Discoveries that turned working class wildcatters into oil barons may seem to be part of the past – if not part of Texas mythology.
But now, Apache Corp. has announced the discovery of what they’re calling Alpine High, a massive oil field in a place long overlooked.
Wall Street Journal reporter Brad Olson, who’s based in Houston, says over the last decade, only a few discoveries of new oil sources have been as big as this one.
“What really excites people in the industry is how much bigger it could actually get,” he says. “I think that that’s sort of what remains to be seen. If it’s as big as the company that founded Apache thinks it is, it could probably be one of the biggest discoveries in the past several decades.”
Olson says in geophysics and geology, scientists have to estimate what happened millions of years ago. Some researchers had assumed that the hydrocarbons 20,000 feet or more below the surface had been “cooked,” which would turn the oil into gas. Analysts haven’t yet vetted the company’s assessments of the find’s value.
“A good way to test the value is how much Apache market value rose after they made the announcement,” he says. “They rose probably by about $1.5 or $2 billion, which is a lot.”
Olson says production and supply could add to the industry glut right now, but this form of energy, known as “wet gas,” has byproducts in it like ethane and butane that can be sold off as well. This discovery may be a windfall for West Texans who own their land’s mineral rights.
“A lot of people own the surface rights – the ability to live in a house somewhere – but not always the mineral rights,” he says. “Interestingly enough, too, Apache has to face some environmental concerns … Balmorhea State Park, the Davis Mountains, the McDonald Observatory.”
Post by Hannah McBride.