of our employees
who have worked so diligently on these projects since their
inception, and we sincerely thank them for their tremendous effort.
I would also like to thank Woodside's CEO and Managing Director,
Peter Coleman, and his entire staff
for their hard work and professionalism in bringing this
transaction to a successful conclusion. I am proud of Apache's
legacy in advancing the Wheatstone and Kitimat LNG projects, and I
am confident that Woodside's participation will have a positive
impact in seeing these world-class LNG facilities through to first
production. We look forward to the redeployment of the proceeds
from this sale, which may be used to reduce debt, repurchase shares
and to pursue other opportunities that enhance our asset base and
drive profitable production growth," said G. Steven Farris, chairman, chief executive
officer and president.
Upon completion of the transaction, Apache will continue to hold
upstream acreage offshore Western
Australia in the Carnarvon,
Exmouth, and Canning basins along with related hydrocarbon reserves
and production. Apache will also retain its 49-percent ownership
interest in Yara Holdings Nitrates Pty Ltd and 10-percent interest
in the related ammonium nitrate plant.
The transaction is expected to close in the first quarter of
2015 and is subject to necessary government and regulatory
approvals and customary post-closing adjustments. The sale of the
Kitimat LNG project is subject to certain operator
consents.
About Apache
Apache Corporation is an oil and gas exploration and production
company with operations in the United
States, Canada,
Egypt, the United Kingdom and Australia. Apache posts announcements,
operational updates, investor information and copies of all press
releases on its website, www.apachecorp.com, and on its Media and
Investor Center mobile application, which is available for free
download from the Apple App Store and the Google Play
Store.
Forward-looking statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements can be identified by words such as "anticipates,"
"intends," "plans," "seeks," "believes," "estimates," "expects" and
similar references to future periods. These statements include, but
are not limited to, statements about future plans, expectations and
objectives for Apache's operations, including statements about our
drilling plans and production expectations, and asset sales and
monetizations. While forward-looking statements are based on
assumptions and analyses made by us that we believe to be
reasonable under the circumstances, whether actual results and
developments will meet our expectations and predictions depend on a
number of risks and uncertainties which could cause our actual
results, performance, and financial condition to differ materially
from our expectations. See "Risk Factors" in our 2013 Form 10-K
filed with the Securities and Exchange Commission for a discussion
of risk factors that affect our business. Any forward-looking
statement made by us in this news release speaks only as of the
date on which it is made. Factors or events that could cause our
actual results to differ may emerge from time to time, and it is
not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future development, or
otherwise, except as may be required by law.
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