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

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