Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2011

Derivative Instruments and Hedging Activities [Abstract]

Open Crude Oil and Natural Gas Derivative Instruments

     As of September 30, 2011, Apache had the following open natural gas derivative positions:

			Fixed-Price Swaps				Collars
					Weighted						Weighted		Weighted
Production	MMBtu		GJ		Average		MMBtu		GJ		Average		Average
Period	(in 000’s)		(in 000’s)		Fixed Price(1)		(in 000’s)		(in 000’s)		Floor Price(1)		Ceiling Price(1)
2011		19,965		—	$	5.97		2,300		—	$	5.00	$	8.85
2011		—		12,880	C $	6.26		—		920	C $	6.50	C $	7.10
2012		48,349		—	$	6.22		21,960		—	$	5.54	$	7.30
2012		—		43,920	C $	6.61		—		7,320	C $	6.50	C $	7.27
2013		10,095		—	$	6.74		6,825		—	$	5.35	$	6.67
2014		1,295		—	$	6.72		—		—	$	—	$	—

⁽¹⁾ U.S. natural gas prices represent a weighted average of several contracts entered into on a per million British thermal units (MMBtu) basis and are settled primarily against NYMEX Henry Hub and various Inside FERC indices. The Canadian gas contracts are entered into on a per gigajoule (GJ) basis and are settled against AECO Index. The Canadian natural gas prices represent a weighted average of AECO Index prices and are shown in Canadian dollars.

     As of September 30, 2011, Apache had the following open crude oil derivative positions:

	Fixed-Price Swaps				Collars
			Weighted				Weighted		Weighted
Production			Average				Average		Average
Period	Mbbls		Fixed Price(1)		Mbbls		Floor Price(1)		Ceiling Price(1)
2011		1,405	$	74.87		7,503	$	69.22	$	96.82
2012		4,110		73.40		12,628		76.42		101.06
2013		1,972		74.29		2,416		78.02		103.06
2014		76		74.50		—		—		—

⁽¹⁾ Crude oil prices represent a weighted average of several contracts entered into on a per barrel basis. Crude oil contracts are primarily settled against NYMEX WTI Cushing Index. A portion of 2011 and 2012 contracts are settled against Dated Brent.

Fair Values of Derivative Instruments Recorded in the Consolidated Balance Sheet

	September 30,		December 31,
	2011		2010
	(In millions)
Current Assets: Prepaid assets and other	$	306	$	167
Other Assets: Deferred charges and other		93		139
Total Assets	$	399	$	306
Current Liabilities: Derivative instruments	$	50	$	194
Noncurrent Liabilities: Other		25		124
Total Liabilities	$	75	$	318

Commodity Derivative Activity Recorded in Statement of Consolidated Operations

     The following table summarizes the effect of derivative instruments on the Company’s statement of consolidated operations:

		For the Quarter				For the Nine Months
		Ended				Ended
		September 30,				September 30,
	Gain (Loss) on Derivatives	2011		2010		2011			2010
	Recognized In Income	(In millions)
Gain (loss) reclassified from accumulated other comprehensive income (loss) into operations (effective portion)	Oil and Gas Production Revenues	$	11	$	53	$	(36	)	$	104
Gain (loss) on derivatives recognized in operations (ineffective portion and basis)	Revenues and Other: Other	$	15	$	—	$	16		$	(1	)

Commodity Derivative Activity in Accumulated Other Comprehensive Income (Loss)

     A reconciliation of the components of accumulated other comprehensive income (loss) in the statement of consolidated shareholders’ equity related to Apache’s cash flow hedges is presented in the table below:

	For the Nine Months Ended September 30,
	2011						2010
	Before			After			Before			After
	Tax			Tax			Tax			Tax
	(In millions)
Unrealized loss on derivatives at beginning of period	$	(54	)	$	(19	)	$	(267	)	$	(170	)
Realized amounts reclassified into earnings		36			32			(104	)		(67	)
Net change in derivative fair value		304			181			596			407
Ineffectiveness reclassified into earnings		(16	)		(10	)		—			—
Unrealized gain on derivatives at end of period	$	270		$	184		$	225		$	170