Apache completes exit from Canada with sale
Management at Houstonbased oil producer Apache Corp. has finally pulled the trigger on completely exiting Canada after signalling for months that it could sell its Alberta and British Columbia assets.
Apache late Thursday said it would sell its remaining oil and natural gas assets in the two western provinces to Calgarybased Paramount Resources Ltd., capping off a $927-million divestment from Canada over the past two months.
The announcement follows a string of recent divestments, particularly in the oilsands, as foreign companies drop their Canadian assets in favour of high-yield U.S. shale plays.
Apache management in recent months had said it was focusing its efforts on U.S. shale basins, particularly after it discovered its massive new Alpine High resource in West Texas that the company said contains more than 75 trillion cubic feet of gas and three billion barrels of oil.
“We believe Apache’s exit from Canada makes strategic sense with (management) recently noting that it has ‘a lot on its plate now with Alpine High’ and that Canada struggled to compete for capital within its portfolio,” analysts at Citigroup said in a note Friday.
Recent oilsands deals include Royal Dutch Shell PLC’s $8.5-billion sale of leases and facilities to Calgary-based Canadian Natural Resources Ltd. in March, closely followed later that month by ConocoPhillips Co.’s $17.7-billion divestment.
The high-profile exits have caused political squabbles in oil-rich Alberta, where the provincial NDP government has implemented a carbon tax and a hard limit on total carbon emissions in the oilsands. But analysts say Apache’s move could be the result of the company’s growing asset base in the U.S. rather than a deliberate exit from Canada.
“It says there are certain companies that want out of Canada, but I don’t know if that means Canada specifically or what they’re really after is just shrinking their own portfolio,” said Brook Papau, an analyst at RS Energy Group in Calgary.
Apache’s management couldn’t be reached for comment Friday, however the company said it would focus its efforts on its existing assets in Egypt, the U.K. North Sea and the U.S. The company’s flagship developments are in the U.S., “particularly within the Permian Basin,” according to a statement by Apache chief executive John Christmann. Financial Post