Dry natural gas drilling in North America’s onshore, once a big calling for Houston-based Apache Corp., is off the to-do list until pricing improves, but with 60 rigs running in the U.S. onshore today — 58 targeting liquids targets — “we’ve got a very active drilling program going on right now, the most active we’ve been in some time in North America,” said CEO G. Steven Farris.

Apache management team spoke with financial analysts about the first quarter’s financial and operational performance during a conference call.

COO Rod Eichler said Apache continues to ramp up in one of its long-time core assets, the Permian Basin, where it is the second largest operator. Production in the first three months of this year averaged almost 99,200 boe/d, with 70% weighted to liquids and 82% black oil, he said. A lot of the drilling success continues to come from conventional drilling, although more of the targets are moving to unconventionals.

“We averaged 28 operated drill rigs for the period, up three from the fourth quarter, drilling 147 vertical wells and 17 horizontals,” said Eichler. “We currently operate 31 rigs in the region, including six horizontals.”

A 14-unit drilling program is up and running in the Permian’s Deadwood area with positive results, he said. In February the first phase of the Deadwood gas processing facility in Glasscock County, TX, started up, an $85 million joint venture project that was launched last July by Apache and Crosstex Energy LP.

“We immediately re-committed the facilities for the 90 MMcf of gas capacity,” said Eichler. “Phase two is expected come online this quarter and will be fully operational later this year. The plant capacity will be 50 MMcf/d.”

Apache also has “more than doubled” its position to nearly 550,000 net acres in the Anadarko Basin fairway of Texas and Oklahoma, said the COO, after completing its acquisition of privately held Cordillera Energy Partners III LLC at the end of April (see Shale Daily, Jan. 24).

“With it, we’ve increased Apache’s exposure to the prolific Granite Wash, Tonkawa, Cleveland and Marmaton gas condensate oil plays. We now operate 22 drilling rigs in Anadarko Basin and are contracting for another two.”

As it moves to more unconventional drilling, Apache completed several notable horizontal wells in the first three months on legacy acreage in the Anadarko Basin. Three horizontal wells drilled in the Cleveland formation averaged initial production (IP) rates over 30 days of 400 b/d of oil and 850 Mcf/d of gas, said Eichler. Two Marmaton horizontals IP’d over 30 days at 340 b/d and 7.5 MMcf/d, while three Granite Wash horizontals averaged 475 b/d and 5.6 MMcf/d.

“We also continued the successful Cherokee program, drilling and completing two wells that produced an average of 250 b/d of oil and 350 Mcf/d for the first month,” Eichler said. “On the newly acquired [Cordillera] properties, 24 wells were drilled and completed during the quarter…We also had a very impressive Marmaton well coming on with a 30-day rate of 11 MMcf/d of gas and 800 b/d of oil. Offsets to this well are currently being completed…In April net productions from the Cordillera assets averaged approximately 21,900 boe/d, up 22% from January.”

The transition to oil and liquids drilling is “fully underway” in Canada, the COO told energy analysts. “Sequentially quarterly oil production is up 5%, and gas liquids volumes increased 22%. We averaged seven rigs during the quarter, drilling 58 wells with approximately 60% of these targeting oil reservoirs and one-third targeting rich gas. The remainder were service wells.”

Among Canadian well highlights was the reactivation of the Kaybob well, which IP’d at 1,800 boe/d over 30 days and currently is producing 1,200 boe/d and 2.6 MMcf/d, said Eichler.

“This is the fifth-highest liquid-producing well in Western Canada and is Apache’s highest liquid producer in the region,” he said.

Meanwhile, in the Canadian House Mountain focus area, a Beaverhill Lake well test came in at 700 b/d. “We also drilled 10 horizontal wells as part of our House Mountain waterflood project, completing the well’s multi-stage asset fracks [hydraulic fractures],” Eichler said. “Initial results are encouraging with IPs up to 1,100 b/d and nine-day rigs averaging 510 b/d during flowback. During the second quarter, the region is focusing on Midale and Brownfield oil drilling programs in Southern Alberta and Saskatchewan.”