The Houston-based oil exploration company Apache has made a significant discovery in West Texas’s Permian Basin, estimated at 75 trillion cubic feet of natural gas and more than 3 billion barrels of oil – almost the equivalent of an entire year of USA crude production, the company announced on Wednesday.
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The new play, part of the southern DE basin, is estimated by Apache to host up to 3 billion barrels of oil and 75 trillion cubic feet of rich gas. Apache also sees significant oil potential in the shallower Pennsylvanian, Bone Springs and Wolfcamp formations. It has dubbed the area “Alpine High”. The Houston driller announced Wednesday, Sept. 7, 2016, it may be sitting on 3 billion barrels of oil and 75 trillion cubic feet of natural gas in an area it calls Alpine High. 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 said only nine of its 19 wells were producing oil or gas, and those are pumping limited quantities because of the poor infrastructure.
So far, the firm has identified 2000-3000+ drilling sites in just two of the five formations the site includes, namely Woodford and Barnett.
The company announced its discovery Wednesday after two years of drilling in the largely undeveloped region. “With the contribution of Alpine High to our global portfolio of world-class worldwide and North American assets, Apache clearly has more profitable-growth opportunities than at any other time in the company’s 60-year history”. While other companies have focused on acquisitions during the downturn, we took a contrarian approach and focused on organic growth opportunities.
“It is a world-class resource play”, Christmann said at a Barclays investor conference in NY.
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“We are incredibly excited about the Alpine High play and its large inventory of repeatable, high-value drilling opportunities”.
