HOUSTON, July 26 /PRNewswire-FirstCall/ -- Apache Corporation (NYSE:APA) (NASDAQ:APA) today reported second-quarter earnings of $632 million or $1.89 per diluted common share on record production and strong commodity prices. In the year-earlier period, Apache earned $722 million or $2.17 per share. Excluding a non-recurring benefit of $132 million, or 39 cents per share, for a reduction in Canadian tax rates, Apache earned $590 million or $1.78 per share in the prior period.
Production totaled 572,000 barrels of oil equivalent (boe) per day, up 14 percent from the year-earlier period and 7 percent from the first quarter of 2007, driven by successful drilling in the United States, Australia and Argentina and an acquisition of producing properties in the Permian Basin.
Worldwide liquid hydrocarbon production increased to 265,537 barrels per day, up 11 percent from the prior-year period. Gas production averaged 1.8 billion cubic feet per day, up 18 percent from the year-earlier quarter.
Cash from operations before changes in operating assets and liabilities totaled a record $1.5 billion, up from $1.3 billion in the year-earlier period. (This is a non-GAAP measure; see reconciliation below.)
"Apache's record second-quarter production was fueled by growth across our portfolio," said G. Steven Farris, Apache's president and chief executive officer. "With our strong first-half performance, we are well on our way to achieving growth at the top of our expected range of 9-12 percent in 2007."
Apache continued to benefit from a positive oil price environment, especially in overseas markets. Worldwide, Apache received $64.12 per barrel, level with the prior-year period and up 15 percent from the first quarter. Apache received $66.75 per barrel produced by the company's overseas operations compared with $60.72 per barrel in North America.
Apache received $5.51 per thousand cubic feet (Mcf) of natural gas, up from $4.97 per Mcf in the prior-year period and $5.22 per Mcf in the first quarter.
"In Apache's core growth areas of Australia, Canada and Egypt, we have matured a number of high potential exploration plays, many of which are being drilled this year," Farris said. "We are also developing six projects that are expected to add production of 108,000 boe per day by 2010."
In Australia, Apache announced a successful appraisal of the Julimar discovery. "The Julimar East-1 encountered 224 feet of net pay in six different zones, bolstering our belief that the recoverable reserves in the Julimar complex exceed 1 trillion cubic feet (Tcf) of gas," he said.
Apache also announced plans to proceed with the Van Gogh and Pyrenees offshore developments; together, the two fields are expected to add net production of 40,000 barrels per day in 2009. The Van Gogh project's first horizontal development well, the Theo 3-H, tested at a rate of 9,694 barrels per day from the main top-Barrow field pay.
In Egypt, Apache is on track to achieve its goal of doubling production by 2010 through exploration, waterflood projects and additional developments at the Qasr field on the Khalda concession.
Apache is a large oil and gas independent with operations in the United States, Canada, the United Kingdom sector of the North Sea, Egypt, Australia and Argentina.
WEBCAST NOTE: Apache will webcast a conference call to discuss its second-quarter results at 1 p.m. Central Time, Thursday, July 26, from Apache's Web site, http://www.apachecorp.com. The conference call will be available for delayed playback by telephone for one week beginning at approximately 5 p.m. on July 26. To access the telephone playback, dial (719) 457-0820 and provide Apache's confirmation code, 2456611. The conference call will be archived on Apache's Web site.
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 2006 Form 10-K and on our website. 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 Six Months
Ended June 30, Ended June 30,
2007 2006 2007 2006
REVENUES AND OTHER:
Oil and gas
production revenues $2,444,031 $2,085,127 $4,467,098 $4,035,425
Other 23,636 (23,609) (2,090) 25,195
2,467,667 2,061,518 4,465,008 4,060,620
OPERATING EXPENSES:
Depreciation, depletion
and amortization 591,107 441,438 1,122,020 814,015
Asset retirement
obligation accretion 24,134 20,861 48,198 41,506
Lease operating costs 418,816 312,402 811,325 604,016
Gathering and
transportation costs 30,185 25,809 58,210 51,913
Severance and other taxes 131,015 168,402 228,287 314,816
