Macquarie, Brookfield to buy Apache’s Australia energy unit
US-based oil and gas exploration and production company Apache has agreed to sell its Australia business to Macquarie Capital and Brookfield Asset Management for $2.1 billion in cash.
Macquarie and Brookfield said the acquisition will form the foundations of a new intermediate oil and gas producer that they will manage jointly.
The divestment is part of a broader repositioning at Apache as the company focuses on the North American onshore market. This shift has seen the company complete approximately $17 billion of asset purchases and $17 billion of asset sales in the past five years. Following the earlier exit of the Wheatstone liquefied natural gas (LNG) project to Woodside Petroleum, Apache is on course to fully exit the Australian exploration and production business.
The unit being sold to Macquarie and Brookfield - Apache Energy - produced a daily average of 49,000 barrels of oil equivalent in March. It comprises interests in six directly-operated oil and gas fields and a two more operated by BHP Billiton; interests in gas processing facilities and associated infrastructure; and exploration and production permits for several basins.
Macquarie and Brookfield said the business will continue to support the growth of the Western Australian domestic gas market. A long-term supply agreement, commencing in 2020, has already been signed with aluminum producer Alcoa.
"The consortium of Brookfield and Macquarie Capital has worked cohesively to bring together this exciting transaction. This portfolio provides strong underlying cash flows via its contracted domestic gas portfolio, production flexibility and a great platform for growth, organically and through market consolidation, led by the strong local management team," said Len Chersky, head of private equity for Brookfield in Australia.
The transaction, which is subject to various government and regulatory approvals, is expected to close in the middle of 2015, Apache said in a statement.
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