Apache Corporation Provides Highlights From Its North Sea Region Update

Apache Corporation Provides Highlights From Its North Sea Region Update

HOUSTON, Nov. 17, 2015 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) is hosting a webcast today with analysts and investors to provide an update on the company's North Sea operations, recent drilling success and views on the future potential of its portfolio in the region. 

"Today we will highlight the uniqueness of Apache's global portfolio and our North Sea assets in particular. We believe our performance and outlook reflect a truly differentiated opportunity that will provide significant value accretion in the coming years. With our financial position and our asset portfolio now in excellent shape, our strategy over the next five years is to focus on growing North America with the support of significant free cash flow generated by our Egypt and North Sea operations. At the same time, we believe that our international regions, and the North Sea in particular, have significant upside potential that will create value for Apache shareholders beyond its near-term free-cash-flow-generation potential," said John J. Christmann, IV, Apache's chief executive officer and president.

Apache enjoys an advantaged position in the North Sea

The North Sea region plays an important role in the overall Apache portfolio by providing competitive investment opportunities across multiple time horizons, exposure to an asset base that is less sensitive to oil price volatility and potential reserve upside with high-impact exploration potential.  With industry-leading production efficiency of 92 percent, approximately 50 percent lower operating costs and materially advantaged infrastructure and offtake capabilities, Apache's position in the North Sea is highly differentiated.

Forties field is proving very resilient, and Beryl area offers significant exploration upside

The Forties field has produced more than 2.6 billion barrels of oil and has recovered more than 50 percent of the resource in place over the past 40 years.  With the size of the remaining resource estimated at nearly 2.5 billion barrels, even small incremental improvements in the recovery factor can result in significant reserve and production gains. Notably, every 1 percent increase in recovery factor equates to approximately 50 million barrels of additional recoverable reserves.

Beryl, is a geologically complex area with multiple fields and stacked pay potential providing significant exploration opportunity. Following the completion of the first 3-D shoot since 1997, Apache recently announced two exceptional discoveries in the area and is moving ahead with development and additional exploration efforts.

Since the acquisition of these two fields, Apache has invested nearly $2.6 billion in infrastructure and is now reaping the benefits of this investment as a higher percentage of capital dollars is now being directed to drilling and production. Over the past four years, Apache invested 44 percent of its capital on infrastructure, yet over the next five years, it is estimated the company will only spend 12 percent of its annual capital on infrastructure requirements. The result will be improving capital efficiency, and all else being equal, improving returns on capital employed.

Significant reserves potential underscores longevity and upside for the region

Apache estimates its total net unrisked reserve potential in the North Sea is 574 million to more than 1 billion barrels of oil equivalent, none of which was booked at year-end 2014. This potential represents an opportunity of four to seven times Apache's year-end 2014 proved reserves in the North Sea of approximately 145 million barrels of oil equivalent. Assuming historical development and exploration success rates, Apache believes it can sustain both reserves and production at current levels for at least another five years while generating significant free cash flow. 

"The North Sea region plays a key role in the Apache portfolio, and our assets are highly differentiated from other operators in the area. We can either sustain or grow our reserves, production and free cash flow at high rates of return, depending on how much capital we ultimately allocate there. We will be able to achieve this because we have high-quality assets coupled with an infrastructure advantage, a cost advantage and a very large exploratory and development inventory. I am proud of what we have delivered this year and am even more excited about what we are positioned to deliver in the future," said Christmann.

Webcast presentation

Today's presentation will be webcast live from the company's website, www.apachecorp.com, beginning at 9 a.m. Central time. The presentation and webcast will be archived on Apache's website.

About Apache

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, 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 Play Store.      

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", "guidance" 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 planned drilling activity, future production and exploration prospects in the United Kingdom sector of the North Sea. 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 2014 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 operations supplement, 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 December 31, 2014, available from Apache at www.apachecorp.com or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, Texas 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.

Logo for the Apache Corporation. More information about Apache can be found at www.apachecorp.com.

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SOURCE Apache Corporation

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