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Apache reports record North America onshore liquids production for first-quarter 2014 with 21 percent year-over-year growth

- Total North America onshore liquids volumes achieves record of 198,500 barrels per day
- Worldwide production averages 640,000 barrels of oil equivalent (boe) per day; 672,000 boe per day including discontinued operations
- Earnings from continuing operations of $1.90 per diluted share/$753 million; adjusted earnings of $1.78 per share/$707 million*
- Cash flow from operating activities of $2.3 billion; $2.2 billion from continuing operations before changes in working capital*
- Repurchased an additional 5.9 million shares for $485 million during first-quarter 2014

HOUSTON, May 8, 2014 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) today announced first-quarter 2014 earnings from continuing operations of $753 million or $1.90 per diluted common share and adjusted earnings,* which exclude certain items that impact the comparability of results, of $707 million or $1.78 per share. For the same period in the prior year, Apache reported earnings from continuing operations of $759 million or $1.91 per diluted common share and adjusted earnings of $797 million or $2.00 per share. Net cash provided by operating activities totaled approximately $2.3 billion in first-quarter 2014, compared with $2.6 billion in the prior year, with cash from continuing operations before changes in operating assets and liabilities* totaling $2.2 billion, compared with $2.3 billion in first-quarter 2013.

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"A record-setting performance by our Permian Region continues to drive strong overall results for the company," said G. Steven Farris, chairman, chief executive officer and president of Apache. "We remained the most active driller in onshore North America, operating an average of 82 rigs during the quarter."

Apache's onshore North American liquids production increased 21 percent in first-quarter 2014 compared with the same period a year ago. The first-quarter 2014 average of 198,500 barrels per day for North American onshore liquids was up 6 percent compared with the fourth-quarter 2013.

"We continued to strengthen our portfolio and build momentum toward a strong second half of 2014," Farris said. "Apache intensified its focus on North America liquids production by completing the sale of our Argentina operations and selected conventional natural gas properties in Western Canada.

"We are currently testing new plays and completion ideas along the Gulf Coast and are encouraged by early results in Canada where a focus on liquids-rich plays contributed to a 10 percent increase in crude oil and natural gas liquids (NGLs) compared with the preceding quarter," Farris said. "Internationally, we are on track for first oil from significant development projects offshore Australia later this year at the Balnaves and Coniston fields, and we announced two new discoveries at the Matruh and Shushan basins in Egypt's Western Desert."

Apache also returned additional capital to shareholders, purchasing 5.9 million shares of Apache common stock on the open market from January through March 2014.

First-quarter production and operating highlights

Highlights from first-quarter drilling include:

  • Total worldwide net daily production of oil, natural gas and NGLs averaged 640,000 boe per day. Including discontinued operations in Argentina, daily production averaged 672,000 boe per day. Liquids production comprised 58 percent of the total from continuing operations, up from 57 percent for the fourth-quarter 2013.
  • The Permian and Central regions increased liquids production 31,000 barrels per day over the prior-year period. Total production from the two regions averaged 239,000 boe per day.
  • The Permian Region achieved record production averaging 150,000 boe per day, up 25 percent from the prior-year period. The region averaged 38 rigs in operation during the quarter and spud 202 gross wells (80 horizontals).

Oil and gas prices

Apache's mix of hydrocarbon production during the first-quarter 2014 included approximately 48 percent crude oil and 10 percent NGLs. Crude oil and NGLs contributed 82 percent of the company's revenue during the period.

Worldwide, Apache received an average price of $101.03 per barrel of crude oil during the first quarter compared with $102.42 per barrel in the prior-year period. Apache received an average price of $4.46 per thousand cubic feet (Mcf) of natural gas, compared with $3.77 per Mcf in the prior-year period.

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.  

* Adjusted earnings, cash from continuing operations before changes in operating assets and liabilities, and adjusted effective tax rate are non-GAAP measures. Please see reconciliations below. For supplemental financial and operational data and non-GAAP information, please go to http://www.apachecorp.com/financialdata.

Conference call

Apache will conduct a conference call to discuss its results and review its portfolio at 1 p.m. Central time Thursday, May 8. 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 time May 8. To access the telephone playback, dial 855-859-2056 or 404-537-3406 for international calls. The conference access code is 30665579.

