APA’s stock price reaction
After the news of its latest discovery—the Alpine High Resource play, on September 7, 2016—Apache Corporation’s (APA) stock closed the day ~7% higher. The stock rose by another 7% the next day, closing at $59.05 on September 8, 2016.
Year-over-year, APA’s stock has increased 43%. Meanwhile, its peers Cimarex Energy (XEC) and Newfield Exploration (NFX) have increased ~26% and 35% year-over-year, respectively. These companies make up 9.7% of the iShares US Oil & Gas Exploration & Production ETF (IEO).
What lies ahead?
In 2017, APA plans to operate 4–5 or more rigs in the Alpine High play, with 60–80 wells per year in the Woodford and Barnett plays. The company plans to perform delineations and start to ramp up production in 2H17.
In the second half of 2016, APA plans to install temporary processing capacity to help it do testing. By mid-2017, it plans to have its in-field gathering and processing infrastructure in place.
In terms of marketing, given the proximity of Alpine High to the WAHA natural gas hub near the New Mexico border, APA believes that its “going to be at the front of the line with a tremendous resource.”
APA also stated: “We are selling the oil, NGLs. We’re getting premium prices for both, and we project that we’re going to be able to bring on the wells and start selling the gas in the second half of 2017.”
You can read more about APA in Market Realist’s series How Long Can Apache Ward Off Merger and Acquisition Suitors?