Speculation is mounting that Apache Energy is set to spin-out its Western Australian assets into a separate entity, with Macquarie Capital Advisers appointed to act on its behalf.
Macquarie confirmed to Business News today that it would act on the Texas-based company’s behalf as it seeks to offload its 13 per cent stake in Chevron’s Wheatstone LNG project.
Apache is also looking to offload all of its Western Australian assets, which include a 65 per cent interest in the Julimar gas field that feeds into Wheatstone, tenements with potential oil discoveries in the Canning Basin, and several joint venture gas developments with Santos.
Earlier this week, Apache chairman and chief executive Steve Farris said that, due to the company’s transition to refocus on North American operations, it was considering selling international assets either through spin-outs or strategic transactions.
Reiterating earlier comments Mr Farris specifically outlined the potential sale of WA assets, and provided a previously unnamed timeframe of nine months.
Mr Farris said Apache had sold off $10 billion worth of assets in the Gulf of Mexico, Australia and Egypt during the past 18 months.
“We are going to be a North American onshore (exploration and production) company, we’re going to transition out of our international positons,” he said
The announcement has sparked debate of the possibility of an initial public offering of Apache’s WA assets.
Apache made a $US74 million operating profit from $US237 million revenue from its Australian oil and gas assets for the quarter ended June 30 2014.
Apache’s Australian assets for the quarter produced 14,555 barrels of oil per day and 210,470 thousand cubic feet of gas per day.
This represented a value of 6 per cent of Apache’s total global oil and gas revenue for the quarter.
In the Canning basin, Apache’s Coniston development project is scheduled to produce its first oil in early 2015 and it has flagged a potentially important major oil discovery at Phoenix South.
It is understood Santos would be interested in some of Apache’s gas assets, which depending on how a deal is structured, could give Santos pre-emptive rights to those connected to its joint ventures.
It is also believed Santos has concerns over the level of exposure it wants to take on in WA’s domestic gas market and is not interested in Apache’s oil assets.
Santos and Apache are currently embroiled in three separate Supreme Court cases over disputes relating to their Spar and John Brookes gas project joint ventures.
Apache is also involved in continuing legal battles with several companies over the Varanus Island gas explosion in 2008.
Woodside and Chevron declined to comment on whether they would be interested buyers.
Other potential buyers include BHP Billiton, which also could have pre-emptive rights over its joint venture in the Macedon gas fields and energy company Origin Energy.