HOUSTON, July 30 /PRNewswire-FirstCall/ -- Apache Corporation
(NYSE:APA) ( NASDAQ: APA) today reported record worldwide oil and
natural gas production of 587,400 barrels of oil equivalent (boe)
per day in the second quarter, up 7.1 percent from the first
quarter and 6.5 percent from the prior-year period. Apache reported
net income of $443 million, or $1.31 per diluted common share,
compared with $1.4 billion, or $4.28 per share, in the prior-year
period. Second-quarter cash from operations before changes in
operating assets and liabilities* totaled $1.26 billion, compared
with $2.3 billion in the prior-year period. Apache's second-quarter
adjusted earnings,* which exclude certain items that impact the
comparability of operating results, totaled $474 million, or $1.41
per share, compared to adjusted earnings of $1.44 billion, or $4.28
per share, in the prior-year period. "The strength of Apache's
geological and geographical diversity, along with our balanced
product mix, fueled our second-quarter results," said G. Steven
Farris, chairman and chief executive officer. "Initial production
from development projects in the Gulf of Mexico and the Western
Desert of Egypt, combined with rebounding oil prices, more than
offset the continuing deterioration of North American natural gas
prices during the quarter," he said. "With continued drilling
successes in Egypt, the Gulf and the North Sea, Apache has strong
momentum going into the second half of the year." Oil production
comprised 48 percent of Apache's worldwide output, but 72 percent
of oil and gas revenues. The company's oil and gas revenue per boe
increased 19 percent from the first quarter. Apache received an
average of $58.15 per barrel of oil, up 37 percent from the first
quarter, and $3.48 per thousand cubic feet of gas, down 9 percent
from the first quarter. Prices for both commodities were
substantially below year-earlier levels. "Our regions' focus on
driving down lifting costs has resulted in lower costs on a boe
basis for two quarters in a row, including a 6-percent decline from
the first quarter to the second," Farris said. Recent drilling and
operational highlights included: -- The Falcon-1x discovery in
Egypt's Matruh Concession tested 4,400 barrels per day from the
Lower Cretaceous Alam El Buieb formation, with production expected
to commence in the third quarter. The well also tested an aggregate
of 46 million cubic feet of gas (MMcf) and 2,368 barrels of
condensate per day from two other zones that will not be produced
until additional processing and transportation capacity is
developed. -- The Hydra-5x, an appraisal well in Egypt's Shushan
Concession, tested 21 MMcf and 3,744 barrels of condensate per day
from the Jurassic Upper Safa formation. The Hydra field is expected
to be developed after completion of a gas sales agreement with the
Egyptian General Petroleum Corp. -- Three new horizontal wells in
the Horn River shale gas play in northeast British Columbia had
initial gross production rates of about 16 MMcf per day each,
strengthening estimates that individual wells in the play
potentially can recover about 10 billion cubic feet (Bcf) of
natural gas. Apache and EnCana each have a 50-percent interest in a
joint venture that holds approximately 425,000 acres at Horn River.
-- In the North Sea, the Forties Charlie 6-3 well commenced
production at a rate of 10,500 barrels per day. The well is the
seventh development well brought on production at Forties in 2009;
its initial production rate is the field's highest since 1994. --
In Egypt, Apache ramped up production through two new processing
trains at the Salam gas plant and is expected to reach gross
production capacity of 200 MMcf and 10,000 barrels of condensate
per day during the third quarter. -- The deepwater Geauxpher Field
at Garden Banks Block 462 - in water 2,700 feet deep about 150
miles off the Louisiana coast in the Gulf of Mexico - came on line
May 15 and produced a total of 4.3 Bcf by June 30. The field is
currently producing 105 MMcf per day from two wells. Apache has a
40-percent interest in the field. "Apache's strong financial
position - with debt at 25 percent of capitalization and $772
million of cash on the balance sheet - provides many avenues for
continued growth, either through our deep inventory of drilling
prospects or through acquisitions," Farris said. Apache Corporation
is an oil and gas exploration and production company with
operations in the United States, Canada, Egypt, the United Kingdom
North Sea, Australia and Argentina. *Adjusted earnings and cash
from operations before changes in operating assets and liabilities
are non-GAAP measures. Please see reconciliations below. NOTE:
Apache will conduct a conference call to discuss its second-quarter
results at 1 p.m. Central time on Thursday, July 30. The call will
be webcast from Apache's Web site, http://www.apachecorp.com/. The
webcast replay and podcast will be archived on Apache's Web site.
