Managers with Apache Corp. were in Anchorage the week of Aug. 22, and they were sounding pretty bullish about their new acreage in Southcentral Alaska’s Cook Inlet basin.
Apache’s main interest is oil, although it’s mindful of the ready local market for natural gas, said John Bedingfield, the company’s vice president for worldwide exploration and new ventures.
Apache was much in the news in July, when it announced a $7 billion deal to buy assets in Canada, Egypt and the Permian basin in Texas and New Mexico from beleaguered BP. Speculation at the time 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. “We’re not ones to wait around.”
Apache’s Alaska moveThe Houston-based independent recently worked a deal to pick up around 200,000 acres of leases scattered broadly around the Cook Inlet basin. Apache acquired the leases from a group that included long-time Alaska investors Daniel K. Donkel and Samuel H. Cade.
Apache approached the Donkel group about the acreage, and Bedingfield, without being too specific, said his company has also talked with a number of other Alaska players. The intent is to build on the Donkel deal and extend Apache’s Cook Inlet presence, he said.
Bedingfield, making his first visit to Alaska, said the physical beauty of the landscape made an immediate impression on him.
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.
Seismic, drilling plansApache 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.
Cook Inlet is intriguing for its oil potential, he said, noting the U.S. Geological Survey estimates close to a billion barrels remain to be discovered.
In a way, Cook Inlet was a victim of the enormous Prudhoe Bay discovery in 1968, which drew investment and attention away from what had been an impressive oil and gas province in its own right, Bedingfield said.
Although Apache has deepwater experience elsewhere in the world, it doesn’t view the large body of water within the Cook Inlet basin, and carries the same name as the basin, a deepwater region. The company, he said, believes it can conduct most of its exploratory work from land, and is focused on the Tyonek and Hemlock formations.
Bedingfield touted the independent’s experience and success in maximizing production from the aging Forties Field in the North Sea, which Apache bought from BP in 2003, and the western desert in Egypt.
The company makes great use of enhanced oil recovery techniques such as water and CO2 flooding, and has the will and the money to drill wells and commercialize finds, Bedingfield said.
The State of Alaska 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.
The company isn’t put off by the problem of Cook Inlet’s endangered beluga whales, he added, saying Apache has plenty of experience working with reef habitat and marine mammals in Australia.