Apache Reports Net Income Of $1 Billion, $2.54 Earnings Per Diluted Share, And $2.8 Billion Of Cash Flow For Second-Quarter 2013

- Achieved 42 percent year-over-year growth in North America onshore liquids

- Announced agreement to sell Gulf of Mexico shelf assets for $3.75 billion

- Increased drilling activities in the Permian and Anadarko basins

Aug 01, 2013, 08:00 ET from Apache Corporation

HOUSTON, Aug. 1, 2013 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA), today announced second-quarter 2013 earnings of $1 billion or $2.54 per diluted common share and adjusted earnings,* which exclude certain items that impact the comparability of results, of $801 million or $2.01 per share. For the same period in the prior year, Apache reported earnings of $337 million or $0.86 per diluted common share and adjusted earnings of $821 million or $2.07 per share. Net cash provided by operating activities came to approximately $2.8 billion, with cash from operations before changes in operating assets and liabilities* totaling $2.6 billion, up from $2.4 billion in the year-ago period.

"We have increased our drilling activities in Texas and Oklahoma to boost production and accelerate cash flow from our crude oil and liquids-rich assets. With our acquisitions in the Permian and Anadarko basins over the last three years, we added to an already formidable, legacy footprint in both of these areas. This gives us an outstanding platform to continue growth in these regions," said G. Steven Farris, chairman and chief executive officer at Apache. "We currently operate 45 rigs in our Permian Region, where second-quarter production was up 18 percent from a year ago, averaging 123,000 barrels of oil equivalent (Boe) per day. In our Central Region, we have ramped up to 35 rigs, and production was up 65 percent from a year ago, averaging 91,000 Boe per day."

Production and operating highlights

Highlights from the three-month period ending June 30, 2013, and more recent drilling include:

  • North American onshore liquids production increased to 175,000 barrels per day, up 42 percent compared with the same period a year ago.
  • In the Permian Basin, production from our Barnhart area has grown substantially, increasing 32 percent from first-quarter 2013 to 4,700 barrels of oil and 13.5 million cubic feet (MMcf) of gas per day. We are currently running six horizontal rigs in the play targeting Upper and Middle Wolfcamp zones.
  • In the Central Region, three Canyon Wash wells drilled last month are testing at a combined rate of more than 4,000 barrels of oil per day from vertical penetrations. The Bivins LIT 115-7 is testing naturally at approximately 885 barrels of oil and 885 thousand cubic feet (Mcf) of natural gas per day. The well is scheduled to be fracture-stimulated later this month. The Bivins LIT 3-3 and the Boys Ranch 116-5 are flowing back after fracture stimulation at 1,467 barrels of oil and 1.3 MMcf of gas and 1,950 barrels of oil and 1.6 MMcf of gas per day, respectively. Over the past two years Apache has built an approximate 100,000 net acreage position in the play.
  • In its international regions, Apache announced today seven new oil and gas discoveries in Egypt, located in four geologic basins and six different concessions. In late July, a third production well came online at the Bacchus development in the North Sea with flow rates of 9,400 barrels of oil per day. Gross production from the Bacchus field, where Apache has a 50 percent working interest, has reached 17,600 barrels of oil per day. A copy of the news releases reporting these results can be accessed at www.apachecorp.com.

Apache's second-quarter 2013 operations supplement includes drilling, production and other updates for each of its 10 regions. The full document can be accessed here www.apachecorp.com/financialdata.

Oil and gas prices

Apache's mix of hydrocarbon production during the second-quarter 2013 included approximately 45 percent crude oil and 9 percent natural gas liquids. Due to the premium prices received for crude oil versus natural gas, liquids contributed 81 percent of the company's revenue during the period.

Worldwide, Apache received an average price of $97.93 per barrel of oil during the second quarter, compared with $97.66 per barrel in the same period of the prior year. Apache received an average price of $3.87 per Mcf of natural gas, up 10 percent from $3.51 per Mcf in the prior-year period.

Portfolio update

"In addition to Apache's operating achievements, we also made significant progress in our portfolio rebalancing plans announced in May," Farris said. "In July, we announced an agreement to sell our Gulf of Mexico Shelf properties to Fieldwood Energy LLC, an affiliate of Riverstone Holdings, for $3.75 billion and Fieldwood's assumption of all asset retirement obligations for these properties, estimated at a discounted value of $1.5 billion. This remains on target to close at the end of September.

