Past metrics like P/E and revenue growth are important, but they don't really paint the complete picture of the company. You shouldn't focus too much on what has happened and should instead focus on what is going to happen. Just because your investment has beaten Wall Street expectations doesn't mean it has a chance to do so in the future,  so why own the stock?

Ramping up drilling activity
Apache Corp (APA 0.56%) has been steadily ramping up drilling activity in the Permian Basin since 2010. By boosting the number of rigs operating in the area to 41 in 2013 from five in 2010, Apache has effectively quadrupled the number of well completions per year.

Starting at ~50,000 barrels of oil equivalent per day, or boepd, in 2010, Apache is now producing around ~132,000 boepd from the area. I would expect Apache to keep boosting output through more drilling activity in the region. With 1.6 million net acres in the region, Apache has been able to locate over 34,000 locations to drill for more production.

Thankfully, there is no shortage of places to drill, and by utilizing cash flow created by past investments, Apache can continue growing in the future.  The Permian Basin also happens to be where Apache sees 37% of its potentially recoverable resources.

To tap into those resources, Apache has been rapidly increasing the number of horizontal rigs it operates. Horizontal rigs have enabled Apache to develop plays like the Wolfcamp or Cline shale, which house enormous amounts of potential. 

Other operators
Pioneer Natural Resources (PXD 0.97%) is also banking on the Permian Basin to aggressively grow liquids output. By using downspacing and deeper laterals, Pioneer thinks it can extract an additional 7 billion barrels of oil equivalent from the Permian Basin versus current proved reserves.

Part of Pioneer Natural Resources' plan to extract more crude from the ground involves reaching all the way down to the Wolfcamp Part D area of the stacked play, which is also known as the Cline shale. By tapping into an area previously left untouched, both Pioneer and Apache can fully develop this massive play.

Pioneer wants to take that a step further and combine deeper laterals with tighter downspacing techniques. 2014 will see Pioneer Natural Resources test out 50-acre spacing, which comes on top of Pioneer trying out 116 and 77-acre spacing last year. Better technology and drilling techniques allow E&P players to boost recovery rates while driving down well completion costs and times.

Regardless of who tries out a different way to do business first, all E&P players benefit as they are able to mimic what works. Pioneer Natural Resources is the leader in the Permian Basin, so expect Apache to look over its shoulder to see how to best develop this play.

What is the Central Region?
In the Central Region, near the Oklahoma-Texas border, a similar story is unfolding. The rig count has grown from five to 29 since 2010, and the number of well completions has roughly quadrupled per year. Output now stands at ~95,000 boepd from the Central Region.

The Central Region is a stacked shale formation made up of several different plays stretching down for five miles:

(Reserves, potential drilling locations)

1. Granite Wash (4,500 Bboe, 22,800 locations)

2. Cleveland (195 MMBoe, 2,300 locations)

3. Tonkawa (202 MMBoe, 2,800 locations)

4. Marmaton (161 MMBoe, 1,600 locations)

There are others, but these are the four to focus on. Apache's Granite Wash acreage houses the most recoverable resources and potential in the play, but the other benches shouldn't just be cast aside. By tapping into each part of the Central Region, Apache hopes to grow its reserves immensely.

To put this into comparison, Apache has 2.9 billion barrels of recoverable resources. Through deeper laterals and better downspacing techniques, Apache thinks it can crank that up to 11.7 billion boe, with 85% of that located in the Permian Basin and Central Region. This is why these are the two assets to watch for future value creation for Apache shareholders, and why I'm bullish on this stock.

Foolish conclusion
While Apache is a global oil and gas producer and has plenty of assets around the world, the Permian Basin and Central Region offers the most growth. By tapping into each bench of a play, both oil producers will be able to revise their reserve estimates higher. Both Apache and Pioneer Natural Resources see billions of barrels of extractable crude just within their reach, all they have to do is be wiling to drill down that deep.

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