-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, E4omrZuzu8uJ12OIFboAnIdh7bctAvd1Gu+MJiRfxAb98PNmKjpUY41t7CFN94Bo TEnvCVU5cOXEgpgGl5Ucuw== 0000950129-95-000238.txt : 19950616 0000950129-95-000238.hdr.sgml : 19950616 ACCESSION NUMBER: 0000950129-95-000238 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950301 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950322 SROS: CSE SROS: NYSE 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-04300 FILM NUMBER: 95522504 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 FORMER COMPANY: FORMER CONFORMED NAME: APACHE OIL CORP DATE OF NAME CHANGE: 19660830 8-K/A 1 AMDT #1 -- APACHE CORPORATION 8-K 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A AMENDMENT NO. 1 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): March 1, 1995 APACHE CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 1-4300 41-0747868 (State or other (Commission (I.R.S. Employer jurisdiction 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 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 The undersigned registrant, Apache Corporation ("Apache"), hereby amends Item 7. "Financial Statements, Pro Forma Financial Information and Exhibits" of its Current Report on Form 8-K, dated March 1, 1995, as follows: ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Financial statements of businesses acquired. Attached hereto as Schedule A is the audited Statement of Combined Revenues and Direct Operating Expenses for the Oil and Gas Properties of Texaco Exploration and Production Inc. Sold to Apache Corporation ("Texaco's Audited Statement of Revenues and Direct Operating Expenses"), for the years ended December 31, 1993 and 1994, and the related notes thereto, together with the Report of Independent Public Accountants of Arthur Andersen LLP concerning the Statement and related notes. (b) Pro forma financial information. Attached hereto as Schedule B are the Unaudited Pro Forma Consolidated Condensed Statement of Operations of Apache Corporation and Subsidiaries, for the year ended December 31, 1994, the Unaudited Pro Forma Consolidated Condensed Balance Sheet of Apache Corporation and Subsidiaries, as of December 31, 1994, and the related notes thereto, to show the pro forma effects of Apache's acquisition of certain oil and gas properties from Texaco Exploration and Production Inc. ("Texaco"). The financial statements contained in Schedule B incorporate by reference the financial statements of Apache contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 1994. (c) Exhibits.
EXHIBIT NO. DESCRIPTION - -------------------- ------------------------------------------------------------------------ 2.1 -- Memorandum of Understanding by and between Texaco Exploration and Production Inc., as seller, and Registrant, as buyer, dated November 29, 1994 (incorporated by reference to Exhibit 99.1 to Registrant's Current Report on Form 8-K, dated November 29, 1994, SEC File No. 1-4300, filed December 29, 1994). 2.2 -- Purchase and Sale Agreement by and between Texaco Exploration and Production Inc., as seller, and Registrant, as buyer, dated December 22, 1994 (incorporated by reference to Exhibit 99.3 to Registrant's Current Report on Form 8-K, dated November 29, 1994, SEC File No. 1-4300, filed December 29, 1994). 10.1 -- Third Amended and Restated Credit Agreement, dated March 1, 1995, among Registrant, the lenders named therein, and The First National Bank of Chicago, as Administrative Agent and Arranger, and Chemical Bank, as Co-Agent and Arranger (incorporated by reference to Exhibit 10.2 to Registrant's Annual Report on Form 10-K for year ended December 31, 1994, SEC File No. 1-4300). 10.2 -- Fiscal Agency Agreement relating to the 6% Debentures, dated as of January 4, 1995, between Registrant and Chemical Bank, as fiscal agent (incorporated by reference to Exhibit 99.2 to Registrant's Current Report on Form 8-K/A, dated December 6, 1994, SEC File No. 1-4300, filed January 11, 1995.) *23.1 -- Consent of Arthur Andersen LLP. 99.1 -- Press Release, dated November 29, 1994, "Apache to Acquire Texaco Properties for $600 Million" (incorporated by reference to Exhibit 99.2 to Registrant's Current Report on Form 8-K, dated November 29, 1994, SEC File No. 1-4300, filed December 29, 1994). 99.2 -- Press Release, dated March 2, 1995, "Apache Closes Acquisition of Texaco Properties" (incorporated by reference to Exhibit 99.2 to Registrant's Current Report on Form 8-K, dated March 1, 1995, SEC File No. 1-4300, filed March 15, 1995).
