AP

HOUSTON OIL and gas producer Apache Corp is buying privately held Cordillera Energy Partners III LLC in a cash-and-stock deal valued at $2.85 billion.

Apache Chairman and CEO G. Steven Farris said the deal is “a unique bolt-on opportunity” that more than doubles Apache’s acreage in the Anadarko Basin.

The acquisition gives Apache access to Cordillera’s approximately 254,000 net acres in the Granite Wash, Tonkawa, Cleveland and Marmaton areas in western Oklahoma and the Texas Panhandle.

Estimated proved reserves are 71.5 million barrels of oil equivalent per day, with current net production at 18,000 barrels of oil equivalent per day.

The Granite Wash is said to have reservoir properties that are better than typical shale resource plays and responds well to horizontal drilling with multi-stage fracturing completions.

Apache has shifted to horizontal drilling. Its horizontal wells drilled in the last three years now make up about half of Apache’s Central Region production, which totalled approximately 40,000 net barrels of oil equivalent per day at 2011’s end.

Apache said that Cordillera also has significant resource potential, including 14,000 potential drilling locations in the Anadarko Basin.

Cordillera will continue to buy acreage on Apache’s behalf through closing.

Cordillera’s owners, including EnCap Investments, other institutional investors and Cordillera management, will receive about $600 million in Apache stock. It says the rest of the acquisition will be paid in cash.

Apache said on Monday that the deal is expected to add to its earnings and cash flow starting this year.

The transaction is expected to close in the second quarter.

Apache, which is based in Houston, has operations in the US, Canada, Egypt, the North Sea, Australia and Argentina.

Its shares finished at $96.80 on Friday. They are up 32 percent from their 52-week low of $73.04 in early October. They traded as high as $134.13 in late April.