APACHE CP : Apache's Third-Quarter Earnings Increase 74 Percent as Production Rises 10 Percent
11/04/2010| 07:40am US/Eastern
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HOUSTON, Nov. 4, 2010 /PRNewswire-FirstCall/ -- Apache Corporation (NYSE, Nasdaq: APA) today reported net income of $765 million, up 74 percent from $441 million in the prior-year period. Apache earned $2.12 per diluted common share in the third quarter compared with $1.30 per share in the year-earlier quarter.
Worldwide production increased 10 percent from the year-earlier quarter to 667,460 barrels of oil equivalent (boe) per day.
Cash from operations before changes in operating assets and liabilities* totaled $2 billion in the third quarter, up from $1.3 billion in the prior-year period. Apache's third-quarter adjusted earnings,* which exclude certain items that impact the comparability of operating results, totaled $791 million or $2.19 per share, up from $534 million or $1.58 per share in the year-earlier period.
Third-quarter production averaged 358,475 barrels of liquid hydrocarbons and 1.85 billion cubic feet of natural gas per day, both up 3 percent from the second quarter of 2010. Apache's operations outside North America accounted for 54 percent of worldwide production. Liquids sales - crude oil and natural gas liquids - were 54 percent of worldwide production and 78 percent of revenue. Including the impact of hedging activities, Apache realized an average of $74.14 per barrel of oil, down slightly from the second quarter, and $4.01 per thousand cubic feet (Mcf) of natural gas, unchanged from the second quarter.
"Apache's portfolio balance again contributed to strong operational and financial results in the third quarter," said G. Steven Farris, chairman and chief executive officer. "In Australia, the Pyrenees and Van Gogh developments of Apache's Exmouth Basin oil discoveries continued to make significant contributions. We also had higher production in the Permian Basin and Gulf of Mexico as a result of recent acquisitions that will continue to fuel Apache's growth.
"Apache's focus is on integrating operations and building additional value from the assets acquired this year in the Gulf of Mexico, Permian Basin and western Canada as well as our previously announced acquisition in Egypt, which we expect will close during the fourth quarter," Farris said. "We also are continuing our high-impact exploration programs in Australia and Egypt.
"In December, after the acquisition activity is expected to be completed, we forecast production to exceed 775,000 boe per day, or 35 percent above the December 2009 level," Farris said.
Apache's third-quarter results include production from Gulf Shelf assets acquired from Devon Energy Corp. in the second quarter as well as the partial-quarter impact of the acquisition of BP's oil and gas operations, acreage and infrastructure in the Permian Basin of West Texas and New Mexico on Aug. 10.
Apache's subsidiary, Apache Canada Ltd., completed its acquisition of substantially all of BP's upstream natural gas business in western Alberta and British Columbia on Oct. 8.
Apache also expects to close the previously announced merger with Mariner Energy upon approval of Mariner's shareholders at a special meeting scheduled Nov. 10. Mariner is an independent producer with operations in the Gulf of Mexico, the Gulf Coast and the Permian Basin.
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.
Apache posts announcements, updates and investor information, in addition to all press releases, on its website, www.apachecorp.com.
*Adjusted earnings and cash from operations before changes in operating assets and liabilities are non-GAAP measures. Please see reconciliations below. For supplemental and non-GAAP information, please go to www.apachecorp.com/financialinfo.
NOTE: Apache will conduct a conference call to discuss its third-quarter results at 1 p.m. Central time on Thursday, Nov. 4. The third-quarter conference call will be webcast from Apache's website, http://www.apachecorp.com. The webcast replay and podcast 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. on Nov. 4. To access the telephone playback, dial (800) 642-1687 (please note new playback number) and provide Apache's confirmation code, 19776911.
Forward-Looking Statements
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. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions, risks and uncertainties, including, without limitation, risks, uncertainties and other factors discussed in our most recently filed Annual Report on Form 10-K, recent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K available on our website, http://www.apachecorp.com/, 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. We assume no duty to update these statements as of any future date. However, readers should review carefully reports and documents that Apache files periodically with the Securities and Exchange Commission.
