Does anyone know if there are currently any competitive lease buyers in the Alpine High? I have open acreage in Section 44, Block 55 T7S and it is very adjacent to A LOT of Apache activity. While Apache seems to be stingy with releasing well results, I can’t imagine they wouldn’t keep drilling wells if they didn’t think they would be profitable so I am hoping to capitalize on some “closeology” with some competitive buyer that wants in on the Apache information.
Travis…
Primexx, Noble Permian, Oxy, Centennial, and many others jumped in there and snapped up the periphery of the originally published boundaries
of the Alpine High discovery…but Apache got there ‘fustest with the mostest’ and leased up over 800,000 acres initially. Then they discovered the stacked shale plays structure of the Delaware basin was more extensive and far reaching than they first imagined.
Apache is concentrating their initial exploration investment in high wet gas
and large volume oil production wells because they get paid $70 plus or
oil and $100 plus for condensate/NGLs, while gas languishes between $2
and $4/mmcf. They want to pay dividends to investors and broaden their
available economic base…good business practice.
Then Apache and its parent BP are acquiring all the property, equipment, and some of the employees of their competitors in the Delaware. They are making it harder for independents to compete with them for exploiting the Delaware. Again, good legal business practice.
The way the stacked shale plays of the Delaware are oriented and the anticline formations within in them are oriented parallel to one another…you should be in a good place to capitalize on the peripheral drilling by wannabe competitors to Apache.
Here is a production map of some of Apache’s results nextdoor to you. Alpine High is somewhat of an enigma. Impressive find in a day in age when most resource plays are thought to be discovered. So far, it has been more corporate flag-waving then commercial success. Your land offsets Apache’s Blackhawk and Chinook wells. Hard to know for sure but I believe they are Woodford tests. The terms “Delaware” and “Permian” refer to periods in Paleozoic Era- Permian age being around 270 Million years old. The woodford is part of the Devonian period which is closer to 400 million years old. This may be semantics to some but it is a important distinction. The well on the corner right of the map is a Wolfcamp test by BHP in 2011. The Permian age rocks do not seem to work in this area. Apache is proving up the older Mississippian/Devonian play but in no way can it be equivacated with the Wolfcamp in Eastern Reeves.
Your land is in a shallower, liquids rich part of the Woodford but Apache’s offsets (so far) will probably never pay out. Product realizations are not that great due to lack of infrastructure and takeaway from the region. Pricing (in a perfect world) would be something like $60 per barrel of condensate. $2.50 NG (*.75 gas shrinkage) 100 bpm NGL cut at 40% of Nymex. Gas uplift of around $1.80. So maybe like 15:1 conversion rate at $60 oil. I would be surprised if they are getting anywhere close to those realizations right now though.
From what I can tell, the dry gas Woodford wells in North Apache high are the only decent results so far (and maybe one or two of the Mont Blanc wells.) Apache has no relation to BP other than that they bought some Permian assets from Amoco in the 90’s. Amoco later merged with BP. Apache is going to struggle to continue to fund Alpine High (IMHO.) It will be a perpetual cash drain on the company and is stealing capital from better performing assets. That said, it is a young play and things can change. They seem committed to it. They rolled up all the money they spent on trunk lines and fractionation/gas processing and put it into a new public vehicle called Altus Midstream. So if the stock performs well, it will be a nifty way for Apache to pay themselves back for billions in out of pocket infrastructure cost. I’m not buying any shares. Reeves.pdf (1.6 MB)
They are trying again just south of you with the Fox State wells so maybe they can make it work. I would expect some interest from competitors at some point but I doubt the bonus offers would be lights out. If you can get $1,000 p/a and 25% for 3 year- that would be pretty darn good.
What they don’t talk about is that Apache along with the rest of the members of the American EPR (exploration, production, refining) consortium control over 26 Trillion US dollars of facilities around the
world. Many nations, like Iran, Iraq, Syria, even Saudi Arabia could not
drill their own wells, produce them, or refine products to sell without
US oil and gas engineering and manpower. Others,like Russia and China would not be able to compete…but we GAVE them, or they STOLE the intellectual property that enabled their EPR efforts. This has
been going on since the 1930s.
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I received offer in Reeves County, GLO lease block 50-7 section 34, bonus $7700 per acre, 1/2 to state, 1/2 to owner. Any suggestions on the bonus offered? Thanks!
Thank you, f100owner for positing. If you have interests with Apache, this is the article for you. Seeking Alpha consistently has some of the best updates on Apache’s Delaware Basin operations.
Yeah, me too!
Anyone have any info on Reeves NW/4 66 1655 & 1693 Blk 13 H&GN Ry Co.
I have 160 ac more or less. Lease up in October 2019. Just wondering.
JMosc
Thank you for your info. I am getting offers to purchase my holding left and right. I am not selling right now…just wondering how close the action was to my holdings.
