APACHE Corporation has made what it believes is “a significant new resource play” in Texas.

The company said that after more than two years of extensive geologic and geophysical work, methodical acreage accumulation, and strategic testing and delineation drilling, it has confirmed the “Alpine High” as an important new discovery.

Apache’s Alpine High acreage lies in the southern portion of the Delaware Basin, primarily in Reeves County, Texas.

The company estimates hydrocarbons in place on its acreage position are 75 trillion cubic feet (tcf) of rich gas and three billion barrels of oil in the Barnett and Woodford formations alone.

The company has also identified significant oil potential in the shallower Pennsylvanian, Bone Springs and Wolfcamp formations.

“Today’s announcement is the culmination of more than two years of hard work by the Apache team,” Apache’s chief executive officer and president, John Christmann IV, said.

“While other companies have focused on acquisitions during the downturn, we took a contrarian approach and focused on organic growth opportunities. These efforts have resulted in the identification of an immense resource that we believe will deliver significant value for our shareholders for many years.

“We are incredibly excited about the Alpine High play and its large inventory of repeatable, high-value drilling opportunities. We have thousands of low-risk locations in the Woodford and Barnett formations alone, and we are looking forward to further delineating what we believe will be a significant number of oil-prone locations in the Pennsylvanian, Wolfcamp and Bone Springs,” Mr Christmann IV added.

Apache has secured 307,000 contiguous net acres (352,000 gross acres) in the play area, where the company has identified 4,000 to 5,000 feet of stacked pay in up to five distinct formations including the Bone Springs, Wolfcamp, Pennsylvanian, Barnett and Woodford.

The company says it has identified 2,000 to more than 3,000 future drilling locations have in the Woodford and Barnett formations alone. These formations are in the wet gas window and are expected to deliver a combination of rich gas and oil. Initial estimates for the Woodford and Barnett zones indicate a pretax, net present value (NPV) range of US$4 million to US$20 million per well, at benchmark oil and natural gas prices of US$50 per barrel and US$3 per million cubic feet (Mcf), respectively.

Apache said expected well costs in development mode for a 4,100 foot lateral are estimated to be approximately US$4 million per well in normally pressured settings and $6 million per well in over-pressured settings.

To date Apache has drilled 19 wells in the play, with nine currently producing in limited quantities due to infrastructure constraints. This includes six wells in the Woodford, one well in the Barnett and one well each in the shallower Wolfcamp and Bone Springs oil formations.