Apache Corporation announces fourth-quarter and full-year 2014 financial and operational results

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Apache Corporation announces fourth-quarter and full-year 2014 financial and operational results

February 12, 2015 at 8:00 AM EST

HOUSTON, Feb. 12, 2015 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) today announced a fourth-quarter 2014 net loss of $4.8 billion or $12.78 per diluted common share, primarily as a result of after-tax, non-cash charges totaling $5.2 billion. Adjusted earnings, which exclude certain items that impact the comparability of results, totaled $404 million or $1.07 per share. Net cash provided by operating activities was approximately $1.9 billion in the fourth quarter of 2014, with cash from operations, before changes in operating assets and liabilities, totaling $2.1 billion.

"Onshore North American liquids production growth exceeded our guidance for 2014, and we exited the year with strong operational momentum," said John J. Christmann IV, Apache's chief executive officer and president. "Since our Nov. 20th North American Update, oil and gas prices have decreased substantially, prompting us to act quickly and decisively to reduce activity levels and reset our well cost structure.  We have reduced our rig count from an average of 91 rigs in the third quarter of 2014 to an estimated 27 rigs by the end of this month.  We have also reduced our frac crews by approximately 50 percent during the same time period and are delaying some well completions until service costs decrease materially. In 2015, Apache will run a streamlined capital program that focuses on efficiency improvements, downspacing and other strategic tests to further delineate our extensive inventory of locations within the Permian, Eagle Ford, Canyon Lime, Duvernay and Montney. While we are fortunate to have a substantial inventory of projects that can make economics at these oil prices, we believe it more prudent to curtail our activity until costs are lower and prices recover.  This strategy will enable us to further strengthen our balance sheet and preserve the financial flexibility to capitalize on industry opportunities during the downturn."

Fourth-quarter acquisition and divestiture activity

During the quarter, Apache significantly expanded and enhanced its core operating areas through $800 million of leasehold acquisitions in onshore North America.

In December, Apache entered into an agreement to sell its interests in the Wheatstone and Kitimat LNG projects along with certain other upstream assets in Australia.  The company anticipates closing the transaction during the first quarter of 2015. Upon closing, Apache will receive cash proceeds of approximately $2.75 billion plus recovery of an estimated $1 billion in net expenditures between June 30, 2014, and closing. On Dec. 31, 2014, Apache completed the previously announced sale of non-core properties in the Anadarko Basin and southern Louisiana and received net proceeds of $1.3 billion.

Christmann noted, "2014 was a year of transition marked by the completion of many of our key strategic portfolio repositioning initiatives. We completed or announced the sale of approximately $7 billion of assets worldwide and enhanced our North American portfolio through the purchase of approximately $1.2 billion of strategic acreage.  2015 will be a year of tangible operational results that demonstrate the progress Apache has made with the application of leading-edge geoscience and process improvements across our nine primary plays in North America.  This will put us in an excellent position to efficiently ramp-up the capital program and take advantage of market opportunities as commodity prices recover."

Fourth-quarter 2014 production and operating highlights

  • The Permian Region achieved record production of approximately 168,700 boe per day, up 26 percent from the prior-year period. The region averaged 42 operated rigs during the quarter and drilled 148 gross operated wells.  Apache plans to operate approximately 10 to 12 rigs in the Permian Basin during 2015.
  • The Central Region produced approximately 93,900 boe per day, up 1 percent from the prior-year period and up 3 percent sequentially from the third quarter of 2014.   The region averaged 20 operated rigs during the quarter and drilled 72 gross operated wells.  In the Canyon Lime play, the company is in the early stages of flow back and testing on its first four-well pad and has drilled two step-out delineation wells that indicate excellent fluid properties and higher-than-expected oil content. Apache plans to operate two to three rigs in the Central Region during 2015, one to two of which will be in the Canyon Lime.
  • Gulf Coast production averaged 32,800 boe per day in the fourth quarter, up 8 percent from the prior-year period and up 13 percent sequentially from the third quarter of 2014.  Following the sale of its south Louisiana properties on Dec. 31, 2014, Apache's Gulf Coast regional production is almost entirely attributable to the Eagle Ford play.   The company is in the early stages of flowing back wells from several new pads in the Eagle Ford.  On the Grant pad in Brazos County, Texas, four wells have been producing for more than 50 days.  These wells have produced substantially higher oil volumes than indicated by the "Area B" type curve presented in Apache's North American Update on Nov. 20, 2014 .  Apache plans to operate one to two rigs in the Eagle Ford during 2015.
  • Egypt's gross production of 344,100 boe per day was down 4 percent from the prior-year period, primarily due to lower gas volumes at the Shell Egypt NV-operated Obaiyed Gas Plant. The lower gas volumes resulted from unplanned mechanical-related downtime and the operator exercising its right to utilize a greater portion of the plant capacity.
  • North Sea production averaged 80,800 boe per day, up 7 percent compared to the prior-year period and the highest quarterly production rate in the history of Apache's operations in the region.      

