Region overview

Apache’s holdings in Australia are focused offshore Western Australia in the Carnarvon basin, where we have operated since acquiring the gas processing facilities on Varanus Island and adjacent producing properties in 1993, in the Exmouth basin and in the Browse basin. Production operations are located in the Carnarvon and Exmouth basins. In total, Apache controls approximately 8.8 million gross acres in Australia through 35 exploration permits, 16 production licenses, and 10 retention leases. Approximately 90 percent of our acreage is undeveloped.

During 2012, the region had net production of 29,000 barrels per day (Bpd) of oil and 214 million cubic feet per day (MMcfd) of natural gas, contributing 9 percent of Apache’s worldwide production revenue, 8 percent of worldwide production and 12 percent of year-end estimated proved reserves. Production compared to the prior year was 7 percent lower primarily as a result of natural decline in the Pyrenees and Van Gogh oil fields. Offsetting production declines was a full year of production from the Reindeer field. This gas is processed through the Devil Creek Gas Plant, which came online in December 2011. This plant is Western Australia’s third domestic natural gas processing hub and the first new hub to be constructed in more than 15 years.

The region is a key component of Apache’s exploration program. During 2012, we participated in drilling 15 offshore wells, of which 10 were exploration or appraisal wells. This compares to nine wells drilled in 2011. Over the past decade, the region’s exploration activity has established a significant pipeline of projects that are expected to contribute to production growth as they are brought onstream in the coming years.

first-Quarter 2013 Update

• First-quarter 2013 production was 55,734 barrels of oil equivalent (Boe) per day, down 8 percent from the fourth quarter of 2012 due to three tropical cyclones which impacted production and created reconnection issues on the Ningaloo Vision FPSO following cyclone Narelle. Total deferred production was approximately 3,500 Boe per day.
• During the first quarter, the region operated an average of three drilling rigs and drilled two gross wells.
• The Stag-48H horizontal oil development well was drilled from the Stag oil platform and logs indicate that the well intersected a total of 1,549 feet of high resistivity oil pay. The well results validated the interpretation of hydrocarbon distribution based on both the reservoir engineering simulation model and the Stag OBC seismic inversion model.

MACEDON

• The BHP-operated Macedon project is reported to be over 94-percent complete and on schedule for first gas late in the third quarter of 2013.
• Apache expects net daily production of 35 million cubic feet per day (MMcfd).

BALNAVES

• The Armada Claire FPSO is currently in the shipyard undergoing conversion and refurbishment.
• All contracts have been executed, and the project remains on schedule for 2014 first production.

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JULIMAR (WHEATSTONE LNG)

• During the quarter, Apache and its partners signed a long-term sales and purchase agreement with Chubu Electric Power Company to deliver 1 million tons per year of LNG from the Wheatstone project.
• The Wheatstone LNG project has over 80 percent of its offtake secured under long-term sales contracts.

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