Apache Production Surges 25% in First Quarter to 732,000 boe Per Day
Quarterly earnings top $1.1 billion or $2.86 per diluted share; cash flow exceeds $2.2 billion
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 31, |
December 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: |
||||||
|
||||||
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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