Offshore staff

(US, GoM) - Apache Corp. has finalized an agreement to acquire BP's remaining producing properties on the Outer Continental Shelf of the Gulf of Mexico.

Apache will pay $1.3 billion in cash to acquire 18 producing fields (11 of which are operated) covering 92 blocks with estimated proved reserves of 27 MMbbl of liquid hydrocarbons and 185 bcf of natural gas.

Apache also has identified 50 drilling locations on the properties and an additional 4 MMbbl of liquids and 26 bcf of natural gas in probable and possible reserves.

Some of the fields are subject to exercise of preferential rights to purchase by other interest owners.

The transaction is expected to close by the end of 2Q 2006.

From the April 1 effective date to year-end, the acquired assets are expected to provide average daily production of 7,100 bbl of oil, 1,500 bbl of natural gas liquids, and 108 MMcf of natural gas, and to generate $320 million of operating cash flow, based on strip prices used in the acquisition.

Production and cash flow are expected to rise in 2007 as fields damaged in the 2005 hurricane season are brought back on-line.

G. Steven Farris, Apache president and CEO, says, "This is our third transaction with BP; in 2003, we acquired properties in the North Sea and the Gulf of Mexico.

"Nearly half of the reserves in the transaction are in properties in which we already own an interest, including the Grand Isle 40s/West Delta complex - one of the largest fields ever discovered in the Gulf."

After the transaction, Shelf assets will comprise 21% of Apache's production (up from 18%) and 15% of worldwide reserves (up from 14%).

04/20/06