"At the end of this portfolio transitioning process, we expect Apache to have an improved asset mix that will drive more predictable production growth and strong returns, and create additional shareholder value for years to come," Farris said.

About Apache

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom, Australia and Argentina. Apache posts announcements, operational updates, investor information and copies of all press releases on its website, www.apachecorp.com.

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

Conference call

Apache will conduct a conference call to discuss its results and review its portfolio at 1 p.m. Central time on Thursday, Aug. 1. The call will be webcast on Apache's website, www.apachecorp.com. A replay of the webcast will be archived on Apache's website and available for delayed playback by telephone for one week beginning at approximately 4 p.m. Central time on Aug. 1. To access the telephone playback, dial 855-859-2056 or 404-537-3406 for international calls. The conference access code is 84102019.

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 plans, expectations, and objectives for Apache's operations, including statements about our drilling plans and production expectations, asset sales and monetizations and share repurchases. The transaction with Fieldwood is subject to customary closing conditions and may not be completed for the amount expected, in the anticipated time frame, or at all. 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 2012 Form 10-K filed 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.

 

APACHE CORPORATION

STATEMENT OF CONSOLIDATED OPERATIONS

(In millions, except per share data)

For the Quarter 

For the Six Months 

Ended June 30,

Ended June 30,

2013

2012

2013

2012

REVENUES AND OTHER:

Oil revenues

$ 3,196

$ 3,092

$ 6,451

$ 6,604

Gas revenues

769

740

1,504

1,551

NGL revenues

154

124

310

258

Oil and gas production revenues

4,119

3,956

8,265

8,413

Derivative instrument gains (losses), net

247

-

147

-

Other 

17

16

47

95

4,383

3,972

8,459

8,508

COSTS AND EXPENSES:

Depreciation, depletion and amortization

Oil and gas property and equipment

    Recurring

1,311

1,194

2,576

2,329

    Additional

-

648

65

1,169

Other assets

93

90

198

174

Asset retirement obligation accretion

65

57

130

112

Lease operating expenses

829

704

1,600

1,377

Gathering and transportation 

80

72

154

149

Taxes other than income

183

203

425

460

General and administrative

133

132

249

260

Merger, acquisitions & transition

-

16

-

22

Financing costs, net

51

45

104

85

2,745

3,161

5,501

6,137

INCOME BEFORE INCOME TAXES

1,638

811

2,958

2,371

Current income tax provision 

284

460

781

1,185

Deferred income tax provision (benefit)

319

(5)

425

33

NET INCOME 

1,035

356

1,752

1,153

Preferred stock dividends

19

19

38

38

INCOME ATTRIBUTABLE TO COMMON STOCK

$ 1,016

$    337

$ 1,714

$ 1,115

NET INCOME PER COMMON SHARE:

Basic

$   2.59

$   0.87

$   4.37

$   2.88

Diluted 

$   2.54

$   0.86

$   4.30

$   2.86

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:

Basic

392

389

392

387

Diluted

408

390

408

403

DIVIDENDS DECLARED PER COMMON SHARE

$   0.20

$   0.17

$   0.40

$   0.34

 

 

 

APACHE CORPORATION

SUMMARY OF CAPITAL COSTS INCURRED

(In millions)

For the Quarter 

For the Six Months 

Ended June 30,

Ended June 30,

2013

2012

2013

2012

CAPITAL EXPENDITURES (1):

Exploration & Development Costs

United States

$   1,413

$            1,392

$ 2,682

$ 2,186

Canada

89

97

347

295

North America

1,502

1,489

3,029

2,481

Egypt

288

260

550

510

Australia

402

175

627

253

North Sea

253

224

430

420

Argentina

52

73

85

157

New Ventures - International

20

12

25

33

International

1,015

744

1,717

1,373

Worldwide Exploration & Development Costs

$   2,517

$            2,233

$ 4,746

$ 3,854

Gathering, Transmission and Processing Facilities

United States

$         32

$                  32

$       50

$       44

Canada

26

42

56

86

Egypt

15

20

34

37

Australia

153

77

333

249

Argentina

2

5

4

9

Total Gathering, Transmission and Processing

$       228

$               176

$    477

$    425

Capitalized Interest

$         90

$                 85

$    183

$    151

Capital Expenditures, excluding Acquisitions

$     2,835

$            2,494

$ 5,406

$ 4,430

Acquisitions

$            -

$            3,302

$    310

$ 3,362

(1) Accrual basis

APACHE CORPORATION

SUMMARY BALANCE SHEET INFORMATION

(In millions)