The conference call will be available for playback by telephone for
one week beginning at approximately 3 p.m. on July 30. To access
the telephone playback, dial (719) 457-0820 and provide Apache's
confirmation code, 4860120. This news release contains certain
"forward-looking statements" within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act
of 1995 including, without limitation, expectations, beliefs, plans
and objectives regarding production and exploration activities. Any
matters that are not historical facts are forward-looking and,
accordingly, involve estimates, assumptions, risks and
uncertainties, including, without limitation, risks, uncertainties
and other factors discussed in our most recently filed Annual
Report on Form 10-K, on our Web site and in our other public
filings and press releases. There is no assurance that Apache's
expectations will be realized, and actual results may differ
materially from those expressed in the forward-looking statements.
We assume no duty to update these statements as of any future date.
APA-F APACHE CORPORATION FINANCIAL INFORMATION (In thousands,
except per share data) For the Quarter For the Six Months Ended
June 30, Ended June 30, -------------- -------------- 2009 2008
2009 2008 ---- ---- ---- ---- REVENUES AND OTHER: Oil and gas
production revenues $2,074,344 $3,904,118 $3,677,958 $7,082,067
Other 19,034 (3,927) 49,245 5,865 ------ ------ ------ -----
2,093,378 3,900,191 3,727,203 7,087,932 --------- ---------
--------- --------- COSTS AND EXPENSES: Depreciation, depletion and
amortization Recurring 573,359 627,668 1,153,976 1,248,157
Additional - - 2,818,161 - Asset retirement obligation accretion
26,483 25,679 53,221 52,176 Lease operating expenses 405,273
446,738 802,762 901,376 Gathering and transportation 33,479 39,767
66,818 80,743 Taxes other than income 115,941 298,548 203,280
541,126 General and administrative 90,905 78,872 175,951 161,295
Financing costs, net 61,155 39,050 119,742 83,303 ------ ------
------- ------ 1,306,595 1,556,322 5,393,911 3,068,176 ---------
--------- --------- --------- INCOME (LOSS) BEFORE INCOME TAXES
786,783 2,343,869 (1,666,708) 4,019,756 Current income tax
provision 218,247 702,106 220,741 1,189,906 Deferred income tax
provision (benefit) 123,816 196,534 (575,229) 363,108 -------
------- -------- ------- NET INCOME (LOSS) 444,720 1,445,229
(1,312,220) 2,466,742 Preferred stock dividends 1,420 1,420 2,840
2,840 ----- ----- ----- ----- INCOME (LOSS) ATTRIBUTABLE TO COMMON
STOCK $443,300 $1,443,809 $(1,315,060) $2,463,902 ========
========== =========== ========== NET INCOME (LOSS) PER COMMON
SHARE: Basic $1.32 $4.32 $(3.92) $7.38 ===== ===== ====== =====
Diluted $1.31 $4.28 $(3.92) $7.32 ===== ===== ====== ===== WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING 335,637 334,208 335,372 333,801
======= ======= ======= ======= APACHE CORPORATION FINANCIAL
INFORMATION (In thousands, except per share data) For the Quarter
For the Six Months Ended June 30, Ended June 30, --------------
-------------- 2009 2008 2009 2008 ---- ---- ---- ---- FINANCIAL
DATA: Revenues and other $2,093,378 $3,900,191 $3,727,203
$7,087,932 ========== ========== ========== ========== Income
(Loss) Attributable to Common Stock $443,300 $1,443,809
$(1,315,060) $2,463,902 ======== ========== =========== ==========
Basic Net Income (Loss) Per Common Share $1.32 $4.32 $(3.92) $7.38
===== ===== ====== ===== Diluted Net Income (Loss) Per Common Share
$1.31 $4.28 $(3.92) $7.32 ===== ===== ====== ===== Weighted Average
Common Shares Outstanding 335,637 334,208 335,372 333,801 =======
======= ======= ======= Diluted Shares Outstanding 337,365 337,676
335,372 336,802 ======= ======= ======= ======= June 30, December
31, 2009 2008 ---- ---- BALANCE SHEET DATA: Cash and Cash
Equivalents $771,557 $1,181,450 Short-term Investments - 791,999
