Since I decided to buy shares of oil and gas driller Apache Corporation (NYSE:APA) last month, the stock has taken me on a wild ride. Energy prices have been bouncing around, and the stock's moves have more to do with the market than any changes in the company's outlook -- one that's very strong right now. 

Despite all the short-term volatility, Apache is looking like it will outperform in the oil and gas industry, starting just a few short months from now. Here's why you should consider joining me in picking up some shares.

Oil wells at night

Apache is building in building out its Alpine High play in the Permian Basin of Texas and expects production growth to begin in earnest later this year. Image source: Getty Images.

Under budget and ahead of schedule

Those are two things any investor wants to hear from a company making a significant capital expenditure. And Apache investors are hearing it about the company's new Alpine High play in Western Texas.

Because of industry misconceptions about the exact amount of hydrocarbons in the area, Apache was able to pick up more than 300,000 net acres of land at the unbelievably cheap price of about $1,300 per acre. Tests indicated that the company is now sitting on more than 3 billion barrels of oil and 75 trillion cubic feet of natural gas. 

But sitting on a bunch of oil and gas isn't enough to affect a company's fortunes. Apache needs to get all of it out of the ground and over to a refinery for processing, which is easier said than done, considering that there's very little in the way of existing infrastructure in the area. Because of those misconceptions I mentioned earlier, Apache has had to pretty much start from scratch -- drilling wells, building pipelines, etc. 

While the work is, in fact, under budget and two months ahead of schedule, the Alpine High oil and gas isn't going to start flowing in earnest until later this year. That means that right now, we're seeing a lot of upfront costs on the balance sheet, while the returns won't start showing up until Q3 at the earliest. But indications are that it's going to be worth the wait.

Recent developments

Things are going well for Apache at Alpine High. So well, in fact, that the company was able to raise its North American production guidance for 2017, from a range of 252 million to 263 million barrels of oil equivalents per day up to 256 million to 264 million BOE/D. This stands in stark contrast to some of the company's competitors like ExxonMobil (NYSE:XOM), whose production numbers have been on the decline.

Apache may also start to see increased production elsewhere in its portfolio, particularly in Egypt and the North Sea. Unlike Alpine High, both regions have extensive infrastructure in place, so they aren't as capital-intensive at the moment.

In Egypt, the company has been granted two new land concessions in the Western Desert, which have increased the size of Apache's Egypt holdings by about 40%. The company hopes to start drilling there in Q3. Meanwhile, in the North Sea, Apache is about to install subsea tieback facilities for its Callater discovery: 1,500 feet of oil-bearing sands it found in 2015. Once the tieback facilities are in place, the company estimates it will be able to produce 20,000 BOE/D from the find. 

At a great price

Apache's share price is fluctuating along with the price of oil -- and is much more volatile than a big integrated major like Exxon:

APA Chart

APA data by YCharts.

However, that means investors actually have the chance to pick up shares on the cheap. In fact, Apache shares are now cheaper than they were before the company's Alpine High discovery was announced in September 2016, weighed down by middling oil prices and first-quarter results that didn't live up to analysts' expectations. That's just another reason why the best is yet to come for Apache.

Investor takeaway

Apache's stock is pretty much in a holding pattern right now. Investors shouldn't expect much to change in the current second quarter of 2017. But in Q3, watch out! Alpine High should start to come online in earnest, drilling should begin in the company's new Egypt assets, and the North Sea Callater discovery should also start producing. Apache turned a profit in Q1 with oil hovering around $50 per barrel, so this increased production should work in the company's favor. 

Plus, with a current dividend yield of over 2%, investors are getting paid to wait for Apache's good times to start rolling.

John Bromels owns shares of Apache. The Motley Fool owns shares of ExxonMobil. The Motley Fool has a disclosure policy.