EX-99.1

EX-99.1 2 d764692dex991.htm EX-99.1 EX-99.1

Exhibit 99.1


		NEWS RELEASE

Apache reports 18 percent year-over-year pro forma North American onshore liquids growth

for second-quarter 2014

•

Second-quarter highlights

•

North American onshore pro forma liquids volumes exceeded 201,000 barrels per day

•

Worldwide production averaged 636,000 barrels of oil equivalent (boe) per day;

pro forma production averaged 550,000 boe per day

•

Generated earnings from continuing operations of $1.31 per diluted share/$505 million;

adjusted earnings of $1.67 per share/$644 million

•

Operating activities provided net cash of $2.3 billion;

$2.2 billion from continuing operations before changes in operating assets and liabilities

•

Repurchased 8.9 million shares of common stock

•

Company provides update on repositioning for North American onshore growth

HOUSTON, July 31, 2014 – Apache Corporation (NYSE, Nasdaq: APA) today announced second-quarter 2014 earnings of $505 million or $1.31 per diluted common share and adjusted earnings, which exclude certain items that impact the comparability of results, of $644 million or $1.67 per share. For the same period in the prior year, Apache’s earnings were $1 billion or $2.54 per diluted common share and adjusted earnings were $813 million or $2.04 per share. Net cash provided by operating activities totaled approximately $2.3 billion in second-quarter 2014, compared with $2.8 billion in the prior year, with cash from operations before changes in operating assets and liabilities totaling $2.2 billion, compared with $2.6 billion in second-quarter 2013. Prior-year results reflect contributions from properties that have been divested, including producing assets in the Gulf of Mexico, Canada, Argentina and a noncontrolling interest in Egypt.

LOGO

APACHE REPORTS SECOND-QUARTER 2014 RESULTS — ADD 1

“Record-setting performance by our Permian Region continues to drive strong results for the company,” said G. Steven Farris, chairman, chief executive officer and president of Apache. “Apache’s onshore North American liquids production increased 18 percent on a pro forma basis in the second-quarter 2014 compared with the same period a year ago,” he said.

“We are excited about our initial results in emerging plays in the East Texas Eagle Ford and Canyon Lime in the U.S., and the Montney and Duvernay in Canada,” Farris said. “We continue to broaden and advance our compelling North American onshore portfolio.

“During the quarter, Apache took additional steps in focusing on North American onshore liquids growth by completing the sale of the non-producing Lucius and Heidelberg deepwater developments and divesting selected, primarily gas-producing properties in western Canada and South Texas. This brings our divestments over the last year to $10 billion,” he said.

Apache also returned additional capital to shareholders, purchasing 14.9 million shares of Apache common stock on the open market during the first six months of 2014, including 8.9 million shares during the second quarter at an average price of $87.30.

Update on repositioning for North American onshore growth

Consistent with the company’s ongoing repositioning for profitable and repeatable North American Onshore growth, Apache intends to completely exit the Wheatstone and Kitimat LNG projects. In addition, Apache is evaluating its international assets and exploring multiple opportunities, including the potential separation of some or all of these assets through the capital markets.

APACHE REPORTS SECOND-QUARTER 2014 RESULTS — ADD 2

Second-quarter 2014 production and operating highlights

Highlights from second-quarter include:

•

Total reported worldwide net daily production of oil, natural gas and natural gas liquids (NGLs) averaged 636,000 boe per day, with pro forma production averaging 550,000 boe per day.

•

North America onshore regions increased pro forma liquids production 31,000 barrels per day over the prior-year period. Total pro forma production averaged 201,000 barrels per day.

•

The Permian Region achieved record production averaging 155,000 boe per day, up 26 percent from the prior-year period. The region averaged 37 operated rigs during the quarter and drilled 164 gross operated wells (74 horizontal).

Oil and gas prices

Apache’s mix of hydrocarbon production during the second-quarter 2014 included approximately 49 percent crude oil and 10 percent NGLs. Crude oil and NGLs contributed 84 percent of the company’s revenue during the period.

