Apache Arranges $350 Million Financing for Australia Oil Projects

Van Gogh, Pyrenees expected to add 40,000 barrels per day to net production by mid 2010

HOUSTON, Dec 08, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- 

Apache Corporation (NYSE, Nasdaq: APA) said today that it has arranged a $350 million financing for the Van Gogh and Pyrenees oil developments offshore Western Australia. The two projects are expected to add a total of 40,000 barrels per day to Apache's worldwide net oil production over the next 18 months. 

The interest rate for initial borrowing in the financing will be approximately 3.5 percent for the first six months; thereafter, interest rates will float with LIBOR. BNP Paribas and HSBC were the lead banks in the financing. 

"This transaction enables Apache to advance our development inventory by funding two major projects at competitive financing rates, despite continuing turmoil in the financial markets," said G. Steven Farris, Apache's president and chief executive officer. 

Apache's Van Gogh development is expected to commence production in the second quarter of 2009 and add 20,000 barrels per day to Apache's net worldwide oil output. Apache is the operator and owns 52.5 percent of the development. 

First oil production from the Pyrenees development is expected in early 2010. The project also is expected to add 20,000 barrels per day to Apache's net oil production. Pyrenees, which is operated by BHP Billiton, will develop reserves in two blocks; Apache has a 28.57-percent interest in License WA-12-R and a 31.5-percent interest in WA-155-P. 

The Pyrenees and Van Gogh projects are major elements of Apache's inventory of developments that is expected to fuel growth over the next four years. Apache reduced much of the commodity price risk in conjunction with the Pyrenees and Van Gogh investments by fixing a portion of U.S. cash flow by hedging a quantity of U.S. production equal to approximately two thirds of the projects' anticipated net production for the first three years. The hedges lock in prices ranging from $60 to $75 per barrel. 

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom North Sea, Australia and Argentina. 

This news release contains certain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 including, without limitation, expectations, beliefs, plans and objectives regarding production and exploration activities. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions, risks and uncertainties, including, without limitation, risks, uncertainties and other factors discussed in our 2007 Form 10-K and on our Web site. There is no assurance that Apache's expectations will be realized, and actual results may differ materially from those expressed in the forward-looking statements. We assume no duty to update these statements as of any future date.