Workers move equipment used to monitor the progress on a well being drilled horizontally at an Apache Corp. oil well near Hobbs, N.M., Feb. 14, 2012.JIM WILSON/The New York Times
Brookfield Asset Management Inc. is teaming up with Macquarie Capital Group Ltd. to acquire Apache Corp.'s Australian energy business.
The two firms will buy the Houston, Tex.-based oil and gas company's Australian subsidiary called Apache Energy Ltd. for $2.1-billion (U.S.) in cash, with ownership split equally between the two firms and their funds. Brookfield's commitment in this deal will come from its private equity funds.
Apache's Australian assets being acquired include oil and gas fields, gas-processing facilities and its off shore oil and gas exploration portfolio. In March, Apache Energy Ltd. produced an average of about 49,000 barrels of oil equivalent per day.
"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," Len Chersky, head of private equity for Brookfield in Australia, said in a statement.
Brookfield and Macquarie said Wednesday that the acquisition will "form the foundations" of a new oil and gas producer owned by both firms.
Apache Corp. has been retooling its business to focus more on its core operations in North America since 2010, selling $17-billion of assets and buying up another $17-billion.
"Today's announcement represents a notable step in Apache's strategic portfolio repositioning," said John Christmann, chief executive of Apache. "Following the sale of our Australian assets, approximately 70 per cent of Apache's production will come from North America onshore."
The move also comes after other Apache sales in Australia. The company recently parted ways with its oil and natural gas properties that were part of its Wheatstone LNG project, selling these to Woodside Petroleum Ltd. for $2.8-billion. The company still has a 49-per-cent stake in Australian fertilizer producer Yara Pilbara Holdings Pty Ltd.
Brookfield's chief executive Bruce Flatt indicated in February that there could be the potential for energy investments, even though the company usually aims to shield its businesses from exposure to commodity movements. "We generally find we're better off investing in backbone infrastructure of the global economy, and at times like this, be ready to invest around the commodity sector when we see opportunities caused by these types of events," Mr. Flatt said on the company's fourth-quarter earnings call. Brookfield manages about $4-billion of energy assets in North America.
The deal is to close mid-year 2015 subject to government and regulatory approvals, and other closing conditions.