Worldwide, Apache received an average price of $103.53 per barrel of crude oil during the second quarter compared with $98.47 per barrel in the prior-year period. Apache received an average price of $4.18 per thousand cubic feet (Mcf) of natural gas, compared with $3.97 per Mcf in the prior-year period.

APACHE REPORTS SECOND-QUARTER 2014 RESULTS — ADD 3

Conference call

Apache will conduct a conference call to discuss its results and review its portfolio at 1 p.m. Central time Thursday, July 31. The conference call will be webcast from Apache’s website, www.apachecorp.com. The webcast replay will be archived on Apache’s website. The conference call will be available for delayed playback by telephone for one week beginning at approximately 4 p.m. Central time July 31. To access the telephone playback, dial 855-859-2056 or 404-537-3406 for international calls. The conference access code is 30666789.

Additional Information

Additional information follows, including reconciliations of adjusted earnings and cash from operations before changes in operating assets and liabilities (non-GAAP financial measures) to the most directly comparable GAAP financial measures and information regarding Pro Forma Production. Our quarterly Operations and Financial Supplements are available at http://www.apachecorp.com/financialdata.

About Apache

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom and Australia. Apache posts announcements, operational updates, investor information and copies of all press releases on its website, www.apachecorp.com, and on its Media and Investor Center mobile application, which is available for free download from the Apple App Store and the Google Play Store.

APACHE REPORTS SECOND-QUARTER 2014 RESULTS — ADD 4

Non-GAAP financial measures

Apache’s financial information includes information prepared in conformity with generally accepted accounting standards (GAAP) as well as non-GAAP information. It is management’s intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted earnings and cash from continuing operations before changes in operating assets and liabilities are non-GAAP measures. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure.

Forward-looking statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods. These statements include, but are not limited to, statements about future plans, expectations and objectives for Apache’s operations, including statements about our drilling plans and production expectations, asset sales and monetizations and share repurchases. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See “Risk Factors” in our 2013 Form 10-K filed with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development or otherwise, except as may be required by law.

Contacts


Media:	(713) 296-6100	Patrick Cassidy
	(713) 296-7276	Bill Mintz

Investor:	(281) 302-2286	Castlen Kennedy
		Christopher Cortez
		Alicia Reis

Website: www.apachecorp.com

APACHE CORPORATION

STATEMENT OF CONSOLIDATED OPERATIONS

(Unaudited)

(In millions, except per share data)


	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
REVENUES AND OTHER:
Oil revenues	$	2,950		$	3,130		$	5,765		$	6,322
Gas revenues		589			721			1,235			1,402
NGL revenues		169			150			355			298

Oil and gas production revenues		3,708			4,001			7,355			8,022
Derivative instrument gains (losses)		(174	)		247			(194	)		147
Other		(50	)		20			(2	)		45

		3,484			4,268			7,159			8,214

COSTS AND EXPENSES:
Depreciation, depletion and amortization
Oil and gas property and equipment
Recurring		1,155			1,258			2,264			2,468
Additional		203			—			203			—
Other assets		99			92			196			194
Asset retirement obligation accretion		45			64			89			127
Lease operating expenses		613			781			1,210			1,503
Gathering and transportation		66			77			136			150
Taxes other than income		181			170			362			399
General and administrative		94			126			199			238
Acquisition, divestiture & separation costs		14			—			30			—
Financing costs, net		35			52			62			107

		2,505			2,620			4,751			5,186

INCOME BEFORE INCOME TAXES		979			1,648			2,408			3,028
Current income tax provision		325			284			741			781
Deferred income tax provision		41			327			203			432

INCOME FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		613			1,037			1,464			1,815
Loss from discontinued operations, net of tax		—			(2	)		(517	)		(63	)

INCOME INCLUDING NONCONTROLLING INTEREST		613			1,035			947			1,752
Net income attributable to noncontrolling interest		108			—			206			—
Preferred stock dividends		—			19			—			38

NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	505		$	1,016		$	741		$	1,714

