8-K

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): July 27, 2006

APACHE CORPORATION

(Exact name of registrant as specified in Charter)

Delaware	1-4300	41-0747868
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer 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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Press Release

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 July 27, 2006, Apache Corporation issued a press release announcing financial and operating results for the fiscal quarter ended June 30, 2006. 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 July 27, 2006, “Apache Second Quarter Earnings Rise 23 Percent to $722 Million or $2.17 Per Share”

3

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 27, 2006	/s/ Roger B. Plank
	Roger B. Plank
	Executive Vice President and
	Chief Financial Officer

4

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press Release dated July 27, 2006, “Apache Second Quarter Earnings Rise 23 Percent to $722 Million or $2.17 Per Share”

EX-99.1

Exhibit 99.1

CONTACTS:

(Media):	Tony Lentini	(713) 296-6227
	Bill Mintz	(713) 296-7276
(Investor):	Robert Dye	(713) 296-6662
(Web site):	www.apachecorp.com

FOR RELEASE AT 7:45 A.M. CENTRAL TIME

APACHE SECOND-QUARTER EARNINGS RISE 23 PERCENT
TO $722 MILLION OR $2.17 PER SHARE

Production crosses 500,000 boe/day milestone as gas output surges 21 percent

     Houston, July 27, 2006 — Apache Corporation (NYSE, Nasdaq: APA) today reported second-quarter earnings of $722 million or $2.17 per diluted common share, up 23 percent from $587 million or $1.76 per share in the prior-year period. Apache’s record production, balanced product mix and higher oil prices offset a steep decline in natural gas prices since the first quarter.

     Cash from operations before changes in operating assets and liabilities totaled $1.3 billion, up from $1.1 billion in the year-earlier period. (This is a non-GAAP measure; see reconciliation below.)

     Production totaled 500,888 barrels of oil equivalent (boe) per day, up from 469,617 boe per day in the prior-year period and up 10 percent from the first quarter of 2006. Gas production averaged 1.6 billion cubic feet per day, up 21 percent from the prior-year period and up 15 percent from the first quarter. Apache produced 240,122 barrels of liquid hydrocarbons per day, down 5 percent from the second quarter of 2005, but a 4 percent increase from the first quarter of 2006.

     “Five of Apache’s seven core areas posted production gains from the first quarter,” said G. Steven Farris, president and chief executive officer. “Our balanced portfolio and product mix combined to deliver excellent results. Higher oil prices and record barrel-equivalent production more than offset the impact of lower natural gas prices on earnings and cash flow.”

     On a barrel-equivalent basis, Apache’s second-quarter production was 52 percent natural gas and 48 percent liquid hydrocarbons.

     Apache’s record gas production was the result of substantially higher output from the Qasr field in Egypt, the John Brookes field in Australia, Canada and the onshore U.S. Central Region. Second-quarter results also included production resulting from the company’s acquisition of Pioneer Resources’ assets in Argentina, which was completed in April.

     Gulf Coast Region production in the second quarter was 20 percent below the year-earlier period as a result of continuing curtailments of platforms and infrastructure damaged by the third-quarter 2005 hurricanes. Restoration activities will continue into 2007.

     Apache’s Gulf of Mexico production will get a boost in coming quarters with the June 21 closing of its acquisition of BP’s producing assets in the shallow waters of the Gulf. The acquisition is expected to add net production of 3,650 barrels of oil and 85 million cubic feet of gas per day during the second half of 2006.

     “Driven by $1.7 billion of producing property acquisitions closed in the first half of the year, our continuing active drilling campaign in all of our regions and the ongoing restoration of production in the Gulf, Apache is on track to achieve 10 percent to 15 percent production growth in 2006,” Farris said.

     During the second quarter, Apache announced that it has agreed to sell its 24.5 percent interest in China’s producing Zhao Dong block to Australia-based ROC Oil Company Limited for $260 million.

     Also, BP has informed Apache of a required shutdown of the Forties Pipeline System in the North Sea for repairs beginning July 29, which will curtail production from Apache’s Forties Field for a period of one week or longer depending on the magnitude of the repairs. Apache will move forward work activities on its Forties platforms to coincide with the pipeline shutdown.

