November 03, 2011 at 08:15 AM EDT
Apache Reports Record Quarterly Production of 752,000 Boe/d

HOUSTON, Nov. 3, 2011 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) reported production of 752,000 barrels of oil equivalent (boe) per day and earnings of $983 million, or $2.50 per diluted share, for the three-month period ending Sept. 30, 2011. These compare with production of 667,000 boe per day and net income of $765 million, or $2.12 per diluted share, for the same period in the prior year.

Excluding certain items that management believes affect the comparability of operating results, Apache reported adjusted earnings* of $1.2 billion in third quarter 2011 compared with $797 million in the year-earlier period. On a per-share basis, adjusted earnings were $2.95 in the third quarter compared with $2.20 per diluted share in the prior-year period. Oil and gas revenues for third quarter 2011 were $4.3 billion, a 41 percent increase from $3.0 billion for the same period last year. Cash from operations before changes in operating assets and liabilities* were $2.7 billion, up 35 percent from the prior year's $2.0 billion.

"Apache had a very productive quarter, both in operations and commercial activity," said G. Steven Farris, chairman and chief executive officer. "For the sixth consecutive quarter, we achieved record daily production on an equivalent basis. We've commenced development of the Balnaves oil field offshore Western Australia. We've extended the productive range of our holdings in Egypt's remote Western Desert with new producers in the Faghur Basin. We continue to drill from the extensive, multiyear inventory of drillable locations we have developed in the Permian, Central, Gulf of Mexico and Canadian regions of North America. Domestically, the recent focus has obviously been on higher-margin oil and liquids-rich opportunities. This operational flexibility is a competitive advantage of Apache's portfolio model.

"Apache made great progress commercially as well during the quarter. We announced the acquisition of ExxonMobil's Beryl and other selected fields in the U.K. sector of the North Sea, expanding our presence in this region. In Australia, the partner-operated Wheatstone Project advanced to development. This is Apache's first liquefied natural gas (LNG) project, and we expect it will enable us to monetize an estimated 2 trillion cubic feet of natural gas resource from the Brunello, Julimar, and Balnaves fields, which also are in development, at premium prices pegged to the worldwide market for LNG, creating additional value at those discoveries," Farris said.

Liquid hydrocarbons represented 50 percent of production and 78 percent of revenues. Apache benefited from higher oil prices for both its international production indexed to Dated Brent benchmarks and sweet crudes from the Gulf of Mexico, which continue to receive a meaningful premium per barrel compared with production benchmarked to West Texas Intermediate prices.  

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. From time to time, Apache posts announcements, operational updates and investor information, and copies of all press releases on its Web site, www.apachecorp.com.

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

NOTE: Apache will conduct a conference call to discuss its third-quarter 2011 results at 1 p.m. Central time on Thursday, Nov. 3. The call will be webcast from Apache's website, www.apachecorp.com. The webcast replay and podcast will be archived on Apache's website. The conference call will be available for delayed playback by telephone for one week beginning at approximately 3 p.m. on Nov. 3. To access the telephone playback, dial 800-642-1687 or 706-645-9291 for international calls and provide Apache's confirmation code, 21273208.

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. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions, risks and uncertainties. These risks include, but are not limited to the volatility of oil and natural gas prices, uncertainties inherent in estimating oil and natural gas reserves, drilling risks, risks related to development of the partner-operated Wheatstone LNG project, and other risks, uncertainties and factors discussed in Apache's 2010 Form 10-K as amended by Amendment No. 1 to our annual report on Form 10-K/A, 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. Unless legally required, Apache assumes no duty to update these statements as of any future date.

APACHE CORPORATION

FINANCIAL INFORMATION

(In millions, except per share data)


































For the Quarter


For the Nine Months




Ended September 30,


Ended September 30,




2011


2010


2011


2010











REVENUES AND OTHER:









Oil and gas production revenues

$                     4,282


$                     3,047


$                   12,515


$                     8,709


Other


46


(34)


76


(51)




4,328


3,013


12,591


8,658











COSTS AND EXPENSES:









Depreciation, depletion and amortization

1,065


787


3,030


2,155


Asset retirement obligation accretion

39


25


114


74


Lease operating expenses

661


507


1,946


1,393


Gathering and transportation

72


43


221


126


Taxes other than income

244


158


663


522


General and administrative

112


89


327


260


Merger, acquisitions & transition

4


8


15


16


Financing costs, net

37


59


123


174




2,234


1,676


6,439


4,720











INCOME BEFORE INCOME TAXES

2,094


1,337


6,152


3,938


Current income tax provision

473


207


1,692


889


Deferred income tax provision

619


352


1,065


706











NET INCOME


1,002


778


3,395


2,343


Preferred stock dividends

19


13


57


13











INCOME ATTRIBUTABLE TO COMMON STOCK

$                        983


$                        765


$                     3,338


$                     2,330











NET INCOME PER COMMON SHARE:









