Apache Corporation (NYSE:APA) is having an incredible day in the market today, and for good reason. The company made an announcement that it had discovered a new source of oil. Today, we'll talk about the news, what we saw in the market as a result, and what we can expect to see from APA ahead. So, let's get right to it.
APA Discovers New Oil Field
As mentioned above Apache is having a strong day in the market after announcing that it had discovered a new oil field. According to the announcement, the field was discovered in west Texas near the Davis Mountains. The new oil field has been named “Alpine High”.
This isn't a small discovery either. In fact, APA said that they expect that the new discovered land holds the equivalent of at least 2 billion barrels of oil. To put that into perspective, even if the company only got the minimum out of the land, it would be worth about $8 billion!
In the announcement, we've learned that the company has been working on this field for quite some time. In fact, over the past 2 years, APA has purchased the majority of the 450,000 acre-field. Today, the company owns 352,000 acres of the field that it purchased at an average price of about $1,300 per acre. To date, there have been 19 wells drilled in the Alpine High field. 9 of these wells have started producing limited quantities due to infrastructure pressures. Here's a key snippet offered from the company's press release...
... after more than two years of extensive geologic and geophysical work, methodical acreage accumulation, and strategic testing and delineation drilling, the company can confirm the discovery of a significant new resource play, the 'Alpine High.' Apache's Alpine High acreage lies in the southern portion of the Deleware Basin, primarily in Reeves County, Texas.
How The Market Reacted To The News
As investors, one of the first things that we learn is that it's important to watch the news. After all, the news has a tendency to move the market. When positive news is released with regard to a publicly traded company, we can expect to see gains in the stock associated with the news. The news released with regard to the Apache Corporation today was overwhelmingly positive. So, it only makes sense that we're seeing gains in the value of the stock. Currently (12:12), the stock is trading at $55.71 per share after a gain of $4.04 per share or 7.82% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have a relatively bullish opinion of what we can expect to see from APA. First and foremost, the news of the new oil field and the massive amount of oil that is expected to be produced out of that field is overwhelmingly positive. It doesn't take a rocket scientist to figure out that this will likely lead to stronger revenue, exciting investors and leading to gains in the stock.