Apache announced it is acquiring Cordillera Energy Partners III (the third built and sold Cordillera success story) for $2.85 billion. The acreage position covers 254,000 net acres in the panhandles of North Texas and Western Oklahoma. When backing out production, the deal equates to an acreage price between $7,000-9,000/acre. Cordillera has 18,000 boe/d of net production in the area, with almost 72 mmboe of proved reserves.
The motivation for the deal wasn’t current production or proved reserves. It was the potential of multiple stacked pay zones. 3P (possible) reserves are estimated to reach as high as 300-400 mmboe from more than 14,000 potential drilling locations. 50% of the acreage is already held by production, which will be a manageable number for a company the size of Apache.
Drilling in the area targets multiple zones of the Granite Wash play, but Apache will also target the Cleveland, Tonkawa, and Marmaton formations. Stack pay zones mean the area is prospective for gas, as well as oil, condensate, and NGLs. Cordillera’s current production is more than 50% liquids.
Apache’s strategy has long been that of acquire and exploit. The company has supplemented its onshore acreage significantly in the past couple of years with acquisitions in West Texas from BP and now Cordillera acquisition in the Granite Wash.