     Apache received $64.35 per barrel of oil in the quarter, up 33 percent from the prior-year period and a 12 percent increase from the first quarter; and $4.97 per thousand cubic feet of gas, down 13 percent from the second quarter of 2005 and a 22 percent drop from the first quarter of 2006.

     For the first six months of 2006, Apache earned $1.4 billion or $4.14 per diluted common share, up from $1.1 billion or $3.44 in the first half of 2005. Cash from operations for the first six months totaled $2.5 billion, up from $2.1 billion in the prior-year period.

     Apache is a large oil and gas independent with operations in the United States, Canada, the United Kingdom sector of the North Sea, Egypt, Australia and Argentina.

-end-

     EDITOR’S NOTE: Apache will webcast a conference call to discuss its second-quarter results at 1 p.m. Central Time, Thursday, July 27, from 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 27. To access the telephone playback, dial (719) 457-0820 and provide Apache’s confirmation code, 2164433. The conference call will be archived on Apache’s Web site.

     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, operating costs, exploration and acquisition activities. 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 Six Months
	Ended June 30,						Ended June 30,
	2006			2005			2006			2005
REVENUES AND OTHER:
Oil and gas production revenues	$	2,085,127		$	1,774,535		$	4,035,425		$	3,401,184
Other		(23,609	)		(15,304	)		25,195			20,335
		2,061,518			1,759,231			4,060,620			3,421,519
OPERATING EXPENSES:
Depreciation, depletion and amortization		441,438			359,011			814,015			698,424
Asset retirement obligation accretion		20,861			13,330			41,506			26,489
Lease operating costs		312,402			255,430			604,016			488,601
Gathering and transportation costs		25,809			26,178			51,913			49,958
Severance and other taxes		168,402			86,593			314,816			158,779
General and administrative		52,191			52,002			97,863			102,413
Total operating expenses		1,021,103			792,544			1,924,129			1,524,664
OPERATING INCOME		1,040,415			966,687			2,136,491			1,896,855
FINANCING COSTS:
Interest expense		50,136			44,807			92,999			90,073
Amortization of deferred loan costs		521			2,047			1,029			2,705
Capitalized interest		(15,882	)		(14,254	)		(30,075	)		(27,663	)
Interest income		(3,267	)		(875	)		(9,631	)		(1,802	)
Net financing costs		31,508			31,725			54,322			63,313
INCOME BEFORE INCOME TAXES		1,008,907			934,962			2,082,169			1,833,542
Provision for income taxes		285,282			346,932			697,623			685,029
NET INCOME		723,625			588,030			1,384,546			1,148,513
Preferred stock dividends		1,420			1,420			2,840			2,840
INCOME ATTRIBUTABLE TO COMMON STOCK	$	722,205		$	586,610		$	1,381,706		$	1,145,673
BASIC NET INCOME PER COMMON SHARE	$	2.19		$	1.79		$	4.19		$	3.49
DILUTED NET INCOME PER COMMON SHARE	$	2.17		$	1.76		$	4.14		$	3.44
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING		329,862			328,578			330,137			328,309

APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands)

	For the Quarter				For the Six Months
	Ended June 30,				Ended June 30,
	2006		2005		2006		2005
COSTS INCURRED:
North America exploration and development	$	553,139	$	510,772	$	1,249,299	$	1,040,206
International exploration and development		247,883		303,311		469,430		565,658
	$	801,022	$	814,083	$	1,718,729	$	1,605,864
Oil and gas property acquisitions	$	1,476,735	$	5,705	$	1,733,575	$	25,654
Gas gathering, transmission and processing facilities		106,611		—		106,611		—
	$	1,583,346	$	5,705	$	1,840,186	$	25,654
Capitalized interest	$	15,882	$	14,254	$	30,075	$	27,663
Asset retirement costs	$	133,579	$	26,776	$	144,686	$	37,289