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 and 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

(In millions, except per share data)













For the Quarter



Ended March 31,



2014


2013






REVENUES AND OTHER:





Oil revenues

$ 2,815


$ 3,192


Gas revenues

646


681


NGL revenues

186


148


Oil and gas production revenues

3,647


4,021


Derivative instrument gains (losses)

(20)


(100)


Other 

48


25



3,675


3,946






COSTS AND EXPENSES:





Depreciation, depletion and amortization





Oil and gas property and equipment





    Recurring

1,109


1,210


Other assets

97


102


Asset retirement obligation accretion

44


63


Lease operating expenses

597


722


Gathering and transportation 

70


73


Taxes other than income

181


229


General and administrative

119


112


Acquisitions, divestitures & transition

2


-


Financing costs, net

27


55



2,246


2,566






INCOME BEFORE INCOME TAXES

1,429


1,380


Current income tax provision 

416


497


Deferred income tax provision

162


105






INCOME FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST

851


778


Loss from discontinued operations, net of tax

(517)


(61)






INCOME INCLUDING NONCONTROLLING INTEREST

334


717


Net income attributable to noncontrolling interest

98


-


Preferred stock dividends

-


19






NET INCOME ATTRIBUTABLE TO COMMON STOCK

$    236


$    698






NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS





Net income from continuing operations attributable to common shareholders

$    753


$    759


Net income (loss) from discontinued operations

(517)


(61)


Net income attributable to common shareholders

$    236


$    698






BASIC NET INCOME (LOSS) PER COMMON SHARE:





Basic net income from continuing operations per share

$   1.92


$   1.94


Basic net loss from discontinued operations per share

(1.32)


(0.16)


Basic net income per share

$   0.60


$   1.78






DILUTED NET INCOME (LOSS) PER COMMON SHARE:





Diluted net income from continuing operations per share

$   1.90


$   1.91


Diluted net loss from discontinued operations per share

(1.30)


(0.15)


Diluted net income per share

$   0.60


$   1.76






WEIGHTED-AVERAGE NUMBER OF COMMON 




   SHARES OUTSTANDING:





Basic

394


392


Diluted

396


408






DIVIDENDS DECLARED PER COMMON SHARE

$   0.25


$   0.20

 

 

APACHE CORPORATION

SUMMARY OF CAPITAL COSTS INCURRED

(In millions)

















For the Quarter





Ended March 31,





2014


2013

CAPITAL EXPENDITURES:





Exploration & Development Costs






United States

$     1,349


$     1,269



Canada

269


258




North America

1,618


1,527



Egypt (1)

320


262



Australia

261


225



North Sea

227


177



Argentina

12


33



New Ventures - International

1


5




International (1)

821


702




Worldwide Exploration & Development Costs (1)

$     2,439


$     2,229









Gathering, Transmission and Processing Facilities






United States

$          45


$          18



Canada

102


30



Egypt (1)

15


19



Australia

168


180



Argentina

1


2



North Sea

1


-




Total Gathering, Transmission and Processing (1)

$        332


$        249









Asset Retirement Costs

$          28


$        134









Capitalized Interest (2)

$          98


$          93









Capital Expenditures, excluding Acquisitions (1)

$     2,897


$     2,705









Asset Retirement Costs - Acquired

$             -


$          53









Acquisitions

$            2


$        310









(1) Includes capital costs attributable to noncontrolling interest in Egypt










(2) Capitalized interest in both quarters includes Argentina discontinued operations of $3M










APACHE CORPORATION

SUMMARY BALANCE SHEET INFORMATION

(In millions)



















March 31,


December 31,





2014


2013









Cash and Cash Equivalents

$    1,643


$     1,906


Other Current Assets 

3,820


4,460


Property and Equipment, net

52,752


52,421


Goodwill

1,369


1,369


Other Assets

1,537


1,481


Total Assets

$   61,121


$   61,637









Short-Term Debt

$             -


$          53


Other Current Liabilities

4,356


4,647


Long-Term Debt

9,673


9,672


Deferred Credits and Other Noncurrent Liabilities

11,915


11,872


Apache Shareholders' Equity

33,082


33,396


Noncontrolling interest

2,095


1,997


Total Liabilities and Shareholders' Equity

$  61,121


$   61,637









Common shares outstanding at end of period

390


396

 

 

APACHE CORPORATION

PRODUCTION INFORMATION























For the Quarter







Ended March 31,







2014


2013










  OIL VOLUME - Barrels per day






Central



21,686


20,526


Permian



88,327


67,900


Gulf of Mexico


6,266


7,235


Gulf Coast


10,975


9,977


GOM Shelf


697


43,625



United States


127,951


149,263


Canada



17,589


17,176



North America


145,540


166,439


Egypt (1)



88,093


91,315


Australia



16,825


20,001


North Sea


59,092


68,462



International (1)


164,010


179,778




Total (1)


309,550


346,217










  NATURAL GAS VOLUME - Mcf per day






Central



260,298


277,025


Permian



215,860


185,713


Gulf of Mexico


16,123


31,136


Gulf Coast


99,242


105,412


GOM Shelf


1,162


254,405



United States


592,685


853,691


Canada



377,712


519,175



North America


970,397


1,372,866


Egypt (1)



377,357


365,612


Australia



215,792


214,395


North Sea


45,071


55,032



International (1)


638,220


635,039




Total (1)


1,608,617


2,007,905










  NGL VOLUME - Barrels per day






Central



24,455


19,517


Permian



25,260


20,583


Gulf of Mexico


828


887


Gulf Coast


2,423


2,313


GOM Shelf


92


5,999



United States


53,058


49,299


Canada



7,769


6,663



North America


60,827


55,962


Egypt (1)



