HOUSTON, Sept. 7, 2016 /PRNewswire/ -- Apache
Corporation (NYSE, Nasdaq: APA) today announced that after more
than two years of extensive geologic and geophysical work,
methodical acreage accumulation, and strategic testing and
delineation drilling, the company can confirm the discovery of a
significant new resource play, the "Alpine High." Apache's Alpine
High acreage lies in the southern portion of the Delaware Basin, primarily in Reeves County, Texas. The company estimates
hydrocarbons in place on its acreage position are 75 trillion cubic
feet (Tcf) of rich gas (more than 1,300 British Thermal Units) and
3 billion barrels of oil in the Barnett and Woodford formations alone. Apache
also sees significant oil potential in the shallower Pennsylvanian,
Bone Springs and Wolfcamp formations.
Key highlights of the discovery:
- Apache has secured 307,000 contiguous net acres (352,000 gross
acres) at an attractive average cost of approximately $1,300 per acre.
- Alpine High has 4,000 to 5,000 feet of stacked pay in up to
five distinct formations including the Bone Springs, Wolfcamp,
Pennsylvanian, Barnett and
Woodford.
- 2,000 to more than 3,000 future drilling locations have been
identified in the Woodford and Barnett formations alone. These formations are
in the wet gas window and are expected to deliver a combination of
rich gas and oil. Initial estimates for the Woodford and
Barnett zones indicate a pretax,
net present value (NPV) range of $4 million
to $20 million per well, at benchmark oil and natural gas
prices of $50 per barrel and
$3 per million cubic feet (Mcf),
respectively. Expected well costs in development mode for a 4,100
foot lateral are estimated to be approximately $4 million per well in normally pressured
settings and $6 million per well in
over-pressured settings.
- Apache has drilled 19 wells in the play, with nine currently
producing in limited quantities due to infrastructure constraints.
This includes six wells in the Woodford, one well in the
Barnett and one well each in the
shallower Wolfcamp and Bone Springs oil formations.
"Today's announcement is the culmination of more than two years
of hard work by the Apache team. While other companies have focused
on acquisitions during the downturn, we took a contrarian approach
and focused on organic growth opportunities. These efforts have
resulted in the identification of an immense resource that we
believe will deliver significant value for our shareholders for
many years," said John J. Christmann
IV, Apache's chief executive officer and president. "We are
incredibly excited about the Alpine High play and its large
inventory of repeatable, high-value drilling opportunities. We have
thousands of low-risk locations in the Woodford and Barnett formations alone, and we are looking
forward to further delineating what we believe will be a
significant number of oil-prone locations in the Pennsylvanian,
Wolfcamp and Bone Springs."
In addition to providing details on Apache's Alpine High
discovery, the company is also providing an update today on its
Midland Basin and other Delaware
Basin assets, including strong comparative well results and future
drilling locations. This update can be found in the slide deck
associated with today's Barclay's 2016 CEO Energy-Power Conference
presentation, which is posted on the company's website at
www.apachecorp.com and investor.apachecorp.com.
"Our announcement today represents a significant addition to our
already deep and highly economic Permian Basin position. With the
contribution of Alpine High to our global portfolio of world-class
international and North American assets, Apache clearly has more
profitable-growth opportunities than at any other time in the
company's 60-year history," Christmann concluded.
2016 capital guidance update
To accelerate the
delineation and development of the Alpine High play, Apache is
increasing its 2016 capital spending by approximately $200 million for the year and raising its
full-year capital guidance to approximately $2 billion. Capital spending on the Alpine High
play in 2016 will represent more than 25 percent of Apache's total
capital spending program.
Barclay's presentation
Apache CEO and President
John J. Christmann IV will present
today, Sept. 7, 2016, at 6:45 a.m. Central time at the Barclay's 2016 CEO
Energy-Power Conference. The presentation and live webcast will be
available on Apache's website at www.apachecorp.com and
investor.apachecorp.com, and the webcast replay will be archived
there as well.
About Apache
Apache Corporation is an oil and gas
exploration and production company with operations in the United States, Canada, Egypt
and the United Kingdom. Apache
posts announcements, operational updates, investor information and
all press releases on its website, www.apachecorp.com, and on its
Media and Investor Center mobile application, which is available
for free download from the Apple App Store and Google's Play store.
To sign up to receive email alerts regarding news and other website
updates, please visit
http://investor.apachecorp.com/alerts.cfm.
Forward-looking statements
This news release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Forward-looking statements can be identified by words
such as "anticipates," "intends," "plans," "seeks," "believes,"
"estimates," "expects," "guidance," and similar references to
future periods. These statements include, but are not limited to,
statements about future plans, expectations and objectives for
Apache's operations, including statements about our capital plans,
drilling plans, production expectations, asset sales, and
monetizations. While forward-looking statements are based on
assumptions and analyses made by us that we believe to be
reasonable under the circumstances, whether actual results and
developments will meet our expectations and predictions depend on a
number of risks and uncertainties which could cause our actual
results, performance, and financial condition to differ materially
from our expectations. See "Risk Factors" in our 2015 Form 10-K
filed with the Securities and Exchange Commission for a discussion
of risk factors that affect our business. Any forward-looking
statement made by us in this news release speaks only as of the
date on which it is made. Factors or events that could cause our
actual results to differ may emerge from time to time, and it is
not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future development or
otherwise, except as may be required by law.
Cautionary note to investors
The United States
Securities and Exchange Commission ("SEC") permits oil and gas
companies, in their filings with the SEC, to disclose only proved,
probable, and possible reserves that meet the SEC's definitions for
such terms. Apache may use certain terms in this earnings release,
such as "resources," "potential resources," "resource potential,"
"estimated net reserves," "recoverable reserves," and other similar
terms that the SEC guidelines strictly prohibit Apache from
including in filings with the SEC. Such terms do not take into
account the certainty of resource recovery, which is contingent on
exploration success, technical improvements in drilling access,
commerciality and other factors, and are therefore not indicative
of expected future resource recovery and should not be relied upon.
Investors are urged to consider carefully the disclosure in
Apache's Annual Report on Form 10-K for the fiscal year ended
Dec. 31, 2015, available from Apache
at www.apachecorp.com or by writing Apache at: 2000 Post Oak Blvd.,
Suite 100, Houston, TX 77056
(Attn: Corporate Secretary). You can also obtain this report from
the SEC by calling 1-800-SEC-0330 or from the SEC's website at
www.sec.gov.
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