Spanish energy company Repsol is exploring the possibility of a reverse merger involving its upstream division, reported Bloomberg, citing sources familiar with the matter.
The company is reportedly in preliminary talks with several potential partners including US-based APA Corp, previously referred to as Apache Corp.
According to the sources, initial discussions have taken place between Repsol and APA. The company has also approached other possible partners for a similar transaction.
Such a move could expand Repsol’s upstream operations and provide a more expedient path to a public offering.
Following reports of the talks, shares in APA increased by as much as 7.3% in New York. Over the past year, the stock has risen by around 16%, valuing APA at approximately $9bn. Meanwhile, Repsol’s shares climbed to 2.2%.
The news agency noted that in 2022, Repsol agreed to sell a 25% stake in its upstream unit to EIG Global Energy Partners, a private equity firm.
That transaction valued the division at $19bn including debt and was intended to support further expansion in the US, while generating capital for investments in low-carbon initiatives.
Repsol's executives have previously indicated that they are preparing the upstream business for a potential "liquidity event" such as a public listing, targeted for 2026.
Last month, CEO Josu Jon Imaz told analysts that options under consideration include an initial public offering (IPO), a reverse merger with a US-listed entity or bringing in a new private investor.
The people familiar with the situation cautioned that discussions are ongoing and may not result in any agreement. Other alternatives, such as an IPO or the sale of a stake, remain on the table.
Spokespeople for Repsol, EIG and APA all declined to comment on the matter.
During the third quarter (Q3), Repsol’s upstream arm reported production of 551,000 barrels of oil equivalent per day (boepd).
It maintains operations across the US, Mexico and Brazil, and is progressing with the first phase of the Pikka project in Alaska.
APA derives most of its production from its home nation, mainly from the Permian Basin and the Gulf of Mexico, while its global activities focus on natural gas, the report said.
Oil makes up 51% of APA’s total output, with natural gas contributing around one-third and natural gas liquids the remainder.
As premium drilling sites in the Permian Basin diminish, many operators are said to have reduced spending and staff to streamline operations.
The US oil sector has also seen a wave of consolidation as companies seek efficiency gains and resource scale.
In September 2025, South East Asian energy and natural resources company MedcoEnergi agreed to acquire operating interests in two production sharing contracts in South Sumatra, Indonesia, from Repsol for up to $90m (Rp1.5trn).
