The Apache Corp. says the Permian Basin was a key player in its successful third quarter with newly acquired properties in the Delaware Basin augmenting its core production in the Midland Basin.
President-CEO John Christmann reported from Houston that results in the Permian “were particularly strong due to a variety of factors including good underlying base production and new well performance, the timing and number of new completions and relatively minimal maintenance, midstream and weather-related downtime.
“In the first quarter of 2023, we expect that Permian Basin production will be flat to down as we experience a lull in new well connections and production to reflect the potential for winter weather-related downtime,” he said.
“Our capital budget next year will be $2 billion to $2.1 billion. This assumes five rigs in the Permian and up to 17 in Egypt while activity in the North Sea and Suriname is projected to remain consistent with 2022 levels. Similar to our approach in ’22, this incorporates what we believe is an appropriate view of inflationary impacts on the capital program.”
Both part of the Permian Basin, the Delaware and Midland basins are sedimentary formations with the Delaware lying under far West Texas and south Southeastern New Mexico. The Midland Basin is primarily east of there with most of its oil and gas in Martin, Midland, Upton, Howard, Glasscock and Reagan counties.
Further reviewing Apache’s global operations, Christmann said drilling and recompletion programs in Egypt “are progressing closer to our original plans for the year.
“The North Sea, after returning to production from seasonal turnarounds, incurred an unusually high amount of unplanned downtime in August and September,” he said last Friday during the third quarter earnings call of his parent company, the ARA Corp. “During the third quarter, we generated more than $600 million of free cash flow.
“On the environmental, social and governance front, I’m pleased to announce that we have successfully delivered on our 2022 goal to reduce flaring in Egypt. Today, new projects are reducing routine upstream flaring by 40 percent, enabling us to compress the gas into sales lines and deliver it to Egyptian consumers for cleaner-burning affordable fuel.
“Turning to our fourth quarter outlook, capital investment is projected to be around $450 million and our full-year guidance of $1.725 billion remains unchanged.”
Chief Financial Officer Steve Riney said Apache had a consolidated net income of $422 million. “Our quarterly results include items outside of APA’s core earnings,” Riney said.
“The most significant of these was a $275-million charge for the impact of the United Kingdom energy profits levy. Net income for the third quarter was $651 million or $1.97 per diluted common share.”
Riney said Apache’s total debt increased by $244 million to $5.5 billion with partial funding of the Delaware Basin acquisition at the end of July.