HOUSTON — Houston-based Apache Corp. announced Monday that it made its first offshore oil discovery in Australia’s Canning Basin, located off the west coast of the country.
Officials with the company say their measurements indicate that, optimistically, there could be as much as 300 million barrels of oil in place at the basin.
The company says it’s continuing to analyze the formation tapped by the well, known as Phoenix South-1, before it can offer a more definitive picture on what volume of oil may lie within the basin.
“Although evaluation is at an early stage, Phoenix South-1 is an exciting result,” said Thomas E. Voytovich, Apache’s executive vice president and chief operating officer for international, said in a statement. “The oil and reservoir quality we have seen point to a commercial discovery. If these results are borne out by further appraisal drilling, Phoenix South may represent a new oil province for Australia. We look forward to working with our partners to continue evaluation of the area.”
Apache, with a 40 percent stake in the project, is the operator. Three other partners — Carnarvon Petroleum and Finder Exploration of Australia and Japan’s JX Nippon Oil & Energy — each have a 20 percent stake.
The exploration well is located in 435-foot water about 110 miles off the coast. Apache has also exercised its option to acquire a stake in two adjacent blocks.
But the discovery comes at a time when company is in the midst of a campaign to shrink its international presence. Australia is one of three international locations outside of North America where Apache is active, along with Egypt and North Sea.
The company produced 51,203 barrels of oil equivalent per day from Australia in the first half of 2014, according to its second quarter earnings report filed with the Securities and Exchange Commission.
Meanwhile, later this quarter, Apache is slated to bring online an effort known as the Balnaves Development Project which will allow the company to extract oil in an area known as the Balnaves reservoir, about 110 miles off the Australian coast.
Earlier this year, Jana Partners urged Apache to ratchet up its effort to divest its international assets. Last month, Apache announced it would completely exit its Australian LNG project known as Wheatstone LNG.
Apache’s stock closed Monday at $98.50 per share, down $0.18. In Australia, however, the announcement sent Carnarvon’s stock soaring on the Australian Securities Exchange. It closed at $0.24 AUS, up $0.16.