Apache Achieves Record Fourth Quarter And 2012 Production; Fourth Quarter Production Averaged 800,000 BOEPD

14 Feb, 2013, 08:00 ET from Apache Corporation

HOUSTON, Feb. 14, 2013 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) today reported record overall production for its fourth consecutive year, as well as record oil and liquids production. Average daily production during 2012 increased to 779,000 barrels of oil equivalent (boe) per day, up 5.4 percent compared with the prior year's production, adjusted for dispositions. Oil and gas revenues were a record $16.9 billion, up from $16.8 billion in the prior year.

These results contributed to full-year 2012 earnings of $1.9 billion or $4.92 per diluted common share, compared with $4.5 billion or $11.47 per share in 2011. Excluding certain items that management believes affect the comparability of operating results, such as the impact of a ceiling test write-down due primarily to substantially weaker Canadian natural gas prices, Apache reported adjusted earnings* of $3.8 billion or $9.48 per share, compared with $4.7 billion or $11.83 per share in 2011. Cash from operations before changes in operating assets and liabilities* was $10.2 billion, sustaining the record level achieved the prior year even with lower average North American natural gas prices.

"Having deepened and strengthened our global portfolio of growth projects since 2010, we are accelerating our operational momentum," said G. Steven Farris, chairman and chief executive officer. "Apache exited 2012 producing in excess of 800,000 boe per day, driven primarily by our North American oil production, which increased 12 percent during the year.

"We have an extensive pipeline of opportunities that will fuel our profitable growth for years to come. This includes more than 67,000 technically evaluated drilling locations in the onshore U.S. It also includes a robust group of world-class development projects throughout our global portfolio, including Wheatstone and Kitimat, our two liquefied natural gas projects with products indexed to crude oil prices."

Apache has become the leading oil and gas driller in the Permian Basin, operating more rigs than any industry competitor. Apache also is among the most active oil and gas companies in the Central Region's Anadarko Basin, as the company accelerates development of its horizontal drilling play inventory. Year-over-year production from these two regions increased 18 and 37 percent, respectively.

Earlier this month, a company subsidiary completed a transaction with Chevron Canada Ltd. to jointly build and operate the Kitimat LNG project, enhancing our efforts to move this project to sanction and monetize natural gas resources we discovered in the Horn River and Liard basins of northern British Columbia. The incremental resources targeted for monetization through Kitimat have the potential to triple Apache's total proved reserves.

In fourth-quarter 2012 earnings totaled $649 million or $1.64 per diluted share, compared with $1.17 billion or $2.98 per share in the prior-year period. Adjusted earnings for the period were $907 million, or $2.27 per share, compared with $1.2 billion, or $2.94 per share in the same period for 2011. Production reached a new quarterly milestone, averaging 800,000 boe per day, and cash from operations totaled $2.77 billion, compared with $2.66 billion in the same period of the prior year.

Apache's oil and natural gas liquids production was 51 percent of total volume in 2012 and contributed 81 percent of revenues reflecting the wide gap between global crude oil and North American natural gas prices.

During 2012 the company added 372 MMboe of reserves, or 131 percent of production, through discoveries and extensions and 73 MMboe through acquisitions for a reserve replacement rate of 156 percent, excluding revisions. Low prices throughout the year for Canadian natural gas resulted in a ceiling test write-down and were the primary driver of negative revisions totaling 299 MMboe. Apache ended the year with proved reserves of 2.9 billion boe, after producing 285 MMboe. The company invested $9.0 billion on exploration and development during the year.

Apache to webcast conference call

Apache Corporation will discuss its fiscal 2012 and fourth-quarter results at 1 p.m. Central time on Thursday, Feb. 14. The conference call will be webcast from Apache's website www.apachecorp.com. The webcast replay will be archived on Apache's website. The conference call will be available for delayed playback by telephone for one week beginning at approximately 4 p.m. on Feb. 14. To access the telephone playback, dial 855-859-2056 or 404-537-3406 for international calls. The conference access code is 84095210.

About Apache

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. Apache posts announcements, operational updates, investor information and copies of all press releases on its website, www.apachecorp.com.

