uploads///APAs Growth Strategy

Must-know: Why Apache Corp. focuses on growth in the US

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Aug. 22 2014, Updated 1:11 p.m. ET

Apache’s growth path

Apache Corp. (APA) has major operations in the U.S., Canada, Egypt, Australia, and the UK.

Apache entered Australia in 1993. This was closely followed by its entry into Egypt.

APA’s Growth Strategy

By 2009, almost 50% of its output started coming from international operations. By this time, Apache decided to focus closer to home. It reduced its exposure to international markets.

However, the company still holds significant international positions.

North America

APA holds ~11.5 million gross acres in North America. Its operations are focused in the Permian Basin, the Anadarko Basin in western Oklahoma and the Texas Panhandle, the Gulf Coast onshore and offshore areas of the U.S., and in western Canada. APA also has leasehold acreage holdings in Alaska.

Egypt

Apache entered Egypt in 1994 when it discovered the Qarun well. APA holds ~9.8 million gross acres there. It continues to actively pursue exploration and development opportunities.

Australia

Australian operations are focused in offshore western Australia in the Carnarvon, Exmouth, and Browse basins. APA controls ~7.9 million gross acres in offshore western Australia through 30 exploration permits, 18 production licenses, and nine retention leases.

UK North Sea

Apache entered the North Sea in 2003. Since then it has actively invested in the region. It has established a large inventory of drilling prospects. Apache holds ~1.2 million gross acres in the UK North Sea.

In 2012, Apache expanded its holdings in the North Sea by acquiring ExxonMobil (XOM) Corporation’s Mobil North Sea Limited assets.

Canada

Apache currently holds ~5.4 million gross acres in Canada. Apache is focused on shifting towards an oil and liquids-rich gas asset portfolio in this region. It had several strategic divestitures during 2013.

The company plans to keep lucrative international assets. The markets will be watching to see how Apache plans to incorporate the new Australian discovery into its growth strategy.

Other oil and gas companies with Australian operations include ConocoPhillips (COP), ExxonMobil (XOM), and Chevron Corp. (CVX). These companies are components of the Energy Select Sector SPDR ETF (XLE).

The next part in the series discusses the market’s reaction to the discovery news.

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