The Houston-based oil firm Apache announced a massive new discovery on Wednesday, which it claims could supply every refiner on the Gulf Coast of the United States for a year, according to a new report by Bloomberg.
The Alpine High discovery, confirmed after two years of testing, could contain three billion barrels of oil and 75 trillion cubic feet of rich gas, a company press release said.
"Today's announcement is the culmination of more than two years of hard work by the Apache team," John J. Christmann IV, Apache's chief executive officer and president, said in the statement. "While other companies have focused on acquisitions during the downturn, we took a contrarian approach and focused on organic growth opportunities."
The site - which cost Apache $1,300 per acre for 352,000 gross acres - sits in the southern portion of the Delaware Basin in western Texas.
So far, the firm has identified 2000-3000+ drilling sites in just two of the five formations the site includes, namely Woodford and Barnett.
"Our announcement today represents a significant addition to our already deep and highly economic Permian Basin position," Christmann said. "With the contribution of Alpine High to our global portfolio of world-class international and North American assets, Apache clearly has more profitable-growth opportunities than at any other time in the company's 60-year history."
The oil major's shares rose by nine percent to $56.17 in early morning trading on Wednesday in response to the announcement, coming back down to $55.33 near 2:00EST. Related: Dakota Access Pipeline Saga Turns Violent
Last month, Apache announced a $244 million net loss for the second quarter of 2016, missing investor forecasts that predicted an unprofitable three months, but at lower margins.
The company's production rates have been low this year, as the Permian basin - one of Apache's major drilling areas - recovers rigs slowly and steadily.
Apache's total global oil and gas production averaged 535,456 barrels of oil equivalent per day last quarter, down from 579,827 boed for the second quarter of 2015.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More
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