-----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, H/PicUDstj7qYbfDyKitf7oAyXO49twcVfXiETe5cW9ee8uhZyeEN+KxjR3odE1T Wq3p74UsqlA3twjLU08nhw== 0000950129-05-010156.txt : 20051027 0000950129-05-010156.hdr.sgml : 20051027 20051027120002 ACCESSION NUMBER: 0000950129-05-010156 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051027 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051027 DATE AS OF CHANGE: 20051027 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: 051159202 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 h29696e8vk.txt APACHE CORPORATION ================================================================================ UNITED STATES 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): October 27, 2005 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 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ The information in this Current Report is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as set forth by specific reference in such filing. ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On October 27, 2005, Apache Corporation issued a press release announcing financial and operating results for the fiscal quarter ended September 30, 2005. The full text of the press release is listed and furnished under Item 9.01 as Exhibit 99.1 and incorporated herein by reference. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) EXHIBITS.
EXHIBIT NO. DESCRIPTION 99.1 Press Release dated October 27, 2005, "Apache's Third-Quarter Earnings Rise 60 Percent to Record $686 Million or $2.05 per Share"
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: October 27, 2005 /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 October 27, 2005, "Apache's Third-Quarter Earnings Rise 60 Percent to Record $686 Million or $2.05 per Share"
EX-99.1 2 h29696exv99w1.txt PRESS RELEASE DATED OCTOBER 27, 2005 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'S THIRD-QUARTER EARNINGS RISE 60 PERCENT TO RECORD $686 MILLION OR $2.05 PER SHARE HOUSTON, Oct. 27, 2005 - Apache Corporation (NYSE, Nasdaq: APA) said today that third-quarter earnings increased 60 percent to a record $686 million or $2.05 per diluted common share despite the impact of Hurricanes Katrina and Rita on Apache's production and as a result of offsetting strong oil and natural gas prices. Apache earned $429 million or $1.30 per share, in the prior-year period. Cash from operations before changes in operating assets and liabilities rose 43 percent to a record $1.26 billion in the third quarter from $883 million in the year-earlier period.* For the first three quarters of 2005, Apache reported net income of $1.8 billion or $5.49 per share, up 58 percent from $1.16 billion or $3.51 per share in the year-earlier period. Cash from operations totaled $3.4 billion for the nine-month period, up 45 percent. Third-quarter production of 453,845 barrels of oil equivalent (boe) per day was approximately 1 percent below the prior-year period and 3 percent below the second-quarter 2005 level as a result of curtailments caused by Hurricanes Katrina and Rita. -more- APACHE'S THIRD-QUARTER EARNINGS RISE 60 PERCENT - ADD 1 Excluding Apache's Gulf Coast Region, Apache's production increased 3 percent in the third quarter from the second quarter. "Even with the impact of the hurricanes' one-two punch, we had a strong quarter, with high prices and good production from all of our core areas," said G. Steven Farris, Apache president and chief executive officer. "Despite the negative impact of the hurricanes, 2005 should be Apache's 26th year of production growth in the last 27 years," Farris said. "Our prospects for continued production growth in 2006 are excellent, as we restore production in the Gulf and continue to grow in Egypt, Australia, the North Sea, Canada and the U.S. Central Region." The storms' impact on U.S. oil and gas production drove commodity prices higher worldwide. This had a significant offsetting influence on Apache's financial results. Apache received an average of $58.66 per barrel of oil, up 54 percent from the prior-year period, and $6.54 per thousand cubic feet (Mcf) of gas, up 37 percent. In North America, where Apache produces 76 percent of its natural gas, the average price was $7.51 per Mcf, up 19 percent. HURRICANE IMPACT Apache's production on the Outer Continental Shelf of the Gulf of Mexico will continue to be curtailed in the fourth quarter of 2005 and the first half of 2006 because of damage to some Apache facilities as well as damage to some third-party pipelines and infrastructure that must be repaired before they can handle Apache production. -more- APACHE'S THIRD-QUARTER EARNINGS RISE 60 PERCENT - ADD 2 "The two hurricanes were the most damaging storms ever to hit a region that provides 25 percent of the nation's domestic oil and gas production," Farris said. "A month after Rita, the Minerals Management Service reports that 1 million barrels per day - nearly two-thirds of the industry's oil production in the Gulf - and 5.6 billion cubic feet of gas per day - more than half of the industry's gas - is still shut in." Current gross operated production in Apache's Gulf Coast region, which includes Apache's Outer Continental Shelf properties as well as fields onshore Louisiana and Texas, is approximately 556 million cubic feet of gas (MMcf) per day, or 70 percent of pre-storm levels and 42,756 barrels of oil per day, or 57 percent of pre-hurricane levels. Apache's net Gulf Coast production averaged 104,871 boe per day in the third quarter, down 20 percent from the second quarter of 2005. The production impact will be greater in the fourth quarter because it will be felt over a full period. Apache has $750 million in total potential insurance coverage for the two hurricanes. The company carries property damage insurance of $250 million per storm (subject to a $7.5 million deductible) and another $100 million in aggregate for the policy year. The $250 million in coverage is provided through a large mutual insurer of energy companies and will be prorated if total claims received by the mutual for a single event exceed $1 billion. Apache also carries business interruption insurance which will cover up to $150 million in revenue losses caused by storms in the Gulf during the policy year. Coverage begins Oct. 29. -more- APACHE'S THIRD-QUARTER EARNINGS RISE 60 PERCENT - ADD 3 Storm-related costs, including insurance premiums and increased lease operating expenses were $18 million in the third quarter. Operating expenses will continue to be higher than normal because of storm-related factors. Even with the disruptions from the hurricanes, Apache continued its active drilling program in the Gulf Coast region, employing 10 rigs during the third quarter. The company completed 12 producers in the Gulf during the quarter. OPERATIONAL RESULTS - In Egypt, Apache's net production of 81,793 boe per day was 6 percent above the second-quarter level, driven by Apache's active drilling program and new gas and condensate sales from the Qasr field. - In Canada, production of 86,385 boe per day was essentially flat with the second quarter. Apache has wells with a total of 110 MMcf per day of gross productive capacity awaiting tie-ins. The company expects to ramp up production over the next several quarters as processing facilities are commissioned and wells are connected. - At the Forties Field in the North Sea, production averaged 68,110 boe per day, up 4 percent from the second quarter, as Apache continued major infrastructure upgrades that will increase the field's production and operating efficiency. - In Australia, production averaged 39,543 boe per day, up 24 percent from the second quarter. Oil production increased 22 percent to 16,499 barrels per day and gas production increased 26 percent to 138 MMcf per day. -more- APACHE'S THIRD-QUARTER EARNINGS RISE 60 PERCENT - ADD 4 - In the Central Region, production averaged 64,818 boe per day, up 1 percent from the second quarter. The region completed 53 producers during the quarter