![APA adds sixth rig](/sites/default/files/styles/hart_news_article_image_640/public/image/2023/11/shutterstock-1168117387.jpg?itok=JTCVOTqO)
Adjusted production was 340,000 boe/d in third quarter 2023, up 5% compared to the prior quarter and up 10% compared to 309,904 boe/d in the third quarter 2022, APA said. (Source: Shutterstock)
Amid an all-stock buying bonanza spurred on by Exxon Mobil Corp. and Chevron Corp. to snatch up shale and international assets, APA Corp. remains focused on creating value, adding a sixth rig in the Permian Basin.
APA is looking to create value through both organic and inorganic avenues, CEO and President John J. Christmann IV said Nov. 2 during the company’s third quarter 2023 webcast, responding to an analyst question about recent shale deals.
“We stayed committed to an exploration program, and you're seeing that pay off in Suriname and longer-term, but I also think you saw us last year bolster some acreage in the Delaware,” Christmann said. “So it's a diet of both that you're constantly looking at, and you've got to continue to focus on adding to the assets as well as what can create value for your shareholders.”
Houston-based APA reported sequential quarterly oil growth in each of its operating areas in the Permian Basin, the North Sea and Egypt.
Adjusted production was 340,000 boe/d in third quarter 2023, up 5% compared to the prior quarter and up 10% compared to 309,904 boe/d in the third quarter 2022, APA said Nov. 1 in its quarterly financial and operations press release.
“Good execution and strong well performance in the Permian Basin were the primary drivers of APA’s third-quarter results,” Christmann said.
APA expects adjusted production to average 334,000 boe/d in this year’s fourth quarter , primarily due to an expected sequential decline in the North Sea due to compressor repairs at its Beryl facility.
Six rigs in the Permian
In the Permian Basin, APA remains focused on driving capital efficiency and profitable oil growth where strong performance continues to drive volumes ahead of guidance, while still retaining material gas optionality.
In the third quarter of 2023, APA had an average of three rigs running in the southern Midland Basin and placed six wells on production. In the Delaware Basin, the company had an average of two rigs running and placed nine wells on production.
In November, APA added its sixth Permian Basin rig in the Delaware Basin. In early-October, the company connected 12 wells and expects 18 additional wells late in fourth quarter 2023.
Christmann said the sixth rig was a spot rig that will go from one pad to another and start in the Delaware. He said the additional rig would allow APA to focus on higher quality and longer laterals.
“We've got a nice footprint that we're always moving inventory from one category up … as we continue to test and find ways to make it all work,” Christmann said.
“APA’s combination of short and long cycle assets provide appropriate growth opportunities,” Truist Securities analyst Neal Dingmann said Nov. 2 in a research report.
“The company announced its plans to add a sixth rig in the Delaware Basin given the attractive economics to accelerate the completion of eight Permian wells from January into December. APA will also continue to monitor natural gas prices to determine when it makes sense to return activity to Alpine High,” Dingmann said.
With regards to the Permian, Dingmann added the sixth Permian rig would likely be “operating between the Delaware and Alpine High basins where needed, though likely could continue throughout the year if commodity prices remain firm.”
Suriname momentum builds
APA and its partner TotalEnergies continue to make progress in Suriname’s promising offshore Block 58.
The companies plan to proceed with FEED work for a 200,000 bbl/d FPSO unit, they both announced in mid-September.
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TotalEnergies, APA Eye $9B FID in Suriname’s Block 58
“A considerable amount of planning, engineering and technical work is being directed toward this project, targeting final investment decision before the end of 2024,” Christmann said, adding that first oil from the block was still expected to flow by 2028.
Regarding the first oil target, Christmann said “obviously there's incentive and motivation to try to accelerate that,” and that he expected TotalEnergies to do everything possible to make that happen.
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