ACQUISITIONS AND DIVESTITURES

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

2022 Activity

During the second quarter of 2022, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $26 million. During the second quarter of 2022, the Company also completed the sale of non-core assets and leasehold in multiple transactions for total cash proceeds of $7 million, recognizing a gain of approximately $1 million upon closing of these transactions.

During the first quarter of 2022, the Company completed a previously announced transaction to sell certain non-core mineral rights in the Delaware Basin. The Company received total cash proceeds of approximately $736 million after certain post-closing adjustments and recognized an associated gain of approximately $563 million. The Company also completed the sale of other non-core assets and leasehold in multiple transactions for total cash proceeds of $8 million. The Company recognized a gain of approximately $1 million upon closing of these transactions during the first quarter of 2022.

The BCP Business Combination was completed on February 22, 2022. As consideration for the contribution of the Contributed Interests, ALTM issued 50 million shares of Class C Common Stock (and Altus Midstream LP issued a corresponding number of common units) to BCP’s unitholders, which are principally funds affiliated with Blackstone and I Squared Capital. ALTM’s stockholders continued to hold their existing shares of Common Stock. As a result of the transaction, the Contributor, or its designees, collectively owned approximately 75 percent of the issued and outstanding shares of ALTM Common Stock. Apache Midstream LLC, a wholly owned subsidiary of APA, which owned approximately 79 percent of the issued and outstanding shares of ALTM Common Stock prior to the BCP Business Combination, owned approximately 20 percent of the issued and outstanding shares of ALTM Common Stock after the transaction closed.

As a result of the BCP Business Combination, the Company deconsolidated ALTM on February 22, 2022 and recognized a gain of approximately $609 million that reflects the difference of the Company’s share of ALTM’s deconsolidated balance sheet and the fair value of its approximate 20 percent retained ownership in the combined entity. A summary of components of the gain, including the ALTM balance sheet amounts deconsolidated at the time of close, is included below:


	As of February 22, 2022
	(In millions)

Fair value of Kinetik Class A Common Stock held by Company	$	802

ASSETS:
Cash and cash equivalents	$	143
Other current assets	29
Property and equipment, net	184
Equity method interests	1,367
Other noncurrent assets	12
Total assets deconsolidated	$	1,735

LIABILITIES:
Current liabilities	$	3
Long-term debt	657
Other noncurrent liabilities	168
Total liabilities deconsolidated	$	828

NONCONTROLLING INTERESTS:
Redeemable noncontrolling interest preferred unit limited partners	$	642
Noncontrolling interest-Altus	72
Total noncontrolling interests deconsolidated	$	714

Net effect of deconsolidating balance sheet	$	(193)

Gain on deconsolidation of ALTM	$	609

During the first quarter of 2022, the Company sold four million of its shares in Kinetik for cash proceeds of $224 million and recognized a loss of $25 million, including transaction fees. Refer to Note 7—Equity Method Interests for further detail. In connection with this secondary offering, the Company has agreed that within the next 24 months, it will invest a minimum of $100 million of these proceeds for new well drilling and completion activity at the Alpine High play in the Delaware Basin, where Kinetik has exclusive gas and NGL gathering and processing rights.

2021 Activity

During the second quarter of 2021, the Company completed the sale of certain non-core assets in the Permian Basin with a net carrying value of $157 million, for cash proceeds of $178 million and the assumption of asset retirement obligations of $44 million. The Company recognized a gain of approximately $65 million in connection with the sale.

During the first quarter of 2021, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $2 million. The Company also completed the sale of certain non-core assets and leasehold, primarily in the Permian Basin, in multiple transactions for total cash proceeds of $3 million. The Company recognized a gain of approximately $2 million upon closing of these transactions during the first quarter of 2021.