ACQUISITIONS AND DIVESTITURES

2017 Activity

Canada Divestitures

In July 2017, Apache announced three separate transactions to sell its subsidiary Apache Canada Ltd. (ACL) and its Canadian operations for aggregate cash proceeds of approximately $713 million, subject to foreign exchange movements and customary closing adjustments. The sale of assets at Midale and House Mountain, located in Saskatchewan and Alberta, closed on June 30, 2017. The Company recognized a $52 million loss in association with this sale. The two remaining transactions to sell ACL and Provost assets in Alberta are expected to close in August 2017.

As a result of the agreements to sell these assets, the remaining ACL assets and liabilities qualified as held for sale as of June 30, 2017. A summary of the associated assets and liabilities classified as held for sale on Apache’s consolidated balance sheet as of June 30, 2017, is detailed below:



	June 30, 2017
	(In millions)
ASSETS
Current assets	$	105
Property, plant & equipment	1,126
Assets held for sale	$	1,231
LIABILITIES
Current liabilities, excluding asset retirement obligation	$	112
Asset retirement obligation	779
Other long-term liabilities	48
Liabilities held for sale	$	939

In connection with classifying these assets as held for sale, a separate impairment analysis was performed for each of the assets within the disposal group. The analyses were based on the agreed-upon proceeds less costs to sell for the two transactions related to ACL and Provost assets, a Level 1 fair value measurement. The net carrying value of the assets held for sale in the impairment calculation included consideration of the currency translation loss of $109 million, which is recorded in “Accumulated Other Comprehensive Loss” on the Company’s consolidated balance sheet. The currency translation loss will be recognized as a component of the expected net gain on sale during the third quarter of 2017 upon closing of the transactions. The fair value of the net assets held for sale exceeded the underlying equity value of ACL and the carrying amount of Provost assets at the balance sheet date, and no impairment was recognized. ACL recorded pretax losses of $93 million and $129 million for the second quarter and first six months of 2017, respectively, compared to pretax losses of $62 million and $161 million, respectively, for the comparable periods in 2016. The Company expects to recognize a small gain upon closing of the transactions during the third quarter of 2017.

U.S. Divestitures

During the first half of 2017, Apache completed the sale of certain non-core assets, primarily in the Permian and Midcontinent/Gulf Coast regions, in multiple transactions for cash proceeds of $522 million, subject to customary closing adjustments. A refundable deposit of $40 million was received in the fourth quarter of 2016 in connection with certain of these transactions. The Company recognized gains of approximately $372 million during the first half of 2017 in connection with these transactions.

North Sea GTP Divestiture

During the fourth quarter of 2016, Apache entered into an agreement to sell its 30.28 percent interest in the Scottish Area Gas Evacuation system (SAGE) and its 60.56 percent interest in the Beryl pipeline in the North Sea to Ancala Midstream Acquisitions Limited (Ancala). The transaction is subject to regulatory and third-party approvals, which are ongoing in 2017. The Company received a refundable deposit in connection with this transaction, which is recorded in “Other current liabilities” on the consolidated balance sheet. The refundable deposit was $142 million as of June 30, 2017.

Leasehold and Property Acquisitions

During the second quarter and first six months of 2017, Apache completed $18 million and $67 million, respectively, of leasehold and property acquisitions primarily in its North America onshore regions.

2016 Activity

Leasehold and Property Acquisitions

During the second quarter and first six months of 2016, Apache completed $99 million and $118 million, respectively, of leasehold and property acquisitions primarily in its North America onshore regions and Egypt.