Farris comments on Kitimat LNG and FEED agreement with Chevron

Apache’s third-quarter results August 1, 2013
Brady Parish, Vice president Apache Investor Relations, said gas revenues are slightly higher than the first quarter, and higher prices offset a slight decline in production. Oil accounts for 78 per cent of Apache’s production including the hedging second quarter prices but averaged $97.93 per barrel down $3.79 from the first quarter. Gas prices averaged $3.87 up $0.15 per MCF from the first quarter.
On Kitimat LNG, Steve Farris, chairman and chief executive officer said, “Wheatstone continues to move forward. We are finally getting in a range where the end of 2016 isn’t that far-off. One thing I would say is that based on our models and our partner’s models, ….. it will pay out in 4.5 years all of our costs and will generate about over $1 billion a year net to Apache. So, as we get closer to that time it becomes more and more interesting. The Kitimat project is going through a supplemental Front End Engineering Design (FEED) with Chevron. Chevron has now taken over the operations of the downstream. We are operating the upstream. We are meeting with our Chevron counterparts, and last week went through a number of things. The dominant one is marketing.  Obviously, marketing is going to drive this program,” Farris said.
On the Cook Inlet work in Alaska where the company recently won a case brought by environmentalists. Farris said: “We’re getting ready to do some 3-D seismic. Frankly, we were disappointed in the well results that we have there. I am personally still very positive about the Cook Inlet. Obviously we’re directing cash to different things right now. So, we slowed down that activity but in terms of its prospect typically, I think it has good value.”
Farris was asked how quickly Apache could turn that into a growth program in Canada with new targets earlier in the conference.
“Well, I think we have two things going on in Canada. One is we have got our transition into more of an unconventional play up there. And then we’ve got to look at our legacy assets and decide what to do with them and we’re in the process of doing that. We would like that region to come out in a position for 2014. Being able to grow and adding a meaningful growth area for us in the North American onshore.”

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