and is operating 21 rigs. "In spite of two major hurricanes, we expect a record fourth quarter, record results in 2005 and continued production growth in 2006," Farris said. Apache Corporation is a large oil and gas exploration and production company with core operations in the United States, Canada, Egypt, the United Kingdom North Sea and Australia. *(This is a non-GAAP measure; see reconciliation below.) -end- NOTE: Apache will webcast its conference call live at 1 p.m. Central Time on Thursday, Oct. 27, from its Web site, www.apachecorp.com. The replay will be available on the Web site or by dialing (719) 457-0820 and using Apache's confirmation code, 856315. The telephone replay will be available for one week beginning at approximately 5 p.m. on Oct. 27. 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 FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, --------------------------- --------------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- REVENUES AND OTHER: Oil and gas production revenues $ 2,051,744 $ 1,414,128 $ 5,452,928 $ 3,814,294 Other 9,308 (7,126) 29,643 (16,620) ----------- ----------- ----------- ----------- 2,061,052 1,407,002 5,482,571 3,797,674 ----------- ----------- ----------- ----------- OPERATING EXPENSES: Depreciation, depletion and amortization 357,159 313,520 1,055,583 895,485 Asset retirement obligation accretion 13,527 11,071 40,016 32,723 Lease operating costs (A) 279,995 208,372 768,596 616,387 Gathering and transportation costs 23,571 20,902 73,529 60,698 Severance and other taxes 150,394 47,148 309,173 77,691 General and administrative 50,047 38,583 152,460 123,821 China litigation provision - - - 71,216 ----------- ----------- ----------- ----------- Total operating expenses 874,693 639,596 2,399,357 1,878,021 ----------- ----------- ----------- ----------- OPERATING INCOME 1,186,359 767,406 3,083,214 1,919,653 FINANCING COSTS: Interest expense 43,517 41,753 133,590 122,495 Amortization of deferred loan costs 521 652 3,226 1,814 Capitalized interest (14,990) (12,593) (42,653) (38,951) Interest income (2,201) (962) (4,003) (1,795) ----------- ----------- ----------- ----------- Net financing costs 26,847 28,850 90,160 83,563 ----------- ----------- ----------- ----------- INCOME BEFORE INCOME TAXES 1,159,512 738,556 2,993,054 1,836,090 Provision for income taxes 472,517 308,081 1,157,546 675,764 ----------- ----------- ----------- ----------- NET INCOME 686,995 430,475 1,835,508 1,160,326 Preferred stock dividends 1,420 1,420 4,260 4,260 ----------- ----------- ----------- ----------- INCOME ATTRIBUTABLE TO COMMON STOCK $ 685,575 $ 429,055 $ 1,831,248 $ 1,156,066 =========== =========== =========== =========== BASIC NET INCOME PER COMMON SHARE $ 2.08 $ 1.31 $ 5.57 $ 3.55 =========== =========== =========== =========== DILUTED NET INCOME PER COMMON SHARE $ 2.05 $ 1.30 $ 5.49 $ 3.51 =========== =========== =========== =========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 329,219 326,294 328,615 325,657 =========== =========== =========== ===========
(A) Third-quarter 2005 lease operating costs includes $18 million of storm-related costs. APACHE CORPORATION FINANCIAL INFORMATION (In thousands)
FOR THE QUARTER FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, ------------------------ ------------------------ 2005 2004 2005 2004 ---------- ---------- ---------- ---------- COSTS INCURRED: North America exploration and development $ 617,123 $ 362,054 $1,657,329 $1,064,872 International exploration and development 308,507 207,597 874,165 551,294 ---------- ---------- ---------- ---------- $ 925,630 $ 569,651 $2,531,494 $1,616,166 ========== ========== ========== ========== Oil and gas property acquisitions $ 10,172 $ 492,371 $ 35,826 $ 490,832 ========== ========== ========== ========== Capitalized interest $ 14,990 $ 12,593 $ 42,653 $ 38,951 ========== ========== ========== ========== Asset retirement costs $ 39,417 $ 116,944 $ 76,706 $ 137,026 ========== ========== ========== ==========