Other Current Assets 2,713,528 2,477,525 Property and Equipment,
net 22,290,308 23,958,517 Restricted Cash - 13,880 Goodwill 189,252
189,252 Other Assets 437,282 573,862 ------- ------- Total Assets
$26,401,927 $29,186,485 =========== =========== Current Liabilities
$1,808,355 $2,520,435 Long-Term Debt 4,954,667 4,808,975 Deferred
Credits and Other Noncurrent Liabilities 4,680,210 5,348,354
Shareholders' Equity 14,958,695 16,508,721 ---------- ----------
Total Liabilities and Shareholders' Equity $26,401,927 $29,186,485
=========== =========== Common shares outstanding at end of period
335,747 334,710 For the Quarter For the Six Months Ended June 30,
Ended June 30, -------------- -------------- 2009 2008 2009 2008
---- ---- ---- ---- COSTS INCURRED: (1) North America exploration
and development $376,497 $801,279 $881,813 $1,544,635 International
exploration and development 506,229 682,766 993,011 1,291,229
------- ------- ------- --------- $882,726 $1,484,045 $1,874,824
$2,835,864 ======== ========== ========== ========== Oil and gas
property acquisitions $188,480 $142,848 $248,505 $150,795 ========
======== ======== ======== (1) Includes noncash asset retirement
costs and capitalized interest as follows: Capitalized interest
$14,972 $17,878 $30,981 $35,056 Asset retirement costs $34,098
$86,434 $93,703 $171,506 APACHE CORPORATION FINANCIAL INFORMATION
For the Quarter For the Six Months Ended June 30, Ended June 30,
-------------- -------------- 2009 2008 2009 2008 ---- ---- ----
---- PRODUCTION AND PRICING DATA: OIL VOLUME - Barrels per day
United States 88,530 100,049 87,642 100,364 Canada 15,833 17,746
16,090 17,547 ------ ------ ------ ------ North America 104,363
117,795 103,732 117,911 ------- ------- ------- ------- Egypt
95,359 64,886 89,475 63,718 Australia 10,478 8,367 9,164 8,894
North Sea 59,688 56,570 60,089 57,670 Argentina 11,948 12,067
12,192 12,146 ------ ------ ------ ------ International 177,473
141,890 170,920 142,428 ------- ------- ------- ------- Total
281,836 259,685 274,652 260,339 ======= ======= ======= =======
AVERAGE OIL PRICE PER BARREL United States $57.00 $97.64 $49.95
$90.59 Canada 55.17 119.16 46.49 106.33 North America 56.72 100.88
49.41 92.93 Egypt 60.30 126.20 51.90 112.28 Australia 63.01 133.79
49.74 116.78 North Sea 58.77 121.10 51.51 108.23 Argentina 46.17
50.12 46.73 47.61 International 58.99 118.14 51.28 105.41 Total
58.15 110.32 50.57 99.76 NATURAL GAS VOLUME - Mcf per day United
States 662,834 758,524 637,894 751,269 Canada 373,796 357,828
365,551 359,289 ------- ------- ------- ------- North America
1,036,630 1,116,352 1,003,445 1,110,558 --------- ---------
--------- --------- Egypt 376,737 233,793 347,443 238,385 Australia
161,069 129,531 151,607 160,355 North Sea 2,645 2,507 2,663 2,556
Argentina 192,542 197,284 192,250 181,209 ------- ------- -------
------- International 732,993 563,115 693,963 582,505 -------
------- ------- ------- Total 1,769,623 1,679,467 1,697,408
1,693,063 ========= ========= ========= ========= AVERAGE NATURAL
GAS PRICE PER MCF United States $3.88 $10.62 $4.21 $9.50 Canada
3.86 9.63 4.26 8.59 North America 3.88 10.30 4.23 9.21 Egypt 3.85
6.26 3.73 5.72 Australia 1.82 2.17 1.71 2.14 North Sea 12.24 21.90
9.82 19.05 Argentina 1.89 1.39 1.94 1.60 International 2.92 3.69
2.82 3.51 Total 3.48 8.09 3.65 7.25 NGL VOLUME - Barrels per day
United States 5,483 7,231 5,198 7,236 Canada 2,052 1,868 2,082
2,052 ----- ----- ----- ----- North America 7,535 9,099 7,280 9,288
Argentina 3,091 2,905 3,114 2,812 ----- ----- ----- ----- Total
10,626 12,004 10,394 12,100 ====== ====== ====== ====== AVERAGE NGL
PRICE PER BARREL United States $27.36 $65.27 $25.90 $61.32 Canada
24.23 59.26 22.40 56.05 North America 26.50 64.04 24.90 60.15
Argentina 15.91 32.31 16.51 39.98 Total 23.42 56.36 22.39 55.46
