Apache's New Wells Strengthen Horn River's Potential Pay

Apache said today that recent drilling results at the Horn River shale play of Northeast British Columbia have strengthened earlier estimates that individual horizontal wells in the play potentially can recover 10 billion cubic feet of natural gas.

Three recent wells at Two Island Lake, operated by joint venture partner EnCana, have been brought on line at gross initial production rates of more than 16 million cubic feet (MMcf) per day and continue to produce 8-10 MMcf per day after two to three weeks.

Apache and EnCana pioneered the shale play in the Horn River Basin and each has a 50-percent interest in 425,000 gross acres -- the leading acreage position in the play. Apache tested the shale potential in a recompletion of a vertical well in the Ootla area in March 2005. Thus far, the two companies have drilled 28 wells and brought 10 horizontal wells on production, and expect to have 32 wells on production by the first quarter of 2010.

Apache and EnCana have increased fracture stimulations to as many as 14 stages per horizontal section. "Drilling costs have come down as we have gained experience and become more efficient, reducing the time needed to drill a well to as little as 16 days from a planned 30 days when we started," said John Crum, Apache's co-chief operating officer and president - North America. "With the potential to drill 2,000 to 3,000 locations from multi-well pads, we have a tremendous resource at Horn River that will be developed over many years."

The partners also commissioned a new compression and dehydration facility as well as a gas gathering pipeline that connects the Two Island Lake area with the Spectra pipeline system near the proposed Cabin gas plant.