-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P759kLGfzFbLcVCwYdiDfZKTSwLrnKOCaexh6470tdtIoRfBTJg1F5mz1VPYjvet xhU+Kp/nXOBymeNP716NLw== 0000950129-03-003734.txt : 20030724 0000950129-03-003734.hdr.sgml : 20030724 20030724133509 ACCESSION NUMBER: 0000950129-03-003734 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030724 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030724 FILER: COMPANY DATA: COMPANY CONFORMED NAME: APACHE CORP CENTRAL INDEX KEY: 0000006769 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 410747868 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04300 FILM NUMBER: 03800520 BUSINESS ADDRESS: STREET 1: 2000 POST OAK BLVD STREET 2: ONE POST OAK CENTER STE 100 CITY: HOUSTON STATE: TX ZIP: 77056-4400 BUSINESS PHONE: 7132966000 MAIL ADDRESS: STREET 1: 2000 POST OAK BLVD STREET 2: STE 100 CITY: HOUSTON STATE: TX ZIP: 77056-4400 FORMER COMPANY: FORMER CONFORMED NAME: APACHE OIL CORP DATE OF NAME CHANGE: 19660830 8-K 1 h07684e8vk.txt APACHE CORPORATION - DATED JULY 24, 2003 =============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 24, 2003 APACHE CORPORATION (Exact name of registrant as specified in Charter) DELAWARE 1-4300 41-0747868 (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification Number) 2000 POST OAK BOULEVARD SUITE 100 HOUSTON, TEXAS 77056-4400 (Address of Principal Executive Offices) Registrant's telephone number, including area code: (713) 296-6000 =============================================================================== ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) EXHIBITS. EXHIBIT NO. DESCRIPTION - ----------- ----------- 99.1 Press Release dated July 24, 2003, "Apache Reports Record Second-Quarter Oil and Gas Production." ITEM 9. REGULATION FD DISCLOSURE Apache Corporation, a Delaware corporation ("Apache"), is furnishing this Current Report on Form 8-K to report information pursuant to Item 12 - Disclosure of Results of Operations and Financial Condition of Form 8-K. On July 24, 2003, Apache issued a press release announcing results for the three and six month periods ended June 30, 2003. The press release is listed and furnished under Item 7 as Exhibit 99.1 and incorporated herein by reference. The press release discusses Apache's cash from operations or "cash flow." Cash from operations represents net cash provided by operating activities before changes in operating assets and liabilities. Cash from operations is presented because management believes it is a useful adjunct to net cash provided by operating activities under accounting principles generally accepted in the United States (GAAP). Cash from operations is widely accepted as a financial indicator of an oil and gas company's ability to generate cash which is used to internally fund exploration and development activities and to service debt. Cash from operations 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, as an indicator of cash flows, or as a measure of liquidity. The following table reconciles net cash provided by operating activities to cash from operations.
FOR THE THREE MONTHS FOR THE SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ---------------------------------- ------------------------------- 2003 2002 2003 2002 ----------- ----------- ------------ ------------ (In thousands) Net cash provided by operating activities $ 686,124 $ 418,820 $ 1,224,165 $ 624,085 Changes in operating assets and liabilities (47,624) (30,610) 58,300 53,333 ----------- ----------- ------------ ----------- Cash from operations $ 638,500 $ 388,210 $ 1,282,465 $ 677,418 ----------- ----------- ------------ -----------
The press release discusses Apache's earnings per share before non-cash adjustments, a non-GAAP financial measure. Earnings per share before non-cash adjustments, a non-GAAP financial measure, excludes items (such as the impact of currency fluctuations on deferred taxes) that management deems not representative of the Company's financial performance. Management believes this measure provides a clearer understanding of the Company's financial results and enables investors to better compare its results with those of other companies.