"Apache had an excellent fourth quarter in both Egypt, where we made two significant new oil discoveries, and in the North Sea, where we achieved record quarterly operating efficiency and production volumes.  Both of these regions provide relatively stable cash flow and complement Apache's growth potential in North America, particularly during the current period of depressed oil and gas prices," said Christmann.

Year-end 2014 proved reserves

Worldwide estimated proved reserves totaled 2.40 billion boe at year-end 2014, down from 2.65 billion boe at year end 2013. The decrease in reserves was the result of sales of approximately 358 million boe of proved reserves during the year. These sales were partially offset by 313 million boe of proved reserves added through extensions and discoveries during the same period. During the year, Apache replaced 158 percent of 2014 North American production through extensions and discoveries.

Oil and gas prices

Apache's production during the fourth quarter 2014 consisted of approximately 62 percent liquids and 38 percent natural gas. Liquids contributed 81 percent of the company's revenue during the period. In North America onshore, Apache received an average oil price of $68.21 per barrel during the fourth quarter, compared with $91.64 per barrel in the prior-year period. North American onshore natural gas prices averaged $3.79 per thousand cubic feet (Mcf), compared with $3.55 per Mcf in the prior-year period. Globally, Apache received an average oil price of $70.89 per barrel during the fourth quarter, compared with $101.12 per barrel in the prior-year period. Global natural gas prices averaged $3.89 per Mcf of natural gas, compared with $3.78 per Mcf in the prior-year period.

Fourth-quarter 2014 charges to income

During the fourth quarter, Apache recorded after-tax, non-cash charges of $5.2 billion, the majority of which was attributable to the following items:  

  • $2 billion reduction in the carrying value of oil and gas properties pursuant to quarterly ceiling test requirements for full cost accounting companies;
  • $1.3 billion impairment of goodwill associated with prior year acquisitions;
  • $1 billion deferred tax adjustment related to undistributed and distributed foreign earnings; and
  • $750 million fair value impairment of downstream LNG assets held for sale.

2015 capital budget and production outlook

Apache anticipates capital spending of $2.1 to $2.3 billion in onshore North America and plans to run an average of 17 rigs in 2015.  Onshore North American production in 2015 is projected to be relatively flat from 2014 average production of approximately 302,000 boe per day, as adjusted for 2014 asset sales. The company's year-end 2015 onshore North American production exit rate is also projected to be relatively flat compared to the average production rate for 2015.

Internationally and offshore, the company is planning a capital budget of $1.5 to $1.7 billion and estimates that 2015 pro forma production will be up slightly from 2014 average production of 207,000 boe per day, as adjusted for 2014 and announced 2015 asset sales. The company's year-end 2015 international and offshore exit rate is projected to be relatively flat compared to its average production rate for the year.

Christmann commented, "We have planned our budget and operations in such a way that we can dynamically manage our activity levels and capital spending to respond quickly to material changes in commodity prices. Should we see a meaningful rebound in oil prices from current strip levels or a notable shift in our cost structure, we have the organizational capability to add rigs and production quickly and efficiently from our ready inventory of highly economic projects in North America."  

Conference call

Apache will conduct a conference call to discuss its fourth-quarter and full-year 2014 results at 1 p.m. Central time ThursdayFeb. 12. 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 timeFeb. 12. To access the telephone playback, dial 855-859-2056 or 404-537-3406 for international calls. The conference access code is 31399418.

Additional Information

Additional information follows, including reconciliations of adjusted earnings and cash from operations before changes in operating assets and liabilities (non-GAAP financial measures) to GAAP measures and information regarding pro forma production. Apache's quarterly supplement is available at www.apachecorp.com/financialdata.

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.      

Non-GAAP financial measures

Apache's financial information includes information prepared in conformity with generally accepted accounting standards (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 and cash from continuing operations before changes in operating assets and liabilities 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. 

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,  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

(Unaudited)

(In millions, except per share data)






























For the Quarter Ended December 31,


For the Year Ended December 31,




2014


2013


2014


2013











REVENUES AND OTHER:









Oil revenues

$  2,234


$ 2,842


$ 10,752


$ 12,632


Gas revenues

556


579


2,329


2,627


NGL revenues

136


179


668


652


Oil and gas production revenues

2,926


3,600


13,749


15,911


Derivative instrument gains (losses), net

205


(124)


284


(399)


Other 


(179)


(30)


(182)


48




2,952


3,446


13,851


15,560











COSTS AND EXPENSES:









