Apache Corporation (NYSE:APA) has a number of oil and natural gas opportunities in Western Canada, and plans extensive exploration and development here over the next five years. (For more information, check out Oil And Gas Industry Primer.)
Although Apache Corporation might be better known by some investors for its leading position in Egypt, the company is heavily involved in exploration and development of various oil and gas assets in Canada. Apache Corporation reported production of 128,000 barrels of oil equivalent per day from its Canadian properties during the first quarter of 2011. The company originally budgeted $800 million in 2011, for various projects here, but in May, 2011, the company increased this budget and allocated an extra $380 million. Apache Corporation has an immense position of 6.3 million net acres under lease across British Columbia, Alberta and Saskatchewan. The company is operating 10 rigs in 2011 on its properties, and has allocated enough funds to drill 164 wells during the year. From 2012 to 2016, Apache Corporation plans to drill 1,100 wells in Canada. (To learn about exploration, read Unearth Profits In Oil Exploration And Production.)
Apache Corporation will drill more than half of its Canadian wells in 2011 at several enhanced oil recovery projects. The company will employ water flood operations, carbon dioxide injection and infill drilling here and hopes to increase production 50% by 2015. Apache Corporation also has two light oil operations at the Cardium and Viking areas. However, the company is at an early stage of development and plans just seven wells here in 2011. If the two areas meet expectations, Apache Corporation will drill 116 wells from 2012 to 2016. (To help you understand more about drilling; see Understanding Oil Industry Terminology.)
Although Apache Corporation and much of the industry are focused on increasing development of oil plays in the current environment, the company also has extensive natural gas assets in Canada. One major natural gas asset for Apache Corporation is the Horn River Basin in British Columbia. The company has seen improving results from initial wells drilled here, but has limited development, due to the lack of infrastructure to process and transport the natural gas to end markets. Apache Corporation is constructing the Kitimat liquefied natural gas facility on the West Coast of Canada, and plans to export most of its Horn River Basin production to Asia, where most expect demand to increase. This project is expected to start up operations in 2015. Other operators that are active in Canada are also involved in this project. EOG Resources (NYSE:EOG) and EnCana Corporation (NYSE:ECA) each own 30% of the Kitimat facility. KBR (NYSE:KBR) will help build the Kitimat project and landed a contract in early 2011 to provide front end engineering and design services.
Apache Corporation also has a number of tight gas properties in western Canada and plans further development here over the next five years. The company plans to drill 12 wells in 2011, and 139 more through 2015.
The Bottom Line
Apache Corporation has a low key but very active exploration and development plan to execute in Canada through 2015. This plan involves both oil and natural gas assets on its multi million acre position. (To read more on how to trade in the energy and other commodities, see An Overview Of Commodities Trading.)
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