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Apache Reports First-Quarter Earnings Rise 62 Percent to $559 Million or $1.67 Per Share
HOUSTON, April 28 /PRNewswire-FirstCall/ -- Apache Corporation (NYSE, Nasdaq: APA) today reported that higher oil and gas prices and strong production contributed to record first-quarter 2005 earnings of $559 million or $1.67 per diluted common share, up from $345 million or $1.05 per diluted common share in the first quarter of 2004.
Cash from operations before changes in operating assets and liabilities totaled $1 billion, up from $737 million in the year-earlier period. (This is a non-GAAP measure; see reconciliation below.)
Production averaged 462,000 barrels of oil equivalent per day in the quarter, up 7 percent from the first quarter of 2004 and up slightly from last year's fourth quarter.
High oil and gas prices were a strong driver for first-quarter financial results. Apache received $46.05 per barrel of oil in the quarter, up 51 percent from the prior-year period; $27.68 per barrel of natural gas liquids, up 16 percent; and $5.30 per thousand cubic feet of gas, up 11 percent.
"We are off to a strong start in 2005, with record earnings," said G. Steven Farris, Apache's president, chief executive officer and chief operating officer. "Our successful drilling program in the first quarter and deep inventory of opportunities should contribute to Apache's financial and operating results in coming quarters."
Recent operational highlights include:
- Apache drilled two significant discoveries in Egypt during the quarter. The Syrah 1X wildcat, on the company's 100 percent- contractor-interest Khalda Concession, tested 46.5 million cubic feet (MMcf) of natural gas per day. The Tanzanite 1X discovery, located onshore on Apache's 65 percent-contractor-interest West Mediterranean Concession, was tested in two separate Alam el Bueib (AEB) zones. The first tested at a rate of 5,296 barrels of oil and 7 MMcf of gas per day and the second at a rate of 5,631 barrels of oil and 17 MMcf of gas per day.
- Apache has drilled 86 wells on Canadian acreage acquired last year in a farm-in from ExxonMobil. Apache has tested 73 wells with productive capacity of 52 MMcf of gas per day. The wells are expected to be brought on production as processing and transportation infrastructure becomes available.
- Apache's debt-to-capitalization ratio declined to 22.7 percent at the end of the first quarter, from 24 percent at year-end 2004.
Apache Corporation is a large gas and oil independent with core operations in the United States, Canada, Egypt, the United Kingdom North Sea and Western Australia.
NOTE: Apache will webcast its conference call live at 1 p.m. Central Time on April 28, 2005, from its Web site, http://www.apachecorp.com . The replay will be available on the Web site or by dialing (719) 457-0820 and using pass code 869266. The telephone replay will be available for one week beginning at approximately 5 p.m. on April 28.
This news release contains certain "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995 including, without limitation, expectations, beliefs, plans and objectives regarding production and exploration and development opportunities. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions and uncertainties. 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.
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
For the Quarter
Ended March 31,
2005 2004
REVENUES AND OTHER:
Oil and gas production revenues $1,626,649 $1,152,754
Other 35,639 (2,815)
1,662,288 1,149,939
OPERATING EXPENSES:
Depreciation, depletion and amortization 339,413 286,228
Asset retirement obligation accretion 13,159 10,761
Lease operating costs 233,171 208,236
Gathering and transportation costs 23,780 19,634
Severance and other taxes 72,186 8,948
General and administrative 50,411 46,057
Total operating expenses 732,120 579,864
OPERATING INCOME 930,168 570,075
FINANCING COSTS:
Interest expense 45,266 40,549
Amortization of deferred loan costs 658 567
Capitalized interest (13,409) (13,650)
Interest income (927) (320)
Net financing costs 31,588 27,146
INCOME BEFORE INCOME TAXES 898,580 542,929
Provision for income taxes 338,097 196,604
NET INCOME 560,483 346,325
Preferred stock dividends 1,420 1,420
INCOME ATTRIBUTABLE TO COMMON STOCK $559,063 $344,905
BASIC NET INCOME PER COMMON SHARE $1.70 $1.06
DILUTED NET INCOME PER COMMON SHARE $1.67 $1.05
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 328,037 325,003
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands)
For the Quarter
Ended March 31,
2005 2004
COSTS INCURRED:
North America exploration and
development $529,434 $342,364
International exploration and
development 262,347 164,074
$791,781 $506,438
Oil and gas property acquisitions $19,949 $1,329
Capitalized interest $13,409 $13,650
Asset retirement costs $10,513 $12,037
March 31, December 31,
2005 2004
BALANCE SHEET DATA:
Current Assets $1,589,007 $1,348,782
Property and Equipment, net 14,369,453 13,860,359
Goodwill 189,252 189,252
Other Assets 109,356 104,087
Total Assets $16,257,068 $15,502,480
Current Liabilities $1,571,447 $1,282,891
Long-Term Debt 2,531,722 2,588,390
Deferred Credits and Other
Noncurrent Liabilities 3,529,950 3,426,778
Shareholders' Equity 8,623,949 8,204,421
Total Liabilities and
Shareholders' Equity $16,257,068 $15,502,480
Common shares outstanding at end
of period 328,189 327,458NON-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
Ended March 31,
2005 2004
Net cash provided by operating
activities $836,172 $652,332
Changes in operating assets and
liabilities 186,896 84,394
Cash from operations before changes
in operating assets and liabilities $1,023,068 $736,726
APACHE CORPORATION
FINANCIAL INFORMATION
For the Quarter
Ended March 31,
2005 2004
FINANCIAL DATA (In thousands, except
per share data):
Revenues and other $1,662,288 $1,149,939
Income Attributable to Common Stock $559,063 $344,905
Basic Net Income Per Common Share $1.70 $1.06
Diluted Net Income Per Common Share $1.67 $1.05
Weighted Average Common Shares
Outstanding 328,037 325,003
Diluted Shares Outstanding 334,038 328,014
PRODUCTION AND PRICING DATA:
NATURAL GAS VOLUME - Mcf per day
United States 637,803 644,462
Canada 346,742 314,064
Egypt 155,328 128,665
Australia 113,734 118,822
North Sea 2,178 1,602
Argentina 3,473 5,160
Total 1,259,258 1,212,775
AVERAGE NATURAL GAS PRICE PER MCF
United States $6.04 $5.35
Canada 5.59 5.09
Egypt 4.30 4.10
Australia 1.82 1.70
North Sea 5.30 4.34
Argentina 0.91 0.47
Total 5.30 4.77
OIL VOLUME - Barrels per day
United States 73,630 67,255
Canada 23,277 25,266
Egypt 54,579 49,097
Australia 15,976 23,658
North Sea 61,870 44,299
China 10,507 7,440
Argentina 704 552
Total 240,543 217,567
AVERAGE OIL PRICE PER BARREL
United States $44.00 $32.36
Canada 47.14 33.00
Egypt 48.77 31.34
Australia 52.99 34.86
North Sea 46.10 22.72
China 33.91 30.12
Argentina 33.97 33.44
Total 46.05 30.44
NGL VOLUME - Barrels per day
United States 9,104 8,128
Canada 2,419 2,598
Total 11,523 10,726
AVERAGE NGL PRICE PER BARREL
United States $28.26 $25.27
Canada 25.46 19.34
Total 27.68 23.83| CONTACT: Apache Corporation | ||
| Media: | Tony Lentini | +1-713-296-6227 |
| Bill Mintz | +1-713-296-7276 | |
| David Higgins | +1-713-296-6690 | |
| Investors: | Robert Dye | +1-713-296-6662 |
| Web site: | http://www.apachecorp.com | |
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