By Shariq Khan and David French
(Reuters) -U.S. oil producer APA Corp said on Wednesday it bought West Texas properties for $505 million during the second quarter, bolstering its position in the Delaware portion of the Permian shale basin.
While APA did not name the seller, Reuters earlier reported the assets belong to privately owned Titus Oil & Gas, according to three sources familiar with the matter.
The purchase marks a significant pivot to West Texas for the former Apache Corp (NASDAQ:APA) after a failed bet on a remote corner of the top U.S. shale basin.
Titus Oil & Gas, backed by private equity firm NGP Energy Capital Management, is among the private oil and gas companies investors have put on the market in recent months hoping higher energy prices would secure bumper valuations.
APA, Titus and NGP did not immediately respond to requests for confirmation on the seller.
Titus and NGP earlier disclosed an agreement to sell New Mexico oil producing assets to Earthstone Energy (NYSE:ESTE) Inc for $627 million.
The assets APA Corp purchased abut its existing assets in the Delaware portion of the Permian basin and should add production of between 12,000 to 14,000 barrels of oil equivalent per day through the rest of this year, the company said.
When oil prices crashed during lockdowns early in the coronavirus pandemic, APA briefly suspended U.S. drilling and reduced activity in Egypt and the North Sea in favor of developing discoveries off the coast of Suriname.
Through 2021, APA returned to normal operations in the Delaware portion of the Permian Basin in Texas, but began streamlining its Permian assets by selling noncore holdings and allocated most of its 2022 exploration budget towards Suriname.
APA on Wednesday also posted adjusted earnings of $2.37, beating analysts' estimates of $2.33 per share, according to Refinitiv data.