Managers with Houston-based independent Apache Corp. were in Anchorage this week, sounding pretty bullish about their new oil and gas acreage in Cook Inlet.
The company’s primary interest is in oil, although Apache is mindful of the ready local market for natural gas, said John Bedingfield, Apache’s vice president for worldwide exploration and new ventures.
In July, when the company announced a $7 billion deal to buy assets in Canada, Egypt and the Permian basin in Texas and New Mexico from BP, speculation was that Apache was angling for a piece of BP’s stake in the giant Prudhoe Bay field on Alaska’s North Slope, but nothing ever came of that.
The North Slope is a fascinating oil province, but for now Apache has its sights set on Cook Inlet, Bedingfield said.
“We believe this is a place that’s got tremendous potential,” he said.
Expect Apache to get right to work, he added.
Apache recently worked a deal to pick up around 200,000 acres of leases scattered around Cook Inlet basin. The company acquired the leases from a group that included Daniel K. Donkel and Samuel H. Cade.
Bedingfield, without being too specific, said his company has also talked with a number of other Alaska players, their intent to build on the Donkel deal and extend Apache’s Cook Inlet presence.
Other visiting Apache managers were David Jennette, director of worldwide exploration and new ventures; David Allard, new ventures exploration manager for North America and the Caribbean; Graham Brander, director of worldwide drilling; and Bill Mintz, public affairs director.
Brander has a little history in Cook Inlet, having worked for a year as a drilling engineer with Unocal in 1995.
Apache has never been an operator in Alaska. It hasn’t opened an Anchorage office, and might not for a while. Initially, the company likely will hire a contractor to represent it locally, Bedingfield said.
The Cook Inlet basin is intriguing for its oil potential, he said, noting the U.S. Geological Survey estimates close to a billion barrels remain to be discovered.
Although Apache has deepwater experience elsewhere in the world, it doesn’t view the offshore part of the basin as deepwater, he said. The company believes it can conduct most of its exploratory work from land, and is focused on the Tyonek and Hemlock formations.
The state has offered some attractive tax incentives for Cook Inlet explorers, but those aren’t why Apache is in the basin, he said.
Apache’s plan is to acquire additional acreage, shoot 3-D seismic beginning next year, and drill in 2012 at the earliest, Bedingfield said.
Editor’s note: See full story in the Aug. 29 edition of Petroleum News, which will be available online to subscribers at www.petroleumnews.com on Friday.