HOUSTON, Feb. 1, 2012 /PRNewswire/ -- Apache Corporation (NYSE andNasdaq: APA) today announced that its Apache Energy Limited subsidiary has completed previously announced plans to acquire an interest in Burrup Holdings Limited, owner of an ammonia fertilizer plant in the Burrup Peninsula region of Western Australia, from ANZ Bank.
Apache paid $439 million, including customary closing adjustments, to acquire a 49-percent interest in Burrup Holdings Limited. Yara International ASA paid ANZ Bank $143 million, including adjustments, to increase its ownership in Burrup Holdings to 51 percent from 35 percent. Yara will become operator after a transition to ensure continued safe operation of the plant.
Apache has supplied natural gas to Burrup Fertilisers since the plant commenced production in 2006. With a capacity of 850,000 metric tons annually, the plant is one of the world's largest ammonia facilities, producing 6 percent of the total world output of tradable ammonia. The plant will be renamed Yara Pilbara.
"This new ownership structure will stabilize the Burrup project after a period of significant uncertainty, and secure a long-term economically viable market for our natural gas production in Western Australia," said Thomas M. Maher, vice president of Apache's Australia Region and managing director of Apache Energy Limited. "This ownership stake provides a means to increase the value of our Australian gas reserves because ammonia prices historically have been correlated to the generally higher prices of corn and crude oil on international markets.Apache entered into a revised long-term natural gas supply contract with Burrup Fertilisers in November 2011.
"We are pleased to be associated with Yara, which is one of the world's largest producers of ammonia fertilizers and has a long-term off-take agreement for Burrup's production," Maher said.
Through the transaction, Apache also acquired an interest in a planned technical ammonium nitrate (TAN) plant in the Burrup Peninsula region to be developed with Yara as operator. Yara intends to proceed with the TAN plant and will assume control of negotiations concerning ownership of the project with Orica, an Australia-based global supplier of mining explosives.
The fast-growing iron ore industry in Western Australia's Pilbara region has created increased demand in the niche market for explosives-grade TAN, the main raw material for ANFO (Porous Ammonium Nitrate plus Fuel Oil), the most widely used civil explosive currently on the market.
Through Apache Energy Limited and other Australian subsidiaries, Apache is a leading producer of natural gas for the domestic Western Australia market.
Apache Corporation is a Houston-based oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom North Sea, Australia and Argentina. Apache posts announcements, operational updates, investor information and copies of all press releases on its website, www.apachecorp.com.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects" and similar references to future periods. These statements include, but are not limited to, statements about the operation of Burrup Holdings Limited, future prices for ammonia fertilizer, stability of the Burrup project, market for our gas, and the development of a TAN plant in Western Australia. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See "Risk Factors" in our 2010 Form 10-K as amended by Amendment No. 1 to our annual report on Form 10-K/A filed with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development, or otherwise, except as may be required by law.
SOURCE Apache Corporation