HOUSTON, Oct. 29 /PRNewswire-FirstCall/ -- Apache Corporation (NYSE, Nasdaq: APA) today reported that for the first time average worldwide production surpassed 600,000 barrels of oil equivalent (boe) per day during the third quarter, increasing 3.4 percent from the second quarter and 19 percent from the prior-year period.
"Apache's regional growth drivers put the company on track for record production and solid financial results in 2009, and we will enter 2010 with strong momentum, including two development projects in Australia that should add 40,000 barrels of oil per day to worldwide output when they commence operations in the first half," said G. Steven Farris, chairman and chief executive officer.
The company produced 607,118 boe per day in the third quarter. Liquid hydrocarbons production averaged 297,997 barrels per day, up 2 percent from the second quarter. Gas production averaged 1.85 billion cubic feet per day, up 5 percent from the second quarter.
Apache reported net income of $441 million, or $1.30 per diluted common share, compared with $1.2 billion, or $3.52 per share, in the prior-year period. Third-quarter cash from operations before changes in operating assets and liabilities* totaled $1.3 billion, compared with $2.1 billion in the prior-year period.
Apache's third-quarter adjusted earnings,* which exclude certain items that impact the comparability of operating results, totaled $534 million, or $1.58 per share, compared to adjusted earnings of $1.1 billion, or $3.19 per share, in the prior-year period.
Apache had approximately $1.4 billion in cash at the end of the third quarter. Debt was 24.7 percent of total capitalization.
Third-quarter operational highlights included:
- The Egypt Region achieved a new record for gross operated production of 290,452 boe per day, up 6 percent from the second quarter and 27 percent from the prior-year period, driven by increased gas output from two new processing trains at the Salam Gas Plant and increased oil production from the Faghur Basin in the Khalda Offset Concession. Net production was down slightly because higher oil prices and lower capital spending reduced cost-recovery barrels under the terms of production-sharing contracts.
- In Australia, net gas production averaged a record 225 million cubic feet (MMcf) per day.
- At the Forties Field in the North Sea, record net production of 71,472 boe per day during the month of July contributed to the second-best quarter since Apache took over operations in 2003. Third-quarter oil output increased 13 percent from the second quarter to 67,288 barrels of oil per day on strong drilling results and increased field efficiency.
- The deepwater Geauxpher Field at Garden Banks Block 462 in the Gulf of Mexico produced 98 MMcf per day during the third quarter; Apache's net was 39 MMcf per day.
Projects that will drive Apache's growth in 2010 include:
- In Australia, the Ningaloo Vision floating production, storage and offloading vessel (FPSO) is expected to arrive at the Van Gogh field in the Exmouth Basin in November, with first production expected in early 2010. Van Gogh is projected to add 20,000 barrels per day to Apache's annual net oil production. Pyrenees, a second oil project in the Exmouth Basin, is projected to begin ramping up to 20,000 barrels per day (net) during the first half.
- Production at Apache's Ootla development in the Horn River Basin shale play in northeast British Columbia is projected to ramp up during the second quarter. Apache and its joint venture partner EnCana plan to have 27 horizontal wells (gross) on production by the end of the first half.
- Apache is planning to drill more than 20 horizontal wells in the Granite Wash play in western Oklahoma and the Texas Panhandle during 2010. The Hostetter #1-23H, Apache's first operated horizontal Granite Wash well, is producing 17 MMcf of natural gas and 800 barrels of liquids per day.
Apache also took steps to build its pipeline of long-term growth projects.
- Apache and Kuwait Foreign Petroleum Exploration Co. (KUFPEC) signed an exclusive agreement to supply gas from their Julimar and Brunello discoveries and become foundation equity partners in Chevron's Wheatstone liquefied natural gas (LNG) hub in Western Australia, unlocking an estimated 2.1 trillion cubic feet of gross gas reserves from two of Apache's largest discoveries. Apache holds a 65-percent interest in the discoveries.
- In Argentina, Apache received government approvals of new contracts to supply 50 MMcf of gas per day from two fields in Argentina's Neuquen and Rio Negro provinces at a price of $5 per million British thermal units (MMBtu). The new contracts - the first approved by the secretary of energy under the government's Gas Plus program - are scheduled to commence in January 2011, although the customer - a power plant operator - has indicated it may begin taking gas in mid-2010. Apache has submitted five additional development projects for approval under Gas Plus.
"Apache's diverse asset base comprises a mix of near-term investments with a pipeline of impactive projects that provide a foundation for solid long-term growth," 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. Supplemental and non-GAAP financial information is available at www.apachecorp.com/financialdata.
NOTE: Apache will conduct a conference call to discuss its third-quarter results at 1 p.m. Central time on Thursday, Oct. 29. 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 Oct. 29. To access the telephone playback, dial (719) 457-0820 and provide Apache's confirmation code, 9353473.
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.
