Apache reports record North America onshore liquids production for first-quarter 2014 with 21 percent year-over-year growth

- Total North America onshore liquids volumes achieves record of 198,500 barrels per day

- Worldwide production averages 640,000 barrels of oil equivalent (boe) per day; 672,000 boe per day including discontinued operations

- Earnings from continuing operations of $1.90 per diluted share/$753 million; adjusted earnings of $1.78 per share/$707 million*

- Cash flow from operating activities of $2.3 billion; $2.2 billion from continuing operations before changes in working capital*

- Repurchased an additional 5.9 million shares for $485 million during first-quarter 2014

08 May, 2014, 08:00 ET from Apache Corporation

HOUSTON, May 8, 2014 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) today announced first-quarter 2014 earnings from continuing operations of $753 million or $1.90 per diluted common share and adjusted earnings,* which exclude certain items that impact the comparability of results, of $707 million or $1.78 per share. For the same period in the prior year, Apache reported earnings from continuing operations of $759 million or $1.91 per diluted common share and adjusted earnings of $797 million or $2.00 per share. Net cash provided by operating activities totaled approximately $2.3 billion in first-quarter 2014, compared with $2.6 billion in the prior year, with cash from continuing operations before changes in operating assets and liabilities* totaling $2.2 billion, compared with $2.3 billion in first-quarter 2013.

"A record-setting performance by our Permian Region continues to drive strong overall results for the company," said G. Steven Farris, chairman, chief executive officer and president of Apache. "We remained the most active driller in onshore North America, operating an average of 82 rigs during the quarter."

Apache's onshore North American liquids production increased 21 percent in first-quarter 2014 compared with the same period a year ago. The first-quarter 2014 average of 198,500 barrels per day for North American onshore liquids was up 6 percent compared with the fourth-quarter 2013.

"We continued to strengthen our portfolio and build momentum toward a strong second half of 2014," Farris said. "Apache intensified its focus on North America liquids production by completing the sale of our Argentina operations and selected conventional natural gas properties in Western Canada.

"We are currently testing new plays and completion ideas along the Gulf Coast and are encouraged by early results in Canada where a focus on liquids-rich plays contributed to a 10 percent increase in crude oil and natural gas liquids (NGLs) compared with the preceding quarter," Farris said. "Internationally, we are on track for first oil from significant development projects offshore Australia later this year at the Balnaves and Coniston fields, and we announced two new discoveries at the Matruh and Shushan basins in Egypt's Western Desert."

Apache also returned additional capital to shareholders, purchasing 5.9 million shares of Apache common stock on the open market from January through March 2014.

First-quarter production and operating highlights

Highlights from first-quarter drilling include:

  • Total worldwide net daily production of oil, natural gas and NGLs averaged 640,000 boe per day. Including discontinued operations in Argentina, daily production averaged 672,000 boe per day. Liquids production comprised 58 percent of the total from continuing operations, up from 57 percent for the fourth-quarter 2013.
  • The Permian and Central regions increased liquids production 31,000 barrels per day over the prior-year period. Total production from the two regions averaged 239,000 boe per day.
  • The Permian Region achieved record production averaging 150,000 boe per day, up 25 percent from the prior-year period. The region averaged 38 rigs in operation during the quarter and spud 202 gross wells (80 horizontals).

Oil and gas prices

Apache's mix of hydrocarbon production during the first-quarter 2014 included approximately 48 percent crude oil and 10 percent NGLs. Crude oil and NGLs contributed 82 percent of the company's revenue during the period.

Worldwide, Apache received an average price of $101.03 per barrel of crude oil during the first quarter compared with $102.42 per barrel in the prior-year period. Apache received an average price of $4.46 per thousand cubic feet (Mcf) of natural gas, compared with $3.77 per Mcf in the prior-year period.

About Apache

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom and Australia. Apache posts announcements, operational updates, investor information and copies of all press releases on its website, www.apachecorp.com, and on its Media and Investor Center mobile application, which is available for free download from the Apple App Store and the Google Play Store.  

* Adjusted earnings, cash from continuing operations before changes in operating assets and liabilities, and adjusted effective tax rate 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/financialdata.

Conference call

Apache will conduct a conference call to discuss its results and review its portfolio at 1 p.m. Central time Thursday, May 8. 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. Central time May 8. To access the telephone playback, dial 855-859-2056 or 404-537-3406 for international calls. The conference access code is 30665579.

