The high-profile geologist main certainly one of Apache Corp.’s most-important exploration ventures has stepped down. The firm’s shares and bonds tumbled, and the associated fee to insure in opposition to default surged.
Steven Keenan, Apache’s senior vice chairman of worldwide exploration, resigned two days in the past, firm spokesman Phil West stated in an e-mail on Friday. The geologist’s departure could gas issues concerning the destiny of Apache’s seek for crude in Suriname, adjoining to an Exxon Mobil Corp. discovery that’s one of many world’s largest finds in years.
“Mr. Keenan’s resignation is just not related to Suriname,” West stated. “The drill bit continues to be above the primary goal zone within the Suriname effectively.”’
Apache could present an replace on the progress of its exploratory efforts throughout the 1.Four-million-acre offshore tract often called Block 58 as quickly as Oct. 30, when the Houston-based firm is scheduled to report third-quarter outcomes.
The shares fell as a lot as 11% on Friday for the largest intraday drop since January 2016. The inventory was down 5.6% to $21.93 at 1:34 p.m.
The price to insure in opposition to an Apache default jumped to the best since August 2016. Five-year credit-default swaps tied to the corporate have been among the many worst performers within the investment-grade CDS market, widening to as a lot as 31 foundation factors on a day when the general market tightened by 1.2 foundation factors.
The yield on Apache’s most actively traded bond, Four.375% notes that mature in 2028, widened by 21 foundation factors, in line with Trace, and have been among the many most actively traded notes within the investment-grade market.
As just lately as final week, Bank of America Merrill Lynch touted the Suriname prospect as probably game-changing for Apache.
It “has potential to reset the funding case,” Merrill Lynch’s veteran oil-industry analyst Doug Leggate stated in an Oct. 18 notice to purchasers. On the power of that thesis, Leggate upgraded his ranking on the inventory and stated a single good effectively may translate right into a $6-a-share profit for Apache.
Keenan was hand-picked by Apache’s then-Chief Executive Officer Steve Farris in 2014 to copy the dramatic discoveries he oversaw for EOG Resources Inc. within the Eagle Ford shale basin in South Texas.
Not lengthy after he joined Apache, the corporate introduced its Alpine High discovery in a little-drilled nook of the Permian Basin in West Texas. At the time, the corporate stated the play held three billion barrels of crude and 75 trillion cubic toes of fuel.
But Apache’s inventory has underperformed rival producers because it first touted the Alpine High discover, which turned out to be far richer in fuel than extra worthwhile crude.