Apache's Home Run | Russell T. Rudy Energy LLC
“Rigzone” reports that Apache Corp. has scored a major operational and financial success with a recent discovery in the highly prospective Delaware Basin of Southeast New Mexico and West Texas. The company has a 300,000 net acre position in the “High Alpine” field, primarily located in Reeves County, Texas. The field is estimated to contain approximately 75 trillion cubic feet of gas and 3 billion barrels of oil primarily in the Barnett and Woodford zones. However, Apache feels that the shallower Pennsylvanian, Bone Spring, and Wolfcamp formations have significant oil potential as well.
According to CEO John Christmann, “This is a world class resource. You’ve got reservoir consistency, continuity, which is going to lead to very repeatable and predictable drilling results and targets.” The field currently has only 19 wells, but Apache has identified 2-3,000 drilling locations. The company has increased its capital budget for this year from $1.8 to 2.0 billion in anticipation of increased drilling and installation of additional gas processing infrastructure.
Further, Apache acquired the acreage for $1,300 an acre in an area where the going rate can be as high as $30,000. Drilling costs are anticipated to range from $4-6 million per well, approximately half of 2014 levels. Predictably, the company’s stock reacted positively to the news, having gone up approximately 13% since the announcement.
Benjamin Shattuck of Wood Mackenzie, observed “This discovery speaks to companies that have positions in core parts of plays that are much more resilient than people had thought.”
To read the article in its entirety, please go to http://www.rigzone.com/news/article.asp?hpf=1&a_id=146501&utm .
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