233


-


North Sea


1,091


1,494



International (1)


1,324


1,494




Total (1)


62,151


57,456










  BOE per day






Central



89,524


86,215


Permian



149,564


119,435


Gulf of Mexico


9,781


13,311


Gulf Coast


29,939


29,859


GOM Shelf


982


92,024



United States


279,790


340,844


Canada



88,310


110,368



North America


368,100


451,212


Egypt (1)



151,219


152,250


Australia



52,790


55,734


North Sea


67,695


79,128



International (1)


271,704


287,112




Total (1)


639,804


738,324













Total excluding noncontrolling interest

589,860


738,324











(1) Includes production volume per day attributable to noncontrolling interest in Egypt



Oil (b/d)


29,066


-



Gas (mcf/d)


124,799


-



NGL (b/d)


78


-










  Discontinued Operations - Argentina






Oil (b/d)



6,885


9,297


Gas (mcf/d)


141,352


188,259


NGL (b/d)


1,287


2,822











BOE/d



31,731


43,495

 

 

APACHE CORPORATION

PRICE INFORMATION

























For the Quarter







Ended March 31,







2014


2013










  AVERAGE OIL PRICE PER BARREL






Central



$ 93.72


$ 88.15


Permian



93.76


82.78


Gulf of Mexico


101.44


110.47


Gulf Coast


101.87


111.03


GOM Shelf


 NM 


111.67



United States (1)


94.84


94.45


Canada



88.19


82.33



North America (1)


94.03


93.20


Egypt




106.70


110.99


Australia



112.26


112.35


North Sea


106.60


110.53



International


107.24


110.97




Total (1)


101.03


102.42










  AVERAGE NATURAL GAS PRICE PER MCF






Central



$   5.20


$   3.73


Permian



4.78


3.77


Gulf of Mexico


5.23


3.40


Gulf Coast


4.93


3.55


GOM Shelf


 NM 


3.54



United States (1)


4.98


3.75


Canada



4.38


3.23



North America (1)


4.75


3.56


Egypt




3.02


2.95


Australia



4.42


4.94


North Sea


10.69


10.00



International


4.03


4.23




Total (1)


4.46


3.77










  AVERAGE NGL PRICE PER BARREL






Central



$ 30.39


$ 26.54


Permian



31.46


25.71


Gulf of Mexico


32.00


34.68


Gulf Coast


35.90


33.69


GOM Shelf


 NM 


28.87



United States


30.81


26.96


Canada



42.09


32.15



North America


32.25


27.58


Egypt




64.34


-


North Sea


79.84


71.16



International


77.11


71.16




Total


33.20


28.71



















  Discontinued Operations - Argentina






Oil price ($/Bbl)


$ 72.70


$ 75.36


Gas price ($/Mcf)


3.04


3.18


NGL price ($/Bbl)


24.57


30.28











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

 

 


APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(In millions, except per share data)





















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:











Ÿ

Management uses adjusted earnings to evaluate the company's operational trends and performance relative to other oil and gas producing companies.











Ÿ

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.  











Ÿ

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




Ended March 31,




2014


2013







Income Attributable to Common Stock (GAAP)

$              236


$              698







Adjustments:





Argentina discontinued operations, net of tax

$              517


$                61


Unrealized foreign currency fluctuation impact on deferred tax expense  

7


(4)


Acquisitions, divestitures & transition costs

1


-


Deferred tax adjustments

(5)


11


Commodity derivative mark-to-market, net of tax

(49)


31

Adjusted Earnings  (Non-GAAP)

$              707


$              797







Net Income per Common Share - Diluted (GAAP)

$             0.60


$             1.76







Adjustments:





Argentina discontinued operations, net of tax

1.30


0.15


Unrealized foreign currency fluctuation impact on deferred tax expense  

0.02


(0.01)


Deferred tax adjustments

(0.01)


0.03


Commodity derivative mark-to-market, net of tax

(0.13)


0.07

Adjusted Earnings Per Share - Diluted (Non-GAAP)

$             1.78


$             2.00













Total income tax provision (GAAP)

$              578


$              602


Tax impact on commodity derivative mark-to-market

(27)


17


Foreign currency fluctuation impact on deferred tax expense

(7)


4


Deferred tax adjustments

5


(11)


Tax impact on acquisitions, divestitures & transition costs

1


-

Total income tax provision, net of adjustments

$              550


$              612







Effective Rate excluding Adjustments (Non-GAAP)

40.6%


42.9%







 

 




APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(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:

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,




2014


2013

Net cash provided by operating activities (GAAP)

$           2,293


$           2,621


Less: Discontinued operations

(82)


(64)

Net cash provided by operating activities excluding discontinued operations

$           2,211


$           2,557

Changes in operating assets and liabilities

11


(262)

Cash from continuing operations before changes in operating assets and liabilities

$           2,222


$           2,295

 

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