Basic


$                       2.56


$                       2.14


$                       8.70


$                       6.78


Diluted


$                       2.50


$                       2.12


$                       8.49


$                       6.72











WEIGHTED-AVERAGE NUMBER OF COMMON








  SHARES OUTSTANDING:









Basic


384


357


384


344


Diluted


400


367


400


349











DIVIDENDS DECLARED PER COMMON SHARE

$                       0.15


$                       0.15


$                       0.45


$                       0.45



APACHE CORPORATION

FINANCIAL INFORMATION

(In millions)






























For the Quarter


For the Nine Months






Ended September 30,


Ended September 30,






2011


2010


2011


2010

CAPITAL EXPENDITURES (1):










Exploration & Development Costs











United States


$                        688


$                        421


$                     1,976


$                     1,039



Canada


175


228


609


593




North America


863


649


2,585


1,632



Egypt


197


205


674


510



Australia


127


106


445


401



North Sea


197


207


618


437



Argentina


87


73


245


167



Chile


-


6


1


20



Other International


22


-


48


-




International


630


597


2,031


1,535




Worldwide Exploration & Development Costs


$                     1,493


$                     1,246


$                     4,616


$                     3,167














Gathering, Transmission and Processing Facilities











United States


$                            9


$                             -


$                            9


$                             -



Canada


29


35


113


107



Egypt


20


21


74


111



Australia


136


12


255


102



Argentina


3


1


7


2




Total Gathering, Transmission and Processing


$                        197


$                          69


$                        458


$                        322














Capitalized Interest


$                          70


$                          29


$                        193


$                          64














Capital Expenditures, excluding acquisitions


$                     1,760


$                     1,344


$                     5,267


$                     3,553














Acquisitions


$                        398


$                     2,517


$                        493


$                     3,550














(1) Accrual basis


























September 30,


December 31,










2011


2010

















BALANCE SHEET DATA:










Cash and Cash Equivalents


$                        586


$                        134






Other Current Assets


3,990


3,346






Property and Equipment, net


41,136


38,151






Goodwill


1,032


1,032






Other Assets


738


762






Total Assets


$                   47,482


$                   43,425


















Short-Term Debt


$                        417


$                          46






Other Current Liabilities


3,607


3,478






Long-Term Debt


6,785


8,095






Deferred Credits and Other Noncurrent Liabilities


8,770


7,429






Shareholders' Equity


27,903


24,377






Total Liabilities and Shareholders' Equity


$                   47,482


$                   43,425


















Common shares outstanding at end of period


384


382







APACHE CORPORATION

FINANCIAL INFORMATION

































For the Quarter


For the Nine Months







Ended September 30,


Ended September 30,







2011


2010


2011


2010














PRODUCTION DATA:









 OIL VOLUME - Barrels per day










Central



7,873


3,767


6,608


3,027


Permian



51,410


39,374


49,849


37,033


GOM Deepwater


6,155


1,782


5,859


1,968


GOM Shelf



45,115


44,771


45,483


44,186


GC Onshore


9,800


8,130


9,336


5,855



United States


120,353


97,824


117,135


92,069


Canada



13,027


13,868


14,040


14,252



North America


133,380


111,692


131,175


106,321


Egypt




103,289


99,818


103,913


96,387


Australia



39,400


56,876


38,248


48,324


North Sea



57,838


58,764


54,097


58,254


Argentina



9,461


9,645


9,577


9,812



International


209,988


225,103


205,835


212,777




Total


343,368


336,795


337,010


319,098














  NATURAL GAS VOLUME - Mcf per day










Central



221,193


216,189


220,094


204,446


Permian



181,070


117,557


171,309


101,440


GOM Deepwater


43,596


19,804


53,557


25,836


GOM Shelf



331,292


330,439


343,214


308,460


GC Onshore


80,842


52,534


77,300


54,464



United States


857,993


736,523


865,474


694,646


Canada



619,897


334,945


633,031


329,443



North America


1,477,890


1,071,468


1,498,505


1,024,089


Egypt




376,259


380,598


368,898


377,051


Australia



187,852


197,090


183,470


202,473


North Sea



2,497


2,372


2,257


2,483


Argentina



223,929


202,381


209,206


180,219



International


790,537


782,441


763,831


762,226




Total


2,268,427


1,853,909


2,262,336


1,786,315














 NGL VOLUME - Barrels per day










Central



1,961


592


1,156


529


Permian



12,733


9,426


11,645


5,814


GOM Deepwater


726


369


760


475


GOM Shelf



4,560


5,079


5,559


3,902


GC Onshore


1,939


1,033


1,881


1,056



United States


21,919


16,499


21,001


11,776


Canada



6,120


2,134


6,220


1,956



North America


28,039


18,633


27,221


13,732


Egypt




(4)


