Liquefied natural gas (LNG) is an important part of future production for Apache (NYSE:APA) with the company estimating that it will derive between 90,000 and 140,000 barrels of oil equivalent (BOE) per day of production from various LNG projects by 2016.
Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.
Apache is part of the Wheatstone LNG project under construction by Chevron (NYSE:CVX) in Australia. The company owns a 13% non-operated interest here.
The first phase of Wheatstone will involve the development of the Wheatstone and Iago offshore natural gas fields, where production will be transported to an onshore LNG facility for processing. The project is also expandable and will produce from other oil and gas fields in the area.
SEE: A Natural Gas Primer
The facility will consist of two trains with an annual capacity of 1.25 billion cubic feet per day. Apache expects the first shipments from Wheatstone in 2016 with the gas destined for various buyers in Asia. The company estimates that its net production from here will be 39,400 BOE per day.
Apache owns 40% and is the operator of the Kitimat LNG project located on the Western coast of Canada in British Columbia. This plant will have a single train and have an annual capacity of 770 million cubic feet per day.
The Kitimat LNG project will handle production from various natural gas fields in Western Canada, including the Horn River Basin. Apache has 196,000 net acres under lease here and is producing 90 million cubic feet per day of natural gas. The company estimates that it will recover 9.2 trillion cubic feet of natural gas from its Horn River Basin properties.
SEE: How To Profit From Natural Gas
Apache also has acreage in the Liard Basin prospective for natural gas and plans to ship some production from here to the Kitimat facility. The company reported a recent well here with an average production of 21.3 million cubic feet per day during the first 30 days.
EOG Resources (NYSE:EOG) and Encana (NYSE:ECA) are also involved with the Kitimat LNG plant, and they each own a 30% stake of the project.
Conoco Phillips (NYSE:COP) operates the Kenai LNG facility, located in Nikiski, Alaska. The plant was built in 1969 and recently restarted operations despite being designated for permanent closure by the company.
SEE: Natural Gas Industry: An Investment Guide
The Bottom Line
Although Apache is known for its focus on oil and liquids development across the globe, the company is also involved with several large scale LNG projects and will use these projects to meet production growth goals set by the company.
At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.
Stock AnalysisUnderstand why energy companies' stock are volatile when oil prices are volatile. Learn about the top five energy companies to buy and hold.
InvestingCommodity prices have been heading lower for more than four years, being the worst performing asset class of 2015 with more losses in cyclical commodities.
Stock AnalysisHere are five stocks that pay safe dividends and should be at least somewhat resilient to a bear market.
InvestingThe further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
InvestingWest Texas Intermediate oil futures have recently made pronounced movements. What do they bode for the world market?
InvestingGrowing global demand for quinoa has impacted Bolivian farmers' way of life. Should the American consumer be wary of buying this product?
MarketsDepressed crude oil prices are here to stay for the foreseeable future. Here's how it will affect an oil industry riddled with unsustainable debt.
Fundamental AnalysisOptions market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.
Stock AnalysisCan these two oil stocks buck the trend?
Investing NewsAlcoa plans to split into two companies. Is this a bullish catalyst for investors?
When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>