APACHE CORPORATION FINANCIAL INFORMATION (In thousands, except per
share data) NON-GAAP FINANCIAL MEASURES: Reconciliation of income
attributable to common stock to adjusted earnings:
--------------------------------------------------------------------------
The press release discusses Apache's adjusted earnings. Adjusted
earnings exclude certain items that management believes affect the
comparability of operating results and are meaningful for the
following reasons: -- Management uses adjusted earnings to evaluate
the company's operational trends and performance relative to other
oil and gas producing companies. -- Management believes this
presentation may be useful to investors who follow the practice of
some industry analysts who adjust reported company earnings for
items that may obscure underlying fundamentals and trends. -- The
reconciling items below are the types of items management believes
are frequently excluded by analysts when evaluating the operating
trends and comparability of the company's results. For the Quarter
For the Six Months Ended June 30, Ended June 30, --------------
-------------- 2009 2008 2009 2008 ---- ---- ---- ---- Income
(Loss) Attributable to Common Stock (GAAP) $443,300 $1,443,809
$(1,315,060) $2,463,902 Adjustments: Foreign currency fluctuation
impact on deferred tax expense 31,164 281 26,350 (12,079)
Additional depletion, net of tax - - 1,981,398 - --- --- ---------
--- Adjusted Earnings (Non- GAAP) $474,464 $1,444,090 $692,688
$2,451,823 ======== ========== ======== ========== Adjusted
Earnings Per Share (Non-GAAP) Basic $1.41 $4.32 $2.07 $7.35 =====
===== ===== ===== Diluted $1.41 $4.28 $2.05 $7.28 ===== ===== =====
===== Average Number of Common Shares Basic 335,637 334,208 335,372
333,801 ======= ======= ======= ======= Diluted 337,365 337,676
337,198 336,802 ======= ======= ======= ======= Reconciliation of
net cash provided by operating activities to cash from operations
before changes in operating assets and liabilities:
--------------------------------------------------------------------------
The press release discusses Apache's cash from operations before
changes in operating assets and liabilities. It is presented
because management believes the information is useful for investors
because it is used internally and widely accepted by those
following the oil and gas industry as a financial indicator of a
company's ability to generate cash to internally fund exploration
and development activities, fund dividend programs, and service
debt. It is also used by research analysts to value and compare oil
and gas exploration and production companies, and is frequently
included in published research when providing investment
recommendations. Cash from operations before changes in operating
assets and liabilities, therefore, is an additional measure of
liquidity, but is not a measure of financial performance under GAAP
and should not be considered as an alternative to cash flows from
operating, investing, or financing activities. The following table
reconciles net cash provided by operating activities to cash from
operations before changes in operating assets and liabilities. For
the Quarter For the Six Months Ended June 30, Ended June 30, 2009
2008 2009 2008 ---- ---- ---- ---- Net cash provided by operating
activities $823,513 $1,929,509 $1,366,729 $3,737,913 Changes in
operating assets and liabilities 436,071 390,240 875,914 426,520
------- ------- ------- ------- Cash from operations before changes
in operating assets and liabilities $1,259,584 $2,319,749
$2,242,643 $4,164,433 ========== ========== ========== ==========
DATASOURCE: Apache Corporation CONTACT: Media, Bill Mintz,
+1-713-296-7276, or Robert Dye, +1-713-296-6662, or Investors, Tom
Chambers, +1-713-296-6685, all of Apache Corporation Web Site:
http://www.apachecorp.com/
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