Apache Corporation’s Kahraman B-22 wildcat natural gas well, located 18 miles north of the company's world-class Qasr Field in Egypt's Western Desert, tested 16 million cubic feet (MMcf) of gas and 486 barrels of condensate per day from a 40-foot section in the Jurassic Lower Safa formation.

The Kahraman B-22 prospect was identified using a new Jurassic exploration model based on the geological and geophysical analysis of the Qasr field, which was discovered on the Khalda Concession by Apache in 2003. Qasr, with proved reserves of 2 trillion cubic feet (Tcf) of gas and 60 million barrels of condensate, is currently producing 362 MMcf of gas and 13,000 barrels of condensate per day from eight wells. Qasr has produced a total of 97 billion cubic feet of gas and 4.2 million barrels of condensate from the Jurassic reservoir since production started in July 2005. Qasr field also produces 8,700 barrels of oil per day from 11 wells in the overlying Alam el Buieb (AEB) and Bahariya formations.

The wildcat is located approximately 18 miles north of Qasr field and 9.3 miles south of Shell's Obaiyed field, the nearest Jurassic gas production. The well was drilled to the Jurassic Lower Safa formation at a total depth of 13,822 feet in order to appraise the westward extent of the shallow Kahraman "B" Bahariya oil field and to explore for deeper traps in the Alam el Bueib and Jurassic Safa formations.

The Kahraman B-22 logged a total of 84 feet of net pay from Jurassic-age sands between 12,379 and 12,849 feet. The thickest and best quality of this pay was perforated between 12,805 and 12,840 feet and fracture stimulated. The Lower Safa tested at an average rate of 16 MMcf of gas and 486 barrels of condensate per day on a 2-inch choke with a flowing well head pressure of 660 pounds per square inch. Results from the recently drilled Kahraman UC-88 well, located 3.3 miles to the southwest of the Kahraman B-22, indicate a possible Jurassic sandstone play expanding northward through the Kahraman B-22 well and onto Apache's Shushan "C" concession. Apache recently acquired 83 square miles of new 3-D seismic over the Shushan "C" lease. The Kahraman B-22 is located on the southern edge of this play and new wells are planned in the Shushan "C" concession to extend the Jurassic play.

"The Kahraman B-22 is a significant distance from known Jurassic gas accumulations and may open up a new area for development," said Rodney J. Eichler, executive vice president and general manager of Apache's operations in Egypt. "Appraisal drilling may show the sand quality and pay improve to the north."

"This discovery opens a new chapter in Apache's exploration and development of Jurassic formation gas reserves at Khalda," Eichler said. "Beginning with the Qasr discovery - the largest in Apache's 52-year history - we have drilled nine commercial discoveries tapping Jurassic formation gas reserves at Khalda and completed 34 producing wells. To date, Apache has booked 2.3 trillion cubic feet (Tcf) of gas and 67 million barrels of condensate at Qasr and other Jurassic fields."

Currently, gross production from Apache's Jurassic fields is 512 MMcf of gas and 18,200 barrels of condensate per day, which is the limit of existing processing facilities. Current net production is 224 MMcf of gas and 8,000 barrels of liquid hydrocarbons per day.

Apache has approximately 23,000 square kilometers of 3-D seismic data covering nearly 56 percent of its 10 million acres in Egypt, Eichler said. The 3-D seismic has been key to identifying deep structures missed by earlier 2-D surveys, particularly in the Qasr, Syrah, Muntaga and Matruh areas.

Earlier exploratory efforts in the area failed because many of the wells stopped short of the Jurassic objectives. The integration of modern geological concepts using 3-D seismic interpretation tied to well log correlations provides a better understanding and mapping of the Jurassic formations.

Apache also announced that it has awarded a $200 million contract to Petrofac Limited to construct a third processing train at its Salam natural gas plant on the Khalda Concession. The new train, to be completed before the end of 2008, will expand Khalda gas processing capacity by 100 million cubic feet (MMcf) of sales gas and 14,000 barrels of sales condensate per day to 610 MMcf and 52,000 barrels per day, including access to processing capacity at Shell's Obaiyed plant that will increase to 210 MMcf and 15,000 barrels per day before the end of 2008.

In addition, Apache has proposed construction of a similar processing train that would bring total processing capacity to 710 MMcf of gas and 66,000 barrels of condensate per day by the end of 2008. The fourth train is awaiting approval from the Egyptian General Petroleum Corporation (EGPC). Apache also is planning to install additional pipeline and production equipment to supply the new processing facilities as well as pipelines to deliver the increased sales volumes to the Egyptian pipeline grid in both the north and south of the country.