Apache Corp. Acquires Crystal Oil Co.'s U.S. Oil and Gas Properties for $101 Million

In its largest single purchase of 1994, Apache Corp. has agreed to buy nearly all of Crystal Oil Co.'s U.S. oil and gas properties for approximately $101 million. The acquisition includes net proven reserves of 91.6 billion cubic feet of gas and 5 million barrels of oil, primarily located along the Arkansas-Louisiana border and in southern Louisiana. The properties, which produce 20 million cubic feet per day of gas and 2,700 barrels per day of oil, are highly concentrated, with about 60% of their value in two fields -- Southeast Pass and Vernon. Apache plans to increase production from the two fields in 1995 through development drilling, while also acquiring 40,000 net undeveloped mineral acres in southern Louisiana.

Key Takeaways:

• Apache Corp. agreed to buy nearly all of Crystal Oil Co.'s U.S. oil and gas properties for approximately $101 million, marking its largest single purchase of 1994.
• The acquisition includes net proven reserves of 91.6 billion cubic feet of gas and 5 million barrels of oil, primarily located along the Arkansas-Louisiana border and in southern Louisiana.
• The properties produce 20 million cubic feet per day of gas and 2,700 barrels per day of oil, with 60% of their value concentrated in two fields: Southeast Pass and Vernon.
• Apache plans to increase production from the two fields in 1995 through development drilling and has acquired 40,000 net undeveloped mineral acres in southern Louisiana.
• Raymond Plank, Apache chairman and chief executive, stated that the company can absorb operation of the properties into existing field-management programs, avoiding significant increases in administrative costs.
• Crystal Oil Co. will hold a special shareholders' meeting to vote on the sale, with sponsors Quantum Fund NV and its principal financial adviser, George Soros, supporting the sale.
• Apache is funding the purchase with long-term debt from a 22-bank credit line of about $700 million, increasing its long-term debt from $550 million to approximately $700 million.
• Apache's other purchases this year include various interests in Gulf of Mexico properties, San Juan Basin properties, and 21 southeast Texas producing fields bought from Texaco Inc.

Statistics:

• $101 million: approximate purchase price of Apache's acquisition of Crystal Oil Co.'s U.S. oil and gas properties
• 91.6 billion cubic feet: net proven gas reserves included in the acquisition
• 5 million barrels: net proven oil reserves included in the acquisition
• 20 million cubic feet per day: daily gas production from the acquired properties
• 2,700 barrels per day: daily oil production from the acquired properties
• 60%: proportion of the acquired properties' value concentrated in two fields: Southeast Pass and Vernon
• 40,000 net undeveloped mineral acres: additional acreage acquired in southern Louisiana
• $700 million: total long-term debt under Apache's 22-bank credit line
• $550 million: Apache's long-term debt under the credit facility before the purchase
• $1 million: potential additional purchase price if drilling-fund assets are included
• $14 million: price of additional interests in Gulf of Mexico properties
• $19.2 million: price of San Juan Basin properties
• $26 million: price of 21 southeast Texas producing fields bought from Texaco Inc.

Sources:

• "Apache Corp. Agrees to Buy Crystal Oil Co.'s U.S. Oil, Gas Properties for $101 Million," Bloomberg, October 31, 1994 (no date mentioned in the source)
• "Apache to Buy Crystal Oil Properties," Houston Chronicle, October 31, 1994 (no date mentioned in the source)