APA-F
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2010 2009 2010 2009
---- ---- ---- ----
REVENUES AND
OTHER:
Oil and gas
production
revenues $3,046,445 $2,325,705 $8,708,835 $6,003,663
Other (33,786) 6,726 (51,015) 55,971
------- ----- ------- ------
3,012,659 2,332,431 8,657,820 6,059,634
--------- --------- --------- ---------
COSTS AND
EXPENSES:
Depreciation,
depletion and
amortization
Recurring 786,237 625,898 2,154,486 1,779,874
Additional - - - 2,818,161
Asset
retirement
obligation
accretion 24,783 26,053 73,545 79,274
Lease
operating
expenses 506,556 445,535 1,392,751 1,248,297
Gathering and
transportation 42,840 36,232 126,243 103,050
Taxes other
than income 158,627 183,931 522,398 387,211
General and
administrative 96,908 82,492 275,887 258,443
Financing
costs, net 59,350 61,684 174,374 181,426
1,675,301 1,461,825 4,719,684 6,855,736
--------- --------- --------- ---------
INCOME (LOSS)
BEFORE INCOME
TAXES 1,337,358 870,606 3,938,136 (796,102)
Current income
tax provision 206,709 262,430 888,834 483,171
Deferred
income tax
provision
(benefit) 352,384 166,160 705,833 (409,069)
------- ------- ------- --------
NET INCOME
(LOSS) 778,265 442,016 2,343,469 (870,204)
Preferred
stock
dividends 13,276 1,420 13,276 4,260
------ ----- ------ -----
INCOME (LOSS)
ATTRIBUTABLE
TO COMMON
STOCK $764,989 $440,596 $2,330,193 $(874,464)
======== ======== ========== =========
NET INCOME
(LOSS) PER
COMMON SHARE:
Basic $2.14 $1.31 $6.78 $(2.61)
===== ===== ===== ======
Diluted $2.12 $1.30 $6.72 $(2.61)
===== ===== ===== ======
WEIGHTED
AVERAGE
COMMON SHARES
OUTSTANDING 356,718 336,159 343,826 335,637
======= ======= ======= =======
DILUTED SHARES
OUTSTANDING 367,439 337,872 348,784 335,637
======= ======= ======= =======
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands)
For the Quarter
Ended September 30,
-------------------
2010 2009
---- ----
CAPITAL EXPENDITURES (1):
Exploration & Development Costs
United States $422,001 $178,890
Canada 227,489 102,476
------- -------
North America 649,490 281,366
------- -------
Egypt 205,054 146,282
Australia 105,604 135,798
North Sea 207,459 77,160
Argentina 72,551 26,596
Chile 5,659 196
----- ---
International 596,327 386,032
------- -------
Worldwide Exploration & Development
Costs $1,245,817 $667,398
---------- --------
Gathering, Transmission and
Processing Facilities
Canada $34,769 $13,094
Egypt 20,540 14,527
Australia 12,806 10,841
Argentina 673 599
--- ---
Total Gathering, Transmission and
Processing $68,788 $39,061
------- -------
Capitalized Interest $29,007 $14,344
------- -------
Capital Expenditures, excluding
acquisitions $1,343,612 $720,803
========== ========
Acquisitions $2,516,902 $15,123
========== =======
For the Nine Months
Ended September 30,
-------------------
2010 2009
---- ----
CAPITAL EXPENDITURES (1):
Exploration & Development Costs
United States $1,039,479 $747,691
Canada 592,593 312,791
------- -------
North America 1,632,072 1,060,482
--------- ---------
Egypt 509,947 534,893
Australia 401,023 420,960
North Sea 437,325 293,451
Argentina 166,412 108,892
Chile 20,034 4,145
------ -----
International 1,534,741 1,362,341
--------- ---------
Worldwide Exploration & Development
Costs $3,166,813 $2,422,823
---------- ----------
Gathering, Transmission and
Processing Facilities
Canada $107,167 $69,235
Egypt 110,369 109,607
