US-based oil producer APA is considering the sale of oil and gas-producing land in the southeast Eagle Ford and Austin Chalk shale basins in Texas, reported Reuters, citing a document.
The firm is looking to raise between $450m and $500m by selling approximately 212,000 net acres, according to two sources close to the bidding process.
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The sources cautioned that the land’s valuation was vulnerable to volatile commodity prices, and APA could decide to retain the properties in case it doesn’t receive the right offer.
The potential sale of the properties of APA is being managed by an undisclosed investment bank.
These properties form part of APA’s total production in the US. The sale is seen as the firm’s plan to focus on its assets in western Texas, where the company is seeing benefits from its investments in a remote area of the Permian basin.
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For November 2022, APA’s acreage on sale is anticipated to have an oil and gas production rate of approximately 15,000 barrels of oil equivalent per day (boepd).
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By GlobalDataEarlier this year, APA closed the acquisition of Texas Delaware basin properties from an undisclosed firm in a $505m deal.
Located primarily in the Loving and Reeves counties, near APA’s existing operations, the acquired assets comprise producing wells, an inventory of undrilled locations, and wells in the process of drilling and completion.
Several public companies have been offloading non-core assets to capitalise on increasing oil and gas prices in the wake of Russia’s invasion of Ukraine and have used the proceeds to invest in profitable locations or to reward shareholders.
Last week, APA reported a third-quarter profit above Wall Street expectations, helped by an ‘excellent Permian basin performance’, and said it expects to return at least $1.6bn to investors this year.
In August, the company purchased West Texas properties adjoining its existing land for $505m, increasing production by 12,000boepd and 14,000boepd, respectively, through the rest of the year.
