Apache To Sell 10 MMcf Per Day For $4.10 Per MMBtu Through Argentina's Gas Plus Program

Published: 09-Nov-2009

Apache Corporation (Apache) has announced that Argentina's Federal Energy Secretariat has approved Apache Argentina's Gas Plus project to supply 10 million cubic feet (MMcf) per day from the Guanaco and Ranquil-Co fields in Neuquen province to Compania Administradora del Mercado Mayorista Electrico (CAMMESA) at a price of $4.10 per million British thermal units (MMBtu) for one year commencing from January 2010.

The approval is Apache's second under the government's Gas Plus program to bring on new supplies through development of tight sands and unconventional gas reserves. To date, Apache is the only company with Gas Plus projects approved for gas marketing, and the company has three additional projects in line for approval. The Federal Energy Secretariat earlier approved Apache's projects to supply 50 MMcf of gas per day from two fields in Argentina's Neuquen and Rio Negro provinces at a price of $5 per MMBtu beginning in 2011.

"These Gas Plus projects are yet another sign of Apache's commitment to invest to meet Argentina's future energy needs," said Jon Graham, vice president of Apache's Argentina Region. "These substantial investments represent a milestone in the exploration and development of gas reserves in non-conventional fields at competitive prices."

Apache plans to drill four wells at Ranquil-Co and two at Guanaco to develop reserves in the Pre-Cuyo formation 7,500 to 9,500 feet below the surface. The wells will be completed with multiple-stage fracture stimulation procedures to tap non-conventional, low-permeability and low-porosity reservoirs. Development of the fields, located approximately 10 miles (15 kilometers) from Cutral Co and Plaza Huincul, will also require investments in natural gas processing and transportation. Apache will provide measurement and production facilities for the Gas Plus volumes separate from the rest of the fields' production facilities.

During the third quarter, Apache produced 184 MMcf of gas per day in Argentina at an average price of $1.89 per thousand cubic feet, including sales to regulated residential and power generation markets as well as deregulated industrial markets.

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