Independent oil and gas producer Apache Corporation said it had completed its first deepwater well offshore Egypt and will test for potentially productive natural gas deposits in the coming weeks.

The Houston-based company issued a cautiously worded statement about the well in its West Mediterranean concession, saying it was encouraged by the wireline logs from the well but would make no further comment until it completed the tests.

Steven Farris, who will succeed Apache founder Raymond Plank as chief executive later this month, was somewhat less cautious in remarks made at the company's annual meeting on Thursday.

“It appears that our first foray into deepwater has been successful,” Farris, the company’s president and chief operating officer, told shareholders.

Farris referred to the Abu Sir well, 42 miles from shore in 3 255 feet of water, as ‘potentially a significant discovery’ and said partners RWE-DEA of Germany and oil giant BP were also very excited.

Apache is the operator with a 55% contractor interest. RWE-DEA has a 28,3% stake and BP has 16,7%.

In its statement Apache said the West Mediterranean block has the greatest exploration potential in the company’s history.

Farris said some 55-trillion cubic feet of natural gas have been found in Egypt’s Nile delta region in recent years, making it one of the world’s hottest gas plays.

Apache is a big player in the shallow waters of the Gulf of Mexico, but has held back from venturing into the oil-rich deepwater Gulf of Mexico, because of the high costs involved and the competitive advantage held by earlier entrants.

Farris said Apache had chosen to drill its first deepwater well offshore Egypt rather than the Gulf of Mexico because of the lower costs.

The Abu Sir well was drilled to a depth of 7 530 feet at a cost of $13-million but had the same reserve potential as a much deeper well in the Gulf costing $80-million, he said.

Apache has been active in Egypt since 1994 and boosted its production there with a $410-million January 2001 deal to buy oil and gas interests there from Spain’s Repsol YPF.

The company’s natural gas production in Egypt rose to 117,5 million cubic feet per day in the first quarter of 2002 from 54,4 million a year earlier while its oil production in Egypt rose to 44 378 barrels from 25 970 barrels.

Apache said Farris has been elected to succeed company founder Raymond Plank as CEO on May 29 when Plank turns 80. Farris will retain the titles of president and chief operating officer and Plank will remain Apache’s chairperson. – Reuters

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