Oil and gas operator Apache North Sea says it intends to be active in acquiring and exploring new acreage and pursuing new development opportunities.
The directors say in their 2007 annual report, just released by Companies House, that the North Sea is a core region for its American parent and the intention is to grow both production and reserves on the UK continental shelf (UKCS).
They say growth can be achieved through exploration, acquisitions and further development of the Forties field.
Apache has operated Forties since acquiring it from BP in 2003 for £401million.
In exploration, the report noted that in 2007 the company was awarded 62,320 acres in four licences applied for in the 24th UK licensing round. It also said that during the year it drilled 16 wells, five of which were productive.
Three exploration wells were drilled outside Forties, but did not find commercial hydrocarbon volumes.
On acquisitions, the directors said the number of asset transactions in 2007 was one of the lowest in recent history for the UK continental shelf, because of higher commodity prices, volatility and uncertainties related to decommissioning liabilities.
Notes to the accounts showed that at December 31 last year the company had made provisions of about £138million for decommissioning Forties, with the costs expected to be incurred in 2025. Another uncertainty the directors highlighted was decreasing reserve potential and escalating costs, translating to further challenges to transform discovery opportunities into viable commercial developments.
They noted that Apache North Sea’s capital spending for 2008 was expected to be more than £300million, with Forties development drilling continuing and 15 new wells planned, along with various platform upgrades.
Production from Forties in 2007 was 19.7million barrels, down from 21.5million barrels the previous year, but remaining reserves had increased by 5%.
Current output from the field is about 65,000 barrels a day and there are net reserves of about 200million barrels remaining.
The accounts show that Apache North Sea generated revenue of about £875million in 2007 compared to just under £847million the year before. Pre-tax profits for the year were £275.3million compared with £300.8million in 2006.
Meanwhile, Canadian Natural Resources, which has interests in the North Sea, has said it will cut back on drilling in British waters next year.
It also said its guidance was for North Sea oil production of 36,000-42,000 barrels per day in 2009; down 14% on this year.
Overall it plans to increase activities in North America and west Africa next year and is budgeting for growth of 11% in production to between 600,000 and 651,000 barrels of oil equivalent per day.
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