US oil company APA has announced the signing of an agreement to sell non-core producing properties in the Permian Basin for $950m.
An undisclosed buyer will acquire assets in the Central Basin Platform, Texas and New Mexico Shelf, and Northwest Shelf.
These properties currently yield an estimated net production of 21,000boepd with approximately 57% being oil.
The sale is part of APA’s strategy to slash its debt, primarily the $2bn incurred from acquiring Callon Petroleum.
The company plans to pay down this debt within the next three years.
Earlier this year, APA sold assets in the Permian and Eagle Ford Basins for nearly $700m, including divestments in the Midland Basin and East Texas.
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By GlobalDataIn the Midland Basin, the divested assets comprised roughly 24,000 net royalty acres, which had a net production of about 2,000boepd, to its subsidiary Apache during the first quarter of 2024 (Q1 2024).
Additionally, APA sold 237,000 net acres in the East Texas Austin Chalk and Eagle Ford plays, which had net production of around 11,000boepd, during the same period.
APA CEO John Christmann IV said: “Through multiple transactions completed this year, we have high-graded and focused our US asset base. Our remaining Permian position has scale and balance in the unconventional Midland and Delaware Basins.
“The net impact of our acquisition of Callon Petroleum and the follow-on asset sales is that APA has increased its onshore US production by approximately 66,000boepd in 2024 and continued to add economic unconventional inventory, with no material change in net debt levels compared to year-end 2023.”
The effective date for the latest sale is set for 1 July 2024, with the expectation to close the transaction in Q4 2024.
This move comes amid a wave of consolidation in the sector, with Reuters reporting $51bn in mergers and acquisitions in Q1.
This trend reflects energy companies’ eagerness to expand their drilling inventories in the Permian Basin while also streamlining operations and reducing debt.
In a similar vein, Occidental Petroleum earlier announced its plans to sell assets to Permian Resources for $818m as part of its debt reduction strategy.
