Apache reports significant new play in Delaware basin
HOUSTON -- Apache Corporation said Wednesday 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 Tcf of rich gas and 3 Bbbl of oil in the Barnett and Woodford formations alone. Apache also sees significant oil potential in the shallower Pennsylvanian, Bone Springs and Wolfcamp formations.
Apache secured 307,000 contiguous net acres (352,000 gross acres) at an average cost of approximately $1,300 per acre, the company said in a statement, adding that the Alpine High has 4,000–5,000 ft of stacked pay in up to five distinct formations including the Bone Springs, Wolfcamp, Pennsylvanian, Barnett and Woodford.
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.
"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 CEO 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."
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% of Apache's total capital spending program.
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