American Oil and Gas Reporter - PBIOS 2016 Official Program Guide - 117

Permian Basin Reports
70,000 linear feet. That same rig today
can drill 15-17 wells in a year with
average lateral lengths of 11,000 feet.
That rig now is drilling 160,000-170,000
linear feet per year."
Multiple Pay Zones
Senior Vice President of Operations
Dan Schooley says Laredo has approximately 128,000 net acres in the company's
core areas in Glasscock, Reagan and
Howard counties on the eastern side of
the Midland Basin. Laredo has more than
1,000 vertical wells and 250 horizontal
wells operating on its acreage, and is
running three rigs.
Foutch, who says Laredo has been focused on adding long-term value, claims
the company's acreage has 4,500 feet of
section that are capable of producing oil
or gas.

"There is the Spraberry, three Wolfcamp benches, the Cline and the Canyon,
which is a little gassier," he details. "We
have vertically tested other zones below
that, too.
"I always wanted several different
plays and basins for the risk factor,"
Foutch continues. "But several years ago,
we realized the Permian was so much
better than anything else we had, so we
sold a large Granite Wash position in the
Anadarko Basin to concentrate on the
Permian. It was a good decision. When
we started, we thought it was going to be
good with two or three zones. But it
keeps getting better and better. The number
of zones is increasing and efficiency is
improving."
He says Laredo owns 49 percent of
the Medallion-Midland Basin Pipeline,
which continues to expand across the

basin. In fact, what started as an 80-mile
pipeline running through the heart of
Laredo's acreage now includes 500 miles
of transportation and gathering lines, and
a service area of some 2 million acres,
according to Foutch. It can connect to
long-haul pipelines at either Midland,
Crane or Colorado City, Tx., giving Laredo's crude the option of going to Cushing,
Ok., or directly to various markets on the
Gulf Coast.
"Third-party operators are eager to
put their oil in the Medallion-Midland
Basin Pipeline," Foutch maintains. "As
evidence of what is happening in the
Permian Basin, there is 40 percent more
production moving through the Medallion-Midland Basin Pipeline in the second
half of 2016 than in the first half. I guarantee you, Saudi Arabia knows about the
Permian Basin."
r

Apache Makes Permian Resource Discovery
HOUSTON-On Sept. 7, Apache Corporation announced the discovery of
what it describes as a "significant new
resource play" in the southern portion
of the Delaware Basin, primarily in
Reeves County, Tx.
The company estimates its Alpine
High acreage position contains 75 trillion
cubic feet of rich gas and 3 billion
barrels of oil in place in the Barnett and
Woodford formations alone, with additional substantial oil potential in the
shallower Pennsylvanian, Bone Spring
and Wolfcamp formations.
John J. Christmann IV, Apache's chief
executive officer and president, says discovering a giant new play in the heart
of one of the world's most established
producing basins is the result of extensive
geologic and geophysical work, methodical acreage accumulation, and strategic testing and delineation drilling.
"(Alpine High) is the culmination of
more than two years of hard work by
the Apache team. While other companies
have focused on acquisitions during the
downturn, we took a contrarian approach
and focused on organic growth opportunities," Christmann states. "These efforts have resulted in the identification
of an immense resource that we believe
will deliver significant value for our

shareholders for many years."
Apache has secured 307,000 contiguous net (352,000 gross) acres in the
Alpine High play area at an average
cost of $1,300 per acre, according to
Christmann. Alpine High has 4,0005,000 feet of stacked pay in up to five
distinct formations, he adds, including
more than 3,000 potential Woodford and
Barnett drilling locations.
The Woodford and Barnett are in the
wet gas window, and are expected to
deliver a combination of rich gas and
oil. Initial estimates for the Woodford
and Barnett indicate a pretax, net present
value range of $4 million to $20 million
per well at benchmark oil and natural
gas prices of $50 a barrel and $3 an
Mcf, respectively, Christmann reports.
Expected well costs in development
mode for a 4,100-foot lateral are estimated
to be $4 million in normally pressured
settings and $6 million per well in overpressured settings, he says.
"We are incredibly excited about the
Alpine High play and its large inventory
of repeatable, high-value drilling opportunities," Christmann remarks. "We
have thousands of low-risk locations in
the Woodford and Barnett formations
alone, and we are looking forward to
further delineating what we believe will

be a significant number of oil-prone locations in the Pennsylvanian, Wolfcamp
and Bone Spring."
Christmann says Apache had drilled
19 wells in the play through early September, with nine producing in limited
quantities because of infrastructure constraints. That included six wells in the
Woodford, and one each in the Barnett,
shallower Wolfcamp, and Bone Spring
oil formations.
"Our announcement represents a significant addition to our already deep
and highly economic Permian Basin position," Christmann comments. "With
the contribution of Alpine High to our
global portfolio of world-class international and North American assets, Apache
clearly has more profitable growth opportunities than at any other time in the
company's 60-year history."
To accelerate delineation and development of Alpine High, Apache has announced a $200 million increase to its
2016 capital spending, raising its fullyear capital guidance to $2.0 billion.
Capital spending on the Alpine High
play will represent more than 25 percent
of Apache's total 2016 program, Christmann concludes.
r

OCTOBER PBIOS 2016 117



Table of Contents for the Digital Edition of American Oil and Gas Reporter - PBIOS 2016 Official Program Guide

Table Of Contents
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American Oil and Gas Reporter - PBIOS 2016 Official Program Guide - Table Of Contents
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