Apache aims for June exit
Apache aims for June exit

Apache hopes to complete its exit from Australia by next June but says it remains open about whether to sell out to a competitor, or spin off the business unit as a stand-alone company.

Addressing an investor conference in New York on Wednesday night, chief executive Steve Farris talked up a "world-class" stake in the Wheatstone LNG project as well as Apache's status as "the number one gas supplier in WA", receiving $US7 per million British thermal units from local gas customers.

"We have tremendously good international assets (but they) don't fit into our North American onshore strategy," Mr Farris said. "We have been working on both avenues for some time and both of them are viable, both in terms of strategic transactions or ultimately spin-outs.

"I would expect we will get to the finish line with some assets (and by the latest in) nine months on the spin-out side."

Mr Farris' comments were his most detailed since Apache hinted in May it was considering the future of its international assets as part of a return to onshore US exploration and production.

Peers led by Woodside Petroleum are poring over Apache's financial and operating data to try to work up viable bids, though it remains unclear how a litany of legal actions in WA against Apache will affect the sales process.

Apache and Santos yesterday briefly squared off in the Supreme Court as their long- standing and lucrative joint venture partnership begins to unravel. Apache also faces more than $200 million of damages claims from the Varanus Island gas explosion in 2008.

Mr Farris told the conference Apache's international assets - headlined by its WA operation and an oil-focused unit in Egypt - produced more than $US1 billion in free cash flow a year and had upside potential.

Mr Farris also confirmed Apache's Balnaves oil field off Dampier had last Friday entered production, at an initial peak rate of 30,000 barrels a day, and was "working through routine start-up issues" while the Coniston oil development, off Exmouth, should "come on in the first half of 2015".

He said an appraisal well was planned for the first quarter next year to test the big Phoenix South oil discovery made last month.

The West Australian

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