Apache Corp. (NYSE:APA) continues to benefit from the company's long investment program in Egypt and will use this region to generate future production and proved reserves growth for the company. (To know more about oil and gas, read Oil And Gas Industry Primer.)

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Egypt Overview
Apache Corp. has been involved with Egypt since the mid 1990s and has nearly 10 million acres located in various concessions across the country. Only 18% of this acreage is developed, giving Apache Corp. a huge prospective inventory of future locations to develop.

2011 Summary
Apache Corp. reported average daily production of approximately 165,000 barrels of oil equivalent (BOE) from Egypt in 2011, with about 63% of this volume composed of crude oil. The company's current production is running at approximately 203,000 barrels of oil and 880 million cubic feet of natural gas per day.

Apache Corp.'s proved reserves in Egypt totaled 292 million BOE at the end of 2011, or about 10% of the company's total. The company reported exploration and development costs of $896 million in Egypt in 2011, up from $757 million the year before.

Development Projects
One development project that Apache Corp. is advancing in Egypt is the Hydra project, located in the Western Desert area. This project is set to start up production in 2013 at a net production rate of 12,000 BOE per day. Apache Corp. estimates that the discovery holds net resources of 55 million BOE.

Apache Corp. is also working on the Qasr Compression Plant in the western Desert area. The plant will provide additional compression needed at the Qasr gas condensate field where the company has made several recent discoveries. The plant is scheduled to come on line in 2014. (Find out how to invest and protect your investments in this slippery sector. For more, see What Determines Oil Prices?)

Foster Wheeler AG (Nasdaq:FWLT) received a contract from Apache Corp. in late 2011 and is working on the Front End Engineering Design (FEED) for this project.

Recent Discoveries
Apache Corp. is continuing to explore and develop in Egypt and reported that a recent well produced at a test rate of 6,301 barrels of oil and 4.2 million cubic feet of natural gas per day. The well was drilled to a Jurassic formation and tested the extent of an existing oil and gas field.

Apache Corp. has drilled 15 development wells so far in Egypt in 2012, and has nine additional wells underway. The company plans 27 additional development wells in the Faghur Basin in 2012.

North Africa
North Africa has a considerable amount of oil and gas resources and several major companies have been active here for decades. In Libya, Hess Corporation (NYSE:HES), Conoco Philips (NYSE:COP) and Marathon Oil (NYSE:MRO) are part of the Waha Concession in partnership with the National Oil Company of Libya. This partnership reported gross production of 340,000 BOE per day in 2010, but experienced significant disruptions recently due to the Libyan Civil War.

The Bottom Line
Apache Corp. has not followed the popular energy industry trend of focusing exclusively on domestic unconventional plays in the United States, and has instead built a growing and diversified oil and gas company. This is probably the superior strategy that will provide the most benefit to shareholders in the long term. (For additional reading, check out A Guide To Investing In Oil Markets.)

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

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