APACHE CP : Apache Production Surges 25% in First Quarter to 732,000 boe Per Day
04/28/2011| 08:20am US/Eastern
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HOUSTON, April 28, 2011 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) reported production of 732,000 barrels of oil equivalent (boe) per day and earnings of $1.1 billion, or $2.86 per diluted share, for the three-month period ending March 31, 2011. These compare with production of 586,000 boe per day and net income of $705 million, or $2.08 per diluted share, for the same period in the prior year.
"Apache is beginning the year with a solid, strong performance," said G. Steven Farris, chairman and chief executive officer. "Despite a number of challenges, our diversified portfolio of assets delivered exceptional earnings and operating results. Liquids production increased 57,000 barrels to 358,000 barrels per day, which enabled Apache to achieve stand-out earnings and cash flow as a leading beneficiary of rising oil prices."
Higher oil prices and production from new wells drilled during the quarter and assets acquired during 2010 combined to increase revenues to $3.9 billion, up from $2.7 billion last year. Cash from operations before changes in operating assets and liabilities* increased 43 percent from the prior year to $2.2 billion. Excluding certain items that management believes affect the comparability of operating results, Apache reported adjusted earnings* of $1.1 billion in first quarter 2011 compared with $712 million in the year-earlier period. On a per-share basis, adjusted earnings were $2.90 in the first quarter compared with $2.10 per diluted share in the prior-year period.
Liquid hydrocarbons represented 49 percent of production and 77 percent of revenues. Approximately 60 percent of the company's oil production came from operations outside North America and received in excess of a $10 premium per barrel compared with domestic production benchmarked to West Texas Intermediate prices.
On the operational front, the company achieved several milestones. These include:
-- Apache's most prolific development well in the Forties field (North
Sea), which came online at approximately 11,800 barrels of oil per day.
-- In the Permian Basin, Apache is operating 24 rigs, up nearly five-fold
from a year ago. Targeting primarily oil objectives, Apache drilled 110
wells including 15 horizontals during the first quarter.
-- Since drilling the first-ever horizontal Hogshooter well last year,
Apache has drilled six wells into this oil-rich segment of the Anadarko
basin's Granite Wash formation. To date, every well has tested in excess
of 1,000 barrels of oil and 2 million cubic feet of gas per day.
-- The company's first operated deepwater production in the Gulf of Mexico
with start-up at the Balboa field.
-- Offshore Australia, Apache's Zola discovery well encountered 410 feet of
net gas pay.
-- In Egypt, Apache operated 22 rigs during the quarter, drilling 33 wells,
including the company's first wells in the Tayim development lease in
West Kalabsha producing from deeper Paleozoic pay. Apache's production
remained online throughout the quarter, increasing sequentially from the
previous three months.
"We continue to strengthen our land position, both in North America and internationally. Our LNG initiatives, Kitimat in Canada and Wheatstone in Australia, are steadily progressing toward project sanction with their respective joint venture partnerships," Farris said.
"Apache's opportunity set has never been more robust. We have a deep backlog of exploitation opportunities across our portfolio. In addition to our legacy plays in core areas, we have other potentially large-scale, long-life assets such as deepwater, LNG, and unconventional plays that can provide lasting, long-term value to our shareholders."
Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom North Sea, Australia and Argentina. From time to time, Apache posts announcements, operational updates and investor information, and copies of all press releases on its Web site, www.apachecorp.com.
*Cash from operations before changes in operating assets and liabilities and adjusted earnings are non-GAAP measures. Please see reconciliations below. For supplemental and non-GAAP information, please go to http://www.apachecorp.com/financialinfo.
NOTE: Apache will conduct a conference call to discuss its first-quarter 2011 results at 1 p.m. Central time on Thursday, April 28. The call will be webcast from Apache's Web site, www.apachecorp.com. The webcast replay and podcast will be archived on Apache's Web site. The conference call will be available for delayed playback by telephone for one week beginning at approximately 3 p.m. on April 28. To access the telephone playback, dial 800-642-1687 or 706-645-9291 for international calls and provide Apache's confirmation code, 21269081.
This news release contains certain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 including, without limitation, expectations, beliefs, plans and objectives regarding production and exploration activities. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," and similar references to future periods. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions, risks and uncertainties. These risks include, but are not limited to the volatility of oil and natural gas prices, uncertainties inherent in estimating oil and natural gas reserves, drilling risks, and other risks, uncertainties and factors discussed in our most recently filed Annual Report on Form 10-K/A, on our Web site and in our other public filings and press releases. 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. Unless legally required, Apache assumes no duty to update these statements as of any future date.
