A U.S. energy company just discovered a “world class” oil and gas resource in west Texas, out on the fringes of the already prolific Permian basin. The WSJ reports on Apache Corp.’s encouraging new find:
The discovery, which Apache is calling “Alpine High,” is in an area near the Davis Mountains that had been overlooked by geologists and engineers, who believed it would be a poor fit for hydraulic fracturing. It could be worth $8 billion by conservative estimates, or even 10 times more, according to the company. […]
The company has begun drilling in the area and says the early wells, which produce more natural gas than oil, are capable of providing at least a 30{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} profit margin at today’s prices, including all costs associated with drilling. Some are so prolific that they can break even at a price of 10 cents per million British thermal units, according to the company. Natural gas futures closed Tuesday at $2.72. […]The new play is a short distance from extensive drilling operations and is likely to stoke the speculative fever that has recently engulfed the Permian, a vast swath of geology in West Texas and New Mexico that has been gushing oil and gas for almost 100 years. The Permian has become popular again because producers have found ways to use newer technologies to extract oil from the area at a profit, even at current below-$50-a-barrel prices.