EX-99.1 2 h24765exv99w1.txt PRESS RELEASE EXHIBIT 99.1 CONTACTS: (MEDIA): TONY LENTINI (713/296-6227) BILL MINTZ (713/296-7276) DAVID HIGGINS (713/296-6690) (INVESTOR): ROBERT DYE (713/296-6662) (WEB SITE): WWW.APACHECORP.COM FOR RELEASE AT 7:45 A.M. CENTRAL TIME APACHE REPORTS FIRST-QUARTER EARNINGS RISE 62 PERCENT TO $559 MILLION OR $1.67 PER SHARE Houston, April 28, 2005 - Apache Corporation (NYSE, Nasdaq: APA) today reported that higher oil and gas prices and strong production contributed to record first-quarter 2005 earnings of $559 million or $1.67 per diluted common share, up from $345 million or $1.05 per diluted common share in the first quarter of 2004. Cash from operations before changes in operating assets and liabilities totaled $1 billion, up from $737 million in the year-earlier period. (This is a non-GAAP measure; see reconciliation below.) Production averaged 462,000 barrels of oil equivalent per day in the quarter, up 7 percent from the first quarter of 2004 and up slightly from last year's fourth quarter. High oil and gas prices were a strong driver for first-quarter financial results. Apache received $46.05 per barrel of oil in the quarter, up 51 percent from the prior-year period; $27.68 per barrel of natural gas liquids, up 16 percent; and $5.30 per thousand cubic feet of gas, up 11 percent. "We are off to a strong start in 2005, with record earnings," said G. Steven Farris, Apache's president, chief executive officer and chief operating officer. "Our successful drilling program in the first quarter and deep inventory of opportunities should contribute to Apache's financial and operating results in coming quarters." Recent operational highlights include: o Apache drilled two significant discoveries in Egypt during the quarter. The Syrah 1X wildcat, on the company's 100 percent-contractor-interest Khalda Concession, tested 46.5 million cubic feet (MMcf) of natural gas per day. The Tanzanite 1X discovery, located onshore on Apache's 65 percent-contractor-interest West Mediterranean Concession, was tested in two separate Alam el Bueib (AEB) zones. The first tested at a rate of 5,296 barrels of oil and 7 MMcf of gas per day and the second at a rate of 5,631 barrels of oil and 17 MMcf of gas per day. o Apache has drilled 86 wells on Canadian acreage acquired last year in a farm-in from ExxonMobil. Apache has tested 73 wells with productive capacity of 52 MMcf of gas per day. The wells are expected to be brought on production as processing and transportation infrastructure becomes available. o Apache's debt-to-capitalization ratio declined to 22.7 percent at the end of the first quarter, from 24 percent at year-end 2004. Apache Corporation is a large gas and oil independent with core operations in the United States, Canada, Egypt, the United Kingdom North Sea and Western Australia. -end- NOTE: Apache will webcast its conference call live at 1 p.m. Central Time on April 28, 2005, from its Web site, www.apachecorp.com. The replay will be available on the Web site or by dialing (719) 457-0820 and using pass code 869266. The telephone replay will be available for one week beginning at approximately 5 p.m. on April 28. 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 production and exploration and development opportunities. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions and uncertainties. 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. APACHE CORPORATION FINANCIAL INFORMATION (In thousands, except per share data)
FOR THE QUARTER ENDED MARCH 31, ---------------------------- 2005 2004 ----------- ----------- REVENUES AND OTHER: Oil and gas production revenues $ 1,626,649 $ 1,152,754 Other 35,639 (2,815) ----------- ----------- 1,662,288 1,149,939 ----------- ----------- OPERATING EXPENSES: Depreciation, depletion and amortization 339,413 286,228 Asset retirement obligation accretion 13,159 10,761 Lease operating costs 233,171 208,236 Gathering and transportation costs 23,780 19,634 Severance and other taxes 72,186 8,948 General and administrative 50,411 46,057 ----------- ----------- Total operating expenses 732,120 579,864 ----------- ----------- OPERATING