Overview

Apache's oil and gas assets are in the Neuquén, Austral and Cuyo basins. While Argentina presents unique challenges with evolving governmental regulations, we are optimistic about our ability to find additional hydrocarbons with the drill bit and grow our reserves and production over the long term.

In 2008, the region drilled 83 wells, 72 of which were productive. We produced 17.5 million barrels of oil equivalent (MMboe), which accounted for 9 percent of Apache’s total production. Argentina holds approximately 5 percent of the company's total estimated proved reserves. Second-quarter 2009 net production was 47,100 barrels per day (Bpd). In the first half of 2009, 21 wells were drilled with a 95 percent success rate.

 Austral basin, Tierra del Fuego

In the Austral Basin, Apache is operating in blocks in which we own a 70-percent working interest, including the San Sebastian field, the newly discovered Sección Veintinueve and an extension to the Sara Norte field. During the second quarter, the Springhill oil well was completed for 900 Bpd day in the Seccion Banos field. The well helped define the field's secondary recovery potential for a water flood that will be commenced by year end. 

 Neuquén basin

Development drilling in the Neuquén province continued in the Guanaco and Ranquil gas field areas. Both fields are approved to receive gas plus price incentives by the federal government.

The Ranquil Co 1039 encountered 110 meters of pay in three zones in the objective Pre-Cuyo formation. Completion operations are currently underway.  In the Guanaco field, five wells have been drilled to date in 2009, four wells are on production, and the fifth is currently being completed. Four additional wells are planned in Guanaco and Ranquil Co in the second half.

 Cuyo basin

In December 2008, the Mendoza Province granted Apache an exploration permit for CCyB Block 17B in the Cuyo basin, increasing Apache's Argentine acreage by 34 percent. The new block consists of just over 1 million sparsely drilled non-producing net acres surrounding 22 of the largest oil fields in Argentina. Apache’s acreage is immediately adjacent to and on trend with several fields, but has never been explored with 3-D seismic. We plan two 3-D surveys when permitting is complete in 2010.