Oil producer APA Corp will sell Permian assets at $950 mln

APA Corp, a U.S. oil-and-gas producer, announced on Tuesday that it will sell its non-core Permian drilling properties for $950 million to an unnamed buyer as part of its efforts to reduce debt.

Energy companies are rushing to increase their oil and natural gas drilling inventory, particularly in the Permian Basin, which is the largest shale formation in the United States.

In an attempt to reduce debt and streamline operations, companies have also been forced to sell assets.

Occidental Petroleum announced earlier this year that it would sell certain assets to Permian Resources.

818 Million Dollars

To reduce debt

In August, it was reported that APA had been exploring the sale of its drilling assets.

The proceeds from the sale of Callon Petroleum will be used to reduce the company's debt of $6.7 billion.

The Houston-based firm said it wanted to pay off $2 billion in debt that it had taken on as part its acquisition within three years.

APA sold non-core assets from the Permian basin and Eagle Ford Basin for almost $700 million in early this year.

John Christmann IV is the CEO of APA Corp. He said, "The company’s unconventional Permian assets and its advantageous transport and marketing position compare favorably with similar-sized pure-play peers."

The deal is expected to be completed in the fourth quarter 2024 and involves properties that have an estimated net production equivalent of 21,000 barrels per day of oil, with approximately 57% being oil.

APA estimates its fourth quarter production will be around 307,000 Boepd once the transaction is closed.

After-market trading saw shares of the company rise by 0.8%. Reporting by Seher dareen and Vallari srivastava in Bengaluru, editing by Alan Barona

(source: Reuters)