Depreciation, depletion and amortization









Oil and gas property and equipment









    Recurring

1,310


1,154


4,747


4,894


    Additional

3,236


368


5,001


995


Other assets

114


110


410


400


Asset retirement obligation accretion

46


46


181


238


Lease operating expenses

617


589


2,479


2,864


Gathering and transportation 

70


57


273


288


Taxes other than income

146


211


678


785


Impairments

2,357


-


2,357


-


General and administrative

125


123


434


482


Acquisition, divestiture & separation costs

1


33


67


33


Financing costs, net

27


20


130


177




8,049


2,711


16,757


11,156











INCOME (LOSS) BEFORE INCOME TAXES

(5,097)


735


(2,906)


4,404


Current income tax provision 

104


473


1,142


1,663


Deferred income tax provision (benefit)

(435)


33


495


261











INCOME (LOSS) FROM CONTINUING OPS INCLUDING NONCONTROLLING INTEREST

(4,766)


229


(4,543)


2,480


Income (Loss) from discontinued operations, net of tax

-


1


(517)


(192)











INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST

(4,766)


230


(5,060)


2,288


Net income attributable to noncontrolling interest

48


56


343


56


Preferred stock dividends

-


-


-


44











INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK

$ (4,814)


$    174


$  (5,403)


$   2,188











NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS









Net income (loss) from continuing operations attributable to common shareholders

$ (4,814)


$    173


$  (4,886)


$   2,380


Net income (loss) from discontinued operations

-


1


(517)


(192)


Net income (loss) attributable to common shareholders

$ (4,814)


$    174


$  (5,403)


$   2,188











BASIC NET INCOME (LOSS) PER COMMON SHARE:









Basic net income (loss) from continuing operations per share

$ (12.78)


$   0.43


$  (12.72)


$      6.02


Basic net income (loss) from discontinued operations per share

-


0.01


(1.34)


(0.49)


Basic net income (loss) per share

$ (12.78)


$   0.44


$  (14.06)


$      5.53











DILUTED NET INCOME (LOSS) PER COMMON SHARE:









Diluted net income (loss) from continuing operations per share

$ (12.78)


$   0.43


$  (12.72)


$      5.97


Diluted net income (loss) from discontinued operations per share

-


-


(1.34)


(0.47)


Diluted net income (loss) per share

$ (12.78)


$   0.43


$  (14.06)


$      5.50











WEIGHTED-AVERAGE NUMBER OF COMMON 








   SHARES OUTSTANDING:









Basic


377


399


384


395


Diluted


377


401


384


406











DIVIDENDS DECLARED PER COMMON SHARE

$     0.25


$   0.20


$      1.00


$      0.80









 

APACHE CORPORATION

PRODUCTION INFORMATION
































% Change











4Q14


3Q14


4Q13


4Q14 to 3Q14


4Q14 to 4Q13


FY 2014


FY 2013




















  OIL VOLUME - Barrels per day














Permian



98,017


91,844


77,703


7%


26%


92,207


72,113


Central



23,832


22,866


22,939


4%


4%


22,599


22,783


Gulf Coast


14,380


12,923


10,397


11%


38%


12,324


10,526


Canada



17,133


17,672


16,570


-3%


3%


17,593


17,724



N.A. Onshore


153,362


145,305


127,609


6%


20%


144,723


123,146


Gulf of Mexico


6,319


5,980


6,530


6%


-3%


6,369


7,386


GOM Shelf


-


-


(27)


NM


NM


168


34,099



North America


159,681


151,285


134,112


6%


19%


151,260


164,631


Egypt(1)



87,445


87,499


89,654


0%


-2%


87,917


89,561


Australia



28,577


22,014


16,760


30%


71%


20,529


19,329


North Sea


66,822


55,247


64,996


21%


3%


60,699


63,721



International (1)


182,844


164,760


171,410


11%


7%


169,145


172,611




Total (1)


342,525


316,045


305,522


8%


12%


320,405


337,242




















  TOTAL LIQUIDS - Barrels per day












Permian



131,429


125,674


101,818


5%


29%


122,658


95,492


Central



49,246


47,353


49,022


4%


0%


47,125


45,817


Gulf Coast


18,555


15,322


13,037


21%


42%


15,213


12,944


Canada



22,812


23,053


22,965


-1%


-1%


23,773


24,413



N.A. Onshore


222,042


211,402


186,842


5%


19%


208,769


178,666


Gulf of Mexico


7,004


6,905


7,270


1%


-4%


7,270


8,224


GOM Shelf


-


71


797


NM


NM


208


39,010



North America


229,046


218,378


194,909


5%


18%


216,247


225,900


Egypt(1)



88,278


88,225


89,654


0%


-2%


88,588


89,561


Australia



28,577


22,014


16,760


30%


71%


20,529


19,329


North Sea


68,632


56,541


66,297


21%


4%


62,091


64,993



International (1)