Forward-looking statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects" and similar references to future periods. These statements include, but are not limited to, statements about future growth plans, expectations, and objectives for Apache's operations including statements about our drilling plans, planned wells, and Wheatstone and Kitimat LNG projects.  While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See "Risk Factors" in our 2011 Form 10-K and our subsequent filings with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development, or otherwise, except as may be required by law.

Cautionary Note to Investors

The United States Securities and Exchange Commission ("SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SEC's definitions for such terms. Apache uses certain terms in this release, such as "resources," and other similar terms that the SEC guidelines strictly prohibit Apache from including in filings with the SEC.  Such terms do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality and other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in Apache's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2011, and amendments thereto, available from Apache at www.apachecorp.com or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, Texas 77056 (Attn: Corporate Secretary). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC's website at www.sec.gov.

*Adjusted earnings and cash from operations before changes in operating assets and liabilities are non-GAAP measures. Please see reconciliations below. For supplemental and non-GAAP information, please go to http://www.apachecorp.com/financialinfo.

 

APACHE CORPORATION

STATEMENT OF CONSOLIDATED OPERATIONS

(In millions, except per share data)

For the Quarter 

For the Year

Ended December 31,

Ended December 31,

2012

2011

2012

2011

REVENUES AND OTHER:

Oil and gas production revenues

$ 4,393

$ 4,295

$ 16,947

$ 16,810

Other 

(2)

2

131

78

4,391

4,297

17,078

16,888

COSTS AND EXPENSES:

Depreciation, depletion and amortization

    Recurring

1,380

1,111

5,183

4,095

    Additional

28

63

1,926

109

Asset retirement obligation accretion

60

40

232

154

Lease operating expenses

790

659

2,968

2,605

Gathering and transportation 

68

75

303

296

Taxes other than income

235

236

862

899

General and administrative

147

132

531

459

Merger, acquisitions & transition

2

5

31

20

Financing costs, net

40

35

165

158

2,750

2,356

12,201

8,795

INCOME BEFORE INCOME TAXES

1,641

1,941

4,877

8,093

Current income tax provision 

506

571

2,235

2,263

Deferred income tax provision

467

181

641

1,246

NET INCOME 

668

1,189

2,001

4,584

Preferred stock dividends

19

19

76

76

INCOME ATTRIBUTABLE TO COMMON STOCK

$     649

$ 1,170

$   1,925

$   4,508

NET INCOME PER COMMON SHARE:

Basic

$    1.66

$    3.05

$      4.95

$   11.75

Diluted 

$    1.64

$    2.98

$      4.92

$   11.47

WEIGHTED-AVERAGE NUMBER OF COMMON 

   SHARES OUTSTANDING:

Basic

391

384

389

384

Diluted

407

400

391

400

DIVIDENDS DECLARED PER COMMON SHARE

$    0.17

$    0.15

$      0.68

$      0.60

 

APACHE CORPORATION

SUMMARY OF CAPITAL COSTS INCURRED

(In millions)

For the Quarter 

For the Year

Ended December 31,

Ended December 31,

2012

2011

2012

2011

CAPITAL EXPENDITURES:

Exploration & Development Costs

United States

$                 1,543

$                    792

$               5,151

$                     2,768

Canada

131

208

590

817

North America

1,674

1,000

5,741

3,585

Egypt

265

222

1,074

896

Australia

355

131

873

576

North Sea

183

205

886

823

Argentina

67

101

289

346

New Ventures - International

14

12

98

61

International

884

671

3,220

2,702

Worldwide Exploration & Development Costs

$                 2,558

$                 1,671

$               8,961

$                     6,287

Gathering, Transmission and Processing Facilities

United States

$                      18

$                      18

$                     75

$                           27

Canada

34

35

172

148

Egypt

18

37

33

111

Australia

103

90

441

345

Argentina

4

5

16

12

North Sea

1

-

1

-

Total Gathering, Transmission and Processing

$                    178

$                    185

$                   738

$                         643

Capitalized Interest

$                      93

$                      70

$                   334

$                         263

Capital Expenditures, excluding Acquisitions

$                 2,829

$                 1,926

$             10,033

$                     7,193

Acquisitions

$                    122

$                 2,696

$               3,543

$                     3,189

APACHE CORPORATION

SUMMARY BALANCE SHEET INFORMATION

(In millions)

