April 8 (Bloomberg) -- Apache Corp., the U.S. oil and natural-gas company that has almost a quarter of its reserves in Canada, said three shale gas wells began production in British Columbia in the western part of the country.

The company said its stake in Ootla, about 60 miles from Fort Nelson in northeastern British Columbia, may hold 9 trillion to 16 trillion cubic feet of gas. Horizontal wells test flowed at rates of 8.8 million cubic feet, 6.1 million cubic feet and 5.3 million cubic feet of gas a day, respectively, Houston-based Apache said today in a statement.

``Although we are still in the early stages of understanding the full scope of this play, these three wells help validate our view that Ootla has the potential to be one of the larger shale gas accumulations in North America,'' Chief Executive Officer Steven Farris said in the statement.

Canada accounts for about 23 percent of Apache's reserves, the second-largest after the U.S., according to the company's Web site. Apache and EnCana Corp., Canada's biggest gas producer, together control more than 400,000 acres in the center of Ootla, the statement said.

Apache will have to make ``significant' investments in infrastructure to produce the gas, the statement said, without elaborating. Apache will have to invest in gathering lines and processing plants in the area, company spokesman Bill Mintz said today in a telephone interview.

Australian Discoveries

Separately, Apache said its Julimar-1 discovery on Australia's Northwest Shelf may contain 2 trillion to 4 trillion cubic feet of gas. The company plans to drill two more wells in the area this year.

The nearby Halyard-1 test well produced as much as 68 million cubic feet of gas and 936 barrels of condensate a day, Apache also said.

Apache operates in the U.S., Canada, Argentina, Australia, Egypt and the U.K. North Sea.

Apache rose $1.40, or 1.1 percent, to $130 in composite trading on the New York Stock Exchange. The stock has gained 21 percent this year.

EnCana rose 63 cents to C$78.68 on the Toronto Stock Exchange.

To contact the reporter on this story: Sonja Franklin in Calgary at sfranklin6@bloomberg.net

Last Updated: April 8, 2008 16:05 EDT