Apache Corp looks to increase activity in Permian Basin
Apache signals capex increase as costs fall, oil prices recover
May 5 (Reuters) – Oil and gas producer Apache Corp said a recent rally in oil prices coupled with lower production costs had created a “better investment environment”, signaling that it may ramp up spending.
The company, which also reported a smaller-than-expected quarterly loss, raised its full year production forecast by 5,000 barrels of oil equivalent per day (boe/d), while maintaining its 2016 capital spending of $1.4 billion-$1.8 billion.
“As we become more confident in the sustainability of higher oil prices and the resulting increase in cash flow relative to our $35-per-barrel plan, we will increase our capital investment program accordingly,” Chief Executive John Christmann said on Thursday.
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Total revenue fell more than 35 percent to $1.05 billion, missing analysts’ estimate of $1.10 billion.
Apache, which now expects 2016 production of 438,000 boe/d-458,000 boe/d, said the majority of additional investment would likely go to the Permian Basin.
Excluding one time items, the company posted a loss of 40 cents per share, smaller than the average analyst estimate of 89 cents per share, according to Thomson Reuters I/B/E/S.
The company’s shares were up 1.2 percent at $51.36 in premarket trading on Thursday. They have fallen more than 25 percent in the past 12 months. (Reporting by Arathy S Nair in Bengaluru; Editing by Shounak Dasgupta)