185,487


166,780


172,711


11%


7%


171,208


173,883




Total


414,533


385,158


367,620


8%


13%


387,455


399,783




















  NATURAL GAS VOLUME - Mcf per day












Permian



223,787


216,804


191,371


3%


17%


217,431


189,450


Central



268,130


260,443


264,786


3%


1%


263,468


272,814


Gulf Coast


85,625


82,710


104,300


4%


-18%


90,776


107,014


Canada



297,004


300,803


421,409


-1%


-30%


322,783


497,515



N.A. Onshore


874,546


860,760


981,866


2%


-11%


894,458


1,066,793


Gulf of Mexico


18,955


19,109


11,378


-1%


67%


19,272


19,743


GOM Shelf


-


122


11,167


NM


NM


365


192,314



North America


893,501


879,991


1,004,411


2%


-11%


914,095


1,278,850


Egypt(1)



358,031


377,838


352,616


-5%


2%


370,262


356,454


Australia



228,284


201,386


254,853


13%


-10%


213,983


223,433


North Sea


73,042


50,647


53,491


44%


37%


55,964


50,961



International (1)


659,357


629,871


660,960


5%


0%


640,209


630,848




Total (1)


1,552,858


1,509,862


1,665,371


3%


-7%


1,554,304


1,909,698




















  BOE per day
















Permian



168,728


161,808


133,713


4%


26%


158,897


127,066


Central



93,933


90,760


93,153


3%


1%


91,036


91,286


Gulf Coast


32,826


29,107


30,421


13%


8%


30,343


30,780


Canada



72,312


73,187


93,199


-1%


-22%


77,569


107,332



N.A. Onshore


367,799


354,862


350,486


4%


5%


357,845


356,464


Gulf of Mexico


10,163


10,090


9,167


1%


11%


10,482


11,515


GOM Shelf


-


92


2,658


NM


NM


269


71,062



North America


377,962


365,044


362,311


4%


4%


368,596


439,041


Egypt(1, 2)



147,950


151,198


148,423


-2%


0%


150,298


148,970


Australia



66,625


55,578


59,236


20%


12%


56,193


56,568


North Sea


80,806


64,982


75,212


24%


7%


71,419


73,487



International (1)


295,381


271,758


282,871


9%


4%


277,910


279,025




Total (1)


673,343


636,802


645,182


6%


4%


646,506


718,066























Total excluding noncontrolling interests

623,743


586,189


618,735


6%


1%


596,405


711,478























(1)Includes production volumes attributable to our noncontrolling partner in Egypt below:










Oil (b/d)


29,391


29,201


15,375






29,292


3,875





Gas (Mcf/d)


119,578


127,020


66,432






123,511


16,278





NGL (b/d)


279


242


-






224


-























(2)BOE per day Egypt Gross Production

344,122


345,708


357,098


0%


-4%


348,401


349,702























Discontinued Operations - Argentina:














Oil (b/d)


-


-


9,276






1,698


9,375




Gas (Mcf/d)


-


-


190,799






34,854


187,390




NGL (b/d)


-


-


1,653






317


2,102























BOE/d


-


-


42,729






7,824


42,709



















 

APACHE CORPORATION

PRO FORMA PRODUCTION INFORMATION




















Pro forma production excludes certain items that management believes affect the comparability of operating results for the periods presented. Pro forma production excludes production attributable to assets that have been divested (in the Gulf of Mexico shelf, Argentina, Canada, and South Texas), production attributable to a noncontrolling interest in our Egypt oil and gas business, and Egypt tax barrels. Management uses pro forma production to evaluate the company's operational trends and performance and believes it is useful to investors and other third parties.