- --------------- * filed herewith 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment on Form 8-K/A to be signed on its behalf by the undersigned thereunto duly authorized. APACHE CORPORATION /s/ ZURAB S. KOBIASHVILI Zurab S. Kobiashvili Vice President, General Counsel and Secretary Date: March 22, 1995 4 SCHEDULE A 5 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Texaco Exploration and Production Inc. We have audited the accompanying Statement of Combined Revenues and Direct Operating Expenses for the Oil and Gas Properties of Texaco Exploration and Production Inc. Sold to Apache Corporation for the years ended December 31, 1994 and 1993. This statement is the responsibility of the management of Texaco Exploration and Production Inc. Our responsibility is to express an opinion on this statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in Form 8-K/A and Form S-4 of Apache Corporation and is not intended to be a complete financial presentation of the properties described above. In our opinion, the statement referred to above presents fairly, in all material respects, the Combined Revenues and Direct Operating Expenses for the Oil and Gas Properties of Texaco Exploration and Production Inc. Sold to Apache Corporation for the years ended December 31, 1994 and 1993, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Houston, Texas March 14, 1995 A-1 6 STATEMENT OF COMBINED REVENUES AND DIRECT OPERATING EXPENSES FOR THE OIL AND GAS PROPERTIES OF TEXACO EXPLORATION AND PRODUCTION INC. SOLD TO APACHE CORPORATION (IN MILLIONS)
FOR THE YEAR FOR THE YEAR ENDED ENDED DECEMBER 31, DECEMBER 31, 1994 1993 ------------ ------------ Revenues........................................................... $163.3 $200.5 Direct Operating Expenses.......................................... 83.7 97.6 ------ ------ Excess of Revenues Over Direct Operating Expenses.................. $ 79.6 $102.9 ====== ======
The accompanying notes are an integral part of this financial statement A-2 7 NOTES TO STATEMENT OF COMBINED REVENUES AND DIRECT OPERATING EXPENSES FOR THE OIL AND GAS PROPERTIES OF TEXACO EXPLORATION AND PRODUCTION INC. SOLD TO APACHE CORPORATION (1) THE PROPERTIES On March 1, 1995, Texaco Exploration and Production Inc. (Texaco) sold certain oil and gas properties (the properties) located in 315 fields in 12 states and offshore Gulf of Mexico to Apache Corporation (Apache) for $571 million. The effective date of the transaction was January 1, 1995. The properties are located in the Permian Basin, the Gulf Coast of Texas and Louisiana, Western Oklahoma, East Texas, the Rocky Mountains and certain offshore locations. (2) BASIS FOR PRESENTATION During the periods presented, the above properties were not accounted for or operated as a separate division by Texaco. Certain costs, such as depreciation, depletion and amortization; general and administrative expenses; and corporate income taxes were not allocated to the individual properties. Accordingly, full separate financial statements prepared in accordance with generally accepted accounting principles do not exist and are not practicable to obtain in these circumstances. Revenues and direct operating expenses included in the accompanying statement represent Texaco's net working interest in the properties and are presented on the accrual basis of accounting. Depreciation, depletion and amortization; allocated general and administrative expenses and corporate income taxes have been excluded. (3) COMMITMENTS AND CONTINGENCIES Pursuant to the terms of the Purchase and Sale Agreement dated December 22, 1994 (the agreement), any claims, litigation or disputes pending as of the effective date or any matters arising in connection with ownership of the properties prior to the effective date are retained by Texaco. Notwithstanding this indemnification, Texaco is not aware of any legal, environmental or other commitments or contingencies that would be materially important in relation to the Combined Revenues and Direct Operating Expenses for the properties. (4) CAPITAL EXPENDITURES (UNAUDITED) Direct operating expenses do not include exploration and development expenditures related to the properties which amounted to $19.9 million and $40.0 million for the years ended December 31, 1994 and 1993, respectively. A-3 8 NOTES TO STATEMENT OF COMBINED REVENUES AND DIRECT OPERATING EXPENSES FOR THE OIL AND GAS PROPERTIES OF TEXACO EXPLORATION AND PRODUCTION INC. SOLD TO APACHE CORPORATION SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED) STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