	June 30,		December 31,
	2006		2005
BALANCE SHEET DATA:
Current Assets	$	2,103,139	$	2,162,077
Property and Equipment, net		19,470,400		16,791,340
Goodwill		189,252		189,252
Other Assets		148,564		129,127
Total Assets	$	21,911,355	$	19,271,796
Current Liabilities	$	3,309,166	$	2,186,564
Long-Term Debt		2,189,302		2,191,954
Deferred Credits and Other Noncurrent Liabilities		4,582,994		4,352,063
Shareholders’ Equity		11,829,893		10,541,215
Total Liabilities and Shareholders’ Equity	$	21,911,355	$	19,271,796
Common shares outstanding at end of period		329,240		330,121

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 Six Months
	Ended June 30,				Ended June 30,
	2006		2005		2006		2005
Net cash provided by operating activities	$	1,220,983	$	993,009	$	2,264,267	$	1,829,181
Changes in operating assets and liabilities		44,696		112,639		225,612		299,535
Cash from operations before changes in operating assets and liabilities	$	1,265,679	$	1,105,648	$	2,489,879	$	2,128,716

APACHE CORPORATION
FINANCIAL INFORMATION

	For the Quarter				For the Six Months
	Ended June 30,				Ended June 30,
	2006		2005		2006		2005
FINANCIAL DATA (In thousands, except per share data):
Revenues and other	$	2,061,518	$	1,759,231	$	4,060,620	$	3,421,519
Income Attributable to Common Stock	$	722,205	$	586,610	$	1,381,706	$	1,145,673
Basic Net Income Per Common Share	$	2.19	$	1.79	$	4.19	$	3.49
Diluted Net Income Per Common Share	$	2.17	$	1.76	$	4.14	$	3.44
Weighted Average Common Shares Outstanding		329,862		328,578		330,137		328,309
Diluted Shares Outstanding		332,920		333,468		333,671		333,267
PRODUCTION AND PRICING DATA:
OIL VOLUME — Barrels per day
United States		65,451		77,140		62,388		75,395
Canada		21,181		21,442		21,434		22,354
Egypt		55,370		53,019		56,326		53,795
Australia		12,273		13,487		12,093		14,725
North Sea		61,455		65,251		62,942		63,570
China		5,419		10,677		4,991		10,592
Argentina		6,581		1,173		3,941		940
Total		227,730		242,189		224,115		241,371
AVERAGE OIL PRICE PER BARREL
United States	$	56.84	$	46.02	$	53.71	$	45.04
Canada		66.81		48.61		60.45		47.85
Egypt		69.33		50.49		65.06		49.62
Australia		74.58		53.52		70.57		53.24
North Sea		66.93		49.65		63.73		47.93
China		66.66		45.35		62.78		39.71
Argentina		44.22		36.19		43.43		35.36
Total		64.35		48.55		60.95		47.31
NATURAL GAS VOLUME — Mcf per day
United States		638,469		653,805		619,860		645,848
Canada		417,494		380,564		401,826		363,747
Egypt		218,788		146,724		215,847		151,002
Australia		184,746		110,005		169,288		111,859
North Sea		2,163		2,297		2,216		2,238
Argentina		102,935		3,248		53,315		3,360
Total		1,564,595		1,296,643		1,462,352		1,278,054
AVERAGE NATURAL GAS PRICE PER MCF
United States	$	6.29	$	6.43	$	6.83	$	6.24
Canada		5.69		6.03		6.66		5.82
Egypt		4.46		4.71		4.44		4.50
Australia		1.58		1.71		1.62		1.76
North Sea		9.68		6.74		9.83		6.04
Argentina		0.92		1.22		0.93		1.06
Total		4.97		5.71		5.62		5.51
NGL VOLUME — Barrels per day
United States		8,811		9,408		8,185		9,257
Canada		2,226		1,913		2,202		2,165
Argentina		1,355		—		682		—
Total		12,392		11,321		11,069		11,422
AVERAGE NGL PRICE PER BARREL
United States	$	40.21	$	31.19	$	38.52	$	29.76
Canada		35.77		24.88		35.94		25.20
Argentina		37.44		—		37.44		—
Total		39.11		30.12		37.94		28.89