Derivative Instruments and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Open Crude Oil and Natural Gas Derivative Instruments

As of March 31, 2013, Apache had the following open crude oil derivative positions:

	Fixed-Price Swaps				Collars
Production Period	Mbbls		Weighted Average Fixed Price(1)		Mbbls		Weighted Average Floor Price (1)		Weighted Average Ceiling Price(1)
2013		1,212		74.90		4,216		82.99		111.81
2013 (2)		34,370		98.97		—		—		—
2014 (3)		76		74.50		—		—		—

⁽¹⁾  Crude oil prices represent a weighted average of several contracts entered into on a per-barrel basis. Crude oil contracts are primarily settled against NYMEX WTI Cushing Index and Platts Dated Brent. Approximately 50 percent of 2013 contracts are settled against Dated Brent.

⁽²⁾  For 2013, these fixed-price swaps have not been designated as cash flow hedges, and changes in fair value are reflected directly in earnings. All other derivative positions have been designated as cash flow hedges.

⁽³⁾  Subsequent to March 31, 2013, Apache entered into additional crude oil derivatives not designated as cash flow hedges totaling 9,673 thousand barrels (Mbbls) for 2014 with a weighted average fixed price of $94.76.

As of March 31, 2013, Apache had the following open natural gas derivative positions which have all been designated as cash flow hedges:

	Fixed-Price Swaps				Collars
Production Period	MMBtu (in 000’s)		Weighted Average Fixed Price(1)		MMBtu (in 000’s)		Weighted Average Floor Price (1)		Weighted Average Ceiling Price (1)
2013 (2)		7,575	$	6.73		4,575	$	5.35	$	6.67
2014		1,295	$	6.72		—	$	—	$	—

⁽¹⁾  U.S. natural gas prices represent a weighted average of several contracts entered into on a per-million British thermal units (MMBtu) basis and are settled against NYMEX Henry Hub.

⁽²⁾  Subsequent to March 31, 2013, Apache entered into additional natural gas derivatives not designated as cash flow hedges totaling 12,840 thousand MMBtu for 2013 with a weighted average fixed price of $4.34.

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the Company’s derivative assets and liabilities measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Quoted Price in Active Markets (Level 1)		Significant Other Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value		Netting(1)			Carrying Amount
			(In millions)
March 31, 2013
Assets:
Derivatives designated as cash flow hedges	$	—	$	29	$	—	$	29	$	(12	)	$	17
Liabilities:
Derivatives designated as cash flow hedges		—		36		—		36
Derivatives not designated as cash flow hedges		—		127		—		127
Total Derivative liabilities	$	—	$	163	$	—	$	163	$	(12	)	$	151
December 31, 2012
Assets:
Derivatives designated as cash flow hedges	$	—	$	48	$	—	$	48	$	(15	)	$	33
Liabilities:
Derivatives designated as cash flow hedges		—		51		—		51
Derivatives not designated as cash flow hedges		—		80		—		80
Total Derivative liabilities	$	—	$	131	$	—	$	131	$	(15	)	$	116

⁽¹⁾  The derivative fair values are based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties.

Fair Values of Derivative Instruments Recorded in Consolidated Balance Sheet

The carrying value of the Company’s derivative assets and liabilities and their locations on the consolidated balance sheet are as follows:

	March 31, 2013		December 31, 2012
	(In millions)
Current Assets: Derivative instruments	$	16	$	31
Other Assets: Deferred charges and other		1		2
Total Assets	$	17	$	33
Current Liabilities: Derivative instruments	$	151	$	116
Total Liabilities	$	151	$	116

Commodity Derivative Activity Recorded in Statement of Consolidated Operations

The following table summarizes the effect of derivative instruments on the Company’s statement of consolidated operations:

	Gain (Loss) on Derivatives Recognized in Income	For the Quarter Ended March 31,
		2013			2012
		(In millions)
Gain (loss) on cash flow hedges reclassified from accumulated other comprehensive loss	Oil and Gas Production Revenues	$	(9	)	$	41
Gain (loss) for ineffectiveness on cash flow hedges	Revenues and Other: Other	$	—		$	(1	)
Gain (loss) on derivatives not designated as cash flow hedges	Revenues and Other: Other	$	(100	)	$	—

Commodity Derivative Activity in Accumulated Other Comprehensive Income (Loss)

A reconciliation of the components of accumulated other comprehensive income (loss) in the statement of consolidated shareholders’ equity related to Apache’s cash flow hedges is presented in the table below. Derivative activity represents all of the reclassifications out of accumulated other comprehensive income (loss) to income for the periods presented.

	For the Quarter Ended March 31,
	2013						2012
	Before tax			After tax			Before tax			After tax
	(In millions)
Unrealized gain (loss) on derivatives at beginning of period	$	(10	)	$	(6	)	$	145		$	114
Realized amounts reclassified into earnings		9			6			(41	)		(34	)
Net change in derivative fair value		(11	)		(8	)		(29	)		1
Ineffectiveness reclassified into earnings		—			—			1			—
Unrealized gain (loss) on derivatives at end of period	$	(12	)	$	(8	)	$	76		$	81