In major deal, consortium buys El Paso's production and exploration division

The El Paso Corporation announced recently it would sell its exploration and production businesses to a consortium headed by Apollo Global Management.

Officials from El Paso Corp. said that the move would generate roughly $7.15 billion, a figure that serves as one of the most significant since the recession struck in 2007, The New York Times reports. What's more, the sale will give the consortium access to some of the nation's gas and oil fields in the U.S., lending them an advantage in the strategic sourcing of the naturally occurring fuel sources.

Mergers and acquisitions activity has been lower thus far this year than in recent years, according to experts. However, the latest deal has helped move the market, which Thomson Reuters estimates is down 35 percent from the same point in 2011. The tepid economic environment in Europe, coupled with fears about growth in the U.S. and emerging economies such as Brazil, Russia, India and China (BRIC), has prompted many companies to forestall planned buyouts and sales.

However, economic data out of the U.S. has increasingly emboldened economists that the latest recovery will be sustained. That has likely injected a bit of confidence into companies mulling either sales or purchases, experts said. With oil prices rising precipitously since the beginning of the year, the consortium is hoping to take advantage of that jump through expanded exploration in the U.S.

Kinder Morgan purchased El Paso outright for more than $21.1 billion, but the company is hoping to construct the largest and most expansive pipeline system in North America. Officials from Kinder Morgan said that the sale of El Paso's natural gas and oil exploration portfolio would help finance its own transaction, leading the way for the consortium to sweep in.

The U.S. has become a hotbed of natural gas drilling over the past years, as hydraulic fracturing – more commonly known as fracking – has enabled energy companies to tap previously unreachable stores of the hydrocarbon. The U.S. has rapidly become the world's largest producer of natural gas, and experts contend that one of the single biggest contributors to the plummeting price of the commodity is the uptick in production from the U.S.

Still, there has been controversy surrounding how extensive El Paso's U.S. reserves actually are, with some scientists speculating they contain far less natural gas and oil than originally estimated. Still, Apollo senior managing director Josh Harris said the company was confident in its purchase.

"Apollo is acquiring a company with an impressive portfolio of valuable natural resource assets, a talented management team and a remarkable group of highly skilled employees. We look forward to building on El Paso's impressive track record of success in partnership with Apollo’s natural resources expertise," he said.

The strategic sourcing of oil and natural gas has become exceedingly important to energy companies over the past few years. They have increasingly spent more money on searching for and identifying new sources of oil and natural gas, but their return on investment has continued to drop, prompting many such firms to reevaluate their strategy.

By investing in El Paso's exploration and production portfolio, Apollo is betting that fracking and other technologically-advanced extraction methods will help bolster natural gas and oil reserves.

On the New York Mercantile Exchange Monday afternoon, natural gas and oil prices both declined. Oil futures for April delivery fell 0.97 percent to trade at $108.70 per barrel. Natural gas futures dropped 2.16 percent to hit $2.50 per million BTUs. Mild winter temperatures throughout the U.S. have also helped suppress natural gas prices thus far this year, according to experts.