FOR THE PERIODS ENDED JUNE 30, 2003 ------------------------------------ THREE MONTHS SIX MONTHS --------------- -------------- Earnings per share $ 1.49 $ 3.59 Non-cash adjustments 0.27 0.34 --------- --------- Earnings per share before non-cash adjustments $ 1.76 $ 3.93 --------- ---------
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. APACHE CORPORATION Date: July 24, 2003 /s/ Roger B. Plank ---------------------------------------- Roger B. Plank Executive Vice President and Chief Financial Officer INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION - ----------- ----------- 99.1 Press Release dated July 24, 2003, "Apache Reports Record Second-Quarter Oil and Gas Production." EX-99.1 3 h07684exv99w1.txt PRESS RELEASE DATED JULY 24, 2003 Exhibit 99.1 [APACHE LETTERHEAD] CONTACTS: (MEDIA): BILL MINTZ (713) 296-7276 TONY LENTINI (713) 296-6227 DAVID HIGGINS (713) 296-6690 (INVESTOR): ROBERT DYE (713) 296-6662 (WEB SITE): WWW.APACHECORP.COM APACHE REPORTS RECORD SECOND-QUARTER OIL AND GAS PRODUCTION Houston, July 24, 2003 - Apache Corporation (NYSE: APA) today reported that record production fueled second-quarter earnings of $243 million, or $1.49 per diluted common share, including the impact of a non-cash charge related to foreign currency fluctuations. Apache reported net income of $143 million, or 95 cents per share, in the prior-year period. Excluding the non-cash charge, Apache earned $288 million or $1.76 per diluted common share. (See below for reconciliation of this non-GAAP number.) The $45 million charge (27 cents per share) was the result of recognizing unrealized foreign currency gains and losses caused by the weakening U.S. dollar. Approximately one half of the non-cash charge was the result of a theoretical tax on a theoretical gain calculated as though Apache had prepaid the U.S. dollar-denominated long-term debt of its Canadian subsidiaries in stronger Canadian dollars. As the company did not prepay the debt, nor realize a gain, nor incur a tax, Apache believes it should not record the charge. Although Apache recorded the charge in the second quarter, the company will seek to resolve this issue with the Securities and Exchange Commission and the Financial Accounting Standards Board. -more- APACHE REPORTS RECORD PRODUCTION - ADD ONE Oil production rose nearly 40 percent to 211,701 barrels per day in the second quarter, compared with 151,480 barrels per day in the year-earlier period. Natural gas production averaged 1.25 billion cubic feet (Bcf) per day, up 15 percent from 1.1 Bcf per day in the prior-year period. Natural gas liquids production averaged 9,342 barrels per day, up from 8,483 barrels per day in the prior-year period. Cash from operations increased to $639 million from $388 million in the prior-year period. (Please see below for a reconciliation of Apache's calculation of cash from operations, a non-GAAP financial measure.) For the six months ended June 30, Apache earned net income of $580 million, or $3.59 per diluted share, including $56 million, or 34 cents per share, in non-cash charges related to foreign currency fluctuations. Excluding the non-cash charges, Apache earned $636 million, or $3.93 per share, in the first half. Apache earned $219 million, or $1.47 per share, in the first half of 2002. First-half cash from operations increased to $1.3 billion from $677 million in the prior-year period. "Record production was just part of the story behind Apache's second-quarter results," said G. Steven Farris, president and chief executive officer. "We had significant drilling successes and we have completed $1.5 billion in acquisitions year-to-date, the impact of which will be reflected in future quarters." Early in the second quarter, Apache completed its two-part acquisition of BP assets in the North Sea and the Gulf of Mexico. On July 2, Apache announced an additional acquisition of fields in the Gulf from Shell Exploration and Production Company. "We also maintained our financial flexibility, with a lower debt-to-capitalization ratio than at the beginning of the year, even with the acquisitions," Farris said. -more- APACHE REPORTS RECORD PRODUCTION - ADD TWO Apache recently announced several significant discoveries, three of which opened