HOUSTON, May 2, 2018 – Apache Corporation (NYSE: APA) (Nasdaq: APA) today announced its financial and operational results for the first quarter of 2018.
Apache reported earnings of $145 million or $0.38 per diluted common share for the first quarter of 2018. These results include a number of items outside of core earnings that are typically excluded by the investment community in their published earnings estimates. When adjusted for these and certain additional items that impact the comparability of results, Apache’s first-quarter earnings were $124 million or $0.32 per share. Net cash provided by operating activities in the quarter was $615 million. Before working capital changes, Apache generated $799 million in operating cash flow. Adjusted earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses (adjusted EBITDAX) was $1.1 billion.
John J. Christmann IV, Apache's chief executive officer and president, said, “During the first quarter, Apache delivered strong operational results and U.S. production significantly above guidance. Outperformance in the United States was driven by a combination of shorter completion cycle times, improving efficiencies and excellent performance from new wells.
“Internationally, production was in line with our guidance, and our exposure to Brent oil pricing contributed to high margins, high cash returns and strong free cash flow. The first quarter was very good from an execution and cost-control standpoint, and we are seeing continued momentum into the second quarter,” said Christmann.
First-quarter operational summary
Highlights from the company’s three principal areas include:
Capital investment and financial position
Oil-and-gas capital investment was $857 million during the quarter, with $115 million for Alpine High midstream. More than two-thirds of the capital spend in the quarter was focused on the Permian Basin.
In March 2018, the company entered into a new five-year revolving credit facility with commitments totaling $4 billion. Apache retired $150 million of notes that matured in February and ended the quarter with $1.1 billion of cash and net debt of $7.3 billion.
2018 outlook and guidance update
Solid operational execution and strong well performance in the first quarter is prompting Apache to raise its 2018 U.S. production guidance range to 250,000 BOE to 258,000 BOE per day from a previous range of 245,000 BOE to 255,000 BOE per day and expects a slight increase in its U.S. oil mix for the year. Capital guidance of $3 billion remains unchanged for the year.
Further details on other financial and operational guidance items for the second quarter and full year 2018 can be found in the First-Quarter 2018 Financial and Operational Supplement.
“We are very pleased with our results year to date, as our methodical approach to delineation and development is generating improved capital efficiency, higher returns and attractive production growth. I believe 2018 will be a year in which Apache differentiates itself operationally, particularly in the Permian Basin, where our measured pace is enabling the timely integration of key learnings and the ability to more effectively manage the inflationary service cost environment,” Christmann concluded.
Apache will host a conference call to discuss its first-quarter 2018 results at 10 a.m. Central time, Thursday, May 3. The conference call will be webcast from Apache's website at www.apachecorp.com and investor.apachecorp.com, and the webcast replay will be archived there as well. A replay of the conference call will be available for seven days following the call. The number for the replay is (855) 859-2056 or (404) 537-3406 for international calls. The conference access code is 3758236. Sign up for email alerts to be reminded of the webcast at investor.apachecorp.com/alerts.cfm.
Additional information follows, including reconciliations of adjusted earnings, cash flow from operations before changes in operating assets and liabilities, adjusted EBITDAX, oil and gas capital investment and net debt (non-GAAP financial measures) to GAAP measures and information regarding adjusted production. Apache’s quarterly supplement is available at www.apachecorp.com/financialdata.
Apache Corporation is an oil and gas exploration and production company with operations in the United States, Egypt and the United Kingdom. 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’s Play store.
Non-GAAP financial measures
Apache’s financial information includes information prepared in conformity with generally accepted accounting principles (GAAP) as well as non-GAAP information. It is management’s intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted earnings, cash flow from operations before changes in operating assets and liabilities, oil and gas capital investment, adjusted EBITDAX and net debt are non- GAAP measures. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure.
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,” “guidance,” “outlook,” 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 capital plans, drilling plans, production expectations, asset sales, and monetizations. 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 2017 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.
Cautionary note to investors
The United States Securities and Exchange Commission ("SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SEC's definitions for such terms. Apache may use certain terms in this earnings release, such as "resources," "potential resources," "resource potential," "estimated net reserves," "recoverable reserves," and other similar terms that the SEC guidelines strictly prohibit Apache from including in filings with the SEC. Such terms do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality and other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in Apache's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2017, available from Apache at www.apachecorp.com or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, TX 77056 (Attn: Corporate Secretary). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC's website at www.sec.gov.
Investor: (281) 302-2286 Gary Clark
Media: (713) 296-7276 Castlen Kennedy
Click here for the full release with quarterly financial statements.
Click here for the First-Quarter 2018 Financial and Operational Supplement.