Apache expands Forties drilling capability

Offshore staff

HOUSTON -- Apache Corp. has contracted OGN Group in Wallsend, northeast England, to build a new satellite oil production platform for the Forties field in the UK central North Sea.

This will be bridge-linked to the Forties Alpha platform.

The contract, valued at over $240 million, should generate more than 1,000 jobs over 20 months both at OGN Group's Hadrian Yard site and for other local contractors, with up to 80% of the materials to be sourced from the UK.

"This project will provide Apache with 18 new slots for drilling additional development wells to increase the ultimate recovery from the prolific Forties field, the largest hydrocarbon discovery in the UK North Sea," said James L. House, Apache's regional VP and managing director — North Sea.

"Apache recently completed time-lapse (4D seismic) surveys at the field and fast tracked data processing to enable enhanced imaging of the reservoir, which has driven the majority of our drilling success over the past seven years. With the new geophysical data set and additional drilling slots, the outlook is to maintain daily oil production in the range of 60,000 b/d of oil during the subsequent three-plus years."

The satellite platform will provide increased drilling capability and will expand utility services to the field, including power generation, produced fluid processing, high-pressure gas compression for artificial lift, and dehydration.

Construction should be completed by mid-2012, after which the platform will be towed to the Forties field for installation.

Apache has a 97% interest in the field, which it acquired in 2003 from BP, with booked proven reserves of around 144 MMboe. The original reserve base has been produced as of end-1Q 2010, with a further 173 MMboe of estimated proven reserves remaining.

In a separate development, Endeavour Energy UK has agreed to acquire an additional 20% interest in the Apache-operated Bacchus development, bringing its share to 30%.

Bacchus is being tied back to Forties Alpha via three subsea wells with first oil expected in mid-2011. Construction of subsea components is under way. This brings Endeavour's total working interest in the project to 30%.

As part of the same transaction, Endeavour also has acquired a 30% interest in block 21/9 containing the Val d'Isere exploration prospect, close to the Forties and Bacchus developments.

11/25/2010