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. 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 2013 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

Ended March 31,

2014

2013

REVENUES AND OTHER:

Oil revenues

$ 2,815

$ 3,192

Gas revenues

646

681

NGL revenues

186

148

Oil and gas production revenues

3,647

4,021

Derivative instrument gains (losses)

(20)

(100)

Other 

48

25

3,675

3,946

COSTS AND EXPENSES:

Depreciation, depletion and amortization

Oil and gas property and equipment

    Recurring

1,109

1,210

Other assets

97

102

Asset retirement obligation accretion

44

63

Lease operating expenses

597

722

Gathering and transportation 

70

73

Taxes other than income

181

229

General and administrative

119

112

Acquisitions, divestitures & transition

2

-

Financing costs, net

27

55

2,246

2,566

INCOME BEFORE INCOME TAXES

1,429

1,380

Current income tax provision 

416

497

Deferred income tax provision

162

105

INCOME FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST

851

778

Loss from discontinued operations, net of tax

(517)

(61)

INCOME INCLUDING NONCONTROLLING INTEREST

334

717

Net income attributable to noncontrolling interest

98

-

Preferred stock dividends

-

19

NET INCOME ATTRIBUTABLE TO COMMON STOCK

$    236

$    698

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

Net income from continuing operations attributable to common shareholders

$    753

$    759

Net income (loss) from discontinued operations

(517)

(61)

Net income attributable to common shareholders

$    236

$    698

BASIC NET INCOME (LOSS) PER COMMON SHARE:

Basic net income from continuing operations per share

$   1.92

$   1.94

Basic net loss from discontinued operations per share

(1.32)

(0.16)

Basic net income per share

$   0.60

$   1.78

DILUTED NET INCOME (LOSS) PER COMMON SHARE:

Diluted net income from continuing operations per share

$   1.90

$   1.91

Diluted net loss from discontinued operations per share

(1.30)

(0.15)

Diluted net income per share

$   0.60

$   1.76

WEIGHTED-AVERAGE NUMBER OF COMMON 

   SHARES OUTSTANDING:

Basic

394

392

Diluted

396

408

DIVIDENDS DECLARED PER COMMON SHARE

$   0.25

$   0.20

 

 

APACHE CORPORATION

SUMMARY OF CAPITAL COSTS INCURRED

(In millions)

For the Quarter

Ended March 31,

2014

2013

CAPITAL EXPENDITURES:

Exploration & Development Costs

United States

$     1,349

$     1,269

Canada

269

258

North America

1,618

1,527

Egypt (1)

320

262

Australia

261

225

North Sea

227

177

Argentina

12

33

New Ventures - International

1

5

International (1)

821

702

Worldwide Exploration & Development Costs (1)

$     2,439

$     2,229

Gathering, Transmission and Processing Facilities

United States

$          45

$          18

Canada

102

30

Egypt (1)

15

19

Australia

168

180

Argentina

1

2

North Sea

1

-

Total Gathering, Transmission and Processing (1)

$        332

$        249

Asset Retirement Costs

$          28

$        134

Capitalized Interest (2)

$          98

$          93

Capital Expenditures, excluding Acquisitions (1)

$     2,897

$     2,705

Asset Retirement Costs - Acquired

$             -

$          53

Acquisitions

$            2

$        310

(1) Includes capital costs attributable to noncontrolling interest in Egypt

(2) Capitalized interest in both quarters includes Argentina discontinued operations of $3M

APACHE CORPORATION

SUMMARY BALANCE SHEET INFORMATION

(In millions)

March 31,

December 31,

2014

2013

Cash and Cash Equivalents

$    1,643

$     1,906

Other Current Assets 

3,820

4,460

Property and Equipment, net

52,752

52,421

Goodwill

1,369

1,369

Other Assets

1,537

1,481

Total Assets

$   61,121

$   61,637

Short-Term Debt

$             -

$          53

Other Current Liabilities

4,356

4,647

Long-Term Debt

9,673

9,672

Deferred Credits and Other Noncurrent Liabilities

11,915

11,872

Apache Shareholders' Equity

33,082

33,396

Noncontrolling interest

2,095

1,997

Total Liabilities and Shareholders' Equity

$  61,121

$   61,637

Common shares outstanding at end of period

390

396

 

 

APACHE CORPORATION

PRODUCTION INFORMATION

For the Quarter

Ended March 31,

2014

2013

  OIL VOLUME - Barrels per day

Central

21,686

20,526

Permian

88,327

67,900

Gulf of Mexico

6,266

7,235

Gulf Coast

10,975

9,977

GOM Shelf

697

43,625

United States

127,951

149,263

Canada

17,589

17,176

North America

145,540

166,439

Egypt (1)

88,093

91,315

Australia

16,825

20,001

North Sea

59,092

68,462

International (1)

164,010

179,778

Total (1)

309,550

346,217

  NATURAL GAS VOLUME - Mcf per day

Central

260,298

277,025

Permian

215,860

185,713

Gulf of Mexico

16,123

31,136

Gulf Coast

99,242

105,412

GOM Shelf

1,162

254,405

United States

592,685

853,691

Canada

377,712

519,175

North America

970,397

1,372,866

Egypt (1)

377,357

365,612

Australia

215,792

214,395

North Sea

45,071

55,032

International (1)

638,220

635,039

Total (1)

