Shares of Apache Corp. climbed 7.9% to $55.74 before the bell rang after the company announced that it had made a “significant” discovery in a Texas shale formation. The discovery holds enough crude oil to supply every refinery on the U.S. Gulf Coast for a year.
Apache said in a statement on Wednesday that the Alpine High discovery in West Texas contains an estimated 3 billion barrels of oil and 75 trillion cubic feet of natural gas. According to the statement, Apache gained drilling rights across 307,000 contiguous acres in the region at an average cost of $1,300 per acre.
“This is a world class resource,” said Chief Executive Officer John Christmann. “We are very early in starting to understand how big this is going to be.”
The company already has drilled 19 wells in the area and has identified 2,000 to 3,000 more drilling sites.
The statement also revealed that Apache raised its full-year 2016 capital budget by 11 percent to $2 billion, and Alpine High will account for about one-quarter of the company’s drilling budget this year.
Disclaimer: We have no position in Apache Corporation (NYSE: APA) and have not been compensated for this article.