Apache Corp. (APA), this year’s third-worst performing oil and natural gas producer on Standard & Poor’s energy index, plans to sell $4 billion in assets by yearend and buy back shares as first-quarter profit missed analysts’ estimates.
Apache, based in Houston, will use initial proceeds of $2 billion to pay down debt, according to a statement today. The balance will be used to buy back as many as 30 million shares.
Apache didn’t identify the assets it intends to sell and said deals may include divestitures or joint-venture agreements. Chairman and Chief Executive Officer Steve Farris said in a March 18 interview that all assets were up for review as it pursued at least $2 billion in asset sales after a two-year, $16 billion acquisition spree.
“We have a process well underway to divest non-core assets,” Farris said in today’s statement. “We are pursuing other monetizations including joint-venture partnerships.”
Patrick Cassidy, an Apache spokesman, declined to comment on any additional assets that may be sold in a telephone interview today.
Apache reported first-quarter net income fell 10 percent to $717 million, or $1.76 a share. Excluding one-time items such as adjustments to the value of forward contracts and property writedowns, profit was $2.02 a share, 19 cents less than the average of 27 analysts’s estimates compiled by Bloomberg
First-quarter production equivalent to 781,819 barrels of oil missed expectations by about 1.6 percent, Hsulin Peng, an analyst for Robert W. Baird & Co. in Stamford, Connecticut, wrote today in a note to clients. Cyclones interrupted output in Australia, Apache said.
The shares rose 1 percent to $78.50 at 8:56 a.m. in New York before regular trading began.
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