Apache Corporation (NYSE:APA) estimates that oil and gas production will increase to over one million barrels of oil equivalent (BOE) per day by 2016, and hopes to generate this growth primarily off the company's extensive footprint in the United States.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

Production Growth
Apache reported average production of 769,000 BOE per day in the first quarter of 2012, and has built up large positions in various conventional and unconventional resource plays in the U.S. The company plans to focus on oil and liquids opportunities in the Permian Basin in Texas and New Mexico and the Anadarko Basin in the Central or Midcontinent area. Apache expects production from the onshore U.S. to represent 41% of the company's total production by 2016, up from only 21% in 2011.

SEE: Oil And Gas Industry Primer

Permian Basin
Apache has 1.6 million net acres under lease in the Permian Basin and reported production of 101,000 BOEs per day from its operations here in April 2012. This makes the company one of the largest producers in the Permian Basin, second only to Occidental Petroleum (NYSE:OXY), which reported production of just over 200,000 barrels per day in 2011.

Apache has steadily ramped up development here over the last few years and plans to spend $1.9 billion in capital here in 2012, up from only $400 million in 2010. The company plans development of a number of different oil and gas plays over the next five years, including the Cline Shale, Wolfcamp Shale, Spraberry, Bone Spring and Yeso.

Apache estimates that Permian Basin production per share will grow at a compound annual rate of 13% from 2011 to 2016.

SEE: Accounting For Differences In Oil And Gas Accounting

Central Area
The Central region will be the fastest growing region for Apache, with the company estimating 24% compound annual growth in production per share from the 2012 exit rate to 2016.

Apache has 1.1 million net acres under lease here and reported production of 59,000 BOE per day in April 2012. The company will have an average of 25 rigs working in the second half of 2012 and will drill 240 wells during the year. Apache is targeting multiple formations here from 2012 to 2016 including the Granite Wash, Marmaton, Cleveland, Canyon Wash and Tonkawa plays.

SEE: Compound Annual Growth Rate: What You Should Know

Other U.S. Regions
Apache has also established new positions in several other onshore plays in the United States. The company has 580,000 net acres prospective for the Mississippi Lime and other formations in Kansas and Nebraska and 300,000 net acres prospective for the Bakken and Three Forks in Montana.

Petroquest Energy (NYSE:PQ) is also active in the Mississippi Lime and recently has started drilling or completing its first three wells here. The company expects to report results by the end of the second quarter of 2012.

Unit Corporation (NYSE:UNT) recently entered the Mississippi Lime through the acquisition of 60,000 net acres. The company recently finished completion operations on its first well and plans to drill up to three more wells here in 2012.

SEE: 5 Biggest Risks Faced By Oil And Gas Companies

The Bottom Line
Apache has a laser-like focus on oil and liquids and has built up a huge inventory of these opportunities in the onshore U.S. The company plans to harvest these plays to grow the company over the next five years.

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

Related Articles
  1. Investing News

    Bank Stocks: Time to Buy or Avoid? (WFC, JPM, C)

    Bank stocks have been pounded. Is this the right time to buy or should they be avoided?
  2. Stock Analysis

    Why the Bullish Are Turning Bearish

    Banks are reducing their targets for the S&P 500 for 2016. Here's why.
  3. Stock Analysis

    How to Find Quality Stocks Amid the Wreckage

    Finding companies with good earnings and hitting on all cylinders in this environment, although possible, is not easy.
  4. Stock Analysis

    Analyzing Sirius XM's Return on Equity (ROE) (SIRI)

    Learn more about the Sirius XM's overall 2015 performance, return on equity performance and future predictions for the company's ROE in 2016 and beyond.
  5. Stock Analysis

    Will Virtusa Corporation's Stock Keep Chugging in 2016? (VRTU)

    Read a thorough review and analysis of Virtusa Corporation's stock looking to project how well the stock is likely to perform for investors in 2016.
  6. Stock Analysis

    The Top 5 Platinum Penny Stocks for 2016 (PLG, XPL)

    Examine five penny stocks in the platinum mining business that investors may wish to consider adding to their investment portfolios for 2016.
  7. Stock Analysis

    Analyzing Porter's Five Forces on JPMorgan Chase (JPM)

    Examine the major money-center bank holding firm, JPMorgan Chase & Company, from the perspective of Porter's five forces model for industry analysis.
  8. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  9. Stock Analysis

    Analyzing Dish Network's Return on Equity (ROE) (DISH, TWC)

    Analyze Dish Network's return on equity (ROE), understand why it has vacillated so greatly in recent years and learn what factors are influencing it.
  10. Fundamental Analysis

    5 Must-Have Metrics For Value Investors

    Focusing on certain fundamental metrics is the best way for value investors to cash in gains. Here are the most important metrics to know.
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  3. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  4. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  5. How do you calculate working capital?

    Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >>
  6. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
Trading Center