Permian Basin 2018

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PERMIAN BASIN: PRODUCTION FORECAST 84 | October 2018 | W ith completion design changes in hand, spacing and pattern tests underway and costs down, Apache Corp. said production growth is entering the acceleration phase at its Permian Basin Alpine High development. The Houston-based company reported pro- duction at Alpine High jumped 23% to average 32,000 boe/d in second-quarter 2018, compared to a year earlier. By the end of July, production had already climbed by 70% to 54,000 boe/d as optimization continues. "For 2018 our Alpine High production is on track to achieve 45,000 boe/d, which is the midpoint of our previous guidance," Apache CEO John Christmann said on a conference call Aug. 2. "The benefits of pad drilling coupled with continual progress on well costs and well productivity are driving a positive bias to our production outlook for next year. As a result, we anticipate that 2019 production from Alpine High will trend toward the high end of 85,000 to 100,000 boe/d guidance range that was estab- lished in February." The emerging oil and gas play sits in the Dela- ware Basin, mostly in Reeves County, Texas. The company announced the discovery in September 2016, estimating 75 Tcf of rich gas and 3 Bbbl of oil in place in the Barnett and Woodford formations plus potential in the shallower Pennsylvania, Bone Springs and Wolfcamp formations. Apache puts its drilling inventory for the play at more than 5,000 wells, but Christmann called the inventory count "conservative" based on results of landing zone and spacing tests. The 2018 Alpine High program includes pad and pattern development tests, geographic delin- eation and acreage retention drilling, Christmann said, noting the move to large pad drilling. A steep production increase is on course for third- and fourth-quarter 2018 following a completion ramp-up that Apache said is in progress. Plans are for the company to place about 90 wells on pro- duction this year as well as conduct tests on the southern flank to delineate the play. So far, optimization efforts appear to be paying off based on recent Alpine High well results shared in the company's operations supplement. Blackfoot, a 12-well pad that is testing 660-ft spacing and three Woodford landing zones on a half section, flow tested at 99 MMcf/d of gas and 200 bbl/d of oil, and is improving, said Tim Sulli- van, executive vice president of operations support for Apache. Christmann pointed out that the production had increased further by the morning of Aug. 2, producing 102 MMcf/d. "That shows you the Recent report indicates a steep production increase is on course for third- and fourth-quarter 2018. Apache Prepares to Boost Production at Permian's Alpine High By Velda Addison Senior Editor, Digital News Group, Hart Energy

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