% Change











4Q14


3Q14


4Q13


4Q14 to 3Q14


4Q14 to 4Q13


FY 2014


FY 2013




















  OIL VOLUME - Barrels per day
















Permian



98,017


91,844


77,703


7%


26%


92,207


72,113


Central



23,832


22,866


22,939


4%


4%


22,599


22,783


Gulf Coast


14,385


12,902


10,075


11%


43%


12,165


10,132


Canada



17,118


17,649


16,348


-3%


5%


17,498


16,788



N.A. Onshore


153,352


145,261


127,065


6%


21%


144,469


121,816


Gulf of Mexico


6,319


5,980


6,530


6%


-3%


6,369


7,386


GOM Shelf


-


-


-


-


-


-


-



North America


159,671


151,241


133,595


6%


20%


150,838


129,202


Egypt




49,361


44,372


43,872


11%


13%


45,203


42,853


Australia



28,577


22,014


16,760


30%


71%


20,529


19,329


North Sea


66,822


55,247


64,996


21%


3%


60,699


63,721



International


144,760


121,633


125,628


19%


15%


126,431


125,903




Total


304,431


272,874


259,223


12%


17%


277,269


255,105




















  TOTAL LIQUIDS - Barrels per day
















Permian



131,429


125,674


101,818


5%


29%


122,658


95,492


Central



49,246


47,353


49,022


4%


0%


47,125


45,817


Gulf Coast


18,544


15,238


12,078


22%


54%


14,778


11,743


Canada



22,797


23,025


21,596


-1%


6%


23,210


22,109



N.A. Onshore


222,016


211,290


184,514


5%


20%


207,771


175,161


Gulf of Mexico


7,004


6,905


7,270


1%


-4%


7,270


8,224


GOM Shelf


-


-


-


-


-


-


-



North America


229,020


218,195


191,784


5%


19%


215,041


183,385


Egypt




49,834


44,749


43,872


11%


14%


45,562


42,853


Australia



28,577


22,014


16,760


30%


71%


20,529


19,329


North Sea


68,632


56,541


66,297


21%


4%


62,091


64,993



International


147,043


123,304


126,929


19%


16%


128,182


127,175




Total


376,063


341,499


318,713


10%


18%


343,223


310,560




















  NATURAL GAS VOLUME - Mcf per day















Permian



223,787


216,804


191,371


3%


17%


217,431


189,450


Central



268,130


260,443


264,786


3%


1%


263,468


272,814


Gulf Coast


85,209


82,032


86,502


4%


-1%


82,698


85,689


Canada



296,872


300,624


316,799


-1%


-6%


295,039


314,836



N.A. Onshore


873,998


859,903


859,458


2%


2%


858,636


862,789


Gulf of Mexico


18,955


19,109


11,378


-1%


67%


19,272


19,743


GOM Shelf


-


-


-


-


-


-


-



North America


892,953


879,012


870,836


2%


3%


877,908


882,532


Egypt




201,475


192,484


180,328


5%


12%


192,184


175,080


Australia



228,284


201,386


254,853


13%


-10%


213,983


223,433


North Sea


73,042


50,647


53,491


44%


37%


55,964


50,961



International


502,801


444,517


488,672


13%


3%


462,131


449,474




Total


1,395,754


1,323,529


1,359,508


5%


3%


1,340,039


1,332,006




















  BOE per day
















Permian



168,728


161,808


133,713


4%


26%


158,897


127,066


Central



93,933


90,760


93,153


3%


1%


91,036


91,286


Gulf Coast


32,746


28,910


26,496


13%


24%


28,562


26,025


Canada



72,275


73,129


74,395


-1%


-3%


72,381


74,582



N.A. Onshore


367,682


354,607


327,757


4%


12%


350,876


318,959


Gulf of Mexico


10,163


10,090


9,167


1%


11%


10,482


11,515


GOM Shelf


-


-


-


-


-


-


-



North America


377,845


364,697


336,924


4%


12%


361,358


330,474


Egypt




83,413


76,830


73,927


9%


13%


77,593


72,033


Australia



66,625


55,578


59,236


20%


12%


56,193


56,568


North Sea


80,806


64,982


75,212


24%


7%


71,419


73,487



International


230,844


197,390


208,375


17%


11%


205,205


202,088




Total


608,689


562,087


545,299


8%


12%


566,563


532,562

 


