In a Feb. 14 press conference to discuss its fourth quarter earnings and production results, Apache Corp. Chairman and Chief Executive Officer G. Steven Farris said Apache is in the process of identifying approximately $2 billion in “asset rationalizations to be completed in 2013,” but he would not elaborate on where those assets are; just that Apache is looking to sell them this year.
Speculation has begun about the 300,000-plus net acres that Apache holds in Daniels County, Mont., on the northwest fringe of the Bakken petroleum system.
John Bedingfield, Apache vice-president for exploration and new ventures, said in late summer that the Bakken petroleum system is at a shallower depth in the area, making the vertical well leg shorter, 7,000-7,400 feet, thus reducing the costs — around $7.5 million compared to about $10 million in the center of the basin in North Dakota.
Bedingfield said Apache has more than 1,900 potential locations in its Montana Bakken acreage, with a potential resource of 1 billion barrels of oil.
Apache’s entry into Daniels County was its first venture into the Williston basin.
It’s the only big player in the county, giving what Bedingfield called at the time a “first-mover” advantage.
An announcement about the company’s drilling results was expected sometime after the first of the year.
In November an Apache spokesperson said the company would “more to say next year after the data (from the first wells) are analyzed, and we’re in a better position to comment on their impact.”
During the recent press conference, Farris said that Apache has drilled some wells in the Bakken in Montana, but said the company is concentrating its efforts on its Permian and Anadarko basin plays.
On March 15, the Billings Gazette quoted a local landman as saying Apache is selling its holdings near Scobey, Mont., the county seat for Daniels.
Petroleum News Bakken was unable to contact that landman who was traveling out of the country.
Hints around repositioningMore recently, in a March 18 article, Bloomberg reported Farris as saying in an interview that Apache is considering all of its options in regard to the sale of $2 billion of assets.
Farris told Bloomberg that Apache is repositioning its portfolio and is looking at what the long-term benefit would be for its shareholders.
Bloomberg identified one of the potential sale assets as Apache’s deepwater Gulf of Mexico, or GOM, assets.
According to Bloomberg, Farris said Apache’s portfolio “changed” after it acquired those GOM assets in 2010 through a $2.7 billion acquisition of Mariner Energy Inc.
Whether it sells its deepwater GOM assets will depend on the market for those holdings, he said.
In 2012, Apache secured a 300,000 set acre share of Fort Worth-based Shale Exploration’s Jayhawk prospect in Daniels County. Shale exploration told Petroleum News Bakken that it is not aware of Apache selling any of its Daniels County assets. “To our knowledge they are not selling,” Shale Exploration chief executive officer Sid Greehey told Petroleum News Bakken.
Petroleum News Bakken contacted Apache on March 20 to ask whether someone could comment on the speculation that Apache’s Daniels County acreage is among the $2 billion in assets Apache is looking to divest.
An Apache spokesman said the company does not comment on speculation regarding acquisition or divestiture activity.