General and administrative 70,798 52,191 138,660 97,863
Financing costs:
Interest expense 81,816 50,136 147,548 92,999
Amortization of
deferred loan costs 852 521 1,546 1,029
Capitalized interest (15,898) (15,882) (37,674) (30,075)
Interest income (3,412) (3,267) (5,999) (9,631)
1,329,413 1,052,611 2,512,121 1,978,451
INCOME BEFORE
INCOME TAXES 1,138,254 1,008,907 1,952,887 2,082,169
Provision for
income taxes 504,716 285,282 826,400 697,623
NET INCOME 633,538 723,625 1,126,487 1,384,546
Preferred stock dividends 1,420 1,420 2,840 2,840
INCOME ATTRIBUTABLE
TO COMMON STOCK $632,118 $722,205 $1,123,647 $1,381,706
NET INCOME PER
COMMON SHARE:
Basic $1.91 $2.19 $3.39 $4.19
Diluted $1.89 $2.17 $3.37 $4.14
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING 331,812 329,862 331,514 330,137
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands)
For the Quarter For the Six Months
Ended June 30, Ended June 30,
2007 2006 2007 2006
COSTS INCURRED: (1)
North America
exploration
and development $641,261 $544,822 $1,382,036 $1,257,708
International
exploration
and development 507,874 251,009 934,243 475,324
$1,149,135 $795,831 $2,316,279 $1,733,032
Oil and gas property
acquisitions $6,098 $1,631,387 $1,032,994 $1,894,033
(1) Includes noncash asset retirement costs
and capitalized interest as follows:
Capitalized
interest $15,898 $15,882 $37,674 $30,075
Asset retirement
costs $52,007 $133,579 $126,828 $144,686
June 30, December 31,
2007 2006
BALANCE SHEET DATA:
Cash and Cash Equivalents $188,642 $140,524
Other Current Assets 2,352,017 2,349,747
Property and Equipment, net 23,789,528 21,346,252
Goodwill 189,252 189,252
Other Assets 412,492 282,400
Total Assets $26,931,931 $24,308,175
Current Liabilities $3,136,506 $3,811,612
Long-Term Debt 4,011,147 2,019,831
Deferred Credits and Other
Noncurrent Liabilities 5,679,090 5,285,679
Shareholders' Equity 14,105,188 13,191,053
Total Liabilities and
Shareholders' Equity $26,931,931 $24,308,175
Common shares outstanding
at end of period 332,007 330,737
NON-GAAP FINANCIAL MEASURES:
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,
2007 2006 2007 2006
Net cash provided by
operating activities $1,386,447 $1,182,024 $2,450,006 $2,225,308
Changes in operating
assets and liabilities 80,574 83,655 209,475 264,571
Cash from operations
before changes in
operating assets and
liabilities $1,467,021 $1,265,679 $2,659,481 $2,489,879
APACHE CORPORATION
FINANCIAL INFORMATION
For the Quarter For the Six Months
Ended June 30, Ended June 30,
2007 2006 2007 2006
FINANCIAL DATA
(In thousands, except
per share data):
Revenues and other $2,467,667 $2,061,518 $4,465,008 $4,060,620
Income Attributable
to Common Stock $632,118 $722,205 $1,123,647 $1,381,706
Basic Net Income
Per Common Share $1.91 $2.19 $3.39 $4.19
Diluted Net Income
Per Common Share $1.89 $2.17 $3.37 $4.14
Weighted Average Common
Shares Outstanding 331,812 329,862 331,514 330,137
Diluted Shares
Outstanding 333,906 332,920 333,595 333,671
PRODUCTION AND PRICING DATA:
OIL VOLUME -- Barrels per day
United States 91,060 65,451 82,901 62,388
Canada 19,036 21,181 19,034 21,434
Egypt 59,890 55,370 60,129 56,326
Australia 16,071 12,273 14,117 12,093
North Sea 55,209 61,455 54,445 62,942
Argentina 11,282 6,581 11,041 3,941
China - 5,419 - 4,991
Total 252,548 227,730 241,667 224,115
AVERAGE OIL PRICE PER BARREL
United States $60.08 $56.84 $58.21 $53.71
Canada 63.75 66.81 58.71 60.45
Egypt 68.65 69.33 62.65 65.06
Australia 74.96 74.58 71.54 70.57
North Sea 66.59 66.93 61.57 63.73
Argentina 45.78 44.22 43.26 43.43
China - 66.66 - 62.78
Total 64.12 64.35 60.21 60.95
NATURAL GAS VOLUME - Mcf per day
United States 801,778 638,469 770,974 619,860
Canada 389,218 417,494 386,136 401,826
Egypt 234,466 218,788 238,951 215,847
Australia 196,249 184,746 195,608 169,288
North Sea 1,944 2,163 1,917 2,216
Argentina 216,187 102,935 207,263 53,315
Total 1,839,842 1,564,595 1,800,849 1,462,352
AVERAGE NATURAL GAS PRICE PER MCF
United States $7.29 $6.29 $7.13 $6.83
Canada 6.79 5.69 6.62 6.66
Egypt 4.48 4.46 4.26 4.44
Australia 1.79 1.58 1.78 1.62
North Sea 13.39 9.68 10.90 9.83
Argentina 1.02 0.92 1.08 0.93
Total 5.51 4.97 5.37 5.62
NGL VOLUME - Barrels per day
United States 8,060 8,811 7,631 8,185
Canada 2,113 2,226 2,172 2,202
Argentina 2,816 1,355 2,726 682
Total 12,989 12,392 12,529 11,069
AVERAGE NGL PRICE PER BARREL
United States $42.10 $40.21 $38.78 $38.52
Canada 39.28 35.77 35.29 35.94
Argentina 36.06 37.44 33.68 37.44
Total 40.33 39.11 37.06 37.94
APA-F
Source: Apache Corporation