Effective January 1, 2010, the United States Securities and Exchange Commission (SEC) now permits oil and gas companies, in their filings with the SEC, to disclose not only "proved" reserves, but also "probable" reserves as well as "possible" reserves. Statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserve estimates provided in this release that are not specifically designated as being estimates of proved reserves may include estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC's latest reserve reporting guidelines. Investors are urged to consider closely the disclosure in Apache's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2010, available from Apache at www.apachecorp.com or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, Texas 77056 (Attn: Corporate Secretary).
APA-F
APACHE CORPORATION
FINANCIAL INFORMATION
(In millions, except per share data)
For the Quarter
Ended March 31,
---------------
2011 2010
---- ----
REVENUES AND OTHER:
Oil and gas production
revenues $3,878 $2,693
Other 47 (20)
--- ---
3,925 2,673
----- -----
COSTS AND EXPENSES:
Depreciation, depletion and
amortization 936 639
Asset retirement obligation
accretion 37 24
Lease operating expenses 623 440
Gathering and
transportation 76 40
Taxes other than income 164 177
General and administrative 112 87
Merger, acquisitions and
transition 5 -
Financing costs, net 45 59
1,998 1,466
----- -----
INCOME BEFORE INCOME TAXES 1,927 1,207
Current income tax
provision 643 343
Deferred income tax
provision 150 159
--- ---
NET INCOME 1,134 705
Preferred stock dividends 19 -
--- ---
INCOME ATTRIBUTABLE TO
COMMON STOCK $1,115 $705
====== ====
NET INCOME PER COMMON
SHARE:
Basic $2.91 $2.09
===== =====
Diluted $2.86 $2.08
===== =====
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 383 337
=== ===
DILUTED SHARES OUTSTANDING 397 339
=== ===
APACHE CORPORATION
FINANCIAL INFORMATION
(In millions)
For the Quarter
Ended March 31,
---------------
2011 2010
---- ----
CAPITAL EXPENDITURES (1):
Exploration & Development
Costs
United States $615 $297
Canada 266 203
--- ---
North America 881 500
--- ---
Egypt 193 166
Australia 162 165
North Sea 210 94
Argentina 69 37
Chile - 10
--- ---
International 634 472
--- ---
Worldwide Exploration &
Development Costs $1,515 $972
------ ----
Gathering, Transmission and
Processing Facilities
Canada $42 $33
Egypt 29 24
Australia 51 56
Argentina - 1
--- ---
Total Gathering, Transmission
and Processing $122 $114
---- ----
Capitalized Interest $60 $17
--- ---
Capital Expenditures,
excluding acquisitions $1,697 $1,103
====== ======
Acquisitions $11 $5
=== ===
(1) Accrual basis
March December
31, 31,
2011 2010
---- ----
BALANCE SHEET DATA:
Cash and Cash Equivalents $356 $134
Other Current Assets 3,645 3,346
Property and Equipment, net 39,046 38,151
Goodwill 1,032 1,032
Other Assets 787 762
Total Assets $44,866 $43,425
======= =======
Short-Term Debt $30 $46
Other Current Liabilities 3,926 3,478
Long-Term Debt 8,130 8,095
Deferred Credits and Other
Noncurrent Liabilities 7,582 7,429
Shareholders' Equity 25,198 24,377
Total Liabilities and
Shareholders' Equity $44,866 $43,425
======= =======
Common shares outstanding at
end of period 383 382
APACHE CORPORATION
FINANCIAL INFORMATION
For the Quarter
Ended March 31,
---------------
2011 2010
---- ----
PRODUCTION DATA:
OIL VOLUME -Barrels per
day
Central 5,046 2,371
Permian 48,280 35,875
GOM Deepwater 5,322 2,202
GOM Shelf 46,558 43,664
GC Onshore 8,517 4,643
----- -----
United States 113,723 88,755
Canada 14,704 14,330
------ ------
North America 128,427 103,085
------- -------
Egypt 108,876 90,746
Australia 34,720 27,090
North Sea 46,968 57,847
Argentina 9,617 9,921
----- -----
International 200,181 185,604
------- -------
Total 328,608 288,689
======= =======
NATURAL GAS VOLUME -Mcf
per day
Central 215,612 190,481
Permian 159,005 100,626
GOM Deepwater 60,589 32,253
GOM Shelf 348,845 293,969
