The majors have a history of selling what they believe are their “cast offs” to the small, independent oil and gas producers because they see little value in them. When they all left the US for global markets, writing the US off as “mature” back in the 1970s, the independents picked up the pieces and carried on.
Not only did many continue to make a profit over the years, but they came up with new technology and expertise that cracked the code to making shale gas and now shale oil economic. The US is now a virtual boom town for energy resources.
So it is interesting to see that the majors, now back in the US and rushing to pick up shale assets from the independents, are selling their conventional assets in both the US and Canada.
Apache may have a history of flying under the radar. But its actions over the past six months mean it can no longer do that. Apache’s $11bn buying spree has made it the biggest US independent by production.
The approval on Wednesday of its $2.7bn cash and stock acquisition of Mariner Energy marked the final of a series of closings in a buying spree that began with acquisitions from Devon Energy, as it exited the Gulf of Mexico, and grew with still more picked up when BP sold assets to raise funds amid its Macondo crisis.
Steve Farris, Apache chief executive, said in an interview, that Apache has always been a growth company and will continue to be one. That is a strategy shareholders seem to like; Apache’s share price has risen from $97.95 to $111 in the past year.