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Lagniappe, Santos, APA lease transfers approved
Kay Cashman Petroleum News
A spokesperson for APA Corp., holding company for Apache Corp., told Petroleum News in mid-November that the "farm in agreement" between APA, Armstrong Oil & Gas's Lagniappe Alaska and Santos's Oil Search (Alaska) on a 148-lease block on Alaska's eastern North Slope had been "executed."
The lease block encompasses 270,000 acres south of the Badami unit and east of Prudhoe Bay. The operator is Lagniappe.
These three working interest owners plan to drill six wells, three per year, in a two-year period starting this winter (see related story on page 1 of this issue).
On Feb. 21 and Feb. 22 lease assignments related to the deal were approved by Alaska's Division of Oil and Gas, the net result leaving APA with a 50% working interest ownership in the acreage and Santos's Oil Search (Alaska) and Armstrong's Lagniappe each with a 25% working interest.
OSA to APA On Dec. 21, the division received assignment applications transferring 25% working interest ownership from Santos's Oil Search (Alaska) to APA Alaska, while retaining a 25% WIO.
Division of Oil and Gas Director Derek Nottingham approved the assignment applications effective Dec. 1, 2023.
Lagniappe to APA On Jan. 22, the division received assignment applications for the same leases, transferring a 25% working interest ownership from Lagniappe Alaska to APA Alaska, with Lagniappe retaining a 25% WIO.
Division Director Nottingham approved the applications with an effective date of Jan. 1, 2024.
Add 20 leases nearby In the state of Alaska's areawide North Slope and Beaufort Sea lease sales held Dec. 13, Lagniappe gained an additional 51,250 acres in 20 leases in the eastern North Slope area where it plans exploration drilling this winter and next.
In online bidding Lagniappe bid on and took 17 tracts for $1,866,393.60 in the North Slope areawide sale, 43,570 acres adjacent to its existing holdings south of Badami. The new leases are east, north and west of the existing acreage, with the largest block to the north.
In the Beaufort Sea sale Lagniappe bid on and took three leases, 7,680 acres, for $380,262.40. The tracts are west of Badami, and north of the company's large acreage position.
About APA Corp. In 2021, Apache Corp. moved to a holding company structure under APA Corp., the public company trading on the Nasdaq stock exchange. APA acquired the Suriname and Dominican Republic subsidiaries from Apache. Apache Corp. is a direct, wholly owned subsidiary of APA and continues to hold assets in the U.S., subsidiaries in Egypt and the U.K., and economic interests in Altus Midstream Co. and Altus Midstream LP.
On Feb. 21 APA announced its 2023 full year financial and operational results and fourth quarter 2023 results, the highlights of which are as follows:
*Expanded exploration portfolio through the addition of onshore leases in Alaska and two offshore blocks in Uruguay.
*Delivered full-year net cash from operating activities of $3.1 billion, adjusted EBITDAX of $5.3 billion and $965 million of free cash flow (FCF).
*Returned $637 million to shareholders or 66% of FCF.
*Increased total company oil production by 8% year-over-year.
*U.S. oil increased 12% from fourth-quarter 2022 to fourth-quarter 2023, driven by strong Permian basin execution and well performance.
*Achieved primary emissions goal of converting more than 2,000 pneumatic devices to instrument air or through-valve retrofit in the U.S.
*Identified an estimated 700 million barrels of recoverable oil resource at Sapakara and Krabdagu on Block 58 offshore Suriname; initiated FEED study and progressing toward 2024 FID.
On Feb. 21, APA also released the following 2024 outlook highlights:
*Planning upstream capital budget of $1.9 billion to $2.0 billion.
*Investing to sustain production on a year-over-year basis.
*Forecasting strong U.S. oil growth in 2024, approximately 8% year-over-year and more than 10% from fourth-quarter 2023 to fourth-quarter 2024;
*Pending acquisition of Callon Petroleum Co. adds scale to APA's existing Delaware basin assets and is expected to be accretive to key financial metrics; and
*Committing to return at least 60% of FCF to shareholders.
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