Apache Corporation (APA) announced that its development wells in the Forties field have started production at a record rate, reaping benefits from the advanced seismic technology that was applied to enhance output.
As per the company, the Charlie 4-3 well’s initial production (IP) rate of 12,567 barrels of oil per day (Bbl/d) is the highest in the Forties since 1990. Prior to this, Charlie 2-2, completed in March, witnessed an IP rate of 11,876 Bbl/d. The other well, Delta 3-5, commenced production with a rate of 8,781 Bbl/d.
Apache carried out 4-D or time-lapse, seismic survey over the Forties field –– single largest oil accumulation discovered in the United Kingdom sector of the North Sea –– last year to improve its ability to distinguish bypassed oil accumulations in the area. The company targets to utilize 4-D technologies across additional areas in the field, where management intends to drill a total of 16 wells this year.
Independent energy firm Apache holds a 97.14% stake in the Forties field with current production of 70,000 barrels of oil equivalent per day following the start-up of two new wells in mid-June. Production at the Charlie platform alone increased from as low as less than 5,000 Bbl/d in 2006 to the present rate of approximately 30,000 Bbl/d.
With the completion of the scheduled repair and maintenance work along with the start-up of the Bravo pipeline, Apache expects full transmission capacity to become available during the third quarter. Management believes that advanced technical know-how along with an experienced and efficient team will lead to successful drilling results.
Houston, Texas-based Apache is engaged in exploration, development and production of natural gas, crude oil and natural gas liquids. Internationally, the company’s core operations are spread across onshore Egypt, offshore U.K. North Sea, onshore Argentina and offshore Western Australia.
We believe that Apache’s large geographically diversified asset base, as well as its balanced exposure to natural gas and crude oil, and multi-year trends in production growth position it strategically ahead of other industry players.
However, considering the volatile macro outlook, operational hindrances, geo-political risks and project timing delays, we see limited upside potential for the stock and maintain our long-term Neutral rating.
Apache, which faces competition from peers such as Anadarko Petroleum Corp. (APC) and Devon Energy Corp. (DVN), currently retains a Zacks #3 Rank (short-term Hold rating).
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