Sources told Reuters that US-based oil and gas firm Apache Corp is talking with YPF for a potential sale of its assets in Argentina. YPF is the state-controlled energy firm in Argentina. Apache holds stakes in 25 fields located in the South American country. Apache made its plans to sell USD 4 billion of assets known in May. The firm said it was divesting its stakes in order to reduce debt. It also said that it needed to sell its stakes to shore up its balance sheet as well as its share price. Apache also has oil and gas operations in Australia, Egypt and North Sea.

A person knowledgeable about the transaction in New York as well as a Buenos Aires-based oil industry source told Reuters that both firms were discussing the potential sale of some of the Argentine investments of Apache Corp. Both sources did not wish to be named while YPF and Apache did not comment on the report.

Apache holds a stake in the Vaca Muerta shale shale oil and gas field in Argentina. Other international oil firms also have rights to the huge formation. YPF said the shale field harbors 661 billion barrels of oil and 1,181 trillion cubic feet of natural gas resources. It is located in the southern Patagonia region of Argentina.

Aside from Vaca Muerta, Apache also has stakes in the provinces of Neuquén, Río Negro, Tierra del Fuego and Mendoza. Its Argentine assets comprised an estimated 6% of Apache's production in 2012. It also made up 3% of the oil firm's proved year-end reserves.

According to the Reuters report, Apache spent over USD 16 billion to purchase oil and gas properties in the past three years. The company is now divesting its assets as it faced difficulties in increasing its production. In July, Apache agreed to sell its Gulf of Mexico assets to Riverstone Holdings, a private equity company, in a deal worth USD 3.75 billion.