It’s not that the operational update in the Apache news release is negative, but it doesn’t tell investors much of anything. Instead, the company simply states that it reached a depth of 6,200 meters and performed some tests.
The Apache news doesn’t include any details about what was found during these tests. What the company does say is that it plans to “set casing, make equipment modifications to the rig, and resume drilling.”
This will have Apache starting the next round of drilling in the middle of December. The company notes that the new target is for it to reach a depth of 6,900 meters. It says that it will conduct additional testing once it has reached this target.
The lack of any kind of concrete news from Apache is concerning. Not providing investors with the results of the test immediately makes it appear that the news wasn’t good. If that’s true, it explains why it’s instantly preparing to start drilling again.
It’s also worth mentioning that Apache has high hopes for this well. It’s not too far from where Exxon Mobil (NYSE:XOM) has found success. Unfortunately, APA may not be able to replicate that at its current well.
APA stock was down 11.85% as of Monday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.