Apache to Develop Lucius Project in Deepwater Gulf of Mexico

Apache Corporation announced that its wholly owned subsidiary along with other co-venturers will proceed with development of the Lucius project in the Keathley Canyon area of the deepwater Gulf of Mexico.

"The Lucius unit is a world-class oil and gas accumulation in an emerging area of the deepwater Gulf," said G. Steven Farris, Apache's chairman and chief executive officer. "The decision to sanction the Lucius development is a milestone for Apache: It is the first major deepwater Gulf project approved since our acquisition of Mariner Energy in 2010."

Lucius, located approximately 200 miles southeast of Houston in waters about 7,000 feet deep, will be developed using a truss spar floating production facility with production capacity of 80,000 barrels of oil and 450 million cubic feet of natural gas per day. The spar is currently under construction at Technip's facility in Pori, Finland. First production is planned for 2014 from six initial producing wells.

The Lucius unit includes portions of Keathley Canyon blocks 874, 875, 918 and 919. Apache Deepwater LLC, an Apache subsidiary, has an 11.7-percent working interest.

Anadarko Petroleum Corporation operates the unit with a 35-percent working interest. Other interest owners include Plains Exploration & Production Company, 23.3 percent; Exxon Mobil Corporation, 15 percent; Petrobras, 9.6 percent; and Eni Petroleum, 5.4 percent.

"We are fortunate to be associated with Anadarko -- one of the premier deepwater explorers and developers -- in this project," Farris said.

Under the terms of a previously announced unitization agreement, Lucius interest owners agreed to process natural gas produced from the Hadrian South field through the Lucius facility in return for a production-handling fee and reimbursement for any required facility upgrades.

In 2012, Apache expects to commence production from three deepwater projects -- the Apache-operated Bushwood (Garden Banks 463) and Wide Berth (Green Canyon 490) as well as Mandy (Mississippi Canyon 199), which is operated by LLOG Exploration Co.


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