After releasing well results from its new West Texas discovery Alpine High, shares of Apache Corp. fell in early trading Tuesday. Some analysts viewed the results as disappointing.
Apache Corp, a Houston-based company, announced in September the new oil field which stretches largely across the bottom of Reeves County, near Balmorhea State Park. According to Apache estimates, Alpine High contained a minimum of 15 billion barrels of oil and gas, one of the largest discoveries as of recent. But, analysts were skeptical: Several other companies tried drilling in the same region but found little oil.
At the annual Credit Suisse Energy Summit in Vail, Colo on Tuesday, Apache chief executive John Christmann revealed new Alpine High details. Apache confirmed oil and gas in five geologic formations, each with several targets. They’ve drilled new well locations that stretch south and west into Pecos County. And the reservoirs are “over-pressured,” the Christmann said, meaning they will more easily produce oil and gas.
Analysts pointed out that initial production in the new wells was not as strong as in earlier wells.
“Overall, we would not be surprised to see shares come under some pressure following the news,” said analysts at the Minneapolis investment bank Piper Jaffray.
But they acknowledged that results may well improve as Apache fine-tunes drilling and completions.
Shares of Apache Corp fell $1.75 or 3 percent to $55.43 by mid-morning.
Article written by HEI contributor Lydia Ezeakor.