Apache Corp looks to increase activity in Permian Basin

Apache signals capex increase as costs fall, oil prices recover

Apache

Apache says the recent rally in oil prices along with lower production costs have created a “better investment environment”. Company photo.

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.

Crownquest-Operating-LLC-uses-EndurAlloy™-production-tubing-to-cut-Permian-Basin-well-operating-costsCrownquest Operating LLC uses EndurAlloy™ production tubing to cut Permian Basin well operating costs

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)

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