December 31,

December 31,

2012

2011

Cash and Cash Equivalents

$                    160

$                    295

Other Current Assets 

4,802

4,508

Property and Equipment, net

53,280

45,448

Goodwill

1,289

1,114

Other Assets

1,206

686

Total Assets

$              60,737

$              52,051

Short-Term Debt

$                    990

$                    431

Other Current Liabilities

4,546

4,532

Long-Term Debt

11,355

6,785

Deferred Credits and Other Noncurrent Liabilities

12,515

11,310

Shareholders' Equity

31,331

28,993

Total Liabilities and Shareholders' Equity

$              60,737

$              52,051

Common shares outstanding at end of period

392

384

 

APACHE CORPORATION

PRODUCTION INFORMATION

For the Quarter 

For the Year

Ended December 31,

Ended December 31,

2012

2011

2012

2011

  OIL VOLUME - Barrels per day

Central

21,026

7,323

14,151

6,788

Permian

65,104

54,381

60,215

50,991

GOM Deepwater

8,355

6,507

6,848

6,022

GOM Shelf

44,752

47,780

42,873

46,031

GC Onshore

10,489

10,189

10,036

9,583

United States

149,726

126,180

134,123

119,415

Canada

17,377

14,882

15,830

14,252

North America

167,103

141,062

149,953

133,667

Egypt

103,056

103,908

99,756

103,912

Australia

26,483

38,169

28,884

38,228

North Sea

65,583

55,859

63,692

54,541

Argentina

9,859

9,655

9,741

9,597

International

204,981

207,591

202,073

206,278

Total 

372,084

348,653

352,026

339,945

  NATURAL GAS VOLUME - Mcf per day

Central

287,956

193,722

242,998

213,447

Permian

184,781

178,766

180,938

173,188

GOM Deepwater

48,177

48,144

46,048

52,193

GOM Shelf

265,918

335,434

291,356

341,242

GC Onshore

103,722

106,505

92,759

84,672

United States

890,554

862,571

854,099

864,742

Canada

550,495

631,122

600,680

632,550

North America

1,441,049

1,493,693

1,454,779

1,497,292

Egypt

350,406

355,091

353,738

365,418

Australia

204,961

189,852

214,013

185,079

North Sea

43,745

2,366

57,457

2,284

Argentina

204,724

221,523

213,464

212,311

International

803,836

768,832

838,672

765,092

Total 

2,244,885

2,262,525

2,293,451

2,262,384

  NGL VOLUME - Barrels per day

Central

10,231

5,566

6,518

2,268

Permian

21,997

12,256

17,966

11,799

GOM Deepwater

1,519

582

1,185

715

GOM Shelf

6,908

4,446

5,738

5,278

GC Onshore

2,229

2,556

2,120

2,051

United States

42,884

25,406

33,527

22,111

Canada

6,837

5,183

6,258

5,958

North America

49,721

30,589

39,785

28,069

Egypt

-

-

-

49

North Sea

1,085

-

1,618

4

Argentina

2,967

2,997

3,008

3,018

International

4,052

2,997

4,626

3,071

Total

53,773

33,586

44,411

31,140

  BOE per day

Central

79,250

45,176

61,169

44,630

Permian

117,898

96,431

108,338

91,655

GOM Deepwater

17,903

15,114

15,708

15,436

GOM Shelf

95,980

108,132

97,170

108,183

GC Onshore

30,005

30,495

27,615

25,746

United States

341,036

295,348

310,000

285,650

Canada

115,963

125,252

122,201

125,636

North America

456,999

420,600

432,201

411,286

Egypt

161,458

163,090

158,713

164,864

Australia

60,643

69,812

64,552

69,074

North Sea

73,959

56,253

74,887

54,925

Argentina

46,946

49,572

48,326

48,000

International

343,006

338,727

346,478

336,863

Total 

800,005

759,327

778,679

748,149

 

