Apache: Winter Storms Hit Production At Permian Basin, Central Region

(RTTNews) - Oil and gas company Apache Corp. (APA) said Thursday that downtime caused by severe winter storms and outages at third-party owned infrastructure adversely affected oil and gas production from its Permian Basin and Central Region operations during the fourth-quarter 2013.

The company experienced widespread power outages primarily in West Texas and New Mexico in late November and early December, with icy road conditions contributing to delays in immediately resuming operations.

In addition, in the Texas Panhandle and Western Oklahoma, Apache temporarily reduced drilling activity in its Central Region during the quarter as part of a capital discipline program.

The company said that fourth-quarter volumes will also reflect recent divestitures by Apache, including the sale of a one-third minority participation in its Egypt oil and gas business that closed in November, divestment of its Gulf of Mexico Shelf operations in September, and the sales of selected Canadian assets.

Apache estimates that the combination of downtime and pipeline outages caused from severe weather in its Permian Region somewhat offset new production added through its drilling program.

As a result, a production increase of about 1,000 barrels of oil equivalent per day (boepd) or more is expected for the Permian in the fourth-quarter 2013 compared with the third-quarter 2013, when the region averaged 131,700 boepd. This represents an increase over the fourth-quarter 2012, in which the region averaged 117,900 boepd.

Severe weather and downtime issues also caused disruptions to company operations in the Texas Panhandle and Western Oklahoma. Capital discipline resulted in a scaling back from 31 drilling rigs in the third quarter to 25 in the fourth.

The combination of unusually severe weather, pipeline outages and reduced drilling in the Central Region resulted in a slight decrease in production for the fourth-quarter 2013 compared with the sequential quarter, when the region averaged 94,800 boepd. This represents an increase over the fourth-quarter 2012, in which the region averaged 79,300 boepd.

Quarter over quarter, Apache anticipates asset sale volumes will reflect an about 134,000 boepd reduction in total production volumes from the third quarter when adjusting for amounts attributable to the sale of a one-third, non-controlling partnership interest in Apache's Egypt oil and gas operations.