Overview

The Gulf Coast region comprises our interests in and along the Gulf of Mexico, in the areas on and offshore Louisiana and Texas. Apache is the largest producer and the largest held-by-production acreage holder in waters less than 1,200 feet deep in the Gulf of Mexico. In 2008, the region contributed approximately 22 percent of Apache's production and approximately 25 percent of revenues and, at year-end, held approximately 14 percent of our estimated proved reserves.
 
In the second quarter, the Gulf Coast region net production was 116,800 barrels per day (Bpd), an increase of 12.2 percent from last quarter.
 
 Production increases during the second quarter were attributed to first production from our Geauxpher fields, which came online May 15, adding 3,100 Bpd, and hurricane-related production restoration adding 5,100 Bpd. New completions and operations capital projects added another 6,200 Bpd.

Our 100 percent-owned South Timbalier 287AA sidetrack resulted in a discovery. The discovery was drilled from Apache South Timbalier 308 platform into the adjoining block. This high-angle well was drilled to 23,000 feet measured depth and logged 40 feet of net oil pay. The well tested at 1,971 Bpd and 8.6 million cubic feet per day (MMcfd), with over 7,000 pounds of flowing tubing pressure during that second quarter. It was brought on production May 13 and continues to produce today at near test-rate levels.

We continue to see further reductions in rig rates and support vessel costs. Our cost per barrel dropped by 9.5 percent from first to second quarters. 

Hurricane recovery update
Hurricane restoration efforts, primarily associated with third-party infrastructure repairs, continue. We expect to recover an additional 8,800 Bpd in the third quarter.