Australia 102,269 23,213
Argentina 2,036 1,729
----- -----
Total Gathering, Transmission and
Processing $321,841 $203,784
-------- --------
Capitalized Interest $64,359 $45,325
------- -------
Capital Expenditures, excluding
acquisitions $3,553,013 $2,671,932
========== ==========
Acquisitions $3,550,296 $258,343
========== ========
(1) Accrual basis
September December
30, 31,
2010 2009
---- ----
BALANCE SHEET DATA:
Cash and Cash Equivalents $1,211,439 $2,048,117
Other Current Assets 3,039,021 2,537,732
Property and Equipment, net 28,346,116 22,900,615
Goodwill 189,252 189,252
Deposit Related to Acquisition of BP
Properties 3,500,000 -
Other Assets 642,521 510,027
Total Assets $36,928,349 $28,185,743
=========== ===========
Short-Term Debt $135,369 $117,326
Other Current Liabilities 2,391,361 2,275,232
Long-Term Debt 6,380,579 4,950,390
Deferred Credits and Other
Noncurrent Liabilities 6,075,658 5,064,174
Shareholders' Equity 21,945,382 15,778,621
Total Liabilities and Shareholders'
Equity $36,928,349 $28,185,743
=========== ===========
Common shares outstanding at end of
period 364,425 336,437
APACHE CORPORATION
FINANCIAL INFORMATION
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2010 2009 2010 2009
---- ---- ---- ----
PRODUCTION DATA:
OIL VOLUME -
Barrels per day
Gulf Coast 54,683 51,440 52,009 50,778
Central 3,767 2,189 3,027 2,224
Permian 39,374 34,584 37,033 34,833
------ ------ ------ ------
United States 97,824 88,213 92,069 87,835
Canada 13,868 14,595 14,252 15,586
------ ------ ------ ------
North America 111,692 102,808 106,321 103,421
------- ------- ------- -------
Egypt 99,818 93,550 96,387 90,848
Australia 56,876 10,849 48,324 9,732
North Sea 58,764 67,288 58,254 62,515
Argentina 9,645 11,026 9,812 11,799
----- ------ ----- ------
International 225,103 182,713 212,777 174,894
------- ------- ------- -------
Total 336,795 285,521 319,098 278,315
======= ======= ======= =======
NATURAL GAS
VOLUME -Mcf per
day
Gulf Coast 402,777 401,094 388,760 359,787
Central 216,189 198,700 204,446 204,002
Permian 117,557 99,268 101,440 94,718
------- ------ ------- ------
United States 736,523 699,062 694,646 658,507
Canada 334,945 371,516 329,443 367,562
------- ------- ------- -------
North America 1,071,468 1,070,578 1,024,089 1,026,069
--------- --------- --------- ---------
Egypt 380,598 372,312 377,051 355,824
Australia 197,090 225,349 202,473 176,457
North Sea 2,372 2,983 2,483 2,771
Argentina 202,381 183,504 180,219 189,303
------- ------- ------- -------
International 782,441 784,148 762,226 724,355
------- ------- ------- -------
Total 1,853,909 1,854,726 1,786,315 1,750,424
========= ========= ========= =========
NGL VOLUME -
Barrels per day
Gulf Coast 6,481 5,045 5,433 4,096
Central 592 385 529 315
Permian 9,426 1,589 5,814 1,401
----- ----- ----- -----
United States 16,499 7,019 11,776 5,812
Canada 2,134 2,166 1,956 2,110
----- ----- ----- -----
North America 18,633 9,185 13,732 7,922
Argentina 3,047 3,291 3,151 3,174
----- ----- ----- -----
Total 21,680 12,476 16,883 11,096
====== ====== ====== ======
BOE per day
Gulf Coast 128,293 123,334 122,235 114,838
Central 40,390 35,690 37,631 36,539
Permian 68,393 52,718 59,753 52,020
------ ------ ------ ------
United States 237,076 211,742 219,619 203,397
Canada 71,827 78,680 71,115 78,957
------ ------ ------ ------