APACHE CORPORATION

PRICE INFORMATION

For the Quarter 

For the Year

Ended December 31,

Ended December 31,

2012

2011

2012

2011

  AVERAGE OIL PRICE PER BARREL

Central

$ 82.55

$  89.36

$  86.48

$  89.89

Permian

81.40

89.99

88.18

90.87

GOM Deepwater

103.06

112.77

105.17

106.75

GOM Shelf

105.27

115.70

108.52

108.92

GC Onshore

105.21

112.66

107.83

105.98

United States (1)

91.01

99.54

94.98

95.51

Canada

82.08

94.38

84.89

93.19

North America (1)

90.08

98.99

93.91

95.27

Egypt(1)

107.80

106.65

110.92

109.92

Australia(1)

111.34

109.53

115.22

111.22

North Sea(1)

106.17

104.64

107.97

104.09

Argentina

74.53

76.67

75.89

68.02

International (1)

106.14

105.24

108.92

106.67

Total(1)

98.93

102.71

102.53

102.19

  AVERAGE NATURAL GAS PRICE PER MCF

Central

$    3.79

$    3.92

$    3.26

$    4.44

Permian

3.75

5.05

3.34

5.17

GOM Deepwater

3.48

3.48

2.99

4.06

GOM Shelf

3.51

3.86

3.01

4.42

GC Onshore

3.47

3.73

2.92

4.34

United States (1)

4.05

4.59

3.74

4.91

Canada (1)

4.03

4.15

3.42

4.47

North America (1)

4.04

4.40

3.61

4.72

Egypt

4.02

4.82

3.90

4.66

Australia

4.88

2.64

4.55

2.69

North Sea

10.11

20.49

8.95

22.25

Argentina

2.98

2.82

2.87

2.64

International

4.30

3.75

4.15

3.67

Total (1)

4.14

4.18

3.80

4.37

  AVERAGE NGL PRICE PER BARREL

Central

$ 27.06

$  29.96

$  27.48

$  38.67

Permian

29.95

39.09

32.97

47.88

GOM Deepwater

32.34

58.28

33.06

50.44

GOM Shelf

28.17

55.07

32.04

49.63

GC Onshore

36.60

56.08

40.04

58.51

United States

29.40

42.03

32.19

48.42

Canada

33.59

50.16

34.63

45.72

North America

29.98

43.41

32.57

47.85

Egypt

-

-

-

66.36

North Sea

94.42

-

77.11

65.45

Argentina

22.76

27.00

21.55

27.90

International

41.96

27.00

40.98

28.56

Total

30.88

41.95

33.45

45.95

(1)  Prices reflect the impact of financial derivative hedging activities. 

 

APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(In millions, except per share data)

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:

Ÿ

Management uses adjusted earnings to evaluate the company's operational trends and performance relative to other oil and gas producing companies.

Ÿ

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.  

Ÿ

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 Year

Ended December 31,

Ended December 31,

2012

2011

2012

2011

Income Attributable to Common Stock (GAAP)

$     649

$ 1,170

$   1,925

$   4,508

Adjustments:

Canada and other oil & gas property write-down, net of tax

18

60

1,427

60

Deferred tax adjustments

226

(75)

226

(75)

U.K. income tax adjustments

-

-

118

218

Commodity derivative mark-to-market, net of tax

51

-

51

-

Merger, acquisitions & transition, net of tax

2

4

19

13

Unrealized foreign currency fluctuation impact on deferred tax expense  

(39)

(5)

1

(73)

Adjusted Earnings  (Non-GAAP)

$     907

$ 1,154

$   3,767

$   4,651

Net Income per Common Share - Diluted (GAAP)

$    1.64

$    2.98

$      4.92

$   11.47

Adjustments:

Canada and other oil & gas property write-down, net of tax

0.04

0.15

3.53

0.15

Deferred tax adjustments

0.56

(0.19)

0.56

(0.19)

