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Apache shares rise after oil discovery that 'could be a game-changer'

Apache Corp. workers
Spencer Platt | Getty Images

Shares of Apache climbed more than 7 percent Thursday in a second day of sharp gains, after the company's Wednesday announcement of a major oil discovery in Texas.

The Houston-based oil and gas exploration company said in a release it had secured more than 300,000 contiguous acres in an oil field it calls "Alpine High" that offers "a significant new resource play."

To accelerate development of Alpine High, which is mostly located in Reeves County in West Texas, Apache is increasing its 2016 capital spending by about $200 million for the year and raising its full-year capital guidance to roughly $2 billion. As a result, capital spending for the project this year will represent more than 25 percent of the company's total capital expenditures, the release said.

Based on the planned expenditure increases, Citi analyst Robert Morris on Thursday raised his price target on the stock to $58 a share from $53. He maintained a "neutral" rating in the report, titled "Alpine High could be a game-changer but too early to tell."