-


66


-


North Sea



14


-


5


-


Argentina



3,008


3,047


3,024


3,151



International


3,018


3,047


3,095


3,151




Total


31,057


21,680


30,316


16,883














 BOE per day











Central



46,699


40,390


44,446


37,631


Permian



94,321


68,393


90,045


59,753


GOM Deepwater


14,148


5,451


15,545


6,749


GOM Shelf



104,890


104,924


108,244


99,498


GC Onshore


25,213


17,918


24,101


15,988



United States


285,271


237,076


282,381


219,619


Canada



122,463


71,827


125,765


71,115



North America


407,734


308,903


408,146


290,734


Egypt




165,995


163,251


165,461


159,228


Australia



70,708


89,724


68,826


82,070


North Sea



58,269


59,159


54,478


58,668


Argentina



49,790


46,423


47,471


43,000



International


344,762


358,557


336,236


342,966




Total


752,496


667,460


744,382


633,700



APACHE CORPORATION

FINANCIAL INFORMATION

































For the Quarter


For the Nine Months







Ended September 30,


Ended September 30,







2011


2010


2011


2010














PRICING DATA:









 AVERAGE OIL PRICE PER BARREL










Central



$            84.55


$            72.43


$            90.09


$            73.73


Permian



86.67


72.47


91.19


73.78


GOM Deepwater


104.05


76.77


104.50


76.46


GOM Shelf



106.64


75.72


106.52


76.49


GC Onshore


102.66


75.95


103.56


76.88



United States (1)


93.86


73.67


94.05


74.05


Canada



88.34


69.01


92.77


71.76



North America (1)


93.32


73.09


93.91


73.74


Egypt (1)



110.96


75.91


111.02


76.15


Australia (1)


113.40


74.80


111.78


74.66


North Sea (2)


101.85


75.25


103.90


76.13


Argentina



69.27


57.31


65.08


56.84



International (1, 2)


107.03


74.66


107.15


74.91




Total (1, 2)


101.71


74.14


102.00


74.52














  AVERAGE NATURAL GAS PRICE PER MCF










Central



$              4.67


$              4.41


$              4.60


$              4.76


Permian



5.35


4.64


5.21


5.49


GOM Deepwater


4.03


4.29


4.23


4.55


GOM Shelf



4.62


4.69


4.60


4.96


GC Onshore


4.60


4.71


4.63


4.94



United States (1)


5.06


5.10


5.02


5.41


Canada (1)


4.49


4.42


4.58


4.72



North America (1)


4.82


4.89


4.83


5.19


Egypt




4.60


3.57


4.61


3.55


Australia



2.88


2.20


2.71


2.21


North Sea



21.43


16.54


22.87


17.35


Argentina



2.74


1.79


2.57


1.93



International


3.71


2.80


3.65


2.86




Total (1)


4.44


4.01


4.43


4.19














 AVERAGE NGL PRICE PER BARREL










Central



$            51.55


$            48.38


$            52.79


$            45.90


Permian



53.84


34.11


51.00


36.31


GOM Deepwater


54.95


40.93


48.41


45.31


GOM Shelf



53.44


25.84


48.17


38.41


GC Onshore


62.57


64.16


59.62


57.09



United States


54.36


34.11


51.03


39.66


Canada



46.93


34.18


44.47


36.58



North America


52.74


34.12


49.53


39.22


Egypt




33.62


-


66.37


-


North Sea



65.45


-


65.45


-


Argentina



26.45


26.39


28.20


28.98



International


26.62


26.39


29.06


28.98




Total


50.20


33.03


47.44


37.31




























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





(2)  Prices reflect the impact of the North Sea fixed-price oil sales contract.






APACHE CORPORATION

FINANCIAL INFORMATION

(In millions, 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,




2011


2010


2011


2010











Income Attributable to Common Stock (GAAP)

$               983


$               765


$            3,338


$            2,330











Adjustments:









U.K. tax rate increase

274


-


218


-


Foreign currency fluctuation impact on deferred tax expense  

(99)


27


(68)


2


Merger, acquisitions & transition, net of tax

2


5


9


10

Adjusted Earnings  (Non-GAAP)

$            1,160


$               797


$            3,497


$            2,342











Net Income per Common Share - Diluted (GAAP)

$              2.50


$              2.12


$              8.49


$              6.72











Adjustments:









U.K. tax rate increase

0.69


-


0.55


-


Foreign currency fluctuation impact on deferred tax expense  

(0.25)


0.07


(0.17)


-


Merger, acquisitions & transition, net of tax

0.01


0.01


0.02


0.03

Adjusted Earnings Per Share - Diluted (Non-GAAP)

$              2.95


$              2.20


$              8.89


$              6.75









































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,




2011


2010


2011


2010

Net cash provided by operating activities

$            2,447


$            1,715


$            7,171


$            4,800

Changes in operating assets and liabilities

241


269


399


587

Cash from operations before changes in operating assets and liabilities

$            2,688


$            1,984


$            7,570


$            5,387












APA-F

SOURCE Apache Corporation

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