Apache - Egyptian Exposure Could be Troublesome

Riots in Egypt calling for "regime change" after 30 years of President Mubarak's rule.  No big deal, right?  Depends on what you are looking at.


Lets look at Apache.


From the company's Q3 2010 supplement:

Quick math tells us that 24% of the company's BOE/d comes from Egypt.  Do riots disrupt their production?  Maybe not, but maybe.  Riots are, by their definition, unpredictable. 


From the company:

Apache Corp. said its production operations in Egypt are unaffected by political unrest in the country.  Apache continues to monitor developments in Egypt as they happen, Patrick Cassidy, a spokesman for Houston-based Apache, said today in a telephone interview. He said the production of oil and gas isn’t affected by current events in the country. Even if the government were to change, Dodge said, anyone running the country would want to continue to work with Apache as a partner to produce petroleum.

 This is something we should keep in mind when looking at the company's valuation.


Bonds:
APA 20's -70
APA 21's -71 (yeah, I'd swap out of 21s into 20s should I want exposure)  was 75/2 on the 21st

APA 40's -92 was +87 on the 24th


Equity:

The equity market (admittedly a faster acting beast) has reflected the companies exposure to Egypt while the bonds have barely budged.  I think bonds can be bought cheaper and I am avoiding the equity if for no other reason than uncertainty and headline risk.