APACHE CORPORATION

PRICE INFORMATION





































4Q14


3Q14


4Q13


FY 2014


FY 2013
















  AVERAGE OIL PRICE PER BARREL












Permian



$ 67.59


$ 88.71


$ 93.44


$ 85.62


$ 93.50


Central



69.83


95.17


92.67


89.36


93.45


Gulf Coast


73.13


99.41


97.06


93.20


106.09


Canada



65.52


85.43


79.44


83.57


87.00



N.A. Onshore


68.21


90.30


91.64


86.61


93.58


Gulf of Mexico


73.94


97.86


95.04


94.03


105.04


GOM Shelf


 NM 


 NM 


 NM 


 NM 


109.57



North America


68.44


90.58


91.64


86.89


96.94


Egypt




73.34


100.06


108.56


97.44


107.94


Australia



71.83


98.82


114.06


94.99


110.42


North Sea


73.16


95.80


107.08


95.53


107.48



International


73.04


98.47


108.54


96.46


108.04




Total


70.89


94.69


101.12


91.94


102.62
















  AVERAGE NATURAL GAS PRICE PER MCF











Permian



$   3.71


$   3.79


$   3.80


$   4.18


$   3.77


Central



4.03


4.00


3.62


4.42


3.72


Gulf Coast


4.06


4.19


3.69


4.50


3.80


Canada



3.56


4.04


3.34


4.07


3.23



N.A. Onshore


3.79


3.97


3.55


4.26


3.51


GOM Deepwater


3.88


3.50


3.61


4.20


3.34


GOM Shelf


 NM 


 NM 


 NM 


 NM 


3.82



North America


3.79


3.97


3.59


4.24


3.61


Egypt




2.94


2.91


3.00


2.96


2.99


Australia



4.24


4.70


4.15


4.43


4.43


North Sea


8.77


6.10


10.58


8.29


10.43



International


4.03


3.74


4.06


3.92


4.10




Total


3.89


3.88


3.78


4.11


3.77
















  AVERAGE NGL PRICE PER BARREL












Permian



$ 20.53


$ 27.29


$ 29.90


$ 26.55


$ 27.94


Central



17.17


24.94


28.34


24.27


25.61


Gulf Coast


20.34


24.85


36.75


26.15


32.44


Canada



24.38


33.50


36.82


33.61


30.50



N.A. Onshore


19.59


26.83


30.26


26.34


27.48


GOM Deepwater


21.46


34.44


35.80


30.52


33.23


GOM Shelf


 NM 


 NM 


 NM 


 NM 


28.52



North America


19.61


26.96


30.27


26.33


27.64


Egypt




41.35


52.80


-


51.80


-


North Sea


45.55


59.47


80.43


59.42


73.06



International


44.22


57.07


80.43


56.94


73.06




Total


20.52


27.84


31.32


27.28


28.56


































Discontinued Operations - Argentina:












Oil price ($/Bbl)




$        -


$   83.22


$   72.70


$ 79.05




Gas price ($/Mcf)




-


3.11


3.04


2.96




NGL price ($/Bbl)




-


17.68


24.57


23.64

 

APACHE CORPORATION

SUMMARY BALANCE SHEET INFORMATION

(Unaudited)

(In millions)














December 31,


December 31,






2014


2013










Cash and Cash Equivalents


$                       769


$                    1,906


Assets Held for Sale


1,628


-


Other Current Assets 


4,018


4,460


Property and Equipment, net


48,076


52,421


Goodwill


87


1,369


Other Assets


1,374


1,481


Total Assets


$                 55,952


$                 61,637










Short-Term Debt


$                             -


$                         53


Other Current Liabilities


3,664


4,647


Long-Term Debt


11,245


9,672


Deferred Credits and Other Noncurrent Liabilities


12,906


11,872


Apache Shareholders' Equity


25,937


33,396


Noncontrolling interest


2,200


1,997


Total Liabilities and Shareholders' Equity


$                 55,952


$                 61,637










Common shares outstanding at end of period


377


396










% of total debt-to-capitalization


29%


22%







 

APACHE CORPORATION

SUMMARY OF COSTS INCURRED AND GTP CAPITAL INVESTMENTS

(Unaudited)

(In millions)
















For the Quarter Ended December 31,


For the Year Ended December 31,






2014


2013


2014


2013














Costs Incurred in Oil and Gas Property:











Acquisitions












Proved


$                            1


$                         47


$                       104


$                       177




Unproved


836


55


1,388


379



Exploration and Development


2,629


2,528


10,153


10,226






3,466


2,630


11,645


10,782














GTP Capital Investments:











Acquisitions


$                             -


$                            5


$                             -


$                         88



GTP Facilities


317


324


1,339


1,177






317


329


1,339


1,265














Total Costs Incurred and GTP Capital Investments


$                    3,783


$                    2,959


$                 12,984


$                 12,047

 

APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(In millions, except per share data)





















Reconciliation of income attributable to common stock to adjusted earnings

Adjusted earnings and adjusted earnings per share are non-GAAP financial measures. Adjusted earnings generally exclude certain items that management believes affect the comparability of operating results or are not related to Apache's ongoing operations. Management uses adjusted earnings to evaluate the company's operational trends and performance relative to other oil and gas 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. 




















For the Quarter Ended December 31,


For the Year Ended December 31,




2014


2013


2014


2013











Income (Loss) Attributable to Common Stock (GAAP)

$ (4,814)


$  174


$ (5,403)


$ 2,188











Adjustments:









Oil & gas property write-downs, net of tax

1,990


139


3,069


541


Deferred tax adjustments (1)

1,046


248


2,096


197


Impairments

2,058


-


2,058


-


Argentina discontinued operations, net of tax

-


(1)


517


191


Loss on divested assets, net of tax

116


-


116


-


Acquisition, divestiture & separation costs, net of tax

1


21


44


21


Rig stacking costs, net of tax

8


-


35


-


Unrealized foreign currency fluctuation impact on deferred tax expense  

(28)


(25)


(45)


(123)


Unrealized commodity derivative mark-to-market, net of tax

27


54


(193)


142

Adjusted Earnings  (Non-GAAP)

$      404


$  610


$  2,294


$ 3,157











Net Income (Loss) per Common Share - Diluted (GAAP)

$ (12.78)


$ 0.43


$ (14.06)


$   5.50











Adjustments:









Oil & gas property write-downs, net of tax

5.26


0.35


7.95


1.33


Deferred tax adjustments (1)

2.78


0.62


5.44


0.49


Impairments

5.46


-


5.35


-


Argentina discontinued operations, net of tax

-


-


1.34


0.47


Loss on divested assets, net of tax

0.31


-


0.30


-


Acquisition, divestiture & separation costs, net of tax

-


0.05


0.12


0.05


Rig stacking costs, net of tax

0.03


-


0.10


-


Unrealized foreign currency fluctuation impact on deferred tax expense  

(0.07)