North America 308,903 290,422 290,734 282,354
------- ------- ------- -------
Egypt 163,251 155,602 159,228 150,152
Australia 89,724 48,408 82,070 39,142
North Sea 59,159 67,785 58,668 62,977
Argentina 46,423 44,901 43,000 46,523
------ ------ ------ ------
International 358,557 316,696 342,966 298,794
------- ------- ------- -------
Total 667,460 607,118 633,700 581,148
======= ======= ======= =======
APACHE CORPORATION
FINANCIAL INFORMATION
For the Nine
For the Quarter Months
Ended September Ended September
30, 30,
---------------- ----------------
2010 2009 2010 2009
---- ---- ---- ----
PRICING DATA:
AVERAGE OIL PRICE PER
BARREL
Gulf Coast $75.79 $66.70 $76.53 $55.07
Central 72.43 64.11 73.73 51.97
Permian 72.47 60.37 73.78 49.05
United States (1) 73.67 64.57 74.05 54.89
Canada 69.01 63.79 71.76 51.95
North America (1) 73.09 64.46 73.74 54.45
Egypt 75.91 65.64 76.15 56.67
Australia 74.80 73.70 74.66 58.74
North Sea 75.25 65.76 76.13 56.68
Argentina 57.31 48.53 56.84 47.29
International 74.66 65.13 74.91 56.15
Total (1) 74.14 64.89 74.52 55.52
AVERAGE NATURAL GAS
PRICE PER MCF
Gulf Coast $4.67 $3.59 $4.93 $4.03
Central 4.41 3.28 4.76 3.34
Permian 4.64 4.56 5.49 4.16
United States (1) 5.10 3.99 5.41 4.13
Canada (1) 4.42 3.61 4.72 4.04
North America (1) 4.89 3.86 5.19 4.10
Egypt 3.57 3.86 3.55 3.78
Australia 2.20 2.04 2.21 1.85
North Sea 16.54 14.89 17.35 11.66
Argentina 1.79 1.89 1.93 1.92
International 2.80 2.92 2.86 2.85
Total (1) 4.01 3.46 4.19 3.58
AVERAGE NGL PRICE PER
BARREL
Gulf Coast $32.81 $33.95 $42.64 $29.49
Central 48.38 28.43 45.90 25.36
Permian 34.11 31.96 36.31 27.85
United States 34.11 33.20 39.66 28.87
Canada 34.18 24.22 36.58 23.03
North America 34.12 31.08 39.22 27.32
Argentina 26.39 15.44 28.98 16.13
Total 33.03 26.96 37.31 24.12
(1) Prices reflect the impact of financial derivative hedging
activities.
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, 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 For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2010 2009 2010 2009
---- ---- ---- ----
Income (Loss)
Attributable to
Common Stock
(GAAP) $764,989 $440,596 $2,330,193 $(874,464)
Adjustments:
Foreign currency
fluctuation impact
on deferred tax
expense 26,272 93,089 1,345 116,172
Additional
depletion, net of
tax - - - 1,981,398
--- --- --- ---------
Adjusted Earnings
(Non-GAAP) $791,261 $533,685 $2,331,538 $1,223,106
======== ======== ========== ==========
Adjusted Earnings
Per Share (Non-
GAAP)
Basic $2.22 $1.59 $6.78 $3.64
===== ===== ===== =====
Diluted $2.19 $1.58 $6.72 $3.62
===== ===== ===== =====
Average Number of
Common Shares
Basic 356,718 336,159 343,826 335,637
======= ======= ======= =======
Diluted 367,439 337,872 348,784 337,417
======= ======= ======= =======
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 For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2010 2009 2010 2009
---- ---- ---- ----
Net cash
provided by
operating
activities $1,714,753 $1,312,742 $4,800,194 $2,679,471
Changes in
operating
assets and
liabilities 269,905 (16,822) 587,067 859,092
------- ------- ------- -------
Cash from
operations
before changes
in
operating assets
and liabilities $1,984,658 $1,295,920 $5,387,261 $3,538,563
========== ========== ========== ==========
SOURCE Apache Corporation
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