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS
Net income from continuing operations attributable to common shareholders	$	505		$	1,018		$	1,258		$	1,777
Net income (loss) from discontinued operations		—			(2	)		(517	)		(63	)

Net income attributable to common shareholders	$	505		$	1,016		$	741		$	1,714

BASIC NET INCOME (LOSS) PER COMMON SHARE:
Basic net income from continuing operations per share	$	1.31		$	2.60		$	3.23		$	4.53
Basic net loss from discontinued operations per share		—			(0.01	)		(1.33	)		(0.16	)

Basic net income per share	$	1.31		$	2.59		$	1.90		$	4.37

DILUTED NET INCOME (LOSS) PER COMMON SHARE:
Diluted net income from continuing operations per share	$	1.31		$	2.54		$	3.21		$	4.45
Diluted net loss from discontinued operations per share		—			—			(1.32	)		(0.15	)

Diluted net income per share	$	1.31		$	2.54		$	1.89		$	4.30

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic		385			392			390			392
Diluted		387			408			392			408

DIVIDENDS DECLARED PER COMMON SHARE	$	0.25		$	0.20		$	0.50		$	0.40

APACHE CORPORATION

PRODUCTION INFORMATION


	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2014		2013		2014		2013
OIL VOLUME - Barrels per day
Permian		90,536		68,811		89,437		68,358
Central		21,987		21,950		21,837		21,242
Gulf Coast		10,977		10,593		10,976		10,287
Canada		17,981		18,573		17,786		17,878

N.A. Onshore		141,481		119,927		140,036		117,765

Gulf of Mexico		6,896		8,223		6,592		7,732
GOM Shelf		2		47,721		339		45,684

North America		148,379		175,871		146,967		171,181

Egypt⁽¹⁾		88,643		88,002		88,370		89,649
Australia		14,555		21,810		15,683		20,911
North Sea		61,610		63,667		60,358		66,051

International⁽¹⁾		164,808		173,479		164,411		176,611

Total⁽¹⁾		313,187		349,350		311,378		347,792

NATURAL GAS VOLUME - Mcf per day
Permian		213,192		190,455		214,519		188,097
Central		264,948		275,507		262,636		276,262
Gulf Coast		95,765		107,424		97,494		106,423
Canada		316,740		520,797		347,057		519,991

N.A. Onshore		890,645		1,094,183		921,706		1,090,773

Gulf of Mexico		22,804		24,957		19,517		28,030
GOM Shelf		261		262,318		674		258,383

North America		913,710		1,381,458		941,897		1,377,186

Egypt⁽¹⁾		367,950		357,291		372,628		361,428
Australia		210,470		212,022		213,116		213,202
North Sea		54,848		48,411		49,986		51,704

International⁽¹⁾		633,268		617,724		635,730		626,334

Total⁽¹⁾		1,546,978		1,999,182		1,577,627		2,003,520

NGL VOLUME - Barrels per day
Permian		29,176		22,692		27,229		21,644
Central		23,738		23,021		24,094		21,279
Gulf Coast		2,545		2,502		2,484		2,408
Canada		5,921		6,686		6,840		6,675

N.A. Onshore		61,380		54,901		60,647		52,006

Gulf of Mexico		1,166		1,162		999		1,025
GOM Shelf		—		7,641		45		6,824

North America		62,546		63,704		61,691		59,855

Egypt⁽¹⁾		884		—		560		—
North Sea		1,367		1,201		1,230		1,346

International⁽¹⁾		2,251		1,201		1,790		1,346

Total⁽¹⁾		64,797		64,905		63,481		61,201

BOE per day
Permian		155,244		123,246		152,420		121,351
Central		89,883		90,888		89,704		88,565
Gulf Coast		29,483		30,998		29,710		30,432
Canada		76,692		112,059		82,469		111,218

N.A. Onshore		351,302		357,191		354,303		351,566

Gulf of Mexico		11,862		13,545		10,843		13,428
GOM Shelf		46		99,082		496		95,573

North America		363,210		469,818		365,642		460,567

Egypt⁽¹⁾		150,853		147,551		151,035		149,887
Australia		49,633		57,147		51,203		56,444
North Sea		72,118		72,936		69,918		76,015

