U.S. energy firm Apache Corp. APA announced its decision to undertake several restructuring measures and management changes in order to improve efficiency and lower costs. However, the market did not respond positively to the news as the stock fell about 1.6% in the last trading session.
The company plans to implement a ‘more integrated, super-region structure’ following its past acquisitions and divestments. The company intends to lower redundancy and improve efficiency through these measures.
New Operational Structure
Apache said that it would streamline operations into three super regions. The company’s North American operations would be divided into the Permian Region and the Houston Region. Its Egypt Region, North Sea Region and Gulf of Mexico Region would be combined to form the International and Offshore Region.
The Permian region will include the Midland Basin, the Central Basin and the Delaware Basin properties. While the Midland and Central basin will continue to be operated from Midland, TX, the Delaware region would receive separate management in San Antonio, TX. The company expects the new management addition to better exploit these conventional assets.
The Houston region would include the Eagle Ford, Anadarko Basin, Texas Panhandle and Canadian properties. The Canadian operations will be continued from Calgary, Alberta. The company intends to close its regional office in Tulsa, OK and relocate some of its employees.
Apache, however, mentioned that it would continue to report production as Permian, Central, Gulf Coast, Canada, Gulf of Mexico, Egypt and the North Sea in its quarterly results.
The energy firm also announced that it plans to improve its cost structure by the end of this year. Further details in this regard will be released during the company’s second-quarter earnings call.
Management Changes
Apache announced a host of management changes to support its new organizational structure. Timothy J. Sullivan will serve as the senior vice president of operations support, based in Houston. Thomas E. Voytovich will be the executive vice president of the International and Offshore Region as well as exploration and production technology. James L. House will act as the senior region vice president of the Houston region.
Grady L. Ables will assume the role of region vice president of the Canada Region. Faron J. Thibodeaux will act as the senior region vice president of the Permian Region. Steven J. Keenan has been appointed as the senior region vice president of the Delaware Basin. Cory L. Loegering will assume the role of region vice president of the U.K. Region and managing director of Apache North Sea. Thomas M. Maher will continue to hold post as the region vice president of the Egypt Region and the general manager of Apache Egypt.
Apache currently carries a Zacks Rank #3 (Hold).
Better-ranked players from the oil and gas exploration and production space include LRR Energy, L.P. LRE, WPX Energy, Inc. WPX and QEP Resources, Inc. QEP. While LRR Energy and WPX sport a Zacks Rank #1 (Strong Buy), QEP Resources holds a Zacks Rank #2 (Buy).
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