Barry Rosenstein’s Hedge Fund Wants Apache to Drop Everything and Come Home

The activist investor wants the oil producer to exit projects abroad to free up cash.

Apache Corporation drilling site

Barry Rosenstein’s activist hedge fund Jana Partners LLC has increased its stake in Apache Corporation to more than $1 billion, which gives it the ability to demand changes in that energy company. The short of it is Jana is calling on the oil and gas producer to unload its international holdings, and to focus on drilling exclusively in the US.

In a letter Jana wrote to investors and published by the Wall Street Journal, the fund claims Investors are unimpressed by Apache’s global diversification. As a results, they’ve “voted with their feet.”

The hedge fund said Apache was a poor performer compared with rival companies that drill exclusively in US shale formations. Jana would like Apache to free up cash by dumping two natural gas projects in Canada and Australia, which will cost billions and take years before they are fully developed.

If the company doesn’t take further steps to increase its value, Jana said in the letter, it should consider selling itself.

Patrick Cassidy, a spokesperson for Apache Corporation said the company welcomes the investment of Jana Partners, ValueWalk reported. Cassidy emphasized that Apache is focused on executing its strategic plan to rebalance its portfolio.

Cassidy said the company is actually going for a more predictable and profitable production growth in North America. Apache is already implementing the measures Jana is demanding. It’s selling its properties overseas, including in Argentina and Egypt, and has raised $10 billion from those sales in the last 18 months.

Jana’s $1 billion stake in Apache was reported by Bloomberg News. Apache’s shares closed down Tuesday at $98.56, but rose 5.4% in after-hours trading.

The company has a stock-market value of $38.45 billion.

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