Apache To Sell 33% Stake of Egypt Business to Sinopec (APA)
Shares of Apache Corporation (APA) were up on Friday morning after news that it has formed a partnership with Sinopec International Petroleum Exploration and Production Corp.
The two companies agreed on the deal after months of talks. This deal is part of Apache’s effort to rebalance its portfolio.
As part of the deal, APA will receive $3.1 billion from Sinopec in exchange for a 33% stake of its oil and gas business in Egypt. Apache will continue to operate the business. The deal is expected to close in the fourth quarter.
Apache reported that the production from its Egypt business averaged 100,000 barrels of oil and 354 million cubic feet of natural gas per day in 2012. The company considers this business to be strong, but is questioning its long-term growth due to instability in the country
CEO and chairman of Apache commented: “We are pleased to launch a global partnership with Sinopec, and to welcome them into our business in Egypt.”
“Sinopec is an ideal partner for us, and we look forward to the growth and value generation ahead for both companies through the expansion of our collaboration to other projects.”
Apache shares were up $5.36, or 6.82%, during pre-market trading Friday. The stock has been mostly flat YTD.
The Bottom Line
Shares of Apache Corporation (APA) have a 1.02% yield based on Thursday’s closing price of $78.64.
Apache Corporation (APA) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.
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