MAY 2 2019: APACHE Q&A - SURINAMEApache will be drilling their first well on Block 58 with the Noble Sam Croft deepwater rig mid year (which is right next to CGX's Corentyne Block).
Apache has a firm 1 well committment with 3 options available. As Apache mentioned on the call - they are preparing to drill 4 wells (hint, hint).
Thy have 100% interest in Block 58 and continue to reivew farm in proposals from others. However, the CEO of Apache strongly alluded to their desire to keep 100% control of the asset through the upcoming exploraiton campaign. In their view, the asset could be a game changer for Apache (which has a market-cap of $11.5B US dollars).
They have not disclosed the location of their first exploration well on Block 58. Apache did however reveal:
* 7 different plays across Apache's blocks - which span from deepwater to shallow water,
* The size of prospects identified on Block 58 are 'very large prospects',
* There are more than 50 'very large' prospects across Apache's blocks in Suriname,
* Apache described Block 58 (in particular) as 'phenominal' - very fortunate (lucky) the company was able to secure the asset in the middle of 2015 when there was not a lot of E&P activity or interest,
* Apache is taking into account all public information available - continues to support Apache's original view on the value of Block 58
*It's possible Apache may drill close to the Guyana border - clearly alluding to a discovery that clearly is positioned across the lease line
Apache's Question-and-Answer Session
Operator
[Operator Instructions] And your first question comes from Bob Brackett of Bernstein Research.
Robert Brackett
Hey, good morning. I had a question on Block 58 in Suriname. It looks like the lease expires the initial exploration term June 24 of next year. Can you talk about the renewal process or the extension process on that lease?
John Christmann
Bob at this point, we've working with the government of Suriname. We've got a one rig or one well, commitment kwhich icks us into the next phase. And obviously we will commence that well ahead of that time schedule, so it'll kick us into the next phase and that's all we've shared publicly at this time.
Robert Brackett
Is the next phase a – two to three-year extension, and is there any relinquishment involved?
John Christmann
It kicks us well into Phase II and at this point, we have not given any more color on Phase II.
Operator
And your next question comes from John Freeman of Raymond James.
John Freeman
Following up on Suriname, given the unsolicited sort of interest you've had from potential partners, and you all talked about, you'd be willing to proceed on an individual basis. Does this in any way sort of possibly delay when you spread the well while you kind of review all these proposals before you spread it?
John Christmann
Not at all. I mean, we're on a path. We're prepared – we are prepared to drill multiple wells, and we’ve said we’ve got a one well commitment with the rig and three optional wells, and we're prepared to head down the path we're on. So not at all.
Operator
And our next question comes from Douglas Leggate of Bank of America.
Douglas Leggate
Well, thanks. Good morning, everyone. Thanks for taking my question. John, I wonder if I could pull this a little bit on Suriname. Was the well drilled in the adjacent block, down or up dip to your prospect, which obviously bodes very well for your block? My second question is, how have you chosen the location of the first well and why wouldn't you drill right up against the Guyana border?
John Christmann
Well, I mean, the first thing is we know we've got an active hydrocarbon system Doug. We've got seven plays when you look at our block, I mean it's just an unbelievable walk and as we've said more than 50, very large prospect. So we obviously have chosen our first well location. We have not disclosed that. But clearly we've taken into account any information we have through public means that's out there.
Douglas Leggate
Would it be reasonable to assume that would be, how can I put it one of the top two or three targets on the block to basically try and make sure your side of it?
John Christmann
I wouldn't want to assume anything about the top three targets on the block, but clearly you've got a discovery a that is on the lease line and that's your bodes well for us. But I hate you assuming anything.
Douglas Leggate
Understand. My follow-up is also about Suriname if you don't mind that. It really goes to your point about 100%. These wells and the adjacent block are quite an expensive relatively speaking $50 million to $100 million given the potential impact on farmed and value in the block. Why wouldn't you drill it 100%?
John Christmann
Well, I mean, as of today we still on the block 100% and that's the path we're marching down. So I mean the reason we wouldn't is because somebody talked us out and doing that.
Douglas Leggate
Fair point. Forgive me. I was going to try one final one. Out of sign beat on the road, talking a little bit about this on the prospect backlog and just share with everybody what you see as your risk prospect on block 48. And I will leave it there. Thank you so much.
John Christmann
I mean I just think it's a phenomenal block. Our timing and when we picked it up, we were just fortunate that we picked this at the middle of 2015 when there was not a lot of activity, a lot of interest. We were able to do it but before Exxon drill laser and before we drilled our first well and it was a really, really low price in terms of the commitment at the time and it is very well-positioned as we've said. There's multiple plays. We've got both shallow and deepwater targets that we can get to. And I mean, when you look at the size of this 1.44 million acres, I mean, that's larger than range county just for perspective. And there's more than seven different plays and 50 plus very large prospect. So we're anxious to kind of get going.