ACQUISITIONS AND DIVESTITURES

2017 Activity

Canada Divestitures

During the third quarter, Apache announced the sale of its subsidiary Apache Canada Ltd. (ACL) and complete exit of its Canadian operations. On June 30, 2017, Apache completed the sale of its Canadian assets at Midale and House Mountain, located in Saskatchewan and Alberta, for aggregate cash proceeds of approximately $228 million. The Company recognized a $52 million loss during the second quarter of 2017 in association with this sale.

In August of 2017, Apache completed the sale of its remaining Canadian operations for aggregate cash proceeds of approximately $478 million. The Company recognized a $74 million gain upon closing of these transactions in the third quarter of 2017. The Company has classified $96 million of proceeds as “Restricted cash” on the Company’s consolidated balance sheet, pending the Alberta Energy Regulator’s clearance of the transfer of Provost area licenses from ACL to the buyer.

A summary of the assets and liabilities at closing of the August transactions is detailed below:



	(In millions)
ASSETS
Current assets	$	110
Property, plant & equipment	1,132
Total Assets	$	1,242
LIABILITIES
Current liabilities, excluding asset retirement obligation	$	120
Asset retirement obligation	780
Other long-term liabilities	46
Total Liabilities	$	946

The net carrying value of the assets disposed included a currency translation loss of $109 million, which was recorded in “Accumulated Other Comprehensive Loss” on the Company’s consolidated balance sheet at December 31, 2016. The currency translation loss was recognized as a reduction of the net gain on sale during the third quarter of 2017 upon closing of the transactions.

Apache’s Canadian operations recorded pretax losses of $12 million and $141 million for the third quarter and first nine months of 2017, respectively, compared to pretax losses of $483 million and $644 million, respectively, for the comparable periods in 2016.

U.S. Divestitures

During the first nine months of 2017, Apache completed the sale of certain non-core assets, primarily leasehold acreage in the Permian and Midcontinent/Gulf Coast regions, in multiple transactions for cash proceeds of $783 million, subject to customary closing adjustments. A refundable deposit of $40 million was received in the fourth quarter of 2016 in connection with certain of these transactions. The Company recognized gains of approximately $594 million during the first nine months of 2017 in connection with these transactions.

North Sea GTP Divestiture

During the fourth quarter of 2016, Apache entered into an agreement to sell its 30.28 percent interest in the Scottish Area Gas Evacuation system (SAGE) and its 60.56 percent interest in the Beryl pipeline in the North Sea to Ancala Midstream Acquisitions Limited (Ancala). The transaction is subject to regulatory and third-party approvals, which are ongoing in 2017. The Company received a refundable deposit in connection with this transaction, which is recorded in “Other current liabilities” on the consolidated balance sheet. The refundable deposit was $149 million as of September 30, 2017.

Leasehold and Property Acquisitions

During the third quarter and first nine months of 2017, Apache purchased $75 million and $142 million, respectively, of leasehold and property acquisitions primarily in its North America onshore regions.

2016 Activity

Leasehold and Property Acquisitions

During the third quarter and first nine months of 2016, Apache purchased $51 million and $169 million, respectively, of leasehold and property acquisitions primarily in its North America onshore regions and Egypt.

Discontinued Operations

Apache sold its operations in Argentina and Australia in 2014 and 2015, respectively. The results of operations related to the Argentina and Australia dispositions and the losses on disposals were classified as discontinued operations in the Company’s financial statements. During 2016, the Company incurred additional losses on these dispositions. The components of the Company’s loss from discontinued operations were as follows:



	For the Quarter Ended September 30,					For the Nine Months Ended September 30,
	2017		2016			2017		2016
	(In millions)
Loss from Australia divestiture	$	—	$	(23	)	$	—	$	(23	)
Loss from Argentina divestiture	—		(10		)	—		(10		)
Loss from discontinued operations, net of tax	$	—	$	(33	)	$	—	$	(33	)

Transaction, Reorganization, and Separation

During the third quarter and first nine months of 2017, Apache recorded $20 million and $14 million, respectively, in expense related to asset divestitures in the U.S. and Canada and employee separation. During the third quarter and first nine months of 2016, Apache recorded $12 million and $36 million, respectively, in expense related to various asset divestitures, company reorganization, and employee separation.