On Tuesday Shell sold its Midale operations as part of a larger deal in selling its entire Plains business unit to Apache Canada Ltd., a wholly-owned subsidiary of Houston-based Apache Corporation, for $770 million Canadian.

Apache has offered to continue employment for most of the 135 Shell employees involved in the sale.

Shell's manager of public affairs Jan Rowley said the sale takes Shell out of Saskatchewan's oil production industry.

Tony Lentini, vice president of public and international affairs for Apache, said the deal involves the transfer of 87.5 million barrels of oil equivalent from Shell Canada and includes 294,294 net acres of undeveloped lease holdings, 100 per cent ownership in a gas processing plant, with a potential capacity of 160 million cubic feet per day in natural gas production and 85,000 kilometres of 2-D seismic and 2,300 square kilometres of 3-D seismic.

"We've got 88 people in our Calgary office and from a standpoint of Apache in Canada this is huge," said Lentini.

"Our Canadian oil reserves liquid-hydrocarbons will increase five-fold from 2,700 barrels per day and our gasoline production will increase 47 per cent from 98 million cubic feet per day based on 1999 second-quarter levels," he said. "Looking at a map the stuff that we purchased runs from southern Saskatchewan and up diagonally across Alberta and up into British Columbia."

In the deal Apache also gets 150,000 net acres of producing properties over 20 fields, 11 of which are Shell-operated, with an average working interest of 55 per cent with an average lifting cost of $2.23 US per barrel of oil equivalent.

Public affairs manager Rowley said the sale came about through Shell's desire to concentrate in three main areas: the oil sands, the East Coast Sable Project and their Foothills natural gas production.

From Apache's perspective, "we put this acquisition together in pretty record time and what our president (Raymond Plank) said today is 10 exploratory wells will be drilled over the next six months. The Shell team and our existing staff expect to generate 20 prospects per year," said Lentini.

Apache has been in business since 1954 and has international assets of $5 billion US, not counting Tuesday's transaction. After Tuesday's transaction is finalized, 19 per cent of Apache's reserves will be found in Canada.