GC Onshore 74,095 54,490
------ ------
United States 858,146 671,819
Canada 642,729 313,537
------- -------
North America 1,500,875 985,356
--------- -------
Egypt 371,514 361,986
Australia 182,922 207,294
North Sea 1,901 2,563
Argentina 188,092 154,723
------- -------
International 744,429 726,566
------- -------
Total 2,245,304 1,711,922
========= =========
NGL VOLUME -Barrels per
day
Central 787 493
Permian 9,341 1,452
GOM Deepwater 1,129 649
GOM Shelf 6,407 3,189
GC Onshore 1,588 1,060
----- -----
United States 19,252 6,843
Canada 6,545 1,734
----- -----
North America 25,797 8,577
------ -----
Egypt 228 -
Argentina 3,055 3,291
----- -----
International 3,283 3,291
----- -----
Total 29,080 11,868
====== ======
BOE per day
Central 41,768 34,610
Permian 84,121 54,098
GOM Deepwater 16,549 8,226
GOM Shelf 111,106 95,848
GC Onshore 22,455 14,785
------ ------
United States 275,999 207,567
Canada 128,370 68,320
------- ------
North America 404,369 275,887
------- -------
Egypt 171,023 151,077
Australia 65,207 61,639
North Sea 47,285 58,275
Argentina 44,021 38,999
------ ------
International 327,536 309,990
------- -------
Total 731,905 585,877
======= =======
APACHE CORPORATION
FINANCIAL INFORMATION
For the Quarter
Ended March 31,
---------------
2011 2010
---- ----
PRICING DATA:
AVERAGE OIL PRICE PER BARREL
Central $89.33 $75.24
Permian 88.72 75.06
GOM Deepwater 97.61 76.30
GOM Shelf 98.84 76.87
GC Onshore 97.73 77.90
United States (1) 89.72 74.33
Canada 87.21 75.39
North America (1) 89.43 74.47
Egypt (1) 107.14 76.49
Australia (1) 105.89 74.94
North Sea (2) 100.89 74.34
Argentina 60.36 57.81
International (1, 2) 103.21 74.60
Total (1, 2) 97.83 74.55
AVERAGE NATURAL GAS PRICE PER
MCF
Central $4.42 $5.73
Permian 4.99 7.12
GOM Deepwater 4.10 5.19
GOM Shelf 4.53 5.78
GC Onshore 4.51 5.69
United States (1) 4.94 6.06
Canada (1) 4.54 5.29
North America (1) 4.77 5.82
Egypt 4.44 3.57
Australia 2.50 2.22
North Sea 20.34 18.31
Argentina 2.18 2.17
International 3.43 2.94
Total (1) 4.32 4.60
AVERAGE NGL PRICE PER BARREL
Central $48.34 $50.06
Permian 45.52 44.50
GOM Deepwater 37.69 54.21
GOM Shelf 42.41 54.14
GC Onshore 55.85 54.83
United States 44.99 51.91
Canada 40.12 40.54
North America 43.76 49.61
Egypt 63.35 -
Argentina 30.51 34.60
International 32.79 34.60
Total 42.52 45.45
(1) Prices reflect the impact of financial derivative hedging
activities.
(2) Prices reflect the impact of the North Sea fixed-price oil
sales contract.
APACHE CORPORATION
FINANCIAL INFORMATION
(In millions, except per share data)
NON-GAAP FINANCIAL MEASURES:
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:
--Management uses adjusted earnings to evaluate
the company's operational trends and performance
relative to other oil and gas producing
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.
--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,
---------------
2011 2010
---- ----
Income Attributable to Common
Stock (GAAP) $1,115 $705
Adjustments:
Foreign currency fluctuation
impact on deferred tax
expense 12 7
Merger, acquisitions and
transition costs, net of tax 4 -
--- ---
Adjusted Earnings (Non-GAAP) $1,131 $712
====== ====
Net Income per Common Share -
Diluted (GAAP) $2.86 $2.08
Adjustments:
Foreign currency fluctuation
impact on deferred tax
expense 0.03 0.02
Merger, acquisitions and
transition costs, net of tax 0.01 -
---- ---
Adjusted Earnings Per Share -
Diluted (Non-GAAP) $2.90 $2.10
===== =====
Reconciliation of net cash provided by
operating activities to cash from 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,
---------------
2011 2010
---- ----
Net cash provided by
operating activities $1,979 $1,154
Changes in operating
assets and liabilities 264 415
--- ---
Cash from operations
before changes in
operating assets and
liabilities $2,243 $1,569
====== ======
SOURCE Apache Corporation
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