Apache Confirms Discovery in Egypt's Western Desert

Apache reports that its Egyptian Qasr-2X appraisal well confirms the Qasr-1X discovery announced in July.

"The Qasr-2X well has a 707-foot gross hydrocarbon column and logs indicate that net Jurassic pay in the Qasr-2X increases to 669 feet, versus 461 feet in the Qasr-1X discovery," said G. Steven Farris, Apache president and chief executive officer.

"We believe the importance of these two wells extends to the wellbeing of Egypt while appearing to be the most significant in Apache's 49-year history," he added. "Reserve potential is now in the range of 1 trillion to 3 trillion cubic feet of gas and 20 million to 70 million barrels of condensate.

Apache expects to drill four additional appraisal wells in the area, which, based on 3-D seismic data, potentially encompasses more than 13,000 acres. These additional wells will enable Apache to better define potential reserves and determine pipeline and gas processing infrastructure requirements. An additional 62 feet of pay was logged at shallower depths in the AEB sands; these sands produce oil in the Ozoris Field approximately 2.4 miles northeast of the Qasr-2X well.

"We recently completed a 6-inch pipeline that will accommodate 30 million cubic feet (MMcf) of gas per day from the Qasr-1X discovery, and we expect to begin production within two weeks," Farris said.

"We believe we have kicked off a new play for condensate-rich Jurassic gas, and we expect additional exploratory drilling and 3-D seismic acquisition in the near future."

"Further analysis of the Qasr-1X discovery in light of the confirmation well suggests that what we thought was a combination of Jurassic Lower Safa and Ras Qattara pay is all Lower Safa," Farris said. We do not believe we have penetrated the Ras Qattara sands on this structure as of yet. Our net- to-gross in the Lower Safa sand package increased from 76 percent in Qasr-1X to 93 percent in Qasr-2X."

The new field is located on the Khalda Concessions, which Apache operates with a 100 percent contractor interest. The latest well is 1.6 miles from the Qasr-1X, which test-flowed a combined 51.8 MMcf of gas and 2,688 barrels of condensate per day from flow tests in two zones in the Lower Safa formation.

Apache is evaluating whether to test the Lower Safa in light of the quality of the log and the current condition of the Qasr-2X wellbore. Any tests in the Lower Safa will be restricted by the diameter of the pipe.