Apache sets aim for fifth Suriname well

Oil and gas company Apache Corporation has selected its fifth exploration well offshore Suriname in Block 58 and filed appraisal plans for two previous discoveries.

Apache said in its third-quarter financial report that the company has selected its fifth exploration well – named Bonboni –situated in the North Central portion of Block 58.

The company added that it also filed appraisal plans for the Maka and Sapakara discoveries and will submit the Kwaskwasi appraisal plan by year-end.

To remind, Apache made the Maka discovery back in January and struck oil in Sapakara in April. Both were labelled as significant discoveries.

Kwaskwasi, touted as a major oil find, was discovered in late July. Operations there, according to the oil firm, were completed during the third quarter.

It is worth noting that the fourth target, Kekesi, is being tested by the Keskesi East-1 exploration well which Apache started drilling in mid-September. All of the wells and finds were done using the Noble Sam Croft drillship.

Apache also stated in its financial report for the quarter that it was in the process of transitioning operatorship of Block 58 to Total and that a robust Suriname exploration and appraisal programs would be conducted in 2021.

As for its financials, the company reported a loss of $4 million in the third quarter of 2020. When adjusted for certain items that impact the comparability of results, Apache reported a third-quarter loss of $59 million. Net cash provided by operating activities in the third quarter was $304 million.

Third-quarter reported production was 445,000 boe per day, and adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 394,000 boe per day, unchanged from the second quarter. 

John J. Christmann IV, Apache’s CEO and president, said: “Apache made excellent progress on its cost initiatives and returned the majority of its curtailed volumes to production during the third quarter as commodity prices improved.

“While significant macro headwinds continue to persist, our strategic approach to creating shareholder value remains unchanged: we are prioritizing long-term returns over growth; generating free cash flow; strengthening our balance sheet through debt reduction, and advancing a large-scale opportunity in Suriname”.

Apache added that, when 2021 is concerned, it anticipates an upstream capital budget of $1 billion or less, based on a WTI oil price of approximately $40 per barrel and a Henry Hub natural gas price of $2.75.

“Apache has strategically chosen to direct a significant portion of our upstream capital investment to our large-scale opportunity in Suriname. In this price environment, we believe this will create more value for our shareholders over the long term than directing capital to short-cycle projects that would generate near-term production growth at relatively lower returns”, Christmann stated.