International⁽¹⁾		272,604		277,634		272,156		282,346

Total⁽¹⁾		635,814		747,452		637,798		742,913

Total excluding noncontrolling interest		585,567		747,452		587,702		742,913

⁽¹⁾	Includes production volume per day attributable to noncontrolling interest in Egypt


Oil (b/d)	29,508	—	29,288	—
Gas (mcf/d)	122,665	—	123,726	—
NGL (b/d)	295	—	187	—

Discontinued Operations - Argentina
Oil (b/d)	—	9,365	3,424	9,331
Gas (mcf/d)	—	184,528	70,286	186,383
NGL (b/d)	—	2,239	640	2,529
BOE/d	—	42,359	15,778	42,924

APACHE CORPORATION

PRO FORMA PRODUCTION INFORMATION

Pro forma production excludes certain items that management believes affect the comparability of operating results for the periods presented. Pro forma production excludes production attributable to assets that have been divested (in the Gulf of Mexico shelf, Argentina, Canada, and South Texas), production attributable to a noncontrolling interest in our Egypt oil and gas business, and Egypt tax barrels. Management uses pro forma production to evaluate the company’s operational trends and performance and believes it is useful to investors and other third parties.


	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2014		2013		2014		2013
OIL VOLUME - Barrels per day
Permian		90,536		68,811		89,437		68,358
Central		21,987		21,950		21,837		21,242
Gulf Coast		10,677		10,009		10,661		9,814
Canada		17,817		17,357		17,615		16,659

N.A. Onshore		141,017		118,127		139,550		116,073

Gulf of Mexico		6,896		8,223		6,592		7,732
GOM Shelf		—		—		—		—

North America		147,913		126,350		146,142		123,805

Egypt		43,117		43,072		43,514		42,844
Australia		14,555		21,810		15,683		20,911
North Sea		61,610		63,667		60,358		66,051

International		119,282		128,549		119,555		129,806

Total		267,195		254,899		265,697		253,611

NATURAL GAS VOLUME - Mcf per day
Permian		213,192		190,455		214,519		188,097
Central		264,948		275,507		262,636		276,262
Gulf Coast		80,976		83,156		81,762		82,786
Canada		289,744		307,139		291,270		308,950

N.A. Onshore		848,860		856,257		850,187		856,095

Gulf of Mexico		22,804		24,957		19,517		28,030
GOM Shelf		—		—		—		—

North America		871,664		881,214		869,704		884,125

Egypt		181,792		177,242		187,310		176,018
Australia		210,470		212,022		213,116		213,202
North Sea		54,848		48,411		49,986		51,704

International		447,110		437,675		450,412		440,924

Total		1,318,774		1,318,889		1,320,116		1,325,049

NGL VOLUME - Barrels per day
Permian		29,176		22,692		27,229		21,644
Central		23,738		23,021		24,094		21,279
Gulf Coast		2,024		1,465		1,969		1,482
Canada		5,440		5,168		5,897		5,111

N.A. Onshore		60,378		52,346		59,189		49,516

Gulf of Mexico		1,166		1,162		999		1,025
GOM Shelf		—		—		—		—

North America		61,544		53,508		60,188		50,541

Egypt		455		—		290		—
North Sea		1,367		1,201		1,230		1,346

International		1,822		1,201		1,520		1,346

Total		63,366		54,709		61,708		51,887

BOE per day
Permian		155,244		123,246		152,420		121,351
Central		89,883		90,888		89,704		88,565
Gulf Coast		26,197		25,333		26,257		25,094
Canada		71,548		73,715		72,057		73,262

N.A. Onshore		342,872		313,182		340,438		308,272

Gulf of Mexico		11,862		13,545		10,843		13,428
GOM Shelf		—		—		—		—

North America		354,734		326,727		351,281		321,700

Egypt		73,871		72,612		75,022		72,180
Australia		49,633		57,147		51,203		56,444
North Sea		72,118		72,936		69,918		76,015

