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Apache Reallocates 2016 Capital to "Alpine High" Play in Reeves County, Exploiting Woodford Formation
Apache Corporation announced its financial and operational results for the third quarter of 2016.
Production
Apache reported global production of 520,000 BOE/D and adjusted production of 438,000 Boe per day, which excludes Egypt noncontrolling interest and tax barrels.
In North America Onshore, production was 270,000 Boe per day while adjusted International and Offshore production was 168,000 Boe per day.
Capex Reallocation
Operations
Permian Basin
Apache placed on production 35 gross-operated wells during the third quarter, predominantly in the Permian Basin.
Alpine High - Reeves County
In the Delaware Basin at Alpine High, the company placed five gross-operated wells on production, three of which were disclosed in September.
The fourth and fifth wells both targeted the Woodford formation:
- The Redwood 1H is an over-pressured Woodford well that achieved a peak 24-hour rate of 18 MMCF/D
- The Blackhawk 1H is a normally pressured Woodford well that tested at a peak 24-hour rate of 5.3 MMCF/D with 224 BOPD and 245 BBL/D NGLs
Bone Spring
Elsewhere in the Delaware Basin, the company placed eight gross-operated wells on production, including the Pelican 106H, which achieved a 30-day average initial production (IP) rate of 942 Boe per day from a 4,700-foot lateral in the third Bone Springs formation at the company's Pecos Bend area.
Midland Basin
In the Midland Basin, Northwest Shelf and Central Basin Platform, the company placed 16 gross-operated wells on production, including 13 wells (nine horizontal and four vertical) in the Yeso play on the Northwest Shelf where low well costs and strong initial production rates generate attractive economics at current oil prices.
Montney
A Lower Montney well in the company's Wapiti focus area in Alberta tested at an initial rate of 10.6 MMcf of natural gas per day and 2,000 barrels of condensate per day with an estimated total drill and complete cost of $6.2 million.
International
North Sea
Production in the quarter averaged 62,000 Boe per day, down from the previous quarter due to maintenance and third-party facility down time.
The company achieved its third consecutive exploration success near the Beryl Field with a discovery in two separate fault blocks at the recently drilled Storr prospect.
Results were in line with pre-drill estimates and underscore the benefits of recent vintage 3-D seismic data and the long-term exploration potential in the Beryl area.
Egypt
Gross production averaged 350,000 Boe per day, and net production, excluding noncontrolling interest and tax barrels, averaged 98,000 Boe per day.
Apache placed nine wells on production during the quarter.
90-percent success rate for wells drilled during the first nine months of the year.
2016 Outlook
Apache's 2016 capital expenditures are tracking in line with its guidance of $2 billion.
Following strong production and drilling results year-to-date, the company expects to end 2016 at the high end of North American Onshore production guidance of 268,000 to 278,000 Boe per day and at the midpoint of International and Offshore production guidance of 170,000 to 180,000 Boe per day.
In the fourth quarter, the company plans to increase development drilling activity in the Midland Basin with the addition of three rigs. This will bring the total number of rigs drilling in the Midland Basin to five and will help contribute to the Permian Region's return to a growth trajectory in the second half of 2017.
Third-quarter financial position and liquidity
Total capital investment, excluding Egypt noncontrolling interest, was $466 million.
At quarter end, Apache's long-term debt remained unchanged at $8.7 billion.
Targeted cash position of $1.5 billion at year-end.
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