Overview

Apache is one of Australia’s most active offshore explorers. In Australia, our exploration activity is focused in the offshore Carnarvon, Gippsland and Browse basins, where Apache holds 4.3 million net acres in 31 exploration permits, 14 production licenses and three retention leases. We also have one production license and two retention leases pending confirmation. Production operations are concentrated in the Carnarvon and Exmouth Basins. Production operations are concentrated in the Carnarvon and Exmouth basins, all of which are Apache operated.

In 2009, the region produced 4,400 barrels of oil equivalent (Boe) per day, a 40-percent increase from 2008 driven by the restoration of our Varanus Island facilities. Australia held 13 percent of our year-end estimated proved reserves. During the year the region participated in drilling 33 wells, which generated 28 productive wells. 
 

Van Gogh

Oil production commenced in February 2010 at our Van Gogh development in Production License WA-35-L in the Exmouth Basin, offshore Western Australia. Apache, the Van Gogh field operator, owns a 52.5-percent interest in the field with INPEX owning the remaining interest. Van Gogh is located 32 miles (53 km) north-northwest of Exmouth. Discovered in 2003, this is Apache's first field development utilizing a floating production, storage and offloading (FPSO) vessel. The field was developed with 19 horizontal production laterals, two water injection wells and one gas injection well. The total horizontal interval drilled for all of the production wells exceeds 106,000 feet (32 km). The Ningaloo Vision FPSO has capacity to process 150,000 barrels of liquids per day, including 63,000 barrels of oil per day, and store 540,000 barrels of oil.

Pyrenees

Production commenced at the nearby BHP Billiton-operated Pyrenees FPSO development project in March 2010. Apache owns a 28.6-percent working interest. Production from the Crosby, Ravensworth and Stickle wells processed through the FPSO vessel at Pyrenees is expected to be brought on in phases, with approximately half the field ramping up from first oil and the other half over the next six months.

Devil Creek

Apache broke ground at the Devil Creek gas plant in September 2009. First gas from the Reindeer field is anticipated in 2011. Apache operates the project with a 55-percent working interest. Net production is expected to ramp up to 60 MMcfd per day in 2012.

Macedon

Apache began the front-end engineering design (FEED) study for the BHP-operated Macedon domestic gas development during the third quarter with a final investment decision expected in June 2010. Apache has a 28.6 percent working interest in the project.

Wheatstone LNG

Apache and Kuwait Foreign Petroleum Exploration Co. (KUFPEC) joined with Chevron to develop the Wheatstone liquefied natural gas (LNG) hub in Western Australia. Apache and KUFPEC signed an exclusive agreement to supply gas from the Julimar and Brunello discoveries and become foundation equity partners in the Chevron-operated Wheatstone project facilities.

This project unlocks 2.1 trillion cubic feet of gas reserves at two of Apache's largest discoveries and generates steady net sales of about 190 million cubic feet per day and 5,100 barrels per day for 15 years at prices pegged to world oil markets. Apache will have a net 16.25 percent interest in the Wheatstone phase 1 development. As a foundation partner, Apache will also have the opportunity to participate in future expansion of the project providing additional options for gas commercialization. A final investment decision on the first phase of the project is slated for 2011, after the FEED is completed.