Apache Corporation

Apache Corporation is one of the largest leaseholders in the Eagle Ford Shale Play.  The company holds over 450,000 acres that are prospective for the Eagle Ford.  Much of the company's acreage (400,000 acres) was established through a JV agreement with Enervest (EV Energy Partners) in September of 2007.  The agreement granted Apache exploration rights below the Austin Chalk.

Apache had mixed results from its Eagle Ford exploration program and has not pursued development of the play. Geologic characteristics of the play are not as favorable in the northern portion of the play in Brazos, Burleson, Grimes, Lee, and Washington counties. The company did find that its acreage is generally prospective for shale gas in the Eagle Ford, and will not likely benefit from higher oil prices.  Future drilling will likely be dictated by natural gas prices as Apache's acreage is all held by production.

Apache Corporation (NYSE: APA) is active in other areas of the US and internationally. The company headquarters is in Houston, TX. The company's reserves are roughly half oil and half natural gas. Apache's exploration and production is concentrated in the United States, Canada, Egypt, Australia, North Sea and Argentina.  Additional emphasis was put on Apache's West Texas assets after the company acquired assets from BP in 2010.

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Apache Corporation Eagle Ford Shale Quarterly Commentary

February 2016

Apache did not report on its Eagle Ford activity this quarter.Highlights from the Q4 and full year 2015 include:

  • Delivered full-year 2015 production of 535 thousand barrels of oil equivalent (Mboe) per day and pro forma production of 486 Mboe per day, which represented pro forma growth in North America Onshore and International and Offshore of 3 percent and 13 percent, respectively;
  • Reduced 2015 total capital spending more than 60 percent year-over-year;
  • Reduced total debt during 2015 by $2.5 billion to $8.8 billion and ended the year with approximately $1.5 billion of cash;
  • Realized a 35-percent reduction in average North American Onshore drilled and completed well costs from the fourth quarter 2014 to the fourth quarter 2015;
  • Establishes a 2016 capital budget of $1.4 to $1.8 billion. Plans to achieve cash flow neutrality for the full year 2016 assuming flat WTI and Brent oil prices of $35 per barrel; and
  • Projects a 7 to 11 percent pro forma production decline year-over-year in 2016.

June 2015

Second-quarter 2015 production averaged 13,973 Boe/d, up 20 percent sequentially due to strong performance of new wells brought online.

Apache made significant progress on improving completion techniques which improved productivity from new wells during the quarter.

At Ferguson Crossing, two wells were completed, the Walker Family 1H and 3H wells, using a new frac design. To date, these Walker Family wells are the company’s best performing wells in Apache’s Eagle Ford play. Also during the quarter, strategic tests were conducted on the Rae 3H and 4H.

Apache now has full 3-D seismic coverage over most of its core acreage (420 square miles) in Burleson, Brazos, and Grimes counties and an additional 240 square miles of final-processed 3-D data along the Eagle Ford trend.

During the remainder of 2015, Apache will average one rig and will end the year with approximately 20 drilled-but-uncompleted wells in backlog.

February 2015

Apache Corporation announced this week that it plans to reduce its Eagle Ford rig count from 12 (December) to four by the end of the month. Further reductions include plans to operate one to two rigs in the Eagle Ford during 2015.  These cuts are part of the bigger forecast for the company that includes a 70 percent reduction in rigs company-wide.

Apache acquired over $600 million of additional Eagle Ford acreage in surrounding areas in 2014.

Source: Apache Corporation