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Apache Reports Third-Quarter Net Income of $1.2 Billion or $3.52 Per Share

October 30, 2008

HOUSTON, Oct. 30 /PRNewswire-FirstCall/ — Apache Corporation today reported that strong crude oil and natural gas prices fueled third-quarter net income of $1.2 billion or $3.52 per diluted common share, up 94 percent from $612 million or $1.83 per share in the prior-year period.

Third-quarter cash from operations — prior to changes in operating assets and liabilities* — totaled $2.1 billion, compared with $1.6 billion in the prior-year period.

Third-quarter production declined 9 percent from the prior-year period and 7 percent from the second quarter to 510,672 barrels of oil equivalent (boe) per day. The decline was the result of two hurricanes that curtailed production in the Gulf of Mexico and onshore Louisiana and continued shut-ins following the June 3 explosion at the gas processing and transportation hub at Varanus Island in Australia. Most of the curtailed production in the Gulf and Australia is expected to be restored by year end, setting the stage for renewed growth in 2009.

“We faced several challenges on the production side during the third quarter; we also had strong earnings, continued progress on our pipeline of development projects, and drilling success in several areas,” said G. Steven Farris, Apache’s president and chief executive officer.

Three developments are expected to impact Apache’s 2009 production: Two new gas processing trains are expected to commence operations in Egypt by year end, boosting net production by approximately 100 million cubic feet (MMcf) of gas and 5,000 barrels of condensate per day; the Van Gogh field in Australia is expected to contribute a net 20,000 barrels of oil per day beginning in mid-2009; and the Geauxpher field in the Gulf of Mexico is expected to commence production during the first quarter at a net rate of approximately 50 MMcf of gas per day.

Apache had notable drilling results in Egypt, where the company drilled four discoveries; at its emerging Ootla shale play in Canada; and in the North Sea, where nine new wells fueled a 25-percent increase in third-quarter production compared with the prior-year period.

“Apache continues to show operational progress, in spite of the recent turmoil in the commodity and equity markets and the global economic slowdown,” Farris said. “Although we have an abundant inventory of drillable prospects across 36 million acres, Apache intends to continue to live within our means. Our major development projects are critical to Apache’s future growth – and we intend to fund them — but we will adjust other capital spending to a level that does not exceed operating cash flow.”

During the third quarter, Apache received an average of $101.04 per barrel of oil and $7.43 per thousand cubic feet of gas. Oil and gas prices were up 43 percent and 49 percent, respectively, above year-earlier levels, but both were 8 percent below second-quarter prices.

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.

*Adjusted earnings and cash from operations before changes in operating assets and liabilities are non-GAAP measures. Please see reconciliations below.

NOTE: Apache will conduct a conference call to discuss its third-quarter results at 1 p.m. Central time on Oct. 30, 2008. The call will be webcast from Apache’s Web site, http://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 Oct. 30. To access the telephone playback, dial (719) 457-0820 and provide Apache’s confirmation code, 4705013.

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 2007 Form 10-K and on our Web site. 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.