AS OF DECEMBER 31, ----------------------- 1994 1993 --------- --------- (IN THOUSANDS) Future: Cash inflows...................................................... $1,526,383 $1,509,815 Production costs.................................................. (760,505) (867,906) Development costs................................................. (221,734) (234,693) Income tax Expense................................................ (171,269) (115,851) ---------- --------- Net cash flows...................................................... 372,875 291,365 Discount for estimated timing of future cash flows.................. (155,824) (110,748) ---------- --------- Total..................................................... $ 217,051 $ 180,617 ========== =========
CHANGES IN THE STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
FOR THE YEAR ENDED ---------------------- 1994 1993 -------- --------- (IN THOUSANDS) Beginning of year..................................................... $180,617 $ 328,223 Sales, net of production costs........................................ (79,619) (102,867) Net change in prices, production and development costs................ 78,917 (251,447) Extensions, discoveries and improved recovery, less related costs..... 8,748 4,021 Development costs incurred during the period.......................... 19,925 40,004 Accretion of discount................................................. 40,722 76,943 Net change in future income taxes..................................... (32,259) 85,740 -------- --------- End of year........................................................... $217,051 $ 180,617 ======== =========
RESERVE INFORMATION
FOR THE YEAR ENDED ----------------------------------------- 1994 1993 ------------------ ------------------ GAS OIL GAS OIL MMCF MBBL MMCF MBBL ------- ------ ------- ------ Proved developed and undeveloped reserves Balance, beginning of year......................... 226,139 81,402 253,407 88,049 Production......................................... (33,089) (7,291) (32,861) (8,619) Discoveries, extensions, and improved recovery..... 16,420 1,825 5,593 1,972 ------- ------ ------- ------ Balance, end of year............................... 209,470 75,936 226,139 81,402 ======= ====== ======= ====== Proved developed reserves Balance, end of year............................... 193,286 61,655 212,635 63,762
A-4 9 SCHEDULE B 10 APACHE CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS The following unaudited consolidated condensed financial statements and related notes are presented to show the pro forma effects of the acquisition of oil and gas properties from Texaco during the first quarter of 1995. The Texaco acquisition will be reported using the purchase method of accounting. The condensed statements of operations are presented to show income from continuing operations as if the Texaco transaction occurred effective January 1, 1994. The pro forma condensed balance sheet is based on the assumption that the transaction occurred effective December 31, 1994. Pro forma data are based on assumptions and include adjustments as explained in the notes to the unaudited pro forma consolidated condensed financial statements. The pro forma data are not necessarily indicative of the financial results that would have occurred had the transaction been effective on and as of the dates referenced above, and should not be viewed as indicative of operations in future periods. The unaudited pro forma consolidated condensed financial statements should be read in conjunction with the notes thereto, Apache's Annual Report on Form 10-K for the fiscal year ended December 31, 1994, which is incorporated by reference, and Texaco's Audited Statement of Revenues and Direct Operating Expenses included herein as Schedule A. B-1 11 APACHE CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1994 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
TEXACO PRO APACHE TEXACO FORMA PRO HISTORICAL HISTORICAL ADJUSTMENTS FORMA -------- -------- -------- -------- REVENUES Oil and gas production revenues.................. $493,500 $163,300 $ $656,800 Gathering, processing and marketing revenues..... 44,287 44,287 Equity in income of affiliates................... 459 459 Other revenues................................... 7,375 7,375 -------- -------- -------- -------- Total revenues........................... 545,621 163,300 708,921 OPERATING EXPENSES Depreciation, depletion and amortization......... 232,612 60,597 (a) 293,209 Impairments...................................... 7,300 7,300 Operating costs.................................. 137,820 83,700 221,520 Gathering, processing and marketing costs........ 37,866 37,866 Administrative, selling and other................ 