Apache Corp. announced a temporary deferral of Alpine High natural gas production in the Permian basin, citing what it calls “extremely low prices” at the Waha hub in West Texas. The deferrals account for 250 MMcfd of gross gas production.
Planned rig count and well completions remain unchanged, said Apache. Alpine High was a September 2016 discovery in the southern Delaware basin within the Permian basin (OGJ Online, Sept. 7, 2016).
“As far back as 2 years ago, Apache foresaw the potential for gas takeaway constraints in the Permian basin,” said John J. Christmann, Apache chief executive officer and president. Consequently, Apache arranged more than 1 bcfd of long-term, firm takeaway capacity on Kinder Morgan’s Gulf Coast Express and Permian Highway pipeline projects.
The Gulf Coast Express is expected to be in service later this year and the Permian Highway is expected to be in service in 2022.
“We anticipate relatively wide and volatile natural gas price differentials in the Permian basin until the Gulf Coast Express pipeline enters service,” Christmann said. “We will closely monitor daily pricing and return our gas to sales when it is profitable to do so.”
Apache will discuss more details about its second-quarter Alpine High production guidance during release of first-quarter results on May 1.