U.K. income tax adjustments

-

-

0.30

0.55

Commodity derivative mark-to-market, net of tax

0.13

-

0.13

-

Merger, acquisitions & transition, net of tax

-

0.01

0.04

0.03

Unrealized foreign currency fluctuation impact on deferred tax expense  

(0.10)

(0.01)

-

(0.18)

Adjusted Earnings Per Share - Diluted (Non-GAAP)

$    2.27

$    2.94

$      9.48

$   11.83

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 Year

Ended December 31,

Ended December 31,

2012

2011

2012

2011

Net cash provided by operating activities

$ 2,082

$ 2,782

$   8,504

$   9,953

Changes in operating assets and liabilities

685

(118)

1,705

281

Cash from operations before changes in operating assets and liabilities

$ 2,767

$ 2,664

$ 10,209

$ 10,234

 

APACHE CORPORATION

OIL & GAS RESERVES INFORMATION

For the Year Ended December 31, 2012

 OIL (Mbbl) 

 U.S. 

 Canada 

 Egypt 

 Australia 

 North Sea 

 Argentina 

 Total 

Balance - Dec 31, 2011

634,014

141,591

128,035

67,945

169,405

20,587

1,161,577

Extensions and Discoveries

84,656

18,935

36,188

6,277

346

1,133

147,535

Purchases

15,942

188

-

276

2,143

-

18,549

Revisions

(7,474)

(4,577)

(3,678)

(66)

(928)

671

(16,052)

Production

(49,089)

(5,792)

(36,511)

(10,571)

(23,312)

(3,565)

(128,840)

Sales

(144)

-

-

-

-

-

(144)

Balance - Dec 31, 2012

677,905

150,345

124,034

63,861

147,654

18,826

1,182,625

 NGL's (Mbbl) 

 U.S. 

 Canada 

 Egypt 

 Australia 

 North Sea 

 Argentina 

 Total 

Balance - Dec 31, 2011

160,033

31,450

-

-

9,262

7,153

207,898

Extensions and Discoveries

71,965

7,655

-

-

246

-

79,866

Purchases

230

9

-

-

231

-

470

Revisions

(4,559)

(2,569)

-

-

(6,329)

(169)

(13,626)

Production

(12,272)

(2,291)

-

-

(592)

(1,101)

(16,256)

Balance - Dec 31, 2012

215,397

34,254

-

-

2,818

5,883

258,352

 Oil & NGL's 

 U.S. 

 Canada 

 Egypt 

 Australia 

 North Sea 

 Argentina 

 Total 

Balance - Dec 31, 2011

794,047

173,041

128,035

67,945

178,667

27,740

1,369,475

Extensions and Discoveries

156,621

26,590

36,188

6,277

592

1,133

227,401

Purchases

16,172

197

-

276

2,374

-

19,019

Revisions

(12,033)

(7,146)

(3,678)

(66)

(7,257)

502

(29,678)

Production

(61,361)

(8,083)

(36,511)

(10,571)

(23,904)

(4,666)

(145,096)

Sales

(144)

-

-

-

-

-

(144)

Balance - Dec 31, 2012

893,302

184,599

124,034

63,861

150,472

24,709

1,440,977

 GAS (MMcf) 

 U.S. 

 Canada 

 Egypt 

 Australia 

 North Sea 

 Argentina 

 Total 

Balance - Dec 31, 2011

2,976,211

3,547,511

982,966

1,569,584

108,442

537,559

9,722,273

Extensions and Discoveries

365,863

252,130

55,967

176,969

16,397

2,623

869,949

Purchases

313,885

2,503

-

1,745

8,494

-

326,627

Revisions

(156,840)

(1,443,989)

(13,974)

101

-

496

(1,614,206)

Production

(312,600)

(219,849)

(129,468)

(78,329)

(21,029)

(78,128)

(839,403)

Sales

(612)

(422)

-

-

-

-

(1,034)

Balance - Dec 31, 2012

3,185,907

2,137,884

895,491

1,670,070

112,304

462,550

8,464,206

TOTAL BOE (Mboe)

 U.S. 

