Seeking Alpha

theavantigroup's  Instablog

theavantigroup
Send Message
  • The Avanti Group Advise Clients On Apache Deal 0 comments
    Sep 15, 2013 8:46 PM

    The Avanti Group is advising clients on opportunities in Apache Corporation, after the troubled oil and gas company agrees to sell a significant stake of its Egyptian operations to Sinopec.

    The Avanti Group the equities research house based in Tokyo, providing professional trading and investment research solutions to institutional and private investors across the globe have recently drawn their investor's attention to developing news within the Apache Corporation.

    Shareholders in Houston based Apache Corp, have seen welcome news with the entry of the giant Chinese oil company China Petrochemical Corp. (Sinopec) into the fray, Apache has spent a turbulent year in which it has struggled to divest itself of assets in attempts to raise $4 billion to put toward key restructuring projects. The Sinopec deal will see the company acquire its much-needed cash yet retain profitable revenue streams in the joint venture with China's largest oil refiner.

    The deal will see Sinopec, which has seen profits surge after its cost cutting and own restructuring drive, buy a 33 percent stake in Apache's Egyptian oil and gas operations for $3.1 billion. It is expected that the day-to-day business model will be managed as a joint concern between the two companies, something that Sinopec has done with other large stake holdings in resource providers.

    "There had been a lot of concern for the final outcome of Apache's efforts, not so much as to whether or not they would raise the required funds and achieve their restructure goals, but more on the question of how much the company would have to lose in assets. There were a lot of sharks in the water, but this deal with Sinopec has put them firmly back on dry land again," commented Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.

    The position in Apache's Egyptian operation has been a profitable ongoing concern since its inception and has remained untroubled by political events in the country over recent years. Production figures for 2012 show that the fields provided 100'000 barrels of oil and 354 million cubic feet of natural gas per day with figures expected to increase further with planned infrastructure additions.

    "Sinopec has a well-earned reputation for bringing long-term and profitable strategy to its joint ventures, between this and their own commanding performance in China this year they have given a well need stamp of confidence to Apache and the market has taken note. Sinopec does not make rash decisions, they fully expect their concerns to increase in value and have proven themselves repeatedly.

    We are closely monitoring this sector and advising our clients appropriately as to best place their current positions," concluded Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.

    The Avanti Group is an equity research house providing research and analysis outsourcing solutions for institutional financial traders worldwide, founded in early 2003.

Back To theavantigroup's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.