Apache Reports New Field Discoveries, Development Lease Approvals And First Horizontal Completion In Egypt's Western Desert

HOUSTON, Jan. 30, 2014 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) said today that recent drilling results, approval of three new development leases and expanded natural gas processing facilities in the West Kalabsha area have set the stage for continued growth and investment in Egypt's Western Desert in 2014. Apache operates in Egypt in partnership with Sinopec International Petroleum Exploration and Production Corporation, which owns a one-third minority interest in Apache's Egypt oil and gas business.

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Successful wells included the deepest well drilled in the Western Desert and the first well in a horizontal drilling program targeting tight conventional and unconventional resources.

"We currently have 27 drilling rigs in operation – including four drilling horizontal wells – as well as 5 million exploration acres and 2 million development acres in the target-rich, stacked-pay environment of the Western Desert. Apache sees continued opportunity for profitable investment developing Egypt's oil and gas resources," said Thomas M. Maher, Apache's region vice president and general manager in Egypt. "This progress is the result of hard work and collaboration involving the Apache team, the Khalda Petroleum and Qarun Petroleum joint ventures and our partners at the Egyptian General Petroleum Corp. (EGPC) and the Ministry of Petroleum."

New field discoveries drive development lease approvals

Based on new field discoveries in the North Tarek and Khalda Offset concessions, Apache has applied for two additional development leases expected to be approved in 2014. Three leases recently approved by EGPC and Minister of Petroleum Sherif Ismail brought the number of applications approved during 2013 to 20. The leases approved in 2013 converted 66,000 acres of short-term exploration acreage into 20- to 25-year term development leases. Apache currently has 119 development leases that cover almost 2 million acres.

New field discoveries included:

• The Apries-1X, located in the Khalda Offset Concession within the Shushan Basin, tested 4,389 barrels of oil and 14.2 million cubic feet (MMcf) of gas per day from Paleozoic Basur sand. The well encountered 87 feet of net pay in the Basur. The well cost approximately $5 million to drill and complete.
• The NTRK-H-1X, located in the North Tarek Concession within the Matruh Basin, tested 20 MMcf of gas and 250 barrels of condensate per day from 60 feet of fracture-stimulated Jurassic Lower Safa pay. The well was a follow-up to the previously announced NTRK-G-1X Upper Safa discovery. This deep gas-condensate well was drilled to 15,710 feet and cost $7 million to drill and complete. 

Successful appraisal drilling and facilities expansion increase production capacity

Apache's Khalda Petroleum JV also completed drilling operations on the deepest well ever drilled in the Western Desert. In the North Ras Qattara Concession of the Alamein Basin, the NRQ-8X was drilled to 19,322 feet to appraise the previously announced NRQ 3151-1X new field discovery. The NRQ-8X encountered 98 feet of net pay in the Jurassic Upper and Lower Safa formations. The well is expected to be tested during the first quarter of 2014. Apache acquired an operating interest in the North Ras Qattara Concession in the Alamein Basin in 2010 and followed up with acreage in the Yidma-Alamein Concession in 2013.

In the Abu Gharadig Basin, Apache continues to develop the multi-pay Meghar Field discovered in 2012. Three development wells were drilled in the second half of 2013, all logging net pay between 127 feet and 181 feet in the Lower Bahariya, Upper Bahariya, Abu Roash G and Abu Roash E sands. Wells with pending completions are expected to extend current record production from the area.

In the nearby Southwest Abu Gharadig Field, the SWAG-8 development well tested 756 barrels of oil and 15.3 MMcf of gas per day from 36 feet of pay in the Abu Roash G formation.

In the Siwa Concession in the far southern Faghur Basin, Apache's Khalda JV drilled the SIWA 2-L2, the first development well in the previously announced SIWA-L Field. The offset well test-flowed 3,047 barrels of oil per day on natural flow from Paleozoic Desouky sand. In aggregate, the two wells currently are producing more than 8,000 barrels of oil per day through early production facilities. Additional development drilling is planned in 2014.

Also in the Faghur Basin, the TAYIM-W3 well in the West Kalabsha Concession tested 2,412 barrels of oil and 5 MMcf of gas per day from 32 feet of aggregate pay in the Upper and Lower Safa formation.

To accommodate additional oil and gas production from the Faghur Basin, the Khalda JV recently completed expansion of existing facilities at West Kalabsha Concession. The expanded facilities are expected to increase oil production by 4,500 barrels of oil per day during the first quarter of 2014.

Early horizontal drilling results optimistic

Apache also reported that that the first well of a multi-well horizontal drilling program in the Western Desert, the AG-115H in the Abu Gharadig Field, was drilled, completed and is currently producing. During December, the Khalda JV well produced an average of 1,681 barrels of oil and 3 MMcf of gas per day from a 1,970-foot lateral of horizontal section within a 20 foot oil zone in the Abu Roash D limestone. Total cost to drill and complete the AG-115H was $6.5 million.

With contributions from the AG-115H and other wells, production from Abu Gharadig Basin properties averaged a record 55,214 barrels of oil equivalent per day (gross) in December, a 90-percent increase since the assets were acquired in 2010.

The AG-115H was one of eight wells initiated during 2013 to test horizontal drilling technology to increase recoveries in a variety of tight conventional and unconventional reservoirs. Additional horizontal drilling is planned in the Abu Gharadig and surrounding fields in 2014.

Testing is under way at a horizontal well targeting the Abu Roash G dolomite in the Main Razzak oil field. Drilling is under way on four horizontal wells, with one targeting the Abu Roash G sandstone in North El Diyur Field, one targeting Abu Roash G dolomite in the North Ras Qattara Field, and two targeting the Upper Bahariya Formation at Umbarka and Neama Fields.

Drilling activity drives momentum into 2014

In 2013, Apache operated an average of 26 drilling rigs and drilled more than 250 wells. Gross production averaged 346,530 barrels of oil equivalent per day during the third quarter.

About Apache

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom, Australia and Argentina. Apache posts announcements, operational updates, investor information and copies of all press releases on its website, www.apachecorp.com.

Forward-looking statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," and similar references to future periods. These statements include, but are not limited to, statements about future plans, expectations, and objectives for Apache's operations, including statements about drilling plans and production expectations in Egypt. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See "Risk Factors" in our 2012 Form 10-K filed with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development, or otherwise, except as may be required by law.

APA-E

SOURCE Apache Corporation

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