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
REVENUES AND OTHER:
Oil and gas
production revenues $2,325,705 $3,368,882 $6,003,663 $10,450,949
Other 6,726 (3,998) 55,971 1,867
----- ------ ------ -----
2,332,431 3,364,884 6,059,634 10,452,816
--------- --------- --------- ----------
COSTS AND EXPENSES:
Depreciation,
depletion and
amortization
Recurring 625,898 600,887 1,779,874 1,849,044
Additional - - 2,818,161 -
Asset retirement
obligation accretion 26,053 24,970 79,274 77,146
Lease operating
expenses 445,535 488,166 1,248,297 1,389,542
Gathering and
transportation 36,232 42,375 103,050 123,118
Taxes other than
income 183,931 304,280 387,211 845,406
General and
administrative 82,492 57,561 258,443 218,856
Financing costs, net 61,684 33,291 181,426 116,594
------ ------ ------- -------
1,461,825 1,551,530 6,855,736 4,619,706
--------- --------- --------- ---------
INCOME (LOSS) BEFORE
INCOME TAXES 870,606 1,813,354 (796,102) 5,833,110
Current income tax
provision 262,430 305,735 483,171 1,495,641
Deferred income tax
provision (benefit) 166,160 316,794 (409,069) 679,902
------- ------- -------- -------
NET INCOME (LOSS) 442,016 1,190,825 (870,204) 3,657,567
Preferred stock
dividends 1,420 1,420 4,260 4,260
----- ----- ----- -----
INCOME (LOSS)
ATTRIBUTABLE TO COMMON
STOCK $440,596 $1,189,405 $(874,464) $3,653,307
======== ========== ========= ==========
NET INCOME (LOSS) PER
COMMON SHARE:
Basic $1.31 $3.55 $(2.61) $10.93
===== ===== ====== ======
Diluted $1.30 $3.52 $(2.61) $10.84
===== ===== ====== ======
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 336,159 334,825 335,637 334,145
======= ======= ======= =======
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
FINANCIAL DATA:
Revenues and other $2,332,431 $3,364,884 $6,059,634 $10,452,816
========== ========== ========== ===========
Income (Loss)
Attributable to
Common Stock $440,596 $1,189,405 $(874,464) $3,653,307
======== ========== ========= ==========
Basic Net Income
(Loss) Per Common
Share $1.31 $3.55 $(2.61) $10.93
===== ===== ====== ======
Diluted Net Income
(Loss) Per Common
Share $1.30 $3.52 $(2.61) $10.84
===== ===== ====== ======
Weighted Average
Common Shares
Outstanding 336,159 334,825 335,637 334,145
======= ======= ======= =======
Diluted Shares
Outstanding 337,872 337,894 335,637 337,151
======= ======= ======= =======
September 30, December 31,
2009 2008
---- ----
BALANCE SHEET DATA:
Cash and Cash
Equivalents $1,357,364 $1,181,450
Short-term
Investments - 791,999
Other Current Assets 2,662,338 2,477,525
Property and
Equipment, net 22,545,531 23,958,517
Restricted Cash - 13,880
Goodwill 189,252 189,252
Other Assets 471,011 573,862
------- -------
Total Assets $27,225,496 $29,186,485
=========== ===========
Current Liabilities $1,986,949 $2,520,435
Long-Term Debt 5,010,030 4,808,975
Deferred Credits and
Other Noncurrent
Liabilities 4,873,195 5,348,354
Shareholders' Equity 15,355,322 16,508,721
---------- ----------
Total Liabilities
and Shareholders'
Equity $27,225,496 $29,186,485
=========== ===========
Common shares
outstanding at end
of period 336,174 334,710
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
COSTS INCURRED (1):
North America
exploration and
development $415,314 $960,624 $1,297,127 $2,505,259
International
exploration and
development 394,188 641,028 1,387,199 1,932,257
------- ------- --------- ---------
$809,502 $1,601,652 $2,684,326 $4,437,516
======== ========== ========== ==========
Oil and gas property
acquisitions $15,123 $4,863 $263,628 $155,658
======= ====== ======== ========
(1) Includes noncash
asset retirement costs
and capitalized interest
as follows:
Capitalized
interest $14,344 $18,674 $45,325 $53,730
Asset retirement
costs $127,760 $178,866 $221,463 $350,372
APACHE CORPORATION
FINANCIAL INFORMATION
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
PRODUCTION AND PRICING DATA:
OIL VOLUME - Barrels per day
Gulf Coast 51,440 41,888 50,778 54,908
Central 36,773 38,396 37,057 38,714
------ ------ ------ ------
United States 88,213 80,284 87,835 93,622