                               APACHE CORPORATION                             FINANCIAL INFORMATION                     (In thousands, except per share data)                               For the Quarter          For the Nine Months                             Ended September 30,       Ended September 30,                              2008        2007         2008         2007   REVENUES AND OTHER:     Oil and gas      production revenues  $3,368,882   $2,498,594  $10,450,949   $6,965,692     Other                     (3,998)       6,364        1,867       14,685                            3,364,884    2,504,958   10,452,816    6,980,377    COSTS AND EXPENSES:     Depreciation,      depletion and      amortization            600,887      600,796    1,849,044    1,722,816     Asset retirement      obligation accretion     24,970       24,436       77,146       72,634     Lease operating      expenses                488,166      409,528    1,389,542    1,198,302     Gathering and      transportation           42,375       34,887      123,118      100,585     Taxes other than      income                  304,280      139,461      845,406      393,222     General and      administrative           57,561       61,405      218,856      200,065     Financing costs, net      33,291       60,367      116,594      165,788                            1,551,530    1,330,880    4,619,706    3,853,412    INCOME BEFORE INCOME    TAXES                   1,813,354    1,174,078    5,833,110    3,126,965     Current income tax      provision               305,735      200,878    1,495,641      684,458     Deferred income tax      provision               316,794      359,852      679,902      702,672    NET INCOME               1,190,825      613,348    3,657,567    1,739,835     Preferred stock      dividends                 1,420        1,420        4,260        4,260    INCOME ATTRIBUTABLE TO    COMMON STOCK           $1,189,405     $611,928   $3,653,307   $1,735,575    NET INCOME PER COMMON    SHARE:     Basic                      $3.55        $1.84       $10.93        $5.23     Diluted                    $3.52        $1.83       $10.84        $5.19    WEIGHTED AVERAGE COMMON    SHARES OUTSTANDING        334,825      332,668      334,145      331,903                                  APACHE CORPORATION                             FINANCIAL INFORMATION                                 (In thousands)                                 For the Quarter         For the Nine Months                               Ended September 30,      Ended September 30,                               2008          2007        2008        2007    COSTS INCURRED: (1)     North America      exploration and      development              $960,624    $647,266   $2,505,259  $2,029,302     International      exploration and      development               641,028     491,381    1,932,257   1,425,624                             $1,601,652  $1,138,647   $4,437,516  $3,454,926      Oil and gas property      acquisitions               $4,863     $17,025     $155,658  $1,050,019      (1) Includes noncash          asset retirement          costs and capitalized          interest as follows:           Capitalized            interest            $18,674     $16,383      $53,730     $54,057           Asset retirement            costs              $178,866     $28,369     $350,372    $155,197                                                      September 30, December 31,                                                        2008          2007    BALANCE SHEET DATA:     Cash and Cash Equivalents                       $1,644,604     $125,823     Other Current Assets                             2,527,688    2,626,428     Property and Equipment, net                     28,118,818   25,231,593     Restricted Cash                                     13,844            -     Goodwill                                           189,252      189,252     Other Assets                                       498,226      461,555     Total Assets                                   $32,992,432  $28,634,651      Current Liabilities                             $2,916,306   $2,665,016     Long-Term Debt                                   3,917,327    4,011,605     Deferred Credits and Other Noncurrent      Liabilities                                     7,395,693    6,580,051     Shareholders' Equity                            18,763,106   15,377,979     Total Liabilities and Shareholders' Equity     $32,992,432  $28,634,651      Common shares outstanding at end of period         334,670      332,927                                 APACHE CORPORATION                             FINANCIAL INFORMATION                              For the Quarter          For the Nine Months                            Ended September 30,       Ended September 30,                              2008        2007         2008         2007   FINANCIAL DATA (In    thousands, except per    share data):     Revenues and other     $3,364,884   $2,504,958  $10,452,816   $6,980,377      Income Attributable      to Common Stock       $1,189,405     $611,928   $3,653,307   $1,735,575      Basic Net Income Per      Common Share               $3.55        $1.84       $10.93        $5.23      Diluted Net Income      Per Common Share           $3.52        $1.83       $10.84        $5.19      Weighted Average      Common Shares      Outstanding              334,825      332,668      334,145      331,903      Diluted Shares      Outstanding              337,894      335,117      337,151      334,086    PRODUCTION AND PRICING DATA:     OIL VOLUME - Barrels      per day       United States            80,284       97,025       93,622       87,660       Canada                   16,655       18,451       17,247       18,838       Egypt                    64,803       60,395       64,082       60,219       Australia                 7,083       14,685        8,286       14,308       North Sea                60,856       48,888       58,740       52,572       Argentina                12,729       11,708       12,342       11,266         Total                 242,410      251,152      254,319      244,863      AVERAGE OIL PRICE PER      BARREL       United States            $93.69       $67.70       $91.48       $61.75       Canada                   111.81        73.95       108.10        63.74       Egypt                    105.60        74.04       110.01        66.50       Australia                 99.66        76.65       111.86        73.30       North Sea                113.56        73.18       110.08        65.21       Argentina                 50.95        49.70        48.76        45.52         Total                  101.04        70.43       100.17        63.74      NATURAL GAS VOLUME -      Mcf per day       United States           635,891      763,693      712,529      768,520       Canada                  349,000      386,659      355,834      386,312       Egypt                   287,231      241,919      254,786      239,951       Australia                54,726      194,520      124,888      195,242       North Sea                 2,697        1,721        2,604        1,851       Argentina               217,091      196,168      193,257      203,524         Total               1,546,636    1,784,680    1,643,898    1,795,400      AVERAGE NATURAL GAS      PRICE PER MCF       United States             $9.96        $6.59        $9.64        $6.95       Canada                     8.70         5.54         8.63         6.25       Egypt                      5.62         4.72         5.68         4.42       Australia                  2.36         1.93         2.18         1.83       North Sea                 27.17        16.98        21.88        12.80       Argentina                  1.41         0.93         1.53         1.03         Total                    7.43         4.99         7.30         5.24      NGL VOLUME - Barrels      per day       United States             5,450        7,766        6,636        7,677       Canada                    2,034        2,253        2,046        2,199       Argentina                 3,005        2,794        2,877        2,749         Total                  10,489       12,813       11,559       12,625      AVERAGE NGL PRICE      PER BARREL       United States            $72.82       $47.18       $64.49       $41.64       Canada                    63.77        40.39        58.62        37.05       Argentina                 36.63        37.74        38.81        35.07         Total                   60.70        43.92        57.06        39.41                                  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 excludes certain items that management believes affect the comparability of operating results. The following provides the reasons adjusted earnings is a meaningful measure:

— 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,                               2008        2007         2008        2007    Income Attributable to    Common Stock (GAAP)     $1,189,405     $611,928  $3,653,307   $1,735,575    Adjustments:     Foreign currency      fluctuation impact on      deferred tax expense    (113,169)     115,180    (125,248)     185,832     Impact of Canadian      Federal tax rate      reductions                     -            -           -      (17,074)    Adjusted  Earnings    (Non-GAAP)              $1,076,236     $727,108  $3,528,059   $1,904,333    Adjusted Earnings Per    Share (Non-GAAP)       Basic                     $3.21        $2.19      $10.56        $5.74       Diluted                   $3.19        $2.17      $10.46        $5.70    Average Number of Common    Shares       Basic                   334,825      332,668     334,145      331,903       Diluted                 337,894      335,117     337,151      334,086     

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,                                2008         2007        2008         2007   Net cash provided by    operating activities    $2,290,654   $1,427,467  $6,028,567   $3,877,472   Changes in operating    assets and liabilities    (167,073)     190,511     259,447      399,987   Cash from operations    before changes in    operating assets and    liabilities             $2,123,581   $1,617,978  $6,288,014   $4,277,459  

APA-F

Apache Corporation

CONTACT: Media, Bill Mintz, +1-713-296-7276, or Investors, Robert Dye,+1-713-296-6662, or David Higgins +1-713-296-6690, all of Apache Corporation

Web site: http://www.apachecorp.com/




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