By Anna Driver
Continue Reading Below
The bulk of the increase is targeted at North America, where drilling costs have risen for a number of producers in basins including the Permian in West Texas, where the competition for equipment, services and workers is fierce.
"We truly allocate capital quarterly," Apache Chief Executive Steve Farris told a meeting of Wall Street investors, adding that the company may raise capital expenditures again later this year.
Apache's North American operations are in Texas, the Gulf of Mexico, and Canada, where it has shale gas and oil properties.
The company, which had hinted at a spending increase in its first-quarter earnings call, now plans to spend $8.12 billion in 2011, up from its forecast for $7.5 billion, Tom Chambers, Apache's chief financial officer, told the company's analyst meeting in New York.
The bulk of the increase will be spent in the second half of the year, so the company's 2011 production outlook for growth of 13 percent to 17 percent remains unchanged, Chambers said.
The Houston-based company, in the planning stages for the Kitimat liquefied natural gas (LNG) terminal in northwestern Canada, said it expects a final investment decision on that facility later this year or early next year, with first gas expected in 2015.
The project, still on the drawing board, is far from complete and should by no means be considered "a slam dunk," Farris told investors in remarks broadcast on the Internet.
He assigned an 80 percent chance to completion of the project.
Apache, which has a proven record of wringing production from mature properties bought from big oil companies, also told investors it plans to start using horizontal drilling in countries like Egypt and Argentina.
Those countries have oil and gas bearing rock, but technology like horizontal drilling is not in as wide use as it is in North America.
Apache's shares closed down less than 1 percent at $121.43 on the New York Stock Exchange.
(Editing by Maureen Bavdek, Tim Dobbyn and Steve Orlofsky)