(Updates share price, adds Apache conference call commentary)
By Swetha Gopinath
May 8 Freeport-McMoRan Copper & Gold Inc
said on Thursday it would buy Apache Corp's deepwater
oil and gas projects in the Gulf of Mexico for $1.4 billion, a
day after announcing it would shed $3.1 billion in Eagle Ford
shale assets in Texas.
Mining giant Freeport said the Eagle Ford asset sale will
fund the purchase of interests in two development projects and
11 deepwater exploration blocks in the Gulf of Mexico.
Meanwhile, Apache, known for its experience using hydraulic
fracturing, or fracking, to unlock oil and gas from rock, has
been selling assets overseas and in the Gulf to focus on
lucrative shale fields in North America.
A 21 percent rise in liquids production from onshore fields
helped Apache post a better-than-expected first-quarter profit
Apache, like Occidental Petroleum Corp and Hess Corp
, has been boosting production in North American shale
where growth is seen as more predictable.
Freeport, a major copper producer, said on Wednesday it was
selling some Eagle Ford assets to Encana Corp, Canada's
top natural gas company, as part of a plan to raise as much as
Freeport is looking to reduce its $20.9 debt load, which
ballooned after it surprised the market in late 2012 with a $9
billion purchase of both Plains Exploration & Production Co and
McMoRan Exploration Co.
The assets being acquired have 55 million oil-equivalent
barrels in estimated proved, probable and possible reserves.
Apache and Freeport shares were little changed in afternoon
trade on the New York Stock Exchange.
Apache said it would focus more on exploration opportunities
in water depths less than 1,000 feet (305 meters) in the Gulf of
Mexico, while looking for joint venture options for its other
"Discoveries on the shelf have quicker cycle times, require
less capital, and provide more options to bring oil and gas to
market," said Thomas E. Voytovich, Apache's chief operating
officer for offshore and international operations.
Apache, which has sold its properties in Canada and
Argentina, is also aiming to sell a part of its 50 percent stake
in the Kitimat liquefied natural gas export project in British
On a conference call with investors, Apache Chief Executive
Officer Steve Farris said the company has also cut its expected
capital expenditure for Kitimat this year to $600 million from
APACHE PROFIT TOPS ESTIMATES
Apache's first-quarter adjusted profit was $1.78 per share,
above the average analyst estimate of $1.62, according to
Thomson Reuters I/B/E/S. But worldwide net daily production of
oil, natural gas and natural gas liquids fell 18 percent on the
year to average 640,000 barrels of oil equivalent.
Based on good well data, Apache plans to double the number
of rigs running in the Eagle Ford Shale in south Texas to eight
by midyear. It may also reallocate capital to that area and the
Revenue fell 7 percent to $3.67 billion, but beat the
average analyst estimate of $3.56 billion.
(Reporting by Swetha Gopinath in Bangalore and Anna Driver in
Houston; Editing by Terry Wade, Marguerita Choy and Jeffrey