Apache Corporation (NYSE, Nasdaq: APA) today announced significant discoveries on two exploration wells in the Beryl area of the U.K. North Sea. The company also drilled two significant development wells in the Beryl area, from which no reserves have been previously booked. Additionally, Apache announced a large discovery at its Seagull prospect, which lies approximately 50 miles south of the company’s Forties Field, the largest oil field in the U.K. North Sea.
The K and Corona wells are the first exploratory prospects drilled by Apache in the Beryl area. Each discovery proves a separate geologic concept that helps to de-risk additional drilling locations. Apache estimates the K and Corona discoveries, combined with the success at Seagull, represent likely net recoverable reserves of 50 million to more than 70 million barrels of oil equivalent (MMboe). Future appraisal drilling will enable the company to further define the upside potential beyond 70 MMboe. Apache’s proved reserves in the North Sea at yearend 2014 were approximately 140 MMboe.
“Apache’s exploration program in the high-potential Beryl area is off to an exceptional start. The success of our first two exploration wells at Beryl, combined with the Seagull discovery, could increase our total North Sea proved reserve base by more than 50 percent. Importantly, results obtained from the wells announced today emphasize the quality of our seismic surveys and the accuracy of our geologic model in the Beryl area,” Thomas E. Voytovich, Apache’s executive vice president – International and Offshore and E&P Technology, said. “Our large discovery at Seagull will likely have a longer investment time-horizon as it may require dedicated production facilities, but it is expected to have a very meaningful impact on Apache’s medium- and long-term production in the region. We look forward to discussing the economics and details of these discoveries, along with a review of our extensive North Sea prospect inventory during our North Sea Region webcast Nov. 17.”
Details of the five discovery wells include:
- K Discovery – After the initial discovery with the 9/19B-18 well in June 2015, Apache successfully drilled two sidetracks into adjacent fault blocks in the Beryl area. In total, this discovery includes more than 1,500 feet of high-quality, oil-bearing sands within the Beryl, Linnhe, Nansen and Cormorant formations, across three distinct fault blocks. Apache is the operator of this discovery with a 55 percent WI, and partner Shell has the remaining 45 percent.
- Corona Discovery – The 9/18a-39A Corona exploration well, also located in the Beryl area, tested Apache’s first Tertiary-aged injectite prospect. The well was drilled to a true total vertical depth subsea (TVDSS) of 6,411 feet and logged 225 feet total vertical depth (TVD) net pay in excellent reservoir-quality sandstone. Apache has a 100 percent working interest (WI) in this discovery.
- Beryl ACN Development Well – Drilled from the Beryl Alpha platform, the ACN development well encountered 131 feet TVD net pay in the Nansen and 40 feet TVD net pay in the Eiriksson formations. The well was successfully completed in the Nansen and came online Oct. 8, 2015 at a test rate of 11,194 barrels of oil per day (Bpd) and 30.4 million cubic feet of natural gas per day (MMcfd). Apache holds a 60.55 percent WI in the well, and partner Shell has the remaining 39.45 percent.
- Nevis Central L4S Development Well – The L4S pilot well, also located in the Beryl area, was drilled to a TVDSS of 9,298 feet and logged 114 feet TVD net pay in the Triassic Lewis formation. The pilot was followed by a high-angle producer that yielded a 30-day initial production (IP) rate of 45 MMcfd and 2,166 Bpd. The well has been producing since early July 2015. Apache has a 60.55 percent WI in the well, and partner Shell has the remaining 39.45 percent.
- Seagull Discovery – An appraisal well was drilled about 50 miles (80 kilometers) south of the Forties complex in Block 22/29c in the Seagull Discovery and confirmed 672 feet of net oil pay over a 1,092-foot column in Triassic-age sands. The well was flow tested with a facility-constrained rate of 8,700 Bpd and 16 MMcfd with a very low pressure drawdown. Further appraisal work will continue following the recent acquisition of a multi-azimuth 3-D survey. Apache will assume operatorship of this license from Talisman Sinopec Energy UK Limited later this year subject to necessary approvals. Apache has a 35 percent WI. Partners in the well include Talisman Sinopec Energy UK Limited with 50 percent WI and JAPEX UK E&P Ltd. with 15 percent WI.
“The North Sea team has generated tremendous value in 2015 for Apache shareholders, despite a significant year-over-year reduction in capital spending. The discoveries we announced today, coupled with the North Sea’s substantial inventory of development locations, provide low-risk investment optionality at very attractive rates of return,” John J. Christmann, IV, Apache’s chief executive officer and president, said. “Our objective is to achieve a balanced investment profile of short-, medium- and long-cycle projects across our global portfolio. The North Sea discoveries we announced today are attractive across the full spectrum of those investment time horizons. These discoveries further reinforce our confidence that our North Sea business has the ability to sustain production volumes, extend the Forties and Beryl productive lives out beyond 2030 and consistently provide significant free cash flow back to the corporation.”
Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt and the United Kingdom. Apache posts announcements, operational updates, investor information and press releases on its website, www.apachecorp.com, and on its Media and Investor Center mobile application, which is available for free download from the Apple App Store and the Google Play Store.