Apache raises $3B in debt to help fund Cordillera acquisition

Houston-based Apache Corp. priced $3 billion in aggregate principal amount of notes in a public offering to help fund its $2.85 billion purchase of Cordillera Energy Partners III LLC.

The company priced $3 billion in aggregate principal amount of notes in a public offering consisting of $400 million principal amount of 1.75% notes due in 2017, $1.1 billion principal amount of 3.25% notes due in 2022, and $1.5 billion principal amount of 4.75% notes due in 2043. Fitch and S&P have rated the issuance at A-, Moody’s at A3, noted Global Hunter Securities (GHS) in a note to investors April 4.

A large portion of the proceeds is expected to fund the $2.25 billion cash portion of the acquisition. The deal, which boosts Apache’s Anadarko Basin position to 487,000 acres (316,000 in the Granite Wash), was announced in late January and is expected to be completed during the second quarter.

A smaller portion of the funds raised will go towards repayment of Apache's $400 million in aggregate principal amount of 6.25% notes which mature on April 15, 2012, and for general corporate purposes.

“[Apache] is also is likely to use some of the funds to pay off $400MM in 6.25% notes due this year, for a total net debt increase of $2.6B. We had assumed a net $2B with the balance of the Cordillera deal that wasn’t paid in shares to be paid from cash; the higher debt level brings our debt/boe to $3.64, and 2012E debt-to-cap to 25% - still well below the 33% peer median. Given that APA has already raised the dividend 13% this year and has manageable debt levels, we expect any cash flow over and above our assumed $11.2B for the year to go into additional capex (currently set at $9.5B for the year), most likely onshore US in the Permian or mid-continent,” the analysts continued.

Joint book-running managers for the notes are Citigroup, Goldman, Sachs & Co., JP Morgan, BofA Merrill Lynch, BMO Capital Markets, Deutsche Bank Securities, HSBC, Mitsubishi UFJ Securities, Morgan Stanley, RBC Capital Markets, RBS, UBS Investment Bank and Wells Fargo Securities.

 

 

Related Articles

Oryx enters Permian with $300M equity commitment

04/09/2014 Oryx Midstream Services LLC has received an equity commitment totaling up to $300 million, and will pursue midstream opportunities in the Permian Basin, focusing initially on the Delaware Basin in ...

Outrigger Energy further expands Permian footprint

04/09/2014 Outrigger Energy LLC is expanding its midstream capabilities in the Permian Basin with the addition of a natural gas gathering and processing and crude oil gathering system in the Midland Basin of ...

Energen sells natural gas utility to become a pure play in the E&P space

04/07/2014

Energen Corp. has signed a definitive stock purchase agreement to sell its natural gas utility business, Alabama Gas Corp. (Alagasco), to The Laclede Group Inc.

Welch appointed EVP, CFO of JP Energy Partners

04/03/2014

JP Energy Partners LP has appointed Patrick Welch as the company’s executive vice president and CFO. Welch has been serving as the interim CFO for the company since November of last year.

Rosetta Resources increases borrowing base to $950 million

04/03/2014 Rosetta Resources Inc. reports the amendment of its senior revolving credit facility to increase its borrowing base. Effective April 2, the company's borrowing base increased from $800 million to $...

More Oil & Gas Financial Articles

Oryx enters Permian with $300M equity commitment

Wed, Apr 9, 2014

Oryx Midstream Services LLC has received an equity commitment totaling up to $300 million, and will pursue midstream opportunities in the Permian Basin, focusing initially on the Delaware Basin in Texas and New Mexico.

Outrigger Energy further expands Permian footprint

Wed, Apr 9, 2014

Outrigger Energy LLC is expanding its midstream capabilities in the Permian Basin with the addition of a natural gas gathering and processing and crude oil gathering system in the Midland Basin of West Texas.

Energen sells natural gas utility to become a pure play in the E&P space

Mon, Apr 7, 2014

Energen Corp. has signed a definitive stock purchase agreement to sell its natural gas utility business, Alabama Gas Corp. (Alagasco), to The Laclede Group Inc.

Welch appointed EVP, CFO of JP Energy Partners

Thu, Apr 3, 2014

JP Energy Partners LP has appointed Patrick Welch as the company’s executive vice president and CFO. Welch has been serving as the interim CFO for the company since November of last year.

Rosetta Resources increases borrowing base to $950 million

Thu, Apr 3, 2014

Rosetta Resources Inc. reports the amendment of its senior revolving credit facility to increase its borrowing base. Effective April 2, the company's borrowing base increased from $800 million to $950 million.

Most Popular

Oil & Gas Jobs

Search More Job Listings >>
Subscribe to OGFJ