 Canada 

 Egypt 

 Australia 

 North Sea 

 Argentina 

 Total 

Balance - Dec 31, 2011

1,290,082

764,293

291,863

329,542

196,741

117,333

2,989,854

Extensions and Discoveries

217,598

68,612

45,516

35,772

3,325

1,570

372,393

Purchases

68,486

614

-

567

3,790

-

73,457

Revisions

(38,173)

(247,811)

(6,007)

(49)

(7,257)

585

(298,712)

Production

(113,461)

(44,725)

(58,089)

(23,626)

(27,409)

(17,687)

(284,997)

Sales

(246)

(70)

-

-

-

-

(316)

Balance - Dec 31, 2012

1,424,286

540,913

273,283

342,206

169,190

101,801

2,851,679

Proved developed reserves:

Oil + NGL's (Mbbls)

629,345

101,691

106,746

29,053

122,073

20,852

1,009,760

Gas (Mboe)

392,264

289,109

115,073

99,342

15,554

60,843

972,185

Balance - Dec 31, 2012 (Mboe)

1,021,609

390,800

221,819

128,395

137,627

81,695

1,981,945

 

APACHE CORPORATION

OIL & GAS RESERVES AND COSTS 

For the Year Ended December 31, 2012

Reserve Additions (Mboe)

 U.S. 

 Canada 

 Egypt 

 Australia 

 North Sea 

 Argentina 

 Other 

 Total 

Extensions and Discoveries

217,598

68,612

45,516

35,772

3,325

1,570

-

372,393

Purchases

68,486

614

-

567

3,790

-

-

73,457

Additions excluding revisions

286,084

69,226

45,516

36,339

7,115

1,570

-

445,850

Revisions

(38,173)

(247,811)

(6,007)

(49)

(7,257)

585

-

(298,712)

Total 

247,911

(178,585)

39,509

36,290

(142)

2,155

-

147,138

Capital Cost Information (Non-GAAP) (in millions)

 U.S. 

 Canada 

 Egypt 

 Australia 

 North Sea 

 Argentina 

 Other 

 Total 

Exploration & Development, excluding Capitalized Interest and Asset Retirement Cost (ARC) (1)

$     5,151

$        590

$  1,074

$        873

$          886

$         289

$     98

$     8,961

Acquisitions, excluding ARC - Acquired

Proved

1,071

5

28

4

59

-

-

1,167

Unproved

2,329

-

-

-

26

-

-

2,355

     Total

$     8,551

$        595

$  1,102

$        877

$          971

$         289

$     98

$  12,483

(1)  Includes capital spending of $1.1 billion for leasehold and $365 million for seismic.

Reconciliation of Exploration and Development Costs to Exploration and Development Costs, excluding Capitalized Interest and Asset Retirement Cost, a Non-GAAP Financial Measure

Presented below is a reconciliation of exploration and development costs (GAAP) to exploration and development costs, excluding capitalized interest and asset retirement cost (Non-GAAP).  Management believes exploration and development costs, excluding capitalized interest and asset retirement cost is a more accurate reflection of the expenditures during the current year.  

 U.S. 

 Canada 

 Egypt 

 Australia 

 North Sea 

 Argentina 

 Other 

 Total 

Exploration & Development Costs (in millions)

$     5,834

$        873

$  1,090

$     1,064

$          948

$         318

$     98

$  10,225

Less: Capitalized Interest

(215)

(38)

(16)

(12)

(24)

(11)

-

(316)

Less: ARC

(468)

(245)

-

(179)

(38)

(18)

-

(948)

   Total Adds

$     5,151

$        590

$  1,074

$        873

$          886

$         289

$     98

$     8,961

Reconciliation of Total Acquisition Costs to Acquisitions, excluding Asset Retirement Cost - Acquired, a Non-GAAP Financial Measure

Presented below is a reconciliation of total acquisition costs (GAAP) to acquisitions, excluding asset retirement cost - acquired (Non-GAAP).  Management believes acquisitions, excluding asset retirement cost - acquired is a more accurate reflection of the costs of acquisitions during the current year.