APA stock is rising in pre-market trading on January 7, 2020, after the company reported a significant oil discovery.
The fact that the price of oil is trending higher from increased hostilities between the US and Iran is also helping to push energy sector stocks higher. Furthermore, this is the seasonally strong time of year for energy stocks.
Apache Corporation (NYSE, Nasdaq: APA) and Total S.A. (NYSE: TOT) today announced a significant oil discovery at the Maka Central-1 well drilled offshore Suriname on Block 58. The well was drilled using the drillship Noble Sam Croft with Apache as operator holding a 50% working interest and Total holding a 50% working interest.
Maka Central-1 successfully tested for the presence of hydrocarbons in multiple stacked targets in the upper Cretaceous-aged Campanian and Santonian intervals and encountered both oil and gas condensate. The formation evaluation program included logging-while-drilling and wireline logs, formation pressures, and preliminary core and fluid analysis. Together with future appraisal wells, this data will be used to quantify the resource in the Campanian and Santonian formations.
The shallower Campanian interval contains 50 meters (164 feet) of net hydrocarbon-bearing reservoir. Preliminary fluid samples and test results indicate light oil and gas condensate with API gravities between 40 and 60 degrees.
The deeper Santonian interval contains 73 meters (240 feet) of net oil-bearing reservoir. Preliminary fluid samples and tests results indicate API oil gravities between 35 and 45 degrees.
The Maka Central-1 also targeted a third interval, the Turonian, a geologic analogue to oil discoveries offshore West Africa. Prior to reaching this interval, the well encountered significantly over-pressured, oil-bearing reservoirs in the lower Santonian, and the decision was made to conclude drilling at approximately 6,300 meters (20,670 feet). The pressures encountered in the lower Santonian are a positive sign for the Turonian and future drilling will test this interval.
Maka Central-1 well confirms geologic model with 73 meters (240 feet) of oil pay and 50 meters (164 feet) of light oil and gas condensate pay; appraisal planning is underway.
Drilling at the next well, Sapakara West-1, approximately 20 kilometers (12 miles) southeast of Maka Central-1, will test the same-aged upper Cretaceous intervals in a separate and distinct stratigraphic feature.
“We are very pleased with results from Maka Central-1. The well proves a working hydrocarbon system in the first two play types within Block 58 and confirms our geologic model with oil and condensate in shallower zones and oil in deeper zones. Preliminary formation evaluation data indicates the potential for prolific oil wells. Additionally, the size of the stratigraphic feature, as defined by 3-D seismic imaging, suggests a substantial resource,” said John J. Christmann, Apache CEO and President.
“Block 58 comprises 1.4 million acres and offers significant potential beyond the discovery at Maka Central. We have identified at least seven distinct play types and more than 50 prospects within the thermally mature play fairway. In partnership with Total, we look forward to advancing both exploration and development of discoveries on the block,” Christmann said.
The Sam Croft will drill the next wells in Block 58, starting with the Sapakara West prospect. Sapakara West-1, located approximately 20 kilometers (12 miles) southeast of the Maka Central discovery, will test oil-prone upper Cretaceous targets in the Campanian and Santonian intervals.