INCOME 930,168 570,075 FINANCING COSTS: Interest expense 45,266 40,549 Amortization of deferred loan costs 658 567 Capitalized interest (13,409) (13,650) Interest income (927) (320) ----------- ----------- Net financing costs 31,588 27,146 ----------- ----------- INCOME BEFORE INCOME TAXES 898,580 542,929 Provision for income taxes 338,097 196,604 ----------- ----------- NET INCOME 560,483 346,325 Preferred stock dividends 1,420 1,420 ----------- ----------- INCOME ATTRIBUTABLE TO COMMON STOCK $ 559,063 $ 344,905 =========== =========== BASIC NET INCOME PER COMMON SHARE $ 1.70 $ 1.06 =========== =========== DILUTED NET INCOME PER COMMON SHARE $ 1.67 $ 1.05 =========== =========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 328,037 325,003 =========== ===========
APACHE CORPORATION FINANCIAL INFORMATION (In thousands)
FOR THE QUARTER ENDED MARCH 31, --------------------------- 2005 2004 ----------- ----------- COSTS INCURRED: North America exploration and development $ 529,434 $ 342,364 International exploration and development 262,347 164,074 ----------- ----------- $ 791,781 $ 506,438 =========== =========== Oil and gas property acquisitions $ 19,949 $ 1,329 =========== =========== Capitalized interest $ 13,409 $ 13,650 =========== =========== Asset retirement costs $ 10,513 $ 12,037 =========== ===========
MARCH 31, DECEMBER 31, 2005 2004 ----------- ------------ BALANCE SHEET DATA: Current Assets $ 1,589,007 $ 1,348,782 Property and Equipment, net 14,369,453 13,860,359 Goodwill 189,252 189,252 Other Assets 109,356 104,087 ----------- ----------- Total Assets $16,257,068 $15,502,480 =========== =========== Current Liabilities $ 1,571,447 $ 1,282,891 Long-Term Debt 2,531,722 2,588,390 Deferred Credits and Other Noncurrent Liabilities 3,529,950 3,426,778 Shareholders' Equity 8,623,949 8,204,421 ----------- ----------- Total Liabilities and Shareholders' Equity $16,257,068 $15,502,480 =========== =========== Common shares outstanding at end of period 328,189 327,458
NON-GAAP FINANCIAL MEASURES: 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, ------------------------- 2005 2004 ---------- ---------- Net cash provided by operating activities $ 836,172 $ 652,332 Changes in operating assets and liabilities 186,896 84,394 ---------- ---------- Cash from operations before changes in operating assets and liabilities $1,023,068 $ 736,726 ========== ==========
APACHE CORPORATION FINANCIAL INFORMATION
FOR THE QUARTER ENDED MARCH 31, ------------------------- 2005 2004 ---------- ---------- FINANCIAL DATA (In thousands, except per share data): Revenues and other $1,662,288 $1,149,939 ========== ========== Income Attributable to Common Stock $ 559,063 $ 344,905 ========== ========== Basic Net Income Per Common Share $ 1.70 $ 1.06 ========== ========== Diluted Net Income Per Common Share $ 1.67 $ 1.05 ========== ========== Weighted Average Common Shares Outstanding 328,037 325,003 ========== ========== Diluted Shares Outstanding 334,038 328,014 ========== ========== PRODUCTION AND PRICING DATA: NATURAL GAS VOLUME - MCF PER DAY United States 637,803 644,462 Canada 346,742 314,064 Egypt 155,328 128,665 Australia 113,734 118,822 North Sea 2,178 1,602 Argentina 3,473 5,160 ---------- ---------- Total 1,259,258 1,212,775 ========== ========== AVERAGE NATURAL GAS PRICE PER MCF United States $ 6.04 $ 5.35 Canada 5.59 5.09 Egypt 4.30 4.10 Australia 1.82 1.70 North Sea 5.30 4.34 Argentina 0.91 0.47 Total 5.30 4.77 OIL VOLUME - BARRELS PER DAY United States 73,630 67,255 Canada 23,277 25,266 Egypt 54,579 49,097 Australia 15,976 23,658 North Sea 61,870 44,299 China 10,507 7,440 Argentina 704 552 ---------- ---------- Total 240,543 217,567 ========== ========== AVERAGE OIL PRICE PER BARREL United States $ 44.00 $ 32.36 Canada 47.14 33.00 Egypt 48.77 31.34 Australia 52.99 34.86 North Sea 46.10 22.72 China 33.91 30.12 Argentina 33.97 33.44 Total 46.05 30.44 NGL VOLUME - BARRELS PER DAY United States 9,104 8,128 Canada 2,419 2,598 ---------- ---------- Total 11,523 10,726 ========== ========== AVERAGE NGL PRICE PER BARREL United States $ 28.26 $ 25.27 Canada 25.46 19.34 Total 27.68 23.83