Why Would Oil Majors Sell Small Wells to Apache?

David Senra says major integrated oil companies would sell smaller wells to Apache while they sought cost reduction, cash to redeploy, and larger reserves. Raymond Plank's counter-position was to buy wells the majors had not invested in, because their incentive was power-law discoveries, and to do a better job on the little wells than the majors cared to do.

The new incarnation required a substantially greater level of critical mass to operate as an oil company on internally generated cash flow from wells owned and operated on Apache's own account. The decision shifted the primary focus from drilling to the acquisition of assets with upside through acquire and exploit tactics. The infrastructure was already there. Once large international companies had developed their fields, some focused more attention on new, virgin opportunities in a worldwide portfolio. As fields depleted, they limited exploration spending to reduce costs. Apache's plan was to put money into the small well the previous owner was not reinvesting in and take the oil more seriously.

Ray Kroc, founder of McDonald's, gave the same kind of reason for beating other restaurants that also sold hamburgers: the chain took the hamburger more seriously than they did.