Summary:
Apache could be a successful turnaround story of the year. Apache is
transitioning into a North America onshore focused E&P company on the back
of massive divestitures.
There are two
major catalysts that investors should watch out for, in the near term. Last
year, investors cheered when Apache (NYSE:APA) sold a significant portion of its
operations in Egypt. This year, the exploration and production company's stock
could rally again as it gears up to sell its LNG assets.
In a recent
interview, Barclays' analyst Thomas Driscoll has said that investors should
watch out for Apache in 2014-15 as the oil giant's turnaround story unfolds.
Apache has
been working on a massive restructuring program, which includes asset sales, in
order to cut down its debt and increase its focus on the lucrative North
American onshore operations.
The
Transition
In the early
1990s, Apache began international expansion by entering Egypt and Australia. By
2009, Apache was getting 34% of its output from North American onshore
operations. Nearly 19% came from the Gulf of Mexico while the rest, 47%, came
from Egypt, North Sea, Australia and Argentina. Back then, Apache decided that
it is going to become a North American onshore focused exploration and
production company, reducing its exposure towards international markets as well
as deepwater resources. And this is exactly what it has done.
In the
previous quarter, Apache got 62% of its production (pro forma basis) from its
North American onshore business, just 2% from the Gulf of Mexico and …. read full article at Seeking Alpha
