Apache Corporation (APA.N) and French rival Total (TOTF.PA) have formed a joint venture to develop a project off Suriname in a deal that gives the struggling US oil and gas producer a cash injection for more exploration, the companies said.
Apache's Suriname offshore prospect near the border with South America's newest oil giant, Guyana, is a long-shot for the struggling US company.
Apache reported this month it had reached its target depth at its first Suriname well but said only that it would drill deeper, knocking 17% of its shares in two days as investors took the news as a sign the well had no commercially viable oil.
Exploration off Suriname is being watched closely as it is just over the border from Exxon Mobil's (XOM.N) and Hess Corp.'s (HES.N) giant fields off the coast of Guyana.
Apache said it would receive $5 billion of cash carry on its first $7.5 billion of appraisal and development capital along with other considerations, including reimbursement for 50% of its spending on block 58 so far.
Total said it would give Apache a bonus of $100 million when the deal closes and could pay more depending on further developments.
Apache has largely pulled back internationally to focus on its much-hyped Alpine High field in a remote corner of the Permian Shale basin, the top US shale formation.
However, Alpine High has been a disappointment, requiring enormous investment in pipeline infrastructure and delivering mostly natural gas at a time when prices are their lowest in more than two decades.
Apache posted a $577 million loss in the first nine months of this year as it pulled back at Alpine High compared with a $421 million profit in the same period of 2018.
Under the Suriname deal, Apache and Total will each hold a 50% working interest in Block 58.
Apache will operate the first three exploration wells in the block, including the Maka Central-1 well, and subsequently transfer operations to Total.