By Taos Turner
BUENOS AIRES---Argentina's leading oil company, YPF SA, agreed
on Wednesday to pay $852 million for all of Apache Corp's. oil and
gas operations in the South American country, as part of an effort
by the state-owned company to increase gas output.
Apache has been selling assets around the world to improve its
balance sheet after years of aggressive acquisitions. Last year,
the Houston-based company said it planned to raise around $4
billion through asset sales.
In a statement, Apache said it has brought in more than $7
billion from assets sales over the past two quarters and is using
that money for investment, debt reduction and stock buybacks, among
other things.
Apache said its estimated reserves in Argentina total around 540
billion cubic feet of natural gas equivalent. Last year, the
company produced an average of 256 million cubic feet of gas a
day.
The acquisition will allow YPF to boost its own oil and gas
reserves by around 14%, while raising gas output by about 15%, YPF
said.
"This is an excellent opportunity to add important operations in
both conventional gas and unconventional resources to YPF's
assets," said Miguel Galuccio, YPF's chief executive. The
transaction comes as the Argentine government entrusted Mr.
Galuccio with increasing energy output, and thus reduce the
country's need for imported fuel.
Mr. Galuccio said YPF would immediately increase the number of
drilling teams operating at Apache's current fields to raise gas
production.
As part of the deal, YPF agreed to take 1,240 kilometers of
exploration and production rights and sell them to Argentine energy
company Pluspetrol SA for $217 million. Mr. Galuccio said that
Pluspetrol was the only company in Argentina apart from YPF to
reverse declining oil production last year.
Apache has around 350 employees working in the provinces of
Neuquen, Rio Negro and Tierra del Fuego in southern Argentina.
YPF is currently involved in talks with Argentina's government
and the Spanish energy company Repsol to compensate Repsol for the
expropriation of its majority stake in YPF in 2012. The parties
reached a preliminary deal in November in which Argentina agreed to
pay Repsol $5 billion in government bonds.
--Tess Stynes contributed to this article.
Write to Taos Turner at taos.turner@wsj.com
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