(0.06)


(0.11)


(0.30)


Unrealized commodity derivative mark-to-market, net of tax

0.08


0.13


(0.49)


0.35

Adjusted Earnings Per Share - Diluted (Non-GAAP)

$     1.07


$ 1.52


$     5.94


$   7.89





















Total income tax provision (GAAP)

$    (331)


$  506


$  1,637


$ 1,924











Adjustments:









Tax impact on oil & gas property write-downs

1,246


229


1,932


454


Tax impact on impairments

299


-


299


-


Tax impact on loss on divested assets

64


-


64


-


Unrealized foreign currency fluctuation impact on deferred tax expense

28


25


45


123


Tax impact on acquisition, divestiture & separation costs

-


12


23


12


Tax impact on rig stacking costs

5


-


19


-


Tax impact on unrealized commodity derivative mark-to-market

15


30


(107)


79


Deferred tax adjustments (1)

(1,046)


(248)


(2,096)


(196)

Adjusted total income tax provision

$      280


$  554


$  1,816


$ 2,396











Adjusted Effective Tax Rate (Non-GAAP)

38.3%


45.4%


40.8%


42.4%











(1)

Deferred tax adjustments for the fourth quarter and third quarter of 2014 include $840 million and $814 million, respectively, related to undistributed foreign earnings $62 million and $249 million, respectively, related to distributed foreign earnings, and other adjustments totaling $144 million and $8 million, respectively.

 

APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(Unaudited)

(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

Cash from operations before changes in operating assets and liabilities is a non-GAAP financial measure. Apache uses it internally and provides the information because management believes it is useful for investors 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
December 31,


For the Year
Ended December 31,




2014


2013


2014


2013

Net cash provided by operating activities (GAAP)

$           1,933


$           2,477


$           8,461


$                  9,835


Less: Discontinued operations

-


(74)


(82)


(232)

Net cash provided by operating activities excluding discontinued operations

$           1,933


$           2,403


$           8,379


$                  9,603

Changes in operating assets and liabilities

141


(385)


218


(67)

Cash from continuing operations before changes in









operating assets and liabilities

$           2,074


$           2,018


$           8,597


$                  9,536

 

APACHE CORPORATION

OIL & GAS RESERVES INFORMATION

For the Year Ended December 31, 2014



































Oil (Mbbls)



 U.S. 


 Canada 


Egypt1


 Australia 


 North Sea 


 Argentina 


Total1

Balance - Dec 31, 2013


653,816


136,892


135,544


59,227


129,580


16,426


1,131,485


Extensions and Discoveries


57,011


9,657


38,074


4,254


17,386


5


126,387


Purchases



15,240


-


-


-


-


-


15,240


Revisions



3,083


(812)


1,801


(216)


(7)


-


3,849


Production



(48,789)


(6,421)


(32,090)


(7,494)


(22,154)


(620)


(117,568)


Sales



(65,796)


(3,517)


-


-


-


(15,811)


(85,124)

Balance - Dec 31, 2014


614,565


135,799


143,329


55,771


124,805


-


1,074,269



































NGLs (Mbbls)



 U.S. 


 Canada 


Egypt1


 Australia 


 North Sea 


 Argentina 


Total1

Balance - Dec 31, 2013


248,023


36,069


-


-


2,650


5,119


291,861


Extensions and Discoveries


47,516


1,163


1,820


-


1


-


50,500


Purchases



2,916


-


-


-


-


-


2,916


Revisions



2,594


116


(17)


-


(2)


-


2,691


Production



(21,464)


(2,256)


(245)


-


(508)


(116)


(24,589)


Sales



(26,192)


(9,977)


-


-


-


(5,003)


(41,172)

Balance - Dec 31, 2014


253,393


25,115


1,558


-


2,141


-


282,207



































Oil & NGLs



 U.S. 


 Canada 


Egypt1


 Australia 


 North Sea 


 Argentina 


Total1

Balance - Dec 31, 2013


901,839


172,961


135,544


59,227


132,230


21,545


1,423,346


Extensions and Discoveries


104,527


10,820


39,894


4,254


17,387


5


176,887


Purchases



18,156


-


-


-


-


-


18,156


Revisions



5,677


(696)


1,784


(216)


(9)


-


6,540


Production



(70,253)


(8,677)


(32,335)


(7,494)


(22,662)


(736)


(142,157)


Sales



(91,988)


(13,494)


-


-


-


(20,814)


(126,296)

Balance - Dec 31, 2014


867,958


160,914


144,887


55,771


126,946


-


1,356,476



































GAS (MMcf)



 U.S. 