34,870 4,000 (b) 38,870 Financing costs, net............................. 30,696 27,883 (c) 58,579 -------- -------- -------- -------- 481,164 83,700 92,480 657,344 -------- -------- -------- -------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES............................................ 64,457 79,600 (92,480) 51,577 Provision (benefit) for income taxes............. 21,620 (4,766)(d) 16,854 -------- -------- -------- -------- NET INCOME FROM CONTINUING OPERATIONS.............. $ 42,837 $ 79,600 $(87,714) $ 34,723 ======== ======== ======== ======== NET INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE............................................ $ .70 $ .57 ======== ======== WEIGHTED AVERAGE COMMON SHARES..................... 61,317 61,317 ======== ========
The accompanying notes to unaudited pro forma financial statements are an integral part of these statements. B-2 12 APACHE CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET AS OF DECEMBER 31, 1994 (IN THOUSANDS)
TEXACO APACHE PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA ---------- ----------- ---------- ASSETS Current assets: Cash and cash equivalents..................................... $ 15,063 $ $ 15,063 Receivables................................................... 101,801 101,801 Inventories................................................... 8,868 8,868 Advances to oil and gas ventures and other.................... 9,165 9,165 ---------- --------- ---------- Total current assets.................................. 134,897 134,897 Net property and equipment...................................... 1,685,433 571,000 (e) 2,263,433 7,000 (f) Other assets.................................................... 58,692 (25,000)(e) 44,892 11,200 (e) ---------- --------- ---------- TOTAL ASSETS.................................................... $1,879,022 $ 564,200 $2,443,222 ========== ========= ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities............................................. $ 147,788 $ 7,000 (f) $ 165,988 11,200 (e) Long-term debt.................................................. 657,486 546,000 (e) 1,203,486 Deferred income taxes........................................... 156,180 156,180 Other noncurrent liabilities.................................... 101,388 101,388 ---------- --------- ---------- TOTAL LIABILITIES............................................... 1,062,842 564,200 1,627,042 SHAREHOLDERS' EQUITY: Common stock.................................................. 78,199 78,199 Paid-in capital............................................... 543,583 543,583 Retained earnings............................................. 207,850 207,850 Treasury stock at cost........................................ (13,452) (13,452) ---------- --------- ---------- Total shareholders' equity............................ 816,180 -- 816,180 ---------- --------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...................... $1,879,022 $ 564,200 $2,443,222 ========== ========= ==========
The accompanying notes to unaudited pro forma financial statements are an integral part of these statements. B-3 13 APACHE CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS BASIS OF PRESENTATION The unaudited pro forma consolidated condensed statement of operations relative to the Texaco acquisition is based on the audited statements of Apache for the year ended December 31, 1994, and Texaco's Audited Statement of Revenues and Direct Operating Expenses for the years ended December 31, 1993 and 1994, and on the adjustments and assumptions described below. The pro forma balance sheet is based on Apache's audited balance sheet at December 31, 1994, and upon the adjustments and assumptions described below. PRO FORMA ADJUSTMENTS THE UNAUDITED PRO FORMA STATEMENT OF OPERATIONS REFLECTS THE FOLLOWING ADJUSTMENTS: (a) Record incremental depreciation, depletion and amortization expense, using the future gross revenue method, resulting from the purchase of properties from Texaco. (b) Record increases in general and administrative expense assumed with acquisition of Texaco properties. (c) Record interest expense and amortization of deferred financing costs associated with debt incurred ($571 million before adjustments) to purchase the Texaco properties, net of capitalized interest, assuming, on a preliminary basis, that $119 million of the purchase price is initially classified as unevaluated property costs. Interest expense was computed assuming a 6 percent rate on $172.5 million, reflecting the rate applicable to the recently issued 6% Convertible Subordinated Debentures due 2002 (6% debentures), and