June 30,

December 31,

2013

2012

Cash and Cash Equivalents

$       184

$               160

Other Current Assets 

4,574

4,802

Property and Equipment, net

55,821

53,280

Goodwill

1,369

1,289

Other Assets

1,402

1,206

Total Assets

$ 63,350

$          60,737

Short-Term Debt

$       478

$               990

Other Current Liabilities

4,680

4,546

Long-Term Debt

12,297

11,355

Deferred Credits and Other Noncurrent Liabilities

13,174

12,515

Shareholders' Equity

32,721

31,331

Total Liabilities and Shareholders' Equity

$ 63,350

$          60,737

Common shares outstanding at end of period

392

392

 

 

 

APACHE CORPORATION

PRODUCTION INFORMATION

For the Quarter 

For the Six Months 

Ended June 30,

Ended June 30,

2013

2012

2013

2012

  OIL VOLUME - Barrels per day

Central

21,950

11,985

21,242

9,234

Permian

68,811

58,391

68,358

57,436

GOM Deepwater

8,223

6,237

7,732

6,019

GOM Shelf

47,721

41,610

45,684

44,097

GC Onshore

10,593

9,455

10,287

10,017

United States

157,298

127,678

153,303

126,803

Canada

18,573

15,277

17,878

15,429

North America

175,871

142,955

171,181

142,232

Egypt

88,002

98,922

89,649

99,206

Australia

21,810

30,497

20,911

30,447

North Sea

63,667

65,996

66,051

65,971

Argentina

9,365

9,583

9,331

9,608

International

182,844

204,998

185,942

205,232

Total 

358,715

347,953

357,123

347,464

  NATURAL GAS VOLUME - Mcf per day

Central

275,507

235,308

276,262

200,585

Permian

190,455

178,068

188,097

179,161

GOM Deepwater

24,957

47,782

28,030

47,389

GOM Shelf

262,318

301,503

258,383

316,822

GC Onshore

107,424

81,752

106,423

86,996

United States

860,661

844,413

857,195

830,953

Canada

520,797

612,064

519,991

624,145

North America

1,381,458

1,456,477

1,377,186

1,455,098

Egypt

357,291

358,985

361,428

367,526

Australia

212,022

211,524

213,202

217,930

North Sea

48,411

64,722

51,704

65,894

Argentina

184,528

224,289

186,383

217,741

International

802,252

859,520

812,717

869,091

Total 

2,183,710

2,315,997

2,189,903

2,324,189

  NGL VOLUME - Barrels per day

Central

23,021

3,962

21,279

3,738

Permian

22,692

16,405

21,644

14,527

GOM Deepwater

1,162

1,474

1,025

865

GOM Shelf

7,641

5,762

6,824

4,678

GC Onshore

2,502

2,062

2,408

2,183

United States

57,018

29,665

53,180

25,991

Canada

6,686

5,844

6,675

6,078

North America

63,704

35,509

59,855

32,069

North Sea

1,201

1,957

1,346

1,962

Argentina

2,239

3,067

2,529

3,030

International

3,440

5,024

3,875

4,992

Total

67,144

40,533

63,730

37,061

  BOE per day

Central

90,888

55,165

88,565

46,403

Permian

123,246

104,475

121,351

101,824

GOM Deepwater

13,545

15,675

13,428

14,782

GOM Shelf

99,082

97,623

95,573

101,579

GC Onshore

30,998

25,142

30,432

26,699

United States

357,759

298,080

349,349

291,287

Canada

112,059

123,131

111,218

125,531

North America

469,818

421,211

460,567

416,818

Egypt

147,551

158,752

149,887

160,460

Australia

57,147

65,751

56,444

66,769

North Sea

72,936

78,741

76,015

78,915

Argentina

42,359

50,031

42,924

48,928

International

319,993

353,275

325,270

355,072

Total 

789,811

774,486

785,837

771,890

 

 

