US producers are emerging from the downturn, and some are betting on unique assets and advantages to differentiate themselves in a market where oil prices look likely to remain capped. For Apache, it is the new Alpine High basin in Texas, which it describes “as an immense resource and a transformational discovery”. Alpine High covers five distinct formations-Bone Spring, Wolfcamp, Barnett, Woodford and the Pennsylvanian. Apache estimates resources of 3bn bl of crude and 75 trillion ft3 (2.1 trillion m3) of gas in the Barnett and Woodford formations alone. Apache has revised up its 2016 capital expenditure (capex) guidance to $2bn from $1.6bn at the start of this year. The earlier level was based on a plan to operate within cash flow at $35/bl. Alpine High was to receive less than $100mn under that plan. But as prices have recovered, Apache has invested all the incremental cash flow-$500mn this year-in the new region “rather than chase near-term production growth elsewhere”, chief executive John Christmann says.
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