the interest rate applicable to bank debt of 5.8 percent for the twelve months ended December 31, 1994. (d) Record pro forma income tax provision (benefit) relating to the pro forma pre-tax income (loss) of the Texaco properties, assuming an effective federal and state tax rate of 37 percent. THE UNAUDITED PRO FORMA BALANCE SHEET REFLECTS THE FOLLOWING ADJUSTMENTS: (e) Reclassify advance to Texaco ($25 million) and record additional debt incurred ($546 million) to purchase Texaco properties and the related estimated bankers' fees and underwriting costs incurred ($11.2 million) to amend and restate the bank credit facility and issue the 6% debentures. The amount paid at closing is subject to additional adjustments. (f) Record assumed liabilities and transaction costs incurred in connection with the purchase of the Texaco properties. B-4 14 APACHE CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA SUPPLEMENTAL OIL AND GAS DISCLOSURE The following table sets forth certain unaudited pro forma information concerning Apache's proved oil and gas reserves at December 31, 1994, giving effect to the Texaco acquisition as if it had occurred on January 1, 1994. There are numerous uncertainties inherent in estimating the quantities of proved reserves and projecting future rates of production and timing of development expenditures. The following reserve data represents estimates only and should not be construed as being exact. UNAUDITED PROVED OIL AND NATURAL GAS RESERVES AT DECEMBER 31, 1994
NATURAL GAS -------------------------------------- PRO APACHE TEXACO FORMA --------- ------- -------- (MILLION CUBIC FEET) Beginning of year...................................... 848,219 226,139 1,074,358 Extension, discoveries and other additions............. 190,794 16,420 207,214 Purchase of minerals in place.......................... 158,309 -- 158,309 Revisions of previous estimates........................ (20,823) -- (20,823) Production............................................. (155,905) (33,089) (188,994) Sale of properties..................................... (4,335) -- (4,335) --------- ------- --------- End of year............................................ 1,016,259 209,470 1,225,729 ========= ======= ========= Proved developed reserves Beginning of year.................................... 720,672 212,635 933,307 ========= ======= ========= End of year.......................................... 910,304 193,286 1,103,590 ========= ======= =========
OIL, CONDENSATE AND NATURAL GAS LIQUIDS -------------------------------------- PRO APACHE TEXACO FORMA --------- ------- -------- (THOUSANDS OF BARRELS) Beginning of year...................................... 89,723 81,402 171,125 Extension, discoveries and other additions............. 10,018 1,825 11,843 Purchase of minerals in place.......................... 9,232 -- 9,232 Revisions of previous estimates........................ 5,620 -- 5,620 Production............................................. (13,577) (7,291) (20,868) Sale of properties..................................... (1,108) -- (1,108) --------- ------- -------- End of year............................................ 99,908 75,936 175,844 ========= ======= ======== Proved developed reserves Beginning of year.................................... 79,401 63,762 143,163 ========= ======= ======== End of year.......................................... 89,407 61,655 151,062 ========= ======= ========
B-5 15 APACHE CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA SUPPLEMENTAL OIL AND GAS DISCLOSURE -- (CONTINUED) The following table sets forth unaudited pro forma information concerning the discounted future net cash flows from proved oil and gas reserves of Apache as of December 31, 1994, net of income tax expense, and giving effect to the Texaco acquisition as if it had occurred on January 1, 1994. Income tax expense has been computed using assumptions relating to the future tax rates and the permanent differences and credits under the tax laws relating to oil and gas activities at December 31, 1994, and do not take into account subsequent changes in tax laws. The information should be viewed only as a form of standardized disclosure concerning possible future cash flows that would result under the assumptions used, but should not be viewed as indicative of fair market value. Reference is made to Apache's financial statements for the fiscal year ended December 31, 1994, which are incorporated herein by reference, and to Texaco's Audited Statement of Revenues and Direct Operating Expenses included herein as Schedule A, for a discussion of the assumptions used in preparing the information presented.
