U.S. gas producer Apache is to buy privately owned oil and gas company Cordillera Energy Partners III in a cash-and-stock deal valued at $2.85 billion to expand its acreage of oil and petroleum liquid fields.

The deal will give Apache access to Denver, Colorado-based Cordillera's portion of Granite Wash -- a geological formation that holds tight gas trapped in its sands.

Apache said on Monday the deal was set to double its acreage in the energy-rich Anadarko Basin, in western Oklahoma and the panhandle of Texas, in which the company has been drilling for over half a century. Cordillera's Granite Wash field is located at the Anadarko Basin.

While unconventional assets like tight gas have attracted firms looking to tap into rich resources, the process -- known as fracking -- used to release the gas has led to a backlash from residents and environmentalists who say contaminates drinking water supplies and fouls streams and rivers.

Cordillera, owned by private equity firm EnCap Investments L.P. and other investors, has proven reserves of 71.5 million barrels of oil equivalent and current net production of 18,000 (boe) per day.

Apache said the acquisition was expected to add to its earnings and cash flow from 2012, adding the development drilling program will become self-funding in 2013.

According to the deal, EnCap, Cordillera management and other institutional investors will receive about $600 million in Apache common stock.

Houston, Texas-based Apache said the balance will be paid in cash and will be funded with debt.

Cordillera was exploring sale options and was hoping to bring in more than $3 billion.

Apache pumps oil in areas such as the North Sea and the Permian Basin in Texas. The natural gas it produces offshore Australia is destined for liquefied natural gas projects that fetch prices more closely linked to oil.

Apache's advisers on the deal, expected to close in the second quarter, were Goldman Sachs & Co and Tudor, Pickering, Holt & Co.

(Reporting by Kavyanjali Kaushik in Bangalore; Editing by Miral Fahmy and Dan Lalor)