Apache Corp. saw its net income jump 75% in 4Q2011 from a year earlier, lifted by higher output and strong crude prices. The producer plans to drill up to 30% more wells this year than in 2011, when it drilled 1,100 gross wells; more than half are to be in the Permian and Anadarko basins. In 4Q2011 total gas output rose 3.2%; oil output climbed 4.3%. North American gas volumes increased to 1.494 Bcf/d in 4Q2011 from 1.432 Bcf/d in 4Q2010, and from 1.478 Bcf/d in 3Q2011. Net profits totaled $1.17 billion ($2.98/share) in 4Q2011, compared with $670 million ($1.77) in 4Q2010. Revenue rose 25% to $4.3 billion.

While 10% of its 2012 capital program will be spent to maintain dry natural gas activities, EOG Resources Inc.‘s focus will continue to be on oil and liquids and in the Eagle Ford Shale it has about 3,200 wells yet to drill. EOG has an estimated 1.6 billion boe net in the play after royalties, a 700 million boe, or 78%, increase from a previous estimate. Total production growth is forecast at 5.5% in 2012, with liquids expected to be 30% higher. Total liquids growth is expected to be composed of a 30% increase in crude and condensate production and a 30% increase in natural gas liquids production. In 2011 output increased 9.4% from 2010. During the fourth quarter, U.S. crude oil and condensate production rose 68% compared to 2010, contributing to a 61% increase for 2011.

Talisman Energy Inc. plans to cut Marcellus Shale exploration activities and reduce by half capital spending budget for the play this year. The Calgary-based company now plans to run as few as three rigs in Pennsylvania down from a January estimate of five-to-seven rigs (see NGI, Jan. 16). The previous decision was based on low gas prices, but a recently approved impact fee on unconventional gas development in Pennsylvania “couldn’t have come at a worse time,” according to Executive Vice President for North American Operations Paul Smith. The company now plans to spend $600 million in the Marcellus, down from $1.2 billion in 2011, with significant capital going toward infrastructure in the region. Although drilling will be roughly a third of 2011 rates, the company expects to maintain its current production level of around 500 MMcf/d without losing any leases because of the productivity of its wells.

Cimarex Energy Co. will spend $1.4-1.6 billion on capital expenditures in fiscal 2012, with nearly all of it devoted to drilling for oil and natural gas liquids (NGLs) in the Permian Basin and the Cana-Woodford Shale. The Denver-based producer also plans to ramp up full-year total production volume to average 615-650 MMcfe/d, up 4-10% from 2011. It reported 4Q2011 net income of $116.9 million ($1.36/share), which was $700,000 lower than the $117.6 million ($1.37) reported in 4Q2010. Although 4Q2011 production volumes averaged 601.4 MMcfe/d — a decrease from the record output of 604.5 MMcfe/d achieved in 4Q2010 — production volumes from the Permian and Midcontinent hit a record high of 531.1 MMcfe/d during 4Q2011, a 17% increase from the previous fourth quarter.

TransCanada Corp., Canada’s largest natural gas and oil pipeline operator, credited an aggressive growth strategy to build new infrastructure for driving net income of C$422 million (C53 cents/share) in 4Q2011 from C$316 million (C39 cents) in 4Q2010. Quarterly revenue was up 15% to C$2.36 billion. Close to C$12 billion in oil and gas pipeline projects are slated to begin service between now and early 2015. The company is re-applying for a cross-border permit from the U.S. State Department for the Keystone XL oil pipeline. In addition, several gas pipeline expansions for North America also are under way; last year the National Energy Board approved gas projects with total capital costs of about C$910 million; another C$810 million of gas projects await federal approval.

Calgary independent Nexen Inc., which has been dealing with some internal strife after CEO Marvin Romanow abruptly resigned in January, reported that quarterly profits were impacted by lower production and natural gas prices. Net profits fell to C$43 million (C8 cents/share) in 4Q2011 from year-ago earnings of C$160 million (C30 cents). Cash flow rose 5% to C$585 million (C11 cents/share), and revenues totaled C$1.7 billion versus C$1.56 billion a year ago. Nexen continues to search for a permanent replacement to fill the top job, as well as several other management positions, said interim CEO Kevin Reinhart, the former CFO.

EQT Midstream Partners LP, a unit of Appalachian producer EQT Corp., is preparing to launch a public offering as a master limited partnership (MLP). The initial public offering (IPO) is expected to raise up to $250 million. EQT Midstream, which would be listed as EQM on the New York Stock Exchange, now has more than 11,400 miles of gathering and transmission pipeline and 63 Bcf of storage capacity. It operates in 22 counties in Pennsylvania and West Virginia. The unit delivered net income to EQT of $22 million through the first nine months of 2011, compared with $12.8 million in the same nine months of 2010.

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