The stock-and-cash deal will give Apache access to Cordillera’s 254,000 acres in the Andarko Basin and the Granite Wash, among other locations that produce the equivalent of 18,000 barrels of oil per day.
“From an economic standpoint, we think it’s a very good deal,” he said. “Don’t look at it as a gas acquisition. Look at it, really, as a liquids acquisition, not unlike what happened in the ’80s when you sold your gas to produce your liquids.”
Apache shares closed up 1.6 percent at $98.38.
Responding to questions about the company’s exposure to possible instability in Egypt, Farris said that government officials have been forthcoming and the situation was stable.
“I think the short answer is: Last year at this time we had 26 rigs running. Today we have 27 rigs running in Egypt,” he said. “We continue to be very active there. We see no changes whatsoever.”
Trader Tim Seymour thought the acquisition was “a great deal,” particularly when valuation is factored in and due to Apache’s sizeable cash reserves.
“They can fund this,” he said. “This is where these guys should be. They’re buying at the right time.”
Trader Joe Terranova also liked the deal, mentioning other names he liked in the natural gas space: Golar, Concho and Pioneer Natural Resources.