Apache Announces Higher Initial Production, Lower Costs In Latest Tonkawa And
Granite Wash Drilling
Optimization projects reduce drilling, completion costs
HOUSTON, May 8, 2013
HOUSTON, May 8, 2013 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA)
today announced updated well results from drilling in the Tonkawa and Granite
Wash formations of the Texas Panhandle and Western Oklahoma.
Tonkawa initial production rates climb 70 percent
Flow rates from Apache's first seven Tonkawa wells drilled and producing for
30 days in 2013 averaged 662 barrels of oil equivalent (boe) per day, a 70
percent increase from wells drilled in the play a year ago. For all seven 2013
wells, after processing for natural gas liquids, the 30-day initial production
(IP) rate averaged 428 barrels of crude oil, 103 barrels of NGLs, and 789
thousand cubic feet (Mcf) of natural gas per day.
"Production from recently drilled Tonkawa wells is exceeding our
expectations," said Rob Johnston, vice president of Apache's Central Region.
"At the same time, we have reduced drilling and completion costs for Tonkawa
wells by approximately $1.5 million per well, or 20 percent, from a year ago.
This combination of higher IP rates and lower costs is improving rates of
return and boosting the prospectivity of our substantial Tonkawa acreage."
Apache currently has nearly 318,000 acres in the Tonkawa and nearly 2,800
identified well locations in the play remaining in its drilling inventory. An
accelerated Tonkawa drilling program is currently under way, with the rig
count expected to double to 10 by July.
Granite Wash wells delivering higher initial production rates at lower cost
In the Granite Wash, flow rates from the company's first six wells drilled and
producing for 30 days in 2013 averaged 1,495 boe per day. For all six wells,
after processing for NGLs, the initial 30-day IP rate averaged 291 barrels of
crude oil, 469 barrels of NGLs, and 4.4 million cubic feet of natural gas per
"We're realizing more robust production from the Granite Wash than we expected
a year ago. With wells online for 30 days, our average flow rate is 20 percent
higher," Johnston said.
"Drilling and completion efficiency has also improved significantly," he said.
"We have decreased costs by 15 percent from a year ago, representing savings
of $1.3-$2 million per well, depending on the formation's depth and reservoir
characteristics. We expect to be able to capture additional cost savings in
the year ahead, as we incorporate more lessons learned from being the most
active driller in the play and analyzing data from the 120-plus Granite Wash
wells we've operated as well as results from other operators in the area. The
more we drill, the more we learn and the better the economics of the Granite
Wash play get."
Johnston noted that the depositional thickness of the Granite Wash play on
Apache's acreage in Texas and western Oklahoma averages an estimated 2,700
feet (gross). Because Granite Wash reservoirs are sandier than shale-based
formations, they can provide for more prolific wells. Like shales, they
provide more predictability and repeatability than conventional oil and gas
Apache currently has more than 350,000 net acres in the Granite Wash and in
excess of 22,800 identified well locations in this play remaining in its
In both the Tonkawa and Granite Wash plays, operating improvements include
more effective well designs and operations, such as using new drilling bit
technology and cementing procedures to reach target depths more quickly;
replacing diesel with natural gas for rig fuel, which is cleaner and less
expensive; and pad drilling, which reduces trucking and rig mobilization
costs. On the completion side, Johnston cited the region's ability to achieve
the same results with fewer and smaller wellbore fracture stimulations,
pumping less fluid and proppant, and recycling more completion fluid. The
combined benefits provide meaningful enhancements to the overall rate of
return for Apache. The company expects to drill about 100 wells in each play
Apache Corporation is an oil and gas exploration and production company with
operations in the United States, Canada, Egypt, the United Kingdom North Sea,
Australia and Argentina. Apache posts announcements, operational updates,
investor information and copies of all press releases on its website,
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 seismic data acquisition, potential
drilling locations, planned drilling activity, future production, and
exploration prospects, and Apache's ability to execute on production and
development plans in the Central Region. 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
that could cause our actual results, performance, and financial condition to
differ materially from our expectations. See "Risk Factors" in our 2012 Form
10-K and our subsequent filings 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.
SOURCE Apache Corporation
Contact: Media: Patrick Cassidy, +1-713-296-6100, Bill Mintz, +1-713-296-7276,
John Roper +1-281-302-2646, Bob Dye, +1-713-296-6662; Investors: Brady Parish,
Christopher Cortez, Alicia Reis, +1-281-302-2286, www.apachecorp.com
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