Apache Corporation (NYSE, Nasdaq: APA) today announced that its subsidiary Apache Canada Ltd. has completed the previously disclosed transaction with Chevron Canada Limited to build and operate the Kitimat LNG project and develop world-class natural gas resources at the Liard and Horn River basins in British Columbia, Canada.
Chevron Canada, a subsidiary of Chevron Corp (NYSE: CVX), and Apache Canada each have become a 50 percent owner of the Kitimat LNG plant, the Pacific Trail Pipelines and 644,000 gross undeveloped acres in the Horn River and Liard basins. After a brief transition period, Chevron Canada will assume operatorship of the LNG plant and the pipeline. Apache Canada increased its ownership in the LNG plant and pipeline from 40 percent and will operate the upstream assets. Apache’s net proceeds from the transaction were $405 million.
“With Chevron’s LNG experience and Apache’s upstream track record, this team is ideally suited to move this project forward toward delivering the tremendous resources at Liard and Horn River to meet Asia’s growing demand for LNG,” said G. Steven Farris, Apache’s chairman and chief executive officer.
Liard and Horn River are two of the most prolific shale gas plays in North America, with more than 50 trillion cubic feet of resource potential on the Apache-Chevron acreage.
Encana and EOG Resources – formerly 30 percent non-operating owners in Kitimat LNG and Pacific Trail Pipelines – sold their interests and exited the venture.
Kitimat LNG, at Bish Cove on the northern British Columbia coast approximately 400 miles (650 km) north of Vancouver, is currently completing front-end engineering and design, and early site work is under way. Current plans call for two liquefaction trains, each with expected capacity of 5 million tons of LNG per annum (about 750 million cubic feet of gas per day). Kitimat LNG has received all significant environmental approvals and a 20-year export license from the Canadian federal government.
The 290-mile (463-km) Pacific Trail Pipelines will provide a direct connection between the Spectra Energy Transmission pipeline system and the Kitimat LNG terminal. The project has strong support from many of the First Nations along the route.
Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom North Sea, Australia and Argentina. Apache posts announcements, operational updates, investor information and copies of all press releases on its website, www.apachecorp.com.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods. These include statements about schedules, costs and government approvals of development of the Kitimat LNG project and Pacific Trail Pipelines, LNG marketing activities and future production and exploration prospects in Western Canada. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See “Risk Factors” in our 2011 Form 10-K and in our subsequent filings with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development or otherwise, except as may be required by law.
Cautionary Note to Investors
The United States Securities and Exchange Commission (“SEC”) permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SEC’s definitions for such terms. Apache uses certain terms in this release, such as “resource potential,” “resource,” and other similar terms that the SEC guidelines strictly prohibit Apache from including in filings with the SEC. Such terms do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality and other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in Apache’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2011, and amendments thereto, available from Apache at www.apachecorp.com or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, Texas 77056 (Attn: Corporate Secretary). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC’s website at www.sec.gov.
SOURCE Apache Corporation