Apache Corp said it will buy oil and natural gas explorer Mariner Energy Inc for $2.7 billion, diving into the deepwater Gulf of Mexico with its second major acquisition this week.

Energy companies have been snapping up assets and companies with lucrative properties in recent months on expectations that demand for oil and gas will rise as the global economy rebounds and prices for fuels will climb.

Apache, the second-largest U.S. independent oil and gas producer by market value behind Anadarko Petroleum , will pay $26.22 per share in cash and stock for each Mariner share, a 45 percent premium over Wednesday's close.

This is the right time for us to enter the Gulf of Mexico, certainly from the technological standpoint, and from an economic standpoint, it should pay dividends for years to come, Chief Executive G. Steven Farris told a conference call.

Energy producers have begun shifting their focus toward oil assets in recent months and away from natural gas as prices for crude have climbed steadily versus gas.

Advances in drilling and seismic technologies have created a boom in deepwater exploration in recent years, as companies can more easily locate and tap into deposits that lie miles beneath the ocean floor.

On Monday, Apache said it planned to buy Devon Energy Corp's shallow-water oil and gas assets on the U.S. Gulf of Mexico Shelf for $1.05 billion.

That deal follows China's Sinopec Group's announcement earlier this week that it will pay $4.65 billion for ConocoPhillips' stake in a Canadian oil sands project and India's Reliance Industries $1.7 billion investment into a joint venture in the Marcellus Shale with Atlas Energy last week.

The number of asset sales has been a boon to Wall Street banks.

REASONABLE PRICE

The acquisition will add Mariner's 63,000 barrels of oil equivalent production per day from the deepwater and continental shelf of the Gulf and the Permian basin in West Texas to Apache, which produced 583,000 BOE per day last year.

Based on the current output, the deal appears expensive, said Phil Weiss, analyst with Argus Research, but including the proven reserves, the purchase price came out to about $15 per

BOE.

That seems like a reasonable number, he said.

Apache mistakenly sent an e-mail to analysts on Wednesday night, which it later sought to recall, inviting them to a conference call on the deal.

Mariner held proved reserves of 181 million BOE at the end of 2009, as well as unbooked resource potential of 2 billion BOE. With stakes in 36 deepwater projects, it sits behind only BP Plc , Royal Dutch Shell and Anadarko in the Gulf.

Weiss said the recent consolidation in the energy sector appeared to still be in its early phase, when studies show the best deals tend to be signed.

The longer it continues, the greater the chance that buyers will be on the wrong side of things, he said. Prices go up and returns go down.

Under the new Apache deal, Mariner shareholders would receive 0.17 of an Apache share and $7.80 for each Mariner share.

Apache will also assume $1.2 billion in Mariner's debt as part of the deal, and that the transaction could be completed by the third quarter.

Mariner Energy is one of the few mid-cap oil and gas companies focused on the Gulf of Mexico, with about 350 offshore blocks, including around 100 in deepwater, totaling around 880,000 net acres at end 2009.

It owns 150,000 acres in the Permian basin and 54,000 net acres in the DJ basin that it recently acquired. It also owns 43,000 acres in unconventional fields, such as shale.

Shares of Apache were down 1.9 per share to $105.96, while Mariner shares jumped 41 percent to $25.51.

(Additional reporting by Mike Erman in New York and Arup Roychoudhury in Bangalore; Editing by Jarshad Kakkrakandy, Dave Zimmerman and Gunna Dickson)

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