Canada 14,595 16,655 15,586 17,247
------ ------ ------ ------
North America 102,808 96,939 103,421 110,869
------- ------ ------- -------
Egypt 93,550 64,803 90,848 64,082
Australia 10,849 7,083 9,732 8,286
North Sea 67,288 60,856 62,515 58,740
Argentina 11,026 12,729 11,799 12,342
------ ------ ------ ------
International 182,713 145,471 174,894 143,450
------- ------- ------- -------
Total 285,521 242,410 278,315 254,319
======= ======= ======= =======
AVERAGE OIL PRICE PER BARREL
Gulf Coast $66.70 $124.91 $55.07 $115.40
Central 60.59 106.06 49.22 101.11
United States (1) 64.57 93.69 54.89 91.48
Canada 63.79 111.81 51.95 108.10
North America (1) 64.46 96.80 54.45 94.07
Egypt 65.64 105.60 56.67 110.01
Australia 73.70 99.66 58.74 111.86
North Sea 65.76 113.56 56.68 110.08
Argentina 48.53 50.95 47.29 48.76
International 65.13 103.86 56.15 104.88
Total (1) 64.89 101.04 55.52 100.17
NATURAL GAS VOLUME - Mcf per day
Gulf Coast 401,094 326,028 359,787 410,388
Central 297,968 309,863 298,720 302,141
------- ------- ------- -------
United States 699,062 635,891 658,507 712,529
Canada 371,516 349,000 367,562 355,834
------- ------- ------- -------
North America 1,070,578 984,891 1,026,069 1,068,363
--------- ------- --------- ---------
Egypt 372,312 287,231 355,824 254,786
Australia 225,349 54,726 176,457 124,888
North Sea 2,983 2,697 2,771 2,604
Argentina 183,504 217,091 189,303 193,257
------- ------- ------- -------
International 784,148 561,745 724,355 575,535
------- ------- ------- -------
Total 1,854,726 1,546,636 1,750,424 1,643,898
========= ========= ========= =========
AVERAGE NATURAL GAS PRICE PER MCF
Gulf Coast $3.59 $11.19 $4.03 $10.39
Central 3.71 9.53 3.60 9.39
United States (1) 3.99 9.96 4.13 9.64
Canada (1) 3.61 8.70 4.04 8.63
North America (1) 3.86 9.51 4.10 9.30
Egypt 3.86 5.62 3.78 5.68
Australia 2.04 2.36 1.85 2.18
North Sea 14.89 27.17 11.66 21.88
Argentina 1.89 1.41 1.92 1.53
International 2.92 3.78 2.85 3.60
Total (1) 3.46 7.43 3.58 7.30
NGL VOLUME - Barrels per day
Gulf Coast 5,045 3,721 4,096 5,035
Central 1,974 1,729 1,716 1,601
----- ----- ----- -----
United States 7,019 5,450 5,812 6,636
Canada 2,166 2,034 2,110 2,046
----- ----- ----- -----
North America 9,185 7,484 7,922 8,682
Argentina 3,291 3,005 3,174 2,877
----- ----- ----- -----
Total 12,476 10,489 11,096 11,559
====== ====== ====== ======
AVERAGE NGL PRICE PER BARREL
Gulf Coast $33.95 $75.01 $29.49 $65.21
Central 31.27 68.10 27.39 62.22
United States 33.20 72.82 28.87 64.49
Canada 24.22 63.77 23.03 58.62
North America 31.08 70.36 27.32 63.11
Argentina 15.44 36.63 16.13 38.81
Total 26.96 60.70 24.12 57.06
(1) Prices reflect the impact of financial derivative hedging
activities.
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 Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
Income (Loss)
Attributable to
Common Stock
(GAAP) $440,596 $1,189,405 $(874,464) $3,653,307
Adjustments:
Foreign
currency
fluctuation
impact on
deferred tax
expense 93,089 (113,169) 116,172 (125,248)
Additional
depletion, net
of tax - - 1,981,398 -
--- --- --------- ---
Adjusted
Earnings (Non-
GAAP) $533,685 $1,076,236 $1,223,106 $3,528,059
======== ========== ========== ==========
Adjusted Earnings
Per Share (Non-GAAP)
Basic $1.59 $3.21 $3.64 $10.56
===== ===== ===== ======
Diluted $1.58 $3.19 $3.62 $10.46
===== ===== ===== ======
Average Number
of Common Shares
Basic 336,159 334,825 335,637 334,145
======= ======= ======= =======
Diluted 337,872 337,894 337,417 337,151
======= ======= ======= =======
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 Nine Months
Ended September 30, Ended September 30,
2009 2008 2009 2008
---- ---- ---- ----
Net cash provided
by operating
activities $1,312,742 $2,290,655 $2,679,471 $6,028,568
Changes in
operating assets
and liabilities (16,822) (167,074) 859,092 259,446
------- -------- ------- -------
Cash from operations
before changes in
operating assets
and liabilities $1,295,920 $2,123,581 $3,538,563 $6,288,014
========== ========== ========== ==========
APA-F
