Apache Corp. is taking the Permian Basin as its main dance partner this year, with two-thirds of 2017 spending destined for the big play’s myriad formations.

The Houston-based independent, which works in North America, the North Sea and in Egypt, said Thursday it is raising its capital expenditures (capex) by more than 60% from 2016 to $3.1 billion from $1.9 billion. Of the total, almost two-thirds is earmarked for the Permian, with $500 million alone budgeted to build out infrastructure in the emerging Alpine High field in the southern Delaware sub-basin.

Initial drilling results from Alpine High, where Apache has a 300,000 net acre leasehold, were unveiled last September, but by November, it had been named the company’s No. 1 target. Alpine High holds about 15 billion boe, and anchors Apache’s Permian portfolio that extends across the Delaware, Midland, Central Basin Platform and Northwest Shelf formations.

“We are poised for excellent long-term, organic growth through 2018 and beyond which will be driven primarily by our high quality acreage positions in the Delaware and Midland basins,” CEO John J. Christmann IV said Thursday.

From year-end 2016 through the end of 2018, total company production should grow at an average annual rate of 10%. The twin drivers, the Midland and Delaware, are projected to see annual output jump on average by “more than 50%.” Oil production from the two basins alone is expected climb by 18% annually.

Last year was “an important step in Apache’s transformation,” Christmann said. “We protected our balance sheet in a volatile price environment, remained focused on costs, and allocated our capital to high-return projects and strategic testing opportunities. This strategy resulted in an expanded economic drilling inventory, meaningful improvements in Permian Basin well performance, a more streamlined portfolio, and lower overhead and operating costs.”

The Alpine High resource play “brings significant drilling inventory and puts Apache in one of the most exciting and competitive positions in the industry.”

Apache drilled and completed 17 gross-operated wells in North America during the final three months of 2016, all in the Permian. Overall production averaged 252,000 boe/d, with Permian output averaging 149,000 boe/d.

Seven rigs were running in the Permian during the final three months of 2016. Five wells were completed at Alpine High, with four wells completed in other areas of the Delaware, primarily targeting the Bone Spring. The company also drilled and completed eight gross-operated wells in the Midland and in the Northwest Shelf and Central Basin Platform.

Apache’s plan to boost output follows a steep reduction in drilling and completion costs last year, with lease operating expenses on a per/bbl basis down 16% from 2015. However, the operator still felt the sting of low commodity prices. Net losses in 4Q2016 totaled $182 million (minus 48 cents/share), but it was a turnaround from 4Q2015 net losses of $4 billion (minus $10.62). Revenue slipped 2% year/year to $1.45 billion. For 2016, losses totaled $1.4 billion net (minus $3.71/share), compared with 2015’s loss of $10.4 billion (minus $27.40). Annual revenue declined by more than 20% to $5.4 billion.

Capex plans this year “will exceed planned cash flow from operations, but given the depth of its attractive opportunities, Apache believes increased investment is strategically important for the year,” Christmann said. “Based on current strip pricing, the remaining outspend will be funded primarily by proceeds from noncore asset sales, more than $400 million of which were already received in the first quarter. Apache has also implemented a hedging program for 2017 oil production to protect cash flows from downside price risk.”

Internationally, Apache plans to invest “at a level to sustain long-term free cash flow in Egypt and the North Sea. Capital investment in these two regions is expected to total approximately $900 million and will primarily focus on low-risk development and step-out exploration opportunities.”

Apache also provided a preliminary view into 2018 capex, with an expected budget of $3.2 billion. “Like 2017, the 2018 plan is expected to be heavily weighted toward investments in the Permian Basin,” Christmann said.

A “brief decline” in production is expected through mid-year before the activity ramp up makes a difference.

Scheduled downtime will lower volumes in the North Sea, along with plant maintenance in Canada, and “natural declines” as a result of reduced investment in lower-margin, North American onshore regions during 2016.

“Once scheduled maintenance is behind us and the impact of our increased capital investment program begins to take hold, we anticipate our production volumes will steadily climb in the second half of the year when Alpine High sales volumes, increased Midland Basin activity, and the North SeaCallater development all come online,” Christmann said.