International		195,622		202,695		196,143		204,639

Total		550,356		529,422		547,424		526,339

APACHE CORPORATION

PRICE INFORMATION


	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2014		2013		2014		2013
AVERAGE OIL PRICE PER BARREL
Permian	$	94.33	$	92.08	$	94.05	$	87.49
Central		100.39		89.18		97.10		88.69
Gulf Coast		103.81		106.22		102.84		108.54
Canada		94.66		87.38		91.47		84.97
N.A. Onshore		96.06		92.03		94.91		89.16
Gulf of Mexico		102.63		105.54		102.06		107.83
GOM Shelf		NM		106.95		NM		109.19
North America ⁽¹⁾		96.24		96.11		95.15		94.70
Egypt		109.74		99.36		108.24		105.25
Australia		115.34		100.79		113.70		106.29
North Sea		109.33		102.95		108.00		106.85
International		110.08		100.86		108.67		105.97
Total⁽¹⁾		103.53		98.47		102.29		100.43

AVERAGE NATURAL GAS PRICE PER MCF
Permian	$	4.48	$	3.86	$	4.63	$	3.81
Central		4.49		3.91		4.84		3.82
Gulf Coast		4.72		4.27		4.83		3.91
Canada		4.21		3.52		4.30		3.37
N.A. Onshore		4.41		3.76		4.62		3.61
Gulf of Mexico		4.35		3.14		4.71		3.28
GOM Shelf		NM		4.18		NM		3.87
North America ⁽¹⁾		4.41		3.86		4.58		3.71
Egypt		2.96		3.00		2.99		2.97
Australia		4.40		4.70		4.41		4.82
North Sea		7.75		10.86		9.07		10.41
International		3.85		4.20		3.94		4.21
Total ⁽¹⁾		4.18		3.97		4.33		3.87

AVERAGE NGL PRICE PER BARREL
Permian	$	28.46	$	25.53	$	29.85	$	25.61
Central		25.03		21.69		27.74		23.90
Gulf Coast		27.86		28.80		31.76		31.14
Canada		31.67		24.60		37.56		28.35
N.A. Onshore		27.42		23.96		29.96		25.52
Gulf of Mexico		31.73		31.26		31.84		32.73
GOM Shelf		NM		27.21		NM		27.93
North America		27.50		24.48		29.83		25.92
Egypt		57.67		—		59.05		—
North Sea		61.81		70.39		69.77		70.81
International		60.19		70.39		66.41		70.81
Total		28.64		25.33		30.86		26.91

Discontinued Operations - Argentina
Oil price ($/Bbl)	$	—	$	77.74	$	72.70	$	76.56
Gas price ($/Mcf)		—		2.79		3.04		2.99
NGL price ($/Bbl)		—		20.94		24.57		26.12

⁽¹⁾	Prices reflect the impact of financial derivative hedging activities.

APACHE CORPORATION

SUMMARY BALANCE SHEET INFORMATION

(Unaudited)

(In millions)


	June 30, 2014		December 31, 2013
Cash and Cash Equivalents	$	524	$	1,906
Short-Term Restricted Cash		1,138		—
Other Current Assets		3,824		4,460
Property and Equipment, net		52,470		52,421
Long-Term Restricted Cash		229		—
Goodwill		1,369		1,369
Other Assets		1,617		1,481

Total Assets	$	61,171	$	61,637

Short-Term Debt	$	1	$	53
Other Current Liabilities		4,569		4,647
Long-Term Debt		9,674		9,672
Deferred Credits and Other Noncurrent Liabilities		12,035		11,872
Apache Shareholders’ Equity		32,755		33,396
Noncontrolling interest		2,137		1,997

Total Liabilities and Shareholders’ Equity	$	61,171	$	61,637

Common shares outstanding at end of period		382		396

APACHE CORPORATION

SUMMARY OF COSTS INCURRED AND GTP CAPITAL INVESTMENTS

(Unaudited)

(In millions)


	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2014		2013		2014		2013
Costs Incurred in Oil and Gas Property:
Acquisitions	$	3	$	—	$	5	$	280
Exploration and Development		2,554		2,727		5,107		5,176

