Apache Corp. (NYSE:APA), an oil and gas producer, announced today it will buy privately held Cordillera Energy Partners for $2.85 billion in cash and stock. This will expand Apache’s holdings in emerging oil and gas fields in the U.S. It will double the company’s land holdings in the Andarko basin, a shale formation in western Oklahoma and the Texas panhandle. Apache is interested in particular the land in the Granite Wash area which holds gas and natural gas liquid.
This is the largest deal in the new year so far and the second largest transaction worldwide. Before today, Cordillera was owned by Encap Investments L.P. and other investors. These investors will receive $2.25 billion in cash and $600 million in stock.
While natural gas prices have been plummeting recently, this transaction will help Apache Corp because a lot of the natural gas is in liquid form which is worth more. Once the deal is finalized, Apache will have access to 71.5 million barrels of oil equivalent and current net production of 18,000 barrels of oil equivalent a day.
APA is currently trading 1.35% higher at $98.16. The stock has traded 3.8 million shares so far today, above its daily average of 3 million shares. The company has a market cap of 37.60 billion.