new plays: o The Qasr-1X tested at a combined rate of 51.8 million cubic feet (MMcf) of natural gas and 2,688 barrels of condensate per day from two zones and logged 606 feet of net pay from six formations. "We believe the Qasr-1X, in Egypt's Khalda Concession, is the most significant Western Desert discovery in the last decade, as it opens a new play over widespread acreage," Farris said. o On the Matruh Concession in Egypt, Apache drilled the Alexandrite-1X wildcat to 15,300 feet in the Jurassic Lower Safa formation. The well logged 146 net feet of gas and condensate pay; a test of the Kabrit interval flowed at a daily rate of 20 MMcf and 1,683 barrels of condensate. "These discoveries are important for Apache and for Egypt because the country shares in the economic benefit associated with finding oil and gas to meet its energy needs," Farris said. o In early July, Apache's Ravensworth-1 well discovered oil in the Exmouth Sub-Basin offshore Western Australia. "This discovery is the most important well we've drilled in Australia this year," Farris said. Apache Corporation is an independent oil and gas exploration and production company with core operations in the United States, Canada, Egypt, the United Kingdom North Sea and Western Australia. -end- This news release contains certain "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995, including, without limitation, expectations, beliefs, plans and objectives regarding Apache's capital expenditures and future production. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are delays and difficulties in completing acquisitions and developing currently owned properties, the failure of exploratory drilling to result in commercial wells, delays due to the limited availability of drilling equipment and personnel, fluctuations in oil and gas prices, general economic conditions and the risk factors detailed from time to time in Apache's periodic reports and registration statements filed with the Securities and Exchange Commission. NOTE: Apache will conduct its quarterly conference call to discuss second quarter results on Thursday, July 24, at 1 p.m. Central Time. The call will be webcast live on Apache's Web site, www.apachecorp.com. The conference call will be available for delayed playback by telephone for one week beginning at approximately 5 p.m. on July 25. To access the telephone playback, dial (719) 457-0820 and provide Apache's confirmation code, 624896. APACHE CORPORATION FINANCIAL INFORMATION (In thousands, except per share data)
FOR THE QUARTER FOR THE SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ---------------------------- ---------------------------- 2003 2002 2003 2002 ----------- ----------- ----------- ----------- REVENUES: Oil and gas production revenues $ 1,044,330 $ 652,264 $ 2,019,492 $ 1,181,653 Other revenues 10,026 4,051 1,473 2,658 ----------- ----------- ----------- ----------- Total revenues 1,054,356 656,315 2,020,965 1,184,311 ----------- ----------- ----------- ----------- OPERATING EXPENSES: Depreciation, depletion and amortization 272,356 210,790 486,705 421,829 Asset retirement obligation accretion 10,445 -- 15,758 -- International impairments -- -- -- 4,600 Lease operating costs 186,286 112,087 320,421 223,230 Gathering and transportation costs 15,131 11,112 26,992 19,345 Severance and other taxes 32,742 17,345 57,296 32,705 General and administrative 30,574 28,015 58,405 53,367 ----------- ----------- ----------- ----------- Total operating expenses 547,534 379,349 965,577 755,076 ----------- ----------- ----------- ----------- OPERATING INCOME 506,822 276,966 1,055,388 429,235 FINANCING COSTS: Interest expense 41,428 41,451 79,124 78,333 Amortization of deferred loan costs 536 466 1,067 800 Capitalized interest (12,618) (10,442) (23,850) (20,464) Interest income (428) (1,043) (1,502) (2,212) ----------- ----------- ----------- ----------- Net financing costs 28,918 30,432 54,839 56,457 ----------- ----------- ----------- ----------- Preferred interests of subsidiaries 3,330 5,129 6,692 8,662 ----------- ----------- ----------- ----------- INCOME BEFORE INCOME TAXES 474,574 241,405 993,857 364,116 Provision for income taxes 230,193 95,095 437,179 137,134 ----------- ----------- ----------- ----------- INCOME