PRO FORMA APACHE TEXACO(1) ADJUSTMENTS PRO FORMA --------- --------- ----------- --------- (IN MILLIONS) Standardized measure of discounted future net cash flows relating to proved reserves, net of income tax expense as of December 31, 1994: Cash inflows........................................ $ 3,564.6 $1,526.4 $ $5,091.0 Production and development costs.................... (1,363.0) (982.2) (2,345.2) Income tax expense.................................. (404.8) (171.3) 138.5(2) (437.6) --------- --------- ----------- --------- Net cash flows...................................... 1,796.8 372.9 138.5 2,308.2 10% annual discount rate............................ (643.8) (155.8) (49.2)(2) (848.8) --------- --------- ----------- --------- Discounted future net cash flows.................... $ 1,153.0 $ 217.1 $ 89.3 1,459.4 ========= ========= =========== =========
PRO FORMA APACHE TEXACO ADJUSTMENTS PRO FORMA --------- --------- ----------- --------- (IN MILLIONS) Change in standardized measure of discounted future net cash flows related to proved oil and gas reserves for the year ended December 31, 1994: Sales, net of production costs...................... $ (355.7) $ (79.6) $ $ (435.3) Net change in prices and production costs........... (113.9) 78.9 (35.0) Discoveries and improved recovery, net of related costs............................................. 176.4 8.7 185.1 Change in future development costs.................. 26.6 19.9 46.5 Revisions in quantities............................. 12.5 -- 12.5 Purchases........................................... 163.5 -- 163.5 Accretion of discount............................... 135.8 40.7 176.5 Change in income taxes.............................. (.1) (32.3) 89.3(2) 56.9 Sales of properties................................. (6.9) (6.9) Change in production rates and other................ (.6) (.6) --------- --------- ----------- --------- $ 37.6 $ 36.3 $ 89.3 $ 163.2 ========= ========= =========== =========
- --------------- (1) Apache has evaluated the Texaco properties and believes, based on its evaluation of the Texaco properties and prior experience with oil and gas property acquisitions, that the future net cash flows from the Texaco properties can be improved significantly through substantial reductions in production and development costs and through enhancement of production relative to the costs and production estimated by Texaco. No pro forma adjustment to reflect any such cost savings or production increases has been made. (2) Record a pro forma adjustment to reduce income tax expense, and the related effect on the discount amount, to reflect that portion of the purchase price allocated to proved properties that is in excess of Texaco's estimated tax basis in the properties. B-6 16 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - -------------------- ------------------------------------------------------------------------ 2.1 -- Memorandum of Understanding by and between Texaco Exploration and Production Inc., as seller, and Registrant, as buyer, dated November 29, 1994 (incorporated by reference to Exhibit 99.1 to Registrant's Current Report on Form 8-K, dated November 29, 1994, SEC File No. 1-4300, filed December 29, 1994). 2.2 -- Purchase and Sale Agreement by and between Texaco Exploration and Production Inc., as seller, and Registrant, as buyer, dated December 22, 1994 (incorporated by reference to Exhibit 99.3 to Registrant's Current Report on Form 8-K, dated November 29, 1994, SEC File No. 1-4300, filed December 29, 1994). 10.1 -- Third Amended and Restated Credit Agreement, dated March 1, 1995, among Registrant, the lenders named therein, and The First National Bank of Chicago, as Administrative Agent and Arranger, and Chemical Bank, as Co-Agent and Arranger (incorporated by reference to Exhibit 10.2 to Registrant's Annual Report on Form 10-K for year ended December 31, 1994, SEC File No. 1-4300). 10.2 -- Fiscal Agency Agreement relating to the 6% Debentures, dated as of January 4, 1995, between Registrant and Chemical Bank, as fiscal agent (incorporated by reference to Exhibit 99.2 to Registrant's Current Report on Form 8-K/A, dated December 6, 1994, SEC File No. 1-4300, filed January 11, 1995.) *23.1 -- Consent of Arthur Andersen LLP. 99.1 -- Press Release, dated November 29, 1994, "Apache to Acquire Texaco Properties for $600 Million" (incorporated by reference to Exhibit 99.2 to Registrant's Current Report on Form 8-K, dated November 29, 1994, SEC File No. 1-4300, filed December 29, 1994). 99.2 -- Press Release, dated March 2, 1995, "Apache Closes Acquisition of Texaco Properties." (incorporated by reference to Exhibit 99.2 to Registrant's Current Report on Form 8-K, dated March 1, 1995, SEC File No. 1-4300, filed March 15, 1995).
- --------------- * filed herewith EX-23.1 2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report, dated March 14, 1995, on the Statement of Combined Revenues and Direct Operating Expenses for the Oil and Gas Properties of Texaco Exploration and Production Inc. Sold to Apache Corporation, included in this Form 8-K/A into Apache Corporation's previously filed Registration Statements on Form S-3 (Nos. 33-51253 and 33-53129), Form S-4 (No. 33-57321) and Form S-8 (Nos. 33-53442, 33-37402 and 33-31407). It should be noted that we have not audited any financial statements of the properties subsequent to December 31, 1994 or performed any audit procedures subsequent to the date of our report. ARTHUR ANDERSEN LLP Houston, Texas March 17, 1995 -----END PRIVACY-ENHANCED MESSAGE-----