ACQUISITIONS AND DIVESTITURES

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

ACQUISITIONS AND DIVESTITURES

ACQUISITIONS AND DIVESTITURES

2020 Activity

During 2020, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $4 million. Also during 2020, the Company completed the sale of certain non-core assets and leasehold, primarily in the Permian Basin, in multiple transactions for total cash proceeds of $87 million, and recognized a gain of $13 million.

2019 Activity

U.S. Divestitures

In the third quarter of 2019, Apache completed the sale of non-core assets in the western Anadarko Basin of Oklahoma and Texas for aggregate cash proceeds of approximately $322 million and the assumption of asset retirement obligations of $49 million. These assets met the criteria to be classified as held for sale in the second quarter of 2019. Accordingly, the Company performed a fair value assessment of the assets and recorded impairments of $240 million to the carrying value of proved and unproved oil and gas properties, other fixed assets, and working capital. The transaction closed in the third quarter of 2019, and the Company recognized a $7 million loss in connection with the sale.

In the second quarter of 2019, Apache completed the sale of certain non-core assets in Oklahoma that had a net carrying value of $206 million for aggregate cash proceeds of approximately $223 million. The Company recognized a $17 million gain in connection with the sale.

During 2019, the Company also completed the sale of certain other non-core producing assets, GPT assets, and leasehold acreage, primarily in the Permian Basin, in multiple transactions for total cash proceeds of $73 million. The Company recognized a net gain of approximately $33 million upon closing of these transactions.

Suriname Joint Venture Agreement

In December 2019, Apache entered into a joint venture agreement with Total S.A. to explore and develop Block 58 offshore Suriname. Under the terms of the agreement, Apache and Total S.A. each hold a 50 percent working interest in Block 58. Pursuant to the agreement, Apache operated the drilling of the first four wells, the Maka Central-1, Sapakara West-1, Kwaskwasi-1, and Keskesi East-1, and subsequently transferred operatorship of Block 58 to Total S.A. on January 1, 2021. Apache will continue to operate the Keskesi exploration well until completion of drilling operations.

In connection with the agreement, Apache received $100 million from Total S.A. upon closing in the fourth quarter of 2019 and $79 million upon satisfying certain closing conditions in the first quarter of 2020 for reimbursement of 50 percent of all costs incurred on Block 58 as of December 31, 2019. All proceeds were applied against the carrying value of the Company’s Suriname properties and associated inventory. The Company recognized a $19 million gain in the first quarter of 2020 associated with the transaction.

Apache will also receive various other forms of consideration, including $5.0 billion of cash carry on Apache’s first $7.5 billion of appraisal and development capital, 25 percent cash carry on all of Apache’s appraisal and development capital beyond the first $7.5 billion, a $75 million cash payment upon achieving first oil production, and future contingent royalty payments from successful joint development projects.

Leasehold, Property, and Other Acquisitions

During 2019, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $40 million.

As part of the Altus transaction described below, Apache contributed options (Pipeline Options) to acquire equity interests in five separate third-party pipeline projects (the Equity Method Interest Pipelines) to Altus Midstream and/or its subsidiaries. As of December 31, 2019, four of the five Pipeline Options had been exercised to acquire various ownership interests in the associated Equity Method Interest Pipelines. The fifth Pipeline Option to acquire an equity interest in a separate intra-basin NGL pipeline was not exercised and expired on March 2, 2020. For discussion of the Equity Method Interest Pipelines, refer to Note 6—Equity Method Interests.

2018 Activity

Altus Transaction

In November 2018, Apache completed a transaction with Altus Midstream Company to create a pure-play, Permian Basin midstream C-corporation anchored by the Company’s GPT assets at Alpine High. Pursuant to the agreement, the Company contributed certain Alpine High midstream assets and the Pipeline Options to Altus and/or its subsidiaries. Altus Midstream Company contributed approximately $628 million of cash, net of transaction expenses. The transaction was accounted for by Altus as a reverse recapitalization. Under this method of accounting, Altus Midstream Company was treated as the “acquired” company, and Apache’s contributed assets of approximately $1.1 billion remained at historical cost, with no goodwill or other intangible assets recorded. Apache owns an approximate 79 percent ownership interest in Altus.

Apache fully consolidates the assets and liabilities of Altus in its consolidated financial statements, with a corresponding noncontrolling interest reflected separately. Apache recorded a noncontrolling interest of $406 million upon closing, which is reflected as a separate component of equity in the Company’s consolidated balance sheet. This represents approximately 21 percent third party ownership of the net assets in Altus at the time of the transaction. The cash contributions in excess of the noncontrolling interest were recognized as additional paid-in capital.

Other Activity

During 2018, the Company completed the sale of certain non-core assets and leasehold, primarily in the North Sea and Permian Basin, in multiple transactions for total cash proceeds of $138 million. The Company recognized gains of approximately $23 million during 2018 upon the closing of these transactions.

During 2018, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for cash proceeds of $133 million.