BEFORE CHANGE IN ACCOUNTING PRINCIPLE 244,381 146,310 556,678 226,982 Cumulative effect of change in accounting principle, net of tax -- -- 26,632 -- ----------- ----------- ----------- ----------- NET INCOME 244,381 146,310 583,310 226,982 Preferred stock dividends 1,420 3,081 2,840 7,989 ----------- ----------- ----------- ----------- INCOME ATTRIBUTABLE TO COMMON STOCK $ 242,961 $ 143,229 $ 580,470 $ 218,993 =========== =========== =========== =========== INCOME ATTRIBUTABLE TO COMMON STOCK BEFORE CHANGE IN ACCOUNTING PRINCIPLE $ 242,961 $ 143,229 $ 553,838 $ 218,993 =========== =========== =========== =========== BASIC NET INCOME PER COMMON SHARE Before change in accounting principle $ 1.50 $ .97 $ 3.45 $ 1.50 =========== =========== =========== =========== After change in accounting principle $ 1.50 $ .97 $ 3.62 $ 1.50 =========== =========== =========== =========== DILUTED NET INCOME PER COMMON SHARE Before change in accounting principle $ 1.49 $ 0.95 $ 3.42 $ 1.47 =========== =========== =========== =========== After change in accounting principle $ 1.49 $ 0.95 $ 3.59 $ 1.47 =========== =========== =========== =========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 161,704 147,814 160,486 145,997 =========== =========== =========== ===========
APACHE CORPORATION FINANCIAL INFORMATION (In thousands)
FOR THE QUARTER FOR THE SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ------------------------- ------------------------- 2003 2002 2003 2002 ---------- ---------- ---------- ---------- CAPITALIZED COSTS INCURRED: North America exploration and development $ 246,176 $ 115,856 $ 498,503 $ 253,233 International exploration and development 108,083 57,708 198,032 118,579 ---------- ---------- ---------- ---------- $ 354,259 $ 173,564 $ 696,535 $ 371,812 ========== ========== ========== ========== Acquisitions: Oil and gas properties $ 686,443 $ 4,145 $1,230,814 $ 4,253 Gas gathering, transmission and processing facilities -- -- 5,484 -- Goodwill -- -- -- -- ---------- ---------- ---------- ---------- Total Acquisitions $ 686,443 $ 4,145 $1,236,298 $ 4,253 ========== ========== ========== ========== Capitalized interest $ 12,618 $ 10,442 $ 23,850 $ 20,464 Property sales $ -- $ -- $ (286) $ --
JUNE 30, DECEMBER 31, 2003 2002 ---------- ------------ BALANCE SHEET DATA: Preferred interests of subsidiaries $ 437,615 $ 436,626 Total debt $2,349,502 $2,158,815 Shareholders' equity $5,999,524 $4,924,280 Common shares outstanding at end of period 161,797 151,253
NON-GAAP FINANCIAL MEASURES: Cash from operations represents net cash provided by operating activities before changes in operating assets and liabilities. Cash from operations is presented because management believes it is a useful adjunct to net cash provided by operating activities under accounting principles generally accepted in the United States (GAAP). Cash from operations is widely accepted as a financial indicator of an oil and gas company's ability to generate cash which is used to internally fund exploration and development activities and to service debt. Cash from operations 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, as an indicator of cash flows, or as a measure of liquidity. The following table reconciles net cash provided by operating activities to cash from operations.
FOR THE THREE MONTHS FOR THE SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ------------------------- ------------------------- 2003 2002 2003 2002 ---------- ---------- ---------- ---------- Net cash provided by operating activities $ 686,124 $ 418,820 $1,224,165 $ 624,085 Changes in operating assets and liabilities (47,624) (30,610) 58,300 53,333 ---------- ---------- ---------- ---------- Cash from operations $ 638,500 $ 388,210 $1,282,465 $ 677,418 ========== ========== ========== ==========
Earnings per share before non-cash adjustments, a non-GAAP financial measure, excludes items (such as the impact of currency fluctuations on deferred taxes) that management deems not representative of the Company's financial performance. Management believes this measure provides a clearer understanding of the Company's financial results and enables investors to better compare its results with those of other companies.
