Seeking Alpha

Apache to sell Argentina operations to YPF for $800M

  • Apache (APA) says it sold all its operations in Argentina to state-controlled energy company YPF for $800M plus the assumption of $52M in back debt.
  • APA says the deal is consistent with its strategy to focus on growth areas such as drilling opportunities onshore North America and international assets generating large free cash flows.
  • At year-end 2013, APA had estimated reserves in the country of ~540B cfe; the company's 2013 production from Argentina averaged 256M cfe/day.
  • APA +2% AH.
Comments (8)
  • PalmDesertRat
    , contributor
    Comments (3053) | Send Message
     
    The press release does not specify whether the cash is in the form of spendable money outside Argentina or whether it has to be held in the central bank or otherwise be blocked by the Argentines.

     

    Sorry, but with Argentina I've learned it's more accurate to assume the worst.
    12 Feb 2014, 05:43 PM Reply Like
  • dutchduke
    , contributor
    Comments (55) | Send Message
     
    Sold out for cheap it appears. Even by conservative measures, APA valued ARG at $1 Billion in its 2013 10K release. APA has spend over $800 MM in CAPEX over the past 3 years in ARG, totally wasted money.

     

    Wonder what the Street was looking for on this? Doesn't matter if analysts applaud, this is value erosoin at its finest. I can see it now, "Sale price could've been higher, but we are glad they continue to divest" Weak
    12 Feb 2014, 05:58 PM Reply Like
  • PalmDesertRat
    , contributor
    Comments (3053) | Send Message
     
    maybe,but the stock is up in the after-market
    12 Feb 2014, 06:51 PM Reply Like
  • dutchduke
    , contributor
    Comments (55) | Send Message
     
    that was the initial dumb money reaction, its only up 0.9% after-market now

     

    I realize they might as well sell and leave, but good lord that's a piss poor sale
    12 Feb 2014, 11:00 PM Reply Like
  • weewa
    , contributor
    Comments (8) | Send Message
     
    I assume they'll be receiving Argentine denominated zero-coupon bonds that mature in 30yrs.......
    12 Feb 2014, 09:08 PM Reply Like
  • PalmDesertRat
    , contributor
    Comments (3053) | Send Message
     
    Or, zero coupon perpetuals
    12 Feb 2014, 10:48 PM Reply Like
  • livinthedream1
    , contributor
    Comment (1) | Send Message
     
    I was hoping they would sell these assets. Great assets but in a really bad country. They had to get what they could and reinvest somewhere else or pay off some more debt. I like the moves they've been making. Next I see them selling 25% of Kitimat. I like Kitimat but the financial build out of the facility is huge so 25% is more appropriate. I love this stocks future!
    12 Feb 2014, 09:26 PM Reply Like
  • dutchduke
    , contributor
    Comments (55) | Send Message
     
    well, the verdict is in and the sale couldn't even counteract earnings miss, continue to short APA
    13 Feb 2014, 09:45 AM Reply Like
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