Apache announces large petroleum discovery in Texas
US midsized oil company Apache announced Wednesday a "significant new resource play" of oil and gas in the state of Texas that it expects to develop in the coming decades.
Apache Corporation estimated the "Alpine High" resource play in western Texas contains three billion barrels of oil and 75 trillion cubic feet of natural gas.
That would make it much smaller than the largest Middle Eastern oil discoveries, but among the most significant petroleum asset bases in the US.
Apache has so far drilled just 19 wells on the play, but anticipates 2,000 to 3,000 more drilling locations in two of the area's five formations. Limited infrastructure in the region could extend the timeframe for developing the fields.
The Houston, Texas-based Apache has acquired an acreage position of nearly 480 square miles (1,243 square kilometers).
The project is "an immense resource that we believe will deliver significant value for our shareholders for many years," said Apache chief executive and president John Christmann.
"We are incredibly excited about the Alpine High play and its large inventory of repeatable, high-value drilling opportunities."
In light of the discovery, Apache boosted its 2016 capital budget by $200 million, raising its full-year budget to about $2 billion.
US petroleum production has surged over the last decade thanks to a shale boom in places like Texas, Pennsylvania and North Dakota. The pace of development has ebbed somewhat over the last two years due to low oil prices, but production remains near historic highs.
Apache shares vaulted 7.9 percent in midday trade to $55.77.