FOR THE PERIODS ENDED JUNE 30, 2003 ------------------------- THREE SIX MONTHS MONTHS ---------- ---------- Earnings per share $ 1.49 $ 3.59 Non-cash adjustments 0.27 0.34 ---------- ---------- Earnings per share before non-cash adjustments $ 1.76 $ 3.93 ========== ==========
APACHE CORPORATION FINANCIAL INFORMATION (In thousands, except per share data)
FOR THE QUARTER FOR THE SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ----------------------------------- ----------------------------------- 2003 2002 2003 2002 --------------- --------------- --------------- --------------- FINANCIAL DATA: Revenues $ 1,054,356 $ 656,315 $ 2,020,965 $ 1,184,311 =============== =============== =============== =============== Income Attributable to Common Stock $ 242,961 $ 143,229 $ 580,470 $ 218,993 =============== =============== =============== =============== Basic Net Income Per Common Share: Before change in accounting principle $ 1.50 $ .97 $ 3.45 $ 1.50 =============== =============== =============== =============== After change in accounting principle $ 1.50 $ .97 $ 3.62 $ 1.50 =============== =============== =============== =============== Diluted Net Income Per Common Share: Before change in accounting principle $ 1.49 $ .95 $ 3.42 $ 1.47 =============== =============== =============== =============== After change in accounting principle $ 1.49 $ .95 $ 3.59 $ 1.47 =============== =============== =============== =============== Weighted Average Common Shares Outstanding 161,704 147,814 160,486 145,997 =============== =============== =============== =============== Diluted Shares Outstanding 163,060 152,065 161,827 152,178 =============== =============== =============== =============== PRODUCTION AND PRICING DATA: NATURAL GAS VOLUME - Mcf per day United States 702,109 514,740 627,858 527,516 Canada 317,079 321,641 313,164 318,169 Egypt 113,169 118,101 118,415 117,815 Australia 106,698 126,670 103,941 123,675 North Sea 2,103 -- 1,057 -- Argentina 7,741 8,607 7,267 6,244 --------------- --------------- --------------- --------------- Total 1,248,899 1,089,759 1,171,702 1,093,419 =============== =============== =============== =============== AVERAGE NATURAL GAS PRICE PER MCF United States $ 5.19 $ 3.35 $ 5.64 $ 2.84 Canada 4.81 2.97 5.08 2.65 Egypt 3.77 3.63 4.15 3.34 Australia 1.40 1.31 1.35 1.27 North Sea 2.08 -- 2.08 -- Argentina 0.50 0.38 0.46 0.46 Total 4.61 3.01 4.92 2.65 OIL VOLUME - Barrels per day United States 72,477 54,462 64,947 55,142 Canada 24,890 24,965 24,813 25,150 Egypt 47,687 43,945 46,704 44,161 Australia 32,673 27,515 31,562 30,213 North Sea 33,387 -- 16,786 -- Argentina 587 593 592 631 --------------- --------------- --------------- --------------- Total 211,701 151,480 185,404 155,297 =============== =============== =============== =============== AVERAGE OIL PRICE PER BARREL United States $ 26.90 $ 25.55 $ 27.81 $ 23.04 Canada 27.80 23.50 29.92 21.18 Egypt 24.45 24.36 27.37 22.89 Australia 26.61 25.34 29.67 22.77 North Sea 25.50 -- 25.50 -- Argentina 27.02 22.87 29.49 21.39 Total 26.19 24.82 28.09 22.64 NGL VOLUME - Barrels per day United States 7,448 6,869 6,769 6,882 Canada 1,894 1,614 1,652 1,487 --------------- --------------- --------------- --------------- Total 9,342 8,483 8,421 8,369 =============== =============== =============== =============== AVERAGE NGL PRICE PER BARREL United States $ 20.24 $ 16.31 $ 22.07 $ 14.55 Canada 15.46 12.05 19.39 11.55 Total 19.27 15.50 21.55 14.02
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