Apache Corporation (NYSE:APA) is planning increased development of oil and gas properties in the Permian Basin as it attempts to boost production of crude oil and liquids from its onshore United States properties over the next five years.

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Production Goals
Apache has established a goal of increasing oil and gas production to more than 1 million barrels of oil equivalent (BOE) per day by 2016, and is relying heavily on the onshore U.S. to accomplish this goal. The company hopes to increase the percentage of production to 41% of its entire production base by 2016.

If the company is successful with its development program here, production per share from the Permian Basin will increase at a 13% compound annual growth rate through 2016 and reach approximately 170,000 BOE per day by that time.

Permian Basin
The company is well established in the Permian Basin and reported production of 101,000 BOE per day in April 2012. It has approximately 1.6 million acres under lease in this basin, which stretches across parts of Western Texas and Eastern New Mexico. Apache estimates that it has tens of thousands of drilling locations here into multiple formations and a net resource base of 3.8 billion BOE.

Midland Basin
More than half of these drilling locations are in the Midland sub basin, where it's targeting the Cline and Wolfcamp Shale, as well as multiple formations with vertical drilling. Apache plans to drill 448 vertical wells in the sub basin in 2012, making this the most active area for the company in the Permian during the year.

SEE: Oil And Gas Industry Primer

Central Basin
Apache's second most active area in the Permian is the Central Basin platform, where it plans to drill 140 wells in 2012. The company is working on many different formations including the San Andreas, Grayburg and Clearfork.

Other Permian Operators
Other large Permian Basin producers include Concho Resources (NYSE:CXO), Pioneer Natural Resources (NYSE:PXD) and Cimarex Energy (NYSE:XEC). Concho recently added to its Permian position with the acquisition of approximately 200,000 net acres for $1 billion.

Pioneer Natural plans to spend $1.8 billion in capital in 2012 in the Permian Basin and is focused on the Spraberry and Wolfcamp Shale.

Cimarex Energy has 438,000 net acres under lease and is focused on the Bone Spring formation and several other plays. The company has budgeted $775 million here in 2012.

The Bottom Line
Apache is counting on the Permian Basin to help increase the share of crude oil and other liquids in its production base through 2016. This prolific basin has attracted capital from many other operators with similar goals.

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

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