Apache Corporation (NYSE: APA) shares were maintaining their gains Wednesday following a huge spike a day earlier after the company announced a significant oil discovery off the coast of Suriname.
Apache Records Historic Gain After Striking Oil
Apache stock had its biggest one-day gain in almost a half century after the announcement Tuesday that it had struck oil at the Maka Central-1 well drilled offshore of the South American country. Apache stock spiked more than 25% on the news in Tuesday's trading.
Apache is a 50% operator of the well drill operation, with Total S.A. (NYSE: TOT) holding the other 50%.
Apache CEO Says Wells Could Be 'Prolific'
"Preliminary formation evaluation data indicates the potential for prolific oil wells," Apache CEO John Christmann said in a press release announcing the find.
The find is silencing Apache critics, SunTrust Robinson Humphrey analyst Neal Dingmann wrote in a note to investors.
"This is the first well following Apache’s late December positive announcement regarding the company’s Suriname JV with Total enabling sustained drilling operations in the play," the analyst said.
SunTrust has a Buy rating on Apache with a $32 price target.
Apache Analyst Says Development Provides 'Incremental Confidence'
Meaningful production impact shouldn't be expected for several quarters, but the oil find "should provide incremental confidence in the potential for oil/hydrocarbon development in the region, particularly given prior investor skepticism," Dingmann said.
After jumping nearly 27% on Tuesday, Apache shares were trading up 1.32% at $32.93 at the time of publication Wednesday.
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