Apache closes merger with Mariner

Apache Corp. said it closed its acquisition of Mariner Energy after Mariner shareholders voted to approve the merger.

The cash-and-stock deal, announced in April and then-valued at $2.7 billion, will give Apache its first significant position in the deep water Gulf of Mexico, where BP, Shell and others have announced major discoveries in recent years.

It’s part of a string of acquisitions the Houston-based oil and gas firm has made to increase its production and exploration opportunities around the globe.

This year, Apache also paid BP $7 billion for oil and gas properties in the U.S., Canada and Egypt, and $1 billion to Devon Energy for shallow-water fields in the Gulf of Mexico.

Apache, whose first-quarter daily output was 576,000 barrels of oil equivalent, expects daily production to exceed 775,000 barrels of oil equivalent in December when all the acquisitions are done.

The deals “will provide Apache with a rich inventory of growth and value-enhancement opportunities for years to come,” Apache CEO G. Steven Farris said in a statement.

In a meeting today, 79 percent of Mariner shareholders approved the Apache takeover.

Under the deal, Apache paid $800 million in cash and issued 17.5 million shares of common stock to Mariner shareholders, as well as assumed $1.6 billion in Mariner debt.

At the end of 2009, Houston-based Mariner had estimated proved reserves of 181 million barrels of oil equivalent across fields in the Gulf of Mexico, the Permian Basin and other sites and unbooked resource potential of 2 billion barrels of oil equivalent per day. During the third quarter, the firm produced 51,348 boe per day.

Its deep-water Gulf portfolio includes 125 blocks, seven discoveries in development — including stakes in the highly touted Lucius and Heidelberg projects — and more than 50 prospects.

The Apache-Mariner merger was announced five days before the April 20 blowout at BP’s Macondo well that killed 11 workers, launched the nation’s worst oil spill and raised questions about the safety of deep water drilling.

The deal closes just weeks after a government-imposed moratorium on oil and gas drilling was lifted in the deep-water Gulf, but questions remain about how quickly regulators will approve new drilling permits.

Apache and Mariner previously worked as partners in the deep-water Gulf of Mexico on the 2008 Geauxpher discovery and development at Garden Banks 462. Apache said it has also gained deep-water expertise with offshore projects in Egypt and Australia.

(Source: fuelfix.com)


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