APACHE CORPORATION

PRICE INFORMATION

For the Quarter 

For the Six Months 

Ended June 30,

Ended June 30,

2013

2012

2013

2012

  AVERAGE OIL PRICE PER BARREL

Central

$ 89.18

$ 88.14

$ 88.69

$ 91.88

Permian

92.08

86.71

87.49

92.44

GOM Deepwater

105.54

105.82

107.83

108.23

GOM Shelf

106.95

109.21

109.19

111.76

GC Onshore

106.22

108.40

108.54

111.06

United States (1)

97.14

94.37

95.84

98.20

Canada

87.38

82.35

84.97

87.46

North America (1)

96.11

93.08

94.70

97.03

Egypt(1)

99.36

98.73

105.25

111.18

Australia(1)

100.79

109.46

106.29

116.20

North Sea(1)

102.95

104.16

106.85

108.67

Argentina

77.74

72.69

76.56

77.88

International (1)

99.67

100.86

104.50

109.56

Total(1)

97.93

97.66

99.80

104.43

  AVERAGE NATURAL GAS PRICE PER MCF

Central

$   3.91

$   2.73

$   3.82

$   2.89

Permian

3.86

2.79

3.81

3.26

GOM Deepwater

3.14

2.34

3.28

2.65

GOM Shelf

4.18

2.47

3.87

2.84

GC Onshore

4.27

2.31

3.91

2.57

United States (1)

4.07

3.33

3.92

3.63

Canada (1)

3.52

2.94

3.37

3.18

North America (1)

3.86

3.17

3.71

3.44

Egypt

3.00

3.75

2.97

3.77

Australia

4.70

4.41

4.82

4.29

North Sea

10.86

9.42

10.41

8.68

Argentina

2.79

2.76

2.99

2.87

International

3.87

4.08

3.93

4.05

Total (1)

3.87

3.51

3.79

3.67

  AVERAGE NGL PRICE PER BARREL

Central

$ 21.69

$ 26.45

$ 23.90

$ 31.63

Permian

25.53

34.36

25.61

38.90

GOM Deepwater

31.26

35.73

32.73

36.14

GOM Shelf

27.21

31.02

27.93

35.59

GC Onshore

28.80

38.28

31.14

42.97

United States

24.46

32.99

25.61

37.51

Canada

24.60

32.07

28.35

37.03

North America

24.48

32.84

25.92

37.42

North Sea

70.39

69.23

70.81

76.69

Argentina

20.94

21.09

26.12

23.61

International

38.19

39.84

41.65

44.47

Total

25.18

33.71

26.87

38.37

(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 Six Months 

Ended June 30,

Ended June 30,

2013

2012

2013

2012

Income Attributable to Common Stock (GAAP)

$ 1,016

$    337

$ 1,714

$ 1,115

Adjustments:

Deferred tax adjustments

7

-

46

-

Oil & gas property write-downs, net of tax

-

480

42

870

Merger, acquisitions & transition, net of tax

-

10

-

13

Unrealized foreign currency fluctuation impact on deferred tax expense  

(66)

(6)

(70)

1

Commodity derivative mark-to-market, net of tax

(156)

-

(125)

-

Adjusted Earnings  (Non-GAAP)

$    801

$    821

$ 1,607

$ 1,999

Net Income per Common Share - Diluted (GAAP)

$   2.54

$   0.86

$   4.30

$   2.86

Adjustments:

Deferred tax adjustments

0.01

-

0.11

-

Oil & gas property write-downs, net of tax

-

1.19

0.10

2.16

Merger, acquisitions & transition, net of tax

-

0.03

-

0.03

Unrealized foreign currency fluctuation impact on deferred tax expense  

(0.16)

(0.01)

(0.17)

0.01

Commodity derivative mark-to-market, net of tax

(0.38)

-

(0.31)

-

Adjusted Earnings Per Share - Diluted (Non-GAAP)

$   2.01

$   2.07

$   4.03

$   5.06

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,

2013

2012

2013

2012

Net cash provided by operating activities

$ 2,759

$ 2,792

$ 5,380

$ 4,799

Changes in operating assets and liabilities

(161)

(414)

(424)

227

Cash from operations before changes in operating assets and liabilities

$ 2,598

$ 2,378

$ 4,956

$ 5,026

APA-F

 

 

SOURCE Apache Corporation



RELATED LINKS

http://www.apachecorp.com