SEPTEMBER 30, DECEMBER 31, 2005 2004 ------------- ------------- BALANCE SHEET DATA: Current Assets $ 1,719,636 $ 1,348,782 Property and Equipment, net 15,745,485 13,860,359 Goodwill 189,252 189,252 Other Assets 131,755 104,087 ------------- ------------- Total Assets $ 17,786,128 $ 15,502,480 ============= ============= Current Liabilities $ 2,076,295 $ 1,282,891 Long-Term Debt 2,191,785 2,588,390 Deferred Credits and Other Noncurrent Liabilities 3,805,197 3,426,778 Shareholders' Equity 9,712,851 8,204,421 ------------- ------------- Total Liabilities and Shareholders' Equity $ 17,786,128 $ 15,502,480 ============= ============= Common shares outstanding at end of period 329,294 327,458
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 FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, --------------------------- -------------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- Net cash provided by operating activities $ 1,330,915 $ 1,021,486 $ 3,160,096 $ 2,320,538 Changes in operating assets and liabilities (67,354) (138,582) 232,181 20,062 ----------- ----------- ----------- ----------- Cash from operations before changes in operating assets and liabilities $ 1,263,561 $ 882,904 $ 3,392,277 $ 2,340,600 =========== =========== =========== ===========
APACHE CORPORATION FINANCIAL INFORMATION
FOR THE QUARTER FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, --------------------------- --------------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- FINANCIAL DATA (In thousands, except per share data): Revenues and other $ 2,061,052 $ 1,407,002 $ 5,482,571 $ 3,797,674 =========== =========== =========== =========== Income Attributable to Common Stock $ 685,575 $ 429,055 $ 1,831,248 $ 1,156,066 =========== =========== =========== =========== Basic Net Income Per Common Share $ 2.08 $ 1.31 $ 5.57 $ 3.55 =========== =========== =========== =========== Diluted Net Income Per Common Share $ 2.05 $ 1.30 $ 5.49 $ 3.51 =========== =========== =========== =========== Weighted Average Common Shares Outstanding 329,219 326,294 328,615 325,657 =========== =========== =========== =========== Diluted Shares Outstanding 334,164 330,193 333,602 329,458 =========== =========== =========== =========== PRODUCTION AND PRICING DATA: OIL VOLUME - BARRELS PER DAY United States 64,906 65,017 71,860 67,110 Canada 21,974 24,743 22,226 25,409 Egypt 54,728 52,602 54,110 51,706 Australia 16,499 32,199 15,323 26,041 North Sea 67,713 58,031 64,966 49,866 China 6,533 7,948 9,224 7,121 Argentina 1,339 532 1,074 542 ----------- ----------- ----------- ----------- Total 233,692 241,072 238,783 227,795 =========== =========== =========== =========== AVERAGE OIL PRICE PER BARREL United States $ 53.85 $ 41.45 $ 47.72 $ 36.90 Canada 60.66 41.34 52.12 36.72 Egypt 60.38 41.51 53.29 35.81 Australia 66.52 46.72 58.06 40.96 North Sea 60.46 25.18 52.33 23.36 China 50.76 35.99 42.35 32.77 Argentina 39.18 31.28 36.96 33.28 Total 58.66 38.04 51.05 34.00 NATURAL GAS VOLUME - MCF PER DAY United States 586,111 640,467 625,716 649,997 Canada 373,079 325,535 366,892 322,390 Egypt 162,386 141,072 154,839 135,709 Australia 138,267 121,088 120,759 118,587 North Sea 2,384 2,043 2,287 1,769 Argentina 2,715 3,467 3,142 3,985 ----------- ----------- ----------- ----------- Total 1,264,942 1,233,672 1,273,635 1,232,437 =========== =========== =========== =========== AVERAGE NATURAL GAS PRICE PER MCF United States $ 7.73 $ 5.30 $ 6.71 $ 5.32 Canada 7.17 5.10 6.28 5.10 Egypt 4.97 4.45 4.67 4.41 Australia 1.69 1.58 1.73 1.64 North Sea 10.57 4.36 7.63 4.57 Argentina 1.35 0.78 1.14 0.62 Total 6.54 4.77 5.86 4.79 NGL VOLUME - BARRELS PER DAY United States 7,097 8,934 8,529 8,218 Canada 2,232 2,794 2,187 2,665 ----------- ----------- ----------- ----------- Total 9,329 11,728 10,716 10,883 =========== =========== =========== =========== AVERAGE NGL PRICE PER BARREL United States $ 34.54 $ 27.56 $ 31.10 $ 25.25 Canada 32.13 24.94 27.59 22.90 Total 33.97 26.94 30.38 24.67
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