 Canada 


Egypt1


 Australia 


 North Sea 


 Argentina 


Total1

Balance - Dec 31, 2013


2,673,126


1,733,457


812,180


1,601,767


107,165


410,717


7,338,412


Extensions and Discoveries


203,318


383,077


125,899


81,156


23,803


-


817,253


Purchases



21,337


-


-


-


-


-


21,337


Revisions



35,910


(12,626)


5,949


-


(54)


-


29,179


Production



(215,829)


(117,816)


(135,145)


(78,104)


(20,427)


(12,722)


(580,043)


Sales



(521,059)


(468,324)


-


-


-


(397,995)


(1,387,378)

Balance - Dec 31, 2014


2,196,803


1,517,768


808,883


1,604,819


110,487


-


6,238,760



































TOTAL BOE (Mboe)


 U.S. 


 Canada 


Egypt1


 Australia 


 North Sea 


 Argentina 


Total1

Balance - Dec 31, 2013


1,347,361


461,871


270,908


326,188


150,090


89,998


2,646,416


Extensions and Discoveries


138,413


74,666


60,877


17,780


21,354


5


313,095


Purchases



21,712


-


-


-


-


-


21,712


Revisions



11,662


(2,800)


2,776


(216)


(18)


-


11,404


Production



(106,225)


(28,313)


(54,859)


(20,511)


(26,067)


(2,856)


(238,831)


Sales



(178,831)


(91,548)


-


-


-


(87,147)


(357,526)

Balance - Dec 31, 2014


1,234,092


413,876


279,702


323,241


145,359


-


2,396,270



































Proved developed reserves:


 U.S. 


 Canada 


Egypt1


 Australia 


 North Sea 


 Argentina 


Total1


Oil + NGL's (Mbbls)


628,005


93,823


130,058


29,996


107,516


-


989,398


Gas (Mboe)



269,417


165,025


106,198


106,711


14,542


-


661,893

Balance - Dec 31, 2014 (Mboe)


897,422


258,848


236,256


136,707


122,058


-


1,651,291


















(1)Includes reserves attributable to our noncontrolling partner in Egypt.







APACHE CORPORATION

OIL & GAS RESERVES AND COSTS 

For the Year Ended December 31, 2014

(In millions, except reserve data)







































Reserve Additions (Mboe)


 U.S. 


 Canada 


Egypt(1)


 Australia 


 North Sea 


 Argentina 


 Other 


Total (1)




















Extensions and Discoveries


138,413


74,666


60,877


17,780


21,354


5


-


313,095

Purchases



21,712


-


-


-


-


-


-


21,712


Additions excluding revisions


160,125


74,666


60,877


17,780


21,354


5


-


334,807

Revisions



11,662


(2,800)


2,776


(216)


(18)


-


-


11,404


Total 



171,787


71,866


63,653


17,564


21,336


5


-


346,211







































Capital Cost Information (Non-GAAP)


 U.S. 


 Canada 


Egypt(1)


 Australia 


 North Sea 


 Argentina 


 Other 


Total (1)

Exploration & Development, excluding Capitalized
  Interest and Asset Retirement Cost (ARC)


















$   5,516


$      715


$ 1,320


$         976


$          996


$            12


$       1


$   9,536

Acquisitions, excluding ARC - Acquired


















Proved



102


-


1


1


-


-


-


104


Unproved



1,221


141


10


16


-


-


-


1,388

     Total



$   6,839


$      856


$ 1,331


$         993


$          996


$            12


$       1


$ 11,028







































Non-GAAP Reconciliations















Presented below is a reconciliation of exploration and development costs (GAAP) to exploration and development costs, excluding capitalized interest and asset retirement cost (Non-GAAP). Management believes exploration and development costs, excluding capitalized interest and asset retirement cost is a more accurate reflection of the expenditures during the current year.


Exploration & Development Costs


$   5,768


$      928


$ 1,335


$     1,051


$       1,055


$            15


$       1


$ 10,153


Less: Capitalized Interest


(209)


(38)


(15)


(20)


(25)


(3)


-


(310)


Less: ARC



(43)


(175)


-


(55)


(34)


-


-


(307)





















   Total Adds



$   5,516


$      715


$ 1,320


$         976


$          996


$            12


$       1


$   9,536




















Presented below is a reconciliation of total acquisition costs (GAAP) to acquisitions, excluding asset retirement cost - acquired (Non-GAAP). Management believes acquisitions, excluding asset retirement cost - acquired is a more accurate reflection of the costs of acquisitions during the current year.
























 U.S. 


 Canada 


Egypt(1)


 Australia 


 North Sea 


 Argentina 


 Other 


Total (1)




















Total Acquisition Costs


















Proved



$       102


$          -


$         1


$             1


$              -


$              -


$      -


$       104


Unproved



1,221


141


10


16


-




-


1,388

Less: ARC - Acquired


-


-


-


-


-


-


-


-





















Acquisitions, excluding ARC - Acquired


$   1,323


$      141


$       11


$           17


$              -


$              -


$      -


$   1,492

(1)Includes reserves and costs attributable to our noncontrolling partner in Egypt.

APA-F

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