In a statement Apache said, “Morgan Stanley Capital Group Inc acquired an overriding royalty interest in the properties for US$645.7 million prior to [our] transaction. Apache has booked an US$83 million liability associated with producing and delivering 20 MMBoe to Morgan Stanley (Apache will not book these reserves) and a US$27 million liability associated with previously hedged production.”
“[Our] acquisition includes 74 fields on 232 offshore blocks, including 89 undeveloped blocks, and 104 platforms. [We] will operate 49 of the fields with 70% of the production and 75% of the net reserves. Apache will book proved reserves of approximately 60 million barrels of oil equivalent (MMboe) of which 50% is natural gas [and we estimate] the properties’ probable reserves at an additional 23 MMboe,” it added.
According to Apache CEO and president G. Steven Farris, “Most of the properties are in areas where we already operate, so we can easily and economically integrate them into our existing operations.”
While Ferris did not elaborate further, it is understood Apache’s share of the acquired production is estimated to average around 47 million cubic feet (MMcf) of natural gas and 3,300 barrels of liquid hydrocarbons per day in the current-year fourth quarter.
This is expected to hit an annual average of 65 MMcf of natural gas and 6,600 barrels of liquid hydrocarbons per day when the Tarantula field comes on stream next year.