Apache Says Julimar Could Hold 1 Tcf of Natural Gas

Apache says that the Julimar East-1 exploratory/appraisal well on Australia's Northwest Shelf logged 224 feet of net gas pay in six sandstone reservoirs of the Triassic Mungaroo formation.

Julimar East-1 was drilled 3.6 miles northeast of the April 2007 Julimar-1 discovery, which encountered 132 feet of net gas in four zones. Production tests on two zones in the discovery flowed at a combined rate of 85 million cubic feet (MMcf) per day, precluding the need for further testing of the Julimar East-1.

Three of the six intersected pay zones in Julimar East-1 are stratigraphically equivalent to gas bearing reservoirs in the Julimar-1 well. The well will be suspended as a future production well.

"With 70 percent more net pay than the initial discovery, the Julimar East-1 well strengthens our belief that the ultimate recoverable reserves in the Julimar complex could exceed 1 trillion cubic feet (Tcf)," said G. Steven Farris, Apache's president and chief executive officer. "Julimar is one of a number of high-potential exploration plays and prospects Apache has matured in our core growth areas of Australia, Canada and Egypt."

The Sedco 703 used to drill the Julimar East-1 will next drill Rosella, another 1 Tcf-potential gas prospect located approximately 3.6 miles southwest of the John Brookes Field, which currently is producing 250 MMcf per day of gas from three wells (138 MMcf per day net to Apache). John Brookes, with ultimate reserves projected to exceed 1 Tcf, is Apache's largest Australian gas field.

The Julimar complex is located on the 239,440-acre WA356P block, where Apache owns a 65-percent interest. The latest well was drilled to a total vertical depth of 13,517 feet in 561 feet of water approximately 87 miles from the Australian coast. Two additional exploratory wells -- Brunello-1 and Julimar Northwest-1 are planned to further appraise the Julimar complex during 2007.

The Julimar complex is on trend with other significant Mungaroo fields, including the multi-Tcf West Tryal Rocks, Pluto and Gorgon fields.

Western Australia's gas market has strengthened recently, with short-term gas contracts in excess of US$5 per thousand cubic feet (Mcf), substantially above historic price realizations of US$1.75 per Mcf.

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