APA Corporation and Partners Lagniappe Alaska and Oil Search Announce Significant Oil Discovery in Alaska’s North Slope at Sockeye-2 Exploration Well; Partners Proceeding with Further Evaluation and Testing

Rhea-AI Summary

APA (NYSE, Nasdaq: APA) and partners Lagniappe Alaska and Oil Search have announced a significant oil discovery at the Sockeye-2 exploratory well in Alaska's North Slope. The well, drilled to approximately 10,500 feet, revealed a high-quality reservoir with 25 feet of net oil pay in a Paleocene-aged sand formation, featuring an impressive 20% average porosity.

The Sockeye prospect spans 25,000 to 30,000 acres, with APA holding a 50% working interest, while operator Lagniappe and Santos each hold 25%. Additional potential pay zones were discovered in the shallower Staines Tongue formation. This marks the partnership's second successful exploratory well on their 325,411-acre position, following the King Street-1 discovery which found oil in two separate Brookian Zones.

The partners are currently conducting further evaluation, including core acquisition and flow testing, with updates to follow upon completion of these tests.

Positive

• Significant oil discovery with 25 feet of net oil pay
• High-quality reservoir with better than expected porosity (20%) and permeability
• Large prospect area covering 25,000-30,000 acres
• Additional potential pay zones discovered in Staines Tongue formation
• Second successful exploratory well, derisking numerous additional prospects

Negative

• Flow test results still pending and unconfirmed
• Actual production capacity yet to be determined

Insights

Oil & Gas Industry Expert

This significant oil discovery at the Sockeye-2 well represents a meaningful technical success for APA and partners. The 25 feet of net oil pay might appear modest at first glance, but the 20% average porosity and reportedly superior permeability compared to regional analogues suggest exceptional reservoir quality that could translate to high well productivity.

What's particularly compelling is the substantial areal extent - with amplitude support across 25,000-30,000 acres, indicating this could be a major field development opportunity rather than an isolated discovery. The successful confirmation of their geologic model also substantially derisks the partnership's broader 325,411-acre position.

The upcoming flow test will be critical in determining commerciality. Strong flow rates would validate both the reservoir quality and significantly enhance project economics. Alaska's North Slope geology typically delivers excellent flow rates from high-quality Brookian sands, and the described reservoir characteristics suggest Sockeye-2 could follow this pattern.

With APA holding a 50% working interest, this discovery could materially impact their reserves and production outlook if development proceeds. The mentioned "significant existing infrastructure" is a key advantage that could dramatically reduce development costs and accelerate time-to-production compared to frontier exploration areas.

Financial Analyst

This Alaska discovery strengthens APA's exploration track record and resource potential outside its core assets. With a 50% working interest in the discovery and broader acreage position, successful development could provide meaningful production growth to offset natural declines in mature assets.

The partnership structure effectively balances risk while maintaining significant upside exposure. Alaska offers attractive fiscal terms compared to international jurisdictions, potentially delivering stronger per-barrel economics despite higher operating costs. The existing infrastructure mentioned would significantly reduce capital intensity for any development scenario.

For context, similar discoveries in Alaska's North Slope have developed into commercial projects producing 10,000-30,000 barrels per day when reservoir characteristics are favorable. The superior porosity and permeability described here could support the higher end of production potential if confirmed through flow testing.

Investors should focus on three key upcoming catalysts: 1) flow test results confirming well productivity, 2) resource estimate announcements following full data integration, and 3) any preliminary development concept studies. The sequential success across both King Street-1 and now Sockeye-2 wells suggests a systematic and effective exploration approach rather than isolated luck.

While full development would require significant capital, the description of "numerous additional prospects" indicates potential for a hub development approach that could optimize returns through shared infrastructure and phased development.

HOUSTON, March 17, 2025 (GLOBE NEWSWIRE) -- APA Corporation (NYSE, Nasdaq: APA) and its partners Lagniappe Alaska, LLC, an Armstong company, and Oil Search (Alaska), LLC, a subsidiary of Santos Limited, today announced preliminary results of the Sockeye-2 exploratory well. Apache holds a 50% working interest, operator Lagniappe and partner Santos each hold 25%.

The Sockeye-2 well was drilled to a depth of approximately 10,500 feet and successfully encountered a high-quality reservoir with approximately 25 feet of net oil pay in one blocky, Paleocene-aged sand with an average porosity of 20%. As compared to recent regional field analogues in the Brookian play, the porosity and permeability are both better than expected, with the permeability to be confirmed through a planned flow test. Additional zones of potential pay were also encountered in the shallower Staines Tongue formation.

The Sockeye prospect is amplitude supported across 25,000 to 30,000 acres, and confirms the partners’ geologic and geophysical models, derisking numerous additional prospects in the area. Wireline logging is complete and additional data collection is underway, including acquiring core and flow testing the well. The partners will provide further updates following the flow test results.

“The Sockeye-2 test is the second successful exploratory well drilled by the partnership on a 325,411-acre position on state lands. The first well, King Street-1, was a new field discovery with oil in two separate Brookian Zones. The Sockeye-2 well further demonstrates the potential of the play, presenting an exciting opportunity in an active area of the North Slope with significant existing infrastructure,” said Bill Armstrong, CEO of Armstrong Oil & Gas.

“We are very encouraged by the results at the Sockeye-2 well, which further proves our geologic and geophysical models and confirms a working hydrocarbon system. We look forward to the results of the flow test and sharing more information about the broader opportunity in Alaska,” added John J. Christmann, APA Corporation CEO.

About APA

APA Corporation owns consolidated subsidiaries that explore for and produce oil and natural gas in the United States, Egypt and the United Kingdom and that explore for oil and natural gas offshore Suriname and elsewhere. APA posts announcements, operational updates, investor information and press releases on its website, www.apacorp.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “continues,” “could,” “estimates,” “expects,” “goals,” “guidance,” “may,” “might,” “outlook,” “possibly,” “potential,” “projects,” “prospects,” “should,” “will,” “would,” and similar references to future periods, but the absence of these words does not mean that a statement is not forward-looking. These statements include, but are not limited to, statements about future plans, expectations, and objectives for operations, including statements about our capital plans, drilling plans, production expectations, asset sales, and monetizations. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See “Risk Factors” in APA’s Form 10-K for the year ended December 31, 2024, and in our quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. APA and its subsidiaries undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development or otherwise, except as may be required by law.

Contacts

Investor: (281) 302-2286
Media: (713) 296-7276        
Website: www.apacorp.com

APA-G

FAQ

What are the key findings from APA's Sockeye-2 well discovery in Alaska?

The Sockeye-2 well discovered 25 feet of net oil pay with 20% average porosity in a Paleocene-aged sand formation, drilled to 10,500 feet depth.

How much acreage does the Sockeye prospect cover in Alaska's North Slope?

The Sockeye prospect is amplitude supported across 25,000 to 30,000 acres within the partnership's total 325,411-acre position.

What is APA 's ownership stake in the Sockeye-2 project?

APA holds a 50% working interest, while Lagniappe Alaska and Oil Search each hold 25%.

What additional discoveries has the APA partnership made in Alaska's North Slope?

The partnership previously discovered oil in two separate Brookian Zones at the King Street-1 well, their first successful exploratory well in the region.

What further testing is planned for APA's Sockeye-2 well?

The partners are conducting core acquisition and flow testing, with permeability confirmation pending through planned flow tests.