Apache Corp., Houston, expects to deliver flat to low single-digit total company oil production growth on an adjusted basis in 2020 with an upstream oil and gas capital spending program of $1.6-1.9 billion, which, at the midpoint, represents a 26% reduction from 2019.
The budget follows a 2019 net loss of $3.6 billion, including a $3 billion net loss in the fourth quarter. The company posted a roughly $3-billion writedown on the Alpine High project. A September 2016 discovery in the southern Delaware basin within the Permian Basin, the company averaged 1 rig, 1 frac crew, and placed 24 wells on production at Alpine High. The project averaged 100,000 boe/d of production for the quarter with 36% liquids mix. By year-end, there were no rigs drilling at Alpine High (OGJ Online, Sept. 7, 2016). On an adjusted basis, Apache’s 2019 earnings totaled $2 million. Net cash provided by operating activities was $2.9 billion.
Citing its differentiated portfolio, John J. Christmann IV, Apache’s chief executive officer and president, said the company has “optionality to fund high-quality, shorter-cycle growth projects in the Permian Basin, Egypt, and the North Sea, as well as longer-cycle organic exploration plays.” The company is “choosing to allocate capital to Suriname over the next several years that could otherwise be directed toward near-term growth opportunities elsewhere,” he said.
In December, the company signed a joint venture agreement with Total in Block 58 offshore Suriname, enabling Apache to retain a 50% working interest in the block (OGJ Online, Dec. 23, 2019). In January the Maka Central-1 well made a significant oil discovery (OGJ Online, Jan. 7, 2020). The Sapakara West-1 exploration well is currently being drilled about 12 miles southeast of Maka Central-1 as the second well on the block. The company has drilled through the shallower Campanian interval and drilling continues toward the deeper Santonian objectives. Once the well reaches total depth, the company will run open-hole logs, pressure tests, fluid and core samples, and associated laboratory analyses. Following Sapakara, the rig will drill a third and likely a fourth exploration test in Block 58.
Apache’s worldwide estimated proved reserves at yearend 2019 totaled 1.01 billion boe. During the year, Apache added about 176.4 MMboe in field extensions and discoveries, more than offsetting production of about 172.9 MMboe.
