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. A summary of the Company’s Canadian assets and liabilities at the time of close is detailed below:



	(In millions)
ASSETS
Cash	$	46
Other current assets	64
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 income (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 $141 million, $684 million, and $2.0 billion for the years ended 2017, 2016, and 2015, respectively.

U.S. Divestitures

During 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 $798 million, subject to customary closing adjustments. Refundable deposits totaling $40 million were received in the fourth quarter of 2016 in connection with certain of these transactions and were recorded in “Other current liabilities” on the consolidated balance sheet as of December 31, 2016. In the first quarter of 2017, Apache completed these transactions, and the liabilities related to the refundable deposits were released. The Company recognized gains of approximately $599 million during 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 SAGE gas plant and its 60.56 percent interest in the Beryl pipeline in the North Sea to Ancala Midstream Acquisitions Limited. A refundable deposit of $134 million was received in the fourth quarter of 2016 in connection with this transaction and was recorded in “Other current liabilities” on the consolidated balance sheet as of December 31, 2016. In November 2017, Apache completed the sale, and the liability related to the refundable deposit was released. No additional proceeds were received, and the Company recognized a $6 million gain upon closing of this transaction.

Leasehold and Property Acquisitions

Apache completed $188 million of leasehold and property acquisitions during 2017, primarily in its North America onshore regions.

2016 Activity

Leasehold and Property Acquisitions

Apache completed $181 million of leasehold and property acquisitions during 2016, primarily in its North America onshore regions.

Divestiture of Other Oil and Gas Properties

Apache recorded $134 million of proceeds from the divestiture of other oil and gas properties during 2016. An associated $21 million of gain was recorded in 2016.

2015 Activity

Yara Pilbara Holdings Pty Limited Sale

In October 2015, Apache sold its 49 percent interest in Yara Pilbara Holdings Pty Limited (YPHPL) for total cash proceeds of $391 million. The investment in YPHPL was accounted for under the equity method of accounting, with the balance recorded as a component of “Deferred charges and other” in Apache’s consolidated balance sheet and the results of operations recorded as a component of “Other” under “Revenue and other” in the Company’s statement of consolidated operations. As of September 30, 2015, Apache recognized an impairment of $148 million on the YPHPL equity investment based on negotiated sales proceeds. No additional gain or loss was recorded upon completion of the sale.

Canada LNG Project Divestiture

In April 2015, Apache completed the sale of its 50 percent interest in the Kitimat LNG project and upstream acreage in the Horn River and Liard natural gas basins to Woodside Petroleum Limited (Woodside). Proceeds at closing were $854 million, of which approximately $344 million was associated with LNG assets and $510 million was associated with upstream assets. Apache recognized a $146 million gain on the sale of the upstream assets upon completion of the sale.

Australia Divestitures

Woodside Sale In April 2015, Apache completed the sale of the Wheatstone LNG project and associated upstream oil and gas assets to Woodside. Proceeds at closing were $2.8 billion, of which approximately $1.4 billion was associated with LNG assets and $1.4 billion was associated with the upstream assets.

The Wheatstone LNG assets and associated upstream assets were classified as held for sale and impaired $833 million in the fourth quarter of 2014. An additional impairment of approximately $49 million was recognized in the first quarter of 2015. During the third quarter of 2016, Apache recognized an additional $23 million loss on the sale related to post-closing adjustments.

Consortium Sale In June 2015, Apache completed the sale of its Australian subsidiary Apache Energy Limited (AEL) to a consortium of private equity funds managed by Macquarie Capital Group Limited and Brookfield Asset Management Inc. Total proceeds of $1.9 billion include customary, post-closing adjustments for the period between the effective date, October 1, 2014, and closing. A loss of approximately $139 million was recognized for the sale of AEL.

Upon closing of the sale of substantially all Australian operations, the associated results of operations for the divested Australian assets and the losses on disposal were classified as discontinued operations in the Company’s financial statements for all periods presented.

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 Year Ended December 31,
	2017		2016			2015
	(In millions)
Revenues and other from discontinued operations	$	—	$	—		$	288

Impairment on Woodside sale	$	—	$	—		$	(49	)
Loss on Woodside sale	—		(23		)	—
Loss on Consortium sale	—		—			(139		)
Income from divested Australian operations	—		—			28
Loss from Argentina divestiture	—		(10		)	—
Income tax benefit	—		—			652
Income (loss) from discontinued operations, net of tax	$	—	$	(33	)	$	492

Leasehold and Property Acquisitions

Apache completed $367 million of leasehold and property acquisitions during 2015, primarily in its North America onshore regions.

Divestiture of Other Oil and Gas Properties

Apache recorded $268 million of proceeds from the divestiture of other oil and gas properties during 2015. An associated $135 million of gain was recorded in 2015.

Transaction, Reorganization, and Separation

Apache recorded $16 million, $39 million, and $132 million of expenses during 2017, 2016, and 2015, respectively, primarily related to company reorganization, including separation costs, investment banking fees and other associated costs. The charges for 2017 include $11 million for consulting fees related to divestitures and $5 million related to employee separation, consolidation of office space, and other reorganization efforts.