Beleaguered by low natural gas and NGL prices that prompted the temporary halt of production earlier this year, the Permian Basin’s Alpine High field must compete for capital with the rest of Apache Corp.’s assets, the company’s CEO said.
Lean gas and part of the field’s rich gas production will continue to be deferred until Kinder Morgan’s Gulf Coast Express pipeline begins service in September, Apache CEO John Christmann said on a call with analysts Aug. 1.
“From a cash flow and returns perspective, it is far more valuable to wait a few weeks and produce into an improved price environment. At current gas and NGL prices some portions of Alpine High are less competitive than other opportunities in our portfolio,” Christmann said. “If this pricing situation does not improve some capital will be reallocated to areas with more leverage to oil price most likely elsewhere in the Permian Basin.”