1,608,617

2,007,905

  NGL VOLUME - Barrels per day

Central

24,455

19,517

Permian

25,260

20,583

Gulf of Mexico

828

887

Gulf Coast

2,423

2,313

GOM Shelf

92

5,999

United States

53,058

49,299

Canada

7,769

6,663

North America

60,827

55,962

Egypt (1)

233

-

North Sea

1,091

1,494

International (1)

1,324

1,494

Total (1)

62,151

57,456

  BOE per day

Central

89,524

86,215

Permian

149,564

119,435

Gulf of Mexico

9,781

13,311

Gulf Coast

29,939

29,859

GOM Shelf

982

92,024

United States

279,790

340,844

Canada

88,310

110,368

North America

368,100

451,212

Egypt (1)

151,219

152,250

Australia

52,790

55,734

North Sea

67,695

79,128

International (1)

271,704

287,112

Total (1)

639,804

738,324

Total excluding noncontrolling interest

589,860

738,324

(1) Includes production volume per day attributable to noncontrolling interest in Egypt

Oil (b/d)

29,066

-

Gas (mcf/d)

124,799

-

NGL (b/d)

78

-

  Discontinued Operations - Argentina

Oil (b/d)

6,885

9,297

Gas (mcf/d)

141,352

188,259

NGL (b/d)

1,287

2,822

BOE/d

31,731

43,495

 

 

APACHE CORPORATION

PRICE INFORMATION

For the Quarter

Ended March 31,

2014

2013

  AVERAGE OIL PRICE PER BARREL

Central

$ 93.72

$ 88.15

Permian

93.76

82.78

Gulf of Mexico

101.44

110.47

Gulf Coast

101.87

111.03

GOM Shelf

 NM 

111.67

United States (1)

94.84

94.45

Canada

88.19

82.33

North America (1)

94.03

93.20

Egypt

106.70

110.99

Australia

112.26

112.35

North Sea

106.60

110.53

International

107.24

110.97

Total (1)

101.03

102.42

  AVERAGE NATURAL GAS PRICE PER MCF

Central

$   5.20

$   3.73

Permian

4.78

3.77

Gulf of Mexico

5.23

3.40

Gulf Coast

4.93

3.55

GOM Shelf

 NM 

3.54

United States (1)

4.98

3.75

Canada

4.38

3.23

North America (1)

4.75

3.56

Egypt

3.02

2.95

Australia

4.42

4.94

North Sea

10.69

10.00

International

4.03

4.23

Total (1)

4.46

3.77

  AVERAGE NGL PRICE PER BARREL

Central

$ 30.39

$ 26.54

Permian

31.46

25.71

Gulf of Mexico

32.00

34.68

Gulf Coast

35.90

33.69

GOM Shelf

 NM 

28.87

United States

30.81

26.96

Canada

42.09

32.15

North America

32.25

27.58

Egypt

64.34

-

North Sea

79.84

71.16

International

77.11

71.16

Total

33.20

28.71

  Discontinued Operations - Argentina

Oil price ($/Bbl)

$ 72.70

$ 75.36

Gas price ($/Mcf)

3.04

3.18

NGL price ($/Bbl)

24.57

30.28

(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

Ended March 31,

2014

2013

Income Attributable to Common Stock (GAAP)

$              236

$              698

Adjustments:

Argentina discontinued operations, net of tax

$              517

$                61

Unrealized foreign currency fluctuation impact on deferred tax expense  

7

(4)

Acquisitions, divestitures & transition costs

1

-

Deferred tax adjustments

(5)

11

Commodity derivative mark-to-market, net of tax

(49)

31

Adjusted Earnings  (Non-GAAP)

$              707

$              797

Net Income per Common Share - Diluted (GAAP)

$             0.60

$             1.76

Adjustments:

Argentina discontinued operations, net of tax

1.30

0.15

Unrealized foreign currency fluctuation impact on deferred tax expense  

0.02

(0.01)

Deferred tax adjustments

(0.01)

0.03

Commodity derivative mark-to-market, net of tax

(0.13)

0.07

Adjusted Earnings Per Share - Diluted (Non-GAAP)

$             1.78

$             2.00

Total income tax provision (GAAP)

$              578

$              602

Tax impact on commodity derivative mark-to-market

(27)

17

Foreign currency fluctuation impact on deferred tax expense

(7)

4

Deferred tax adjustments

5

(11)

Tax impact on acquisitions, divestitures & transition costs

1

-

Total income tax provision, net of adjustments

$              550

$              612

Effective Rate excluding Adjustments (Non-GAAP)

40.6%

42.9%

 

 

APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(In millions, except per share data)

 

Reconciliation of net cash provided by operating activities to cash from continuing 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

Ended March 31,

2014

2013

Net cash provided by operating activities (GAAP)

$           2,293

$           2,621

Less: Discontinued operations

(82)

(64)

Net cash provided by operating activities excluding discontinued operations

$           2,211

$           2,557

Changes in operating assets and liabilities

11

(262)

Cash from continuing operations before changes in operating assets and liabilities

$           2,222

$           2,295

 

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