Apache's Tests Result at Matruh Concession

Apache Corporation reported that its second discovery of the year in Egypt's Matruh Basin - the Samaa-1X - tested 44 million cubic feet (MMcf) of natural gas and 2,910 barrels of condensate per day from two zones.

The nearby Opera-1X discovery, drilled earlier in 2010, test-flowed 890 barrels of oil per day from the Cretaceous-age Alam El Buieb (AEB-3D) formation.

The Samaa-1X is located in the Matruh Concession, approximately 1.2 miles (2 km) northwest of the Matruh field and 3.7 miles (6 km) southeast of the 2008 Maggie-1X discovery. The latest discovery tested 21 MMcf and 913 barrels of condensate per day in the Lower Safa and 23 MMcf and 1,997 barrels of condensate per day from the Upper Safa.

"The Matruh Basin and the Faghur Basin, 140 kilometers to the southwest, continue to be successful focus areas for Apache, with AEB and Safa reservoirs that have proven to be prolific oil and gas producers," said Tom Voytovich, vice president of Apache's Egypt Region. "The thickness of the sands and the stacked pay zones in both areas present multiple opportunities for further exploration."

The Matruh Concession, acquired through farm-out from Shell in 2001, currently produces 130 MMcf of gas and 18,000 barrels of oil per day from 16 wells; the concession has yielded 119 billion cubic feet of gas and 11.2 million barrels of oil since Apache established production on the concession in 2003. "Since early 2009, production on the concession has grown from 60 MMcf and 5,000 barrels of oil per day to its current rate, and these two new discoveries prove that the basin has more to give."

Apache is planning to drill 11 additional exploration wells and two appraisal wells in the Matruh Basin during 2010. Apache continues to evaluate 3-D seismic surveys - including a recently completed 155-square-mile (400 square kilometers) survey - to identify additional exploration opportunities in the basin, which extends across portions of several Apache-operated concessions.

The Samaa-1X well was designed to test the Lower AEB and Safa reservoirs. "In the surrounding area, the Safa reservoirs have provided most of the historic production in the Imhotep, Mihos, Matruh and Maggie fields, and the AEB-6 was productive in the Matruh Field," Voytovich said.

The Opera-1X was the first test on a large, undrilled Jurassic structure, targeting AEB-3 oil in the Matruh concession. It is the third successful discovery, along with the prolific Jade and Falcon fields, of AEB-3D oil in the Matruh concession. Apache currently is drilling the Opera-2X appraisal, northeast of the discovery well, and is planning several additional wells in this under-explored reservoir interval.

"These recent discoveries in the Matruh Basin - and our 2010 success in the Faghur Basin - provide additional evidence of the exploration potential on Apache acreage in Egypt and the benefits of working in stacked-pay areas," said Voytovich. "Both the Opera-1X and Samaa-1X are near existing production outlets. The Opera well is producing at 800 barrels per day and we expect Samaa-1X to be brought on-line quickly to take advantage of the high condensate yield from the well."

In the Faghur Basin, Apache expects to bring additional facilities on line in the second quarter that will expand productive capacity to 20,000 barrels per day.