Gulf Oil and Gas accountACCOUNT

Apache Completes First Horizontal Wells

Source: www.gulfoilandgas.com 11/4/2010, Location: North America

Apache Corporation reported that the first two horizontal wells to target the Hogshooter segment of the Granite Wash play in the Anadarko Basin each commenced production at rates exceeding 2,000 barrels of oil per day.

The Hogshooter wash is shallower, younger and more oil-prone than previous Granite Wash targets in western Oklahoma and the Texas Panhandle. The two wells were drilled more than 15 miles apart in Beckham County, Okla., near the east/west axis of the Granite Wash play. The distance between the wells points to meaningful potential in the Hogshooter segment across a broad area. Apache controls 200,000 gross acres in the Granite Wash play and leased nearly 30,000 net acres in 2010.

The Edler #1-5, located in Section 5 of Township 11N-20 W of Beckham County, commenced production at a daily rate of 2,050 barrels of oil and 3.7 million cubic feet (MMcf) of gas. The well was drilled to a vertical depth of approximately 11,360 feet with a 4,360-foot horizontal section before it was completed in eight stages. Apache owns an 82-percent interest in the well.

The Thetford #4-23, located in Section 23 of Township 11N-23W of Beckham County, initially produced 2,100 barrels of oil and 3.2 MMcf of gas per day. It was drilled to a vertical depth of approximately 10,900 feet with a 4,280-foot horizontal section and then completed in nine stages. Apache owns a 56-percent interest in the well.

After almost two months on production, each of the wells is averaging approximately 700 barrels of oil and 3.5 MMcf of gas per day.

Apache currently is operating nine horizontal rigs in the Granite Wash play and plans to drill a third horizontal Hogshooter well by year-end. For 2011, the company currently plans to add a tenth horizontal rig and drill more than 40 horizontal Granite Wash wells — including 10 in the oil-rich Hogshooter. Over the past year, Apache has completed 19 Granite Wash horizontal wells with current aggregate net production of 2,600 barrels of oil and 40 MMcf of gas per day. Seven wells are awaiting completion.

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