		2,557		2,727		5,112		5,456

GTP Capital Investments:
Acquisitions	$	—	$	—	$	—	$	83
GTP Facilities		378		236		723		492

		378		236		723		575

Total Costs Incurred and GTP Capital Investments	$	2,935	$	2,963	$	5,835	$	6,031

APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(Unaudited)

(In millions, except per share data)

Reconciliation of income attributable to common stock to adjusted earnings:

Adjusted earnings and adjusted earnings per share are non-GAAP financial measures. Adjusted earnings generally exclude certain items that management believes affect the comparability of operating results or are not related to Apache’s ongoing operations. Management uses adjusted earnings to evaluate the company’s operational trends and performance relative to other oil and gas companies. Management believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings for items that may obscure underlying fundamentals and trends.


	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
Income Attributable to Common Stock (GAAP)	$	505		$	1,016		$	741		$	1,714

Adjustments:
Argentina discontinued operations, net of tax	$	—		$	2		$	517		$	63
Oil & gas property write-downs, net of tax		77			—			77			—
Unrealized foreign currency fluctuation impact on deferred tax expense		13			(66	)		20			(70	)
Acquisition, divestiture & separation costs, net of tax		9			—			20			—
Rig stacking costs, net of tax		9			—			9			—
Deferred tax adjustments		—			17			(5	)		28
Commodity derivative mark-to-market, net of tax		31			(156	)		(18	)		(125	)

Adjusted Earnings (Non-GAAP)	$	644		$	813		$	1,361		$	1,610

Net Income per Common Share - Diluted (GAAP)	$	1.31		$	2.54		$	1.89		$	4.30

Adjustments:
Argentina discontinued operations, net of tax	$	—		$	—			1.32			0.15
Oil & gas property write-downs, net of tax		0.20			—			0.20			—
Unrealized foreign currency fluctuation impact on deferred tax expense		0.03			(0.16	)		0.05			(0.17	)
Acquisition, divestiture & separation costs, net of tax		0.03			—			0.05			—
Rig stacking costs, net of tax		0.02			—			0.02			—
Deferred tax adjustments		—			0.04			(0.01	)		0.07
Commodity derivative mark-to-market, net of tax		0.08			(0.38	)		(0.05	)		(0.31	)

Adjusted Earnings Per Share - Diluted (Non-GAAP)	$	1.67		$	2.04		$	3.47		$	4.04

Total income tax provision (GAAP)	$	366		$	611		$	944		$	1,213

Adjustments:
Tax impact on oil & gas property write-downs	$	126		$	—		$	126		$	—
Tax impact on acquisition, divestiture & separation costs		5			—			10			—
Tax impact on rig stacking costs		5			—			5			—
Deferred tax adjustments		—			(17	)		5			(28	)
Tax impact on commodity derivative mark-to-market		18			(86	)		(9	)		(69	)
Foreign currency fluctuation impact on deferred tax expense		(13	)		66			(20	)		70

Adjusted total income tax provision	$	507		$	574		$	1,061		$	1,186

Adjusted Effective Tax Rate (Non-GAAP)		40.3	%		40.8	%		40.4	%		41.8	%

APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(Unaudited)

(In millions, except per share data)

Reconciliation of net cash provided by operating activities to cash from continuing operations before changes in operating assets and liabilities:

Cash from operations before changes in operating assets and liabilities is a non-GAAP financial measure. Apache uses it internally and provides the information because management believes it is useful for investors 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 June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
Net cash provided by operating activities (GAAP)	$	2,339		$	2,759		$	4,632		$	5,380
Less: Discontinued operations		—			(40	)		(82	)		(104	)

Net cash provided by operating activities excluding discontinued operations	$	2,339		$	2,719		$	4,550		$	5,276
Changes in operating assets and liabilities		(111	)		(164	)		(100	)		(426	)

Cash from continuing operations before changes in operating assets and liabilities	$	2,228		$	2,555		$	4,450		$	4,850