The Houston company estimates the discovery, dubbed “Alpine High,” could be worth at least $8 billion.
Apache believes the new shale play spans at least five formations, contains over three billion barrels of oil and 75 trillion cubic feet of rich natural gas.
John Christmann IV, Apache’s CEO, called Alpine High an “immense resource” that the company is “incredibly excited” about discovering.
Wall Street is already seeing dollar signs, sending Apache’s stock price surging 10% in the two trading days since the find was unveiled.
“The play has the potential to be a transformative event for the company,” Raymond James analyst John Freeman wrote in a research report. “Apache sees an incredible opportunity to establish the next big resource play in the U.S.” Apache Energy’s huge shale oil discovery in West Texas, named “Alpine High,” is estimated to contain three billion barrels of crude. Apache has identified at least 2,000 drilling locations, and estimates an initial value of between $4 million to $20 million per well. That translates to at least $8 billion in value for the company, but potentially a lot more. The company has already drilled 19 wells in the play, with nine currently producing “limited quantities” due to infrastructure constraints.
Rob Thummel, a portfolio manager at energy investment firm Tortoise Capital, said the announcement will “definitely open investors’ eyes” and could lead his firm to make an investment in Apache.