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

News provided by

Apache Corporation

May 08, 2014, 08:00 ET

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.

"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:

•	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,
		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

APA-F

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SOURCE Apache Corporation

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