Why is Wall Street in love with the Permian Basin?

[dan_s]

Apache notes new resource play with Alpine High

After 2 years of extensive geologic and geophysical work, Apache Corp. estimates its southern Delaware basin Alpine High play to contain 75 tcf of rich gas and 3 billion bbl of oil in 4,000-5,000 ft of stacked pay in up to five distinct formations including Bone Springs, Wolfcamp, Pennsylvanian, Barnett, and Woodford.

Wall Street love the term "Stacked Pays". The traders visualize stacks of money.

[Roadster]

Dan Any juniors close to Apache Alpine find? Thanks

[dan_s]

Apache's big reserves are in Reeves County. Go here to locate it: http://geology.com/county-map/texas.shtml

It sits in Northern Delaware Basin (a sub-basin of the Permian). Concho Resources (CXO) is active there, but they don't have a large acreage position in Reeves County. PDC Energy (PDCE) recently acquired 57,000 acres in the Northern Delaware Basin and they listed Reeves as one of the counties where it was. PDCE trades today at 30% below my valuation.

Keep in mind that the counties in West Texas are VERY BIG.

[setliff]

i believe that is southern delaware basin

[TexAg82]

Not sure how many Reeves acres they have, but Ring Energy (REI) acquired a 14,000 acre parcel in Reeves and Culberson counties last year.

[dan_s]

I talked to one of our West Texas landmen this morning. Apache's Reeves County leasehold is far from infrastructure and he thinks the production will be gassy. Rumor in Midland is that Apache is trying to pump up their value to get taken over by OXY.

[setliff]

before we had the horizontal thing, there were many wells drilled in the area.