Apache to Develop Lucius Project in Deepwater Gulf of Mexico

HOUSTON, Dec. 15, 2011 /PRNewswire/ -- Apache Corporation (NYSE andNasdaq: APA) today announced that its wholly owned subsidiary along with other co-venturers will proceed with development of the Lucius project in the Keathley Canyon area of the deepwater Gulf of Mexico. 

"The Lucius unit is a world-class oil and gas accumulation in an emerging area of the deepwater Gulf," said G. Steven Farris, Apache's chairman and chief executive officer. "The decision to sanction the Lucius development is a milestone for Apache: It is the first major deepwater Gulf project approved since our acquisition of Mariner Energy in 2010."

Lucius, located approximately 200 miles southeast of Houston in waters about 7,000 feet deep, will be developed using a truss spar floating production facility with production capacity of  80,000 barrels of oil and 450 million cubic feet of natural gas per day. The spar is currently under construction at Technip's facility in Pori, Finland. First production is planned for 2014 from six initial producing wells.

The Lucius unit includes portions of Keathley Canyon blocks 874, 875, 918 and 919. Apache Deepwater LLC, an Apache subsidiary, has an 11.7-percent working interest.

Anadarko Petroleum Corporation operates the unit with a 35-percent working interest. Other interest owners include Plains Exploration & Production Company, 23.3 percent; Exxon Mobil Corporation, 15 percent; Petrobras, 9.6 percent; and Eni Petroleum, 5.4 percent.

"We are fortunate to be associated with Anadarko – one of the premier deepwater explorers and developers – in this project," Farris said.

Under the terms of a previously announced unitization agreement, Lucius interest owners agreed to process natural gas produced from the Hadrian South field through the Lucius facility in return for a production-handling fee and reimbursement for any required facility upgrades.

In 2012, Apache expects to commence production from three deepwater projects – the Apache-operated Bushwood (Garden Banks 463) and Wide Berth (Green Canyon 490) as well as Mandy (Mississippi Canyon 199), which is operated by LLOG Exploration Co.

About Apache

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom North Sea, Australia and Argentina. From time to time, Apache posts announcements, operational updates and investor information, and copies of all press releases on its website, www.apachecorp.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," "estimates," "expects" and similar references to future periods.  These statements include, but are not limited to, statements about the anticipated first production from developments in the Gulf of Mexico.  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 our 2010 Form 10-K as amended by Amendment No. 1 to our annual report on Form 10-K/A filed with the Securities and Exchange Commission for a discussion of risk factors that affect our business.  Any forward-looking statement made by us 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.  We 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.

(Web site):  www.apachecorp.com

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SOURCE Apache Corporation