Permian Basin 2017

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PERMIAN BASIN: KEY PLAYERS 16 | November 2017 | and the basin brought in $234 million in capital investments in the quarter, the report stated. Apache Corp. Apache has more than 3.1 million gross acres in the Permian region. Estimated proved reserves of 611 MMboe were reported at year-end 2016, repre- senting 47% of the company's worldwide reserves, according to Apache's website. First-quarter 2017 oil production in the Permian was 75,210 bbl/d, with total liquids production of 109,492 bbl/d and natural gas production reported at 227.6 Mcf/d. The company also reported 147,534 boe/d in the first quarter, compared to 171,041 boe/d a year earlier. Oil and gas capital investment was $738 million during the second quarter, with two-thirds focused on the Permian Basin, according to the company's second-quarter 2017 report, and the company oper- ated an average of 17 rigs during the quarter. In September 2016, Apache confirmed the dis- covery of the significant new resource play Alpine High. Apache's Alpine High acreage lies in the southern portion of the Delaware Basin, primarily in Reeves County, Texas. The company estimated hydrocarbons in place on its acreage position are 75 Tcf of rich gas (more than 1,300 Btu) and 3 Bbbl of oil in the Barnett and Woodford formations, a press release stated. Apache also reported significant oil potential in the shallower Pennsylvanian, Bone Springs and Wolfcamp formations. Alpine High has 4,000 ft to 5,000 ft of stacked pay in up to five distinct formations including the Bone Springs, Wolfcamp, Pennsylvanian, Barnett and Woodford. As of September 2016, Apache had drilled 19 wells in the play, with nine producing in limited quanti- ties due to infrastructure constraints. This includes six wells in the Woodford, one well in the Barnett and one well each in the shallower Wolfcamp and Bone Springs oil formations, the release stated. Apache's 2017 plans include increasing activity in the Permian while also continuing to balance capital investments between its larger development project at Alpine High and focused exploration and development programs on other core assets in its Permian region. During 2017 the company expects to average 15 drilling rigs in the Permian Basin and drill about 250 wells, which includes a four- to six-rig delineation drilling program at Alpine High. The company plans to allocate about two-thirds of its 2017 capital budget to the Permian region, according to the company's website. BHP Billiton BHP Billiton operates about 850,000 net acres in the Permian. As of June 30, the company had one rig operat- ing in the Permian. Two additional rigs were sched- uled to start up in September and will focus on completion trials, which will inform a transition to full pad development as early as the 2019 financial year, a press release stated. "More than half of the new rigs put in place since the end of 2016 have been in the Permian. The remain- der have been distributed across multiple areas," according to BHP's February web article "Last In, First Out: the Fundamental Case for Oil Investment." In the Permian, the company expects increased recoveries of more than 60% over the full well life, including a 20% increase in the first year of production, a press release stated. The company reported year-end 2016 production of 8.8 Bcf of natural gas, 1,314 boe of NGL and 2,793 boe of crude oil and condensate, according to a January news release. The company has access to more than 1 Bboe in the Permian, "meaning this field has the poten- tial to become the largest production and free cash contributor in our petroleum portfolio within five years," said Steve Pastor, BHP Billiton president of operations petroleum, in a press release. In August BHP stated it is looking to sell its U.S. shale assets. "We have determined that our onshore U.S. assets are non-core, and we are actively pursu- ing options to exit these assets for value," the com- pany said in its annual report. "In the meantime, we will complete well trials, acreage swaps and assess midstream solutions to increase the value, profit- ability and marketability of our acreage." A BBC News article reported, "Chief executive Andrew Mackenzie said a number of parties are interested in acquiring its onshore U.S. oil and gas operations but would not name the price the com- pany is seeking for the assets."

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