By Stephen Bell
PERTH, Australia--The new owner of Apache Corp.'s one-time
Australian oil-and-gas business said it will aggressively pursue
frontier exploration, a plan that includes drilling two wells near
an offshore discovery cited last year as containing up to 300
million barrels of crude.
Quadrant Energy, which retains the same executives and employees
as under Apache's ownership, expects to benefit from being its own
boss rather than a small part of a U.S.-based oil company, CEO
Brett Darley said in an interview.
"The key change will be a focus on growing this particular
entity as opposed to being part of a company focused on growing
North American shale," he told The Wall Street Journal.
Based in Perth, the capital of Western Australia state, Quadrant
unveiled its name and corporate independence on Friday, when Apache
settled the US$1.9 billion sale of assets to a consortium of
private equity funds managed by Macquarie Corporate and
Brookfield.
It marks the formal completion of Apache's Australian exit,
spurred by a strategic retreat toward established assets in North
America, alongside producing oil-and-gas fields in the North Sea
and Egypt.
The Quadrant deal was announced in April, just days after Apache
completed its sale of a Wheatstone LNG stake and related
oil-and-natural-gas properties to Woodside Petroleum Ltd. (WPL.AU)
for US$2.8 billion.
Quadrant supplies more than 40% of Western Australia's domestic
gas. But it is crude oil, where the company is already a
significant supplier, that will dominate immediate growth plans,
said Mr. Darley.
The new owners have committed to a significant exploration
budget this year, including a hole to be drilled into the Phoenix
oil find unveiled by Apache in August, he added.
In announcing the discovery, north of Port Hedland in 133 meters
of water, Apache said it may have found up to 300 million barrels
of oil in place, which would make it one of Australia's largest oil
finds in decades.
Apache also said Phoenix could reopen an oil-exploration
province in the remote Canning Basin that some international energy
companies abandoned decades earlier after wells turned up dry.
Whether the crude can be produced in commercial volumes remains to
be proven.
In April, a technical advisor provided a "best estimate" of 19
million barrels of recoverable oil for Phoenix South, and 42
million barrels for the nearby Roc prospect, due to be drilled late
this year. Roc is a geological target roughly twice the size of
Phoenix 1, and may have "more chance of commercial flow," said Mr.
Darley.
Meanwhile, Quadrant's Levitt prospect, in another large,
frontier permit west of Phoenix, is due to be drilled next month,
he added. Mr. Darley said he believes Quadrant can thrive as a
mid-sized oil-and-domestic gas player in Australia, which is
dominated by giant liquefied-natural-gas export ventures operated
by super-majors.
The company expects to produce on average 53,500 barrels of oil
equivalent in 2015, including output from the new Coniston oil
field, which is currently in commissioning, Mr. Darley said.
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