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Apache's New Oil And Gas Discovery Could Yield As Much As $80 Billion

Summary

New ‘Alpine High’ discovery could generate as much as $80 billion for Apache Corp.

The west Texas field could become one of the largest discoveries in a decade.

It has discovered the equivalent of a minimum of two billion barrels of oil.

Adds $200 million in CapEx to accelerate development in new field.

source: Apache via Wall Street Journal

Apache Corp. (NYSE:APA) announced it has discovered at least 2 billion barrels of oil near the Davis Mountains, and possibly 3 billion barrels; an area most industry insiders didn't think was conducive to fracturing methods.

The reason for that was the rock layers in the area were inundated with clay, which in the case of natural case, suggested the yield would be much less than in other plays. That's because the clay would interfere with fracturing.

Depending on the price of oil and proved reserves, it could generate anywhere from $8 billion to $80 billion in revenue for Apache over the life of the wells, according to the company.

Apache has upwardly revised it capital expenditure by $200 million for 2016 in order to expedite the asset.

It will take a few years to get production rolling because there has to be pipelines and processing equipment brought into play. In 2016 the company has drilled 19 wells in the 'Alpine High' region.

source: StockCharts.com

Acreage under its control

About two years ago Apache started to buy up the mineral rights in the area, eventually discovering the extraordinary potential it represented. There was little in the way of competitive bidding because of the assumption it was a poor...


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