Natural gas liquids revenue
In Part 6 of this series, we covered Apache Corporation’s (APA) revenues from natural gas and its implications. In this article, we’ll look into APA’s natural gas liquids (or NGL) revenue.
APA’s revenues from NGL went up by a sharp 26% in 2013 over 2011. Year-to-date, the trend continues as NGL revenues are up by 11% over levels from the same period a year ago. NGL production has increased 4% year-to-date, and the average sale price in 3Q14 fell marginally by 2% from the 2013 average. Year-to-date, NGL’s share of total North American revenue has climbed to 9% from 7% in the same period in 2013.
Other energy upstream companies that benefit from higher natural gas and NGL production in the US include Chesapeake Energy Corporation (CHK). CHK is a component of the Energy Select Sector SPDR ETF (XLE). Midstream energy companies are also benefiting from higher NGL fractionation services. These include DCP Midstream Partners, LP (DPM) and Targa Resources Partners LP (NGLS). Targa Resources is a component of the Alerian MLP ETF (AMLP).
Gulf of Mexico deepwater asset sale
The recent Louisiana and Anadarko Basin asset sales are a continuation of APA’s asset portfolio re-balancing. In the last 18 months, APA divested properties worth $10 billion. Earlier, on June 30, APA sold its non-operated interests in the Lucius and Heidelberg development projects and 11 deepwater exploration blocks in the Gulf of Mexico. APA sold these assets to a subsidiary of Freeport-McMoRan Inc. (FCX) for $1.4 billion. The divestitures include liquids and natural gas assets.
So, what will the continual portfolio re-balancing mean for Apache Corporation in 2015? Find out, next.