Apache Finds Gas with Gnu-1 Well Offshore Australia

Apache Corporation reported that its Gnu-1 exploration/appraisal well in the Reindeer/Caribou Field located in the WA 209P permit off Australia's Northwest Shelf tested 26 million cubic feet (MMcf) of gas and 61 barrels of condensate per day from the North Rankin Formation.

Apache operates the well with a 55 percent working interest; Santos, Ltd., has 45 percent.

The Gnu-1 well logged 378 feet of net pay in the Legendre Formation, the main reservoir. This is 78 feet of new pay (more than previously seen in the field). The Legendre pay zones, located approximately 3,500 feet uphole from the North Rankin reservoir, will not be tested as an earlier Legendre well tested 35 MMcf of gas and 165 barrels of condensate per day. When developed for production, the Legendre sands are expected to deliver in excess of 100 MMcf of gas per day.

The North Rankin Formation was tested on a 1-1/4 -inch choke with 954 pounds per square inch of flowing wellhead pressure. Perforations were between 11,259 feet and 11,287 feet measured depth. The well is approximately 56 miles offshore in the northeast section of Apache's Carnarvon Basin acreage in 200 feet of water.

"This well brings our expected gross recoverable reserves at the Reindeer/Caribou field to half a trillion cubic feet of natural gas," said Apache CEO, President and COO G. Steven Farris. "We plan to develop this field with an objective of first production in 2008. With five additional seismically defined prospects in the immediate vicinity, the first of which we plan to spud later this year, the growth potential of this area is significant."

Part of the gas is dedicated to the company's existing contracts and ample market opportunities exist for the rest. Development options, including the possibility of a new pipeline to the mainland, are currently being evaluated.

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