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Apache Corp. to grow investment in Permian Basin

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Written by Joshua Mann

Click HERE to Read the Article by the Publisher.


Houston-based Apache Corp. has joined a slew of other oil producers planning to step up investments in the Permian Basin going forward.

The company is planning to add three more rigs to its business in the Midland Basin, a subsection of the Permian, according to Apache’s third-quarter earnings release. That brings the total number of rigs it operates there to five.

“You’re going to see capital allocation change as we go forward. This year, over 50 percent of our capital will be allocated to the Permian,” Gary Clark, Apache’s vice president of investor relations, said at the Rice Energy Finance Summit 2016 on Nov. 4. “We expect that to go up next year.”

Part of that 2017 increase will draw growth from the company’s position in Alpine High, a new discovery in the western part of the Permian, Apache CEO John Christmann said on the company’s third-quarter earnings call. Apache estimates the Alpine High reserves at 75 trillion cubic feet of rich gas and 3 billion barrels of oil in the Barnett and Woodford formations, with potential for more growth in the other formations stacked in the play.

And the company can sustain its current business even if oil prices don’t rise, Clark said.

“We think returns are very good,” Clark said. “We feel very good about our economics at $45.”

He also said the company would keep growing its rig count if prices stabilize up between $50 and $60, though.

“You’ll see Apache put more rigs back in next year” as long as prices stabilize higher, he said.


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Written by Joshua Mann

Click HERE to Read the Article by the Publisher.

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