10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 1-4300

APACHE CORPORATION

(exact name of registrant as specified in its charter)

Delaware	41-0747868
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

One Post Oak Central, 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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Number of shares of registrant’s common stock outstanding as of July 31, 2014 382,473,038

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED OPERATIONS

(Unaudited)

	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(In millions, except per common share data)
REVENUES AND OTHER:
Oil and gas production revenues
Oil revenues	$	2,950		$	3,130		$	5,765		$	6,322
Gas revenues		589			721			1,235			1,402
Natural gas liquids revenues		169			150			355			298
		3,708			4,001			7,355			8,022
Derivative instrument gains (losses), net		(174	)		247			(194	)		147
Other		(50	)		20			(2	)		45
		3,484			4,268			7,159			8,214
OPERATING 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, and separation costs		14			—			30			—
Financing costs, net		35			52			62			107
		2,505			2,620			4,751			5,186
NET INCOME FROM CONTINUING OPERATIONS 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
NET INCOME FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		613			1,037			1,464			1,815
Net loss from discontinued operations, net of tax		—			(2	)		(517	)		(63	)
NET INCOME INCLUDING NONCONTROLLING INTEREST		613			1,035			947			1,752
Preferred stock dividends		—			19			—			38
Net income attributable to noncontrolling interest		108			—			206			—
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	505		$	1,016		$	741		$	1,714
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Net income from continuing operations attributable to common shareholders	$	505		$	1,018		$	1,258		$	1,777
Net loss from discontinued operations		—			(2	)		(517	)		(63	)
Net income attributable to common shareholders	$	505		$	1,016		$	741		$	1,714
NET INCOME 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 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

The accompanying notes to consolidated financial statements

are an integral part of this statement.

1

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME

(Unaudited)

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2014		2013		2014			2013
	(In millions)
NET INCOME INCLUDING NONCONTROLLING INTEREST	$	613	$	1,035	$	947		$	1,752
OTHER COMPREHENSIVE INCOME (LOSS):
Commodity cash flow hedge activity, net of tax:
Reclassification of loss on settled derivative instruments		—		8		—			14
Change in fair value of derivative instruments		—		7		(1	)		(1	)
		—		15		(1	)		13
COMPREHENSIVE INCOME INCLUDING NONCONTROLLING INTEREST		613		1,050		946			1,765
Preferred stock dividends		—		19		—			38
Comprehensive income attributable to noncontrolling interest		108		—		206			—
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCK	$	505	$	1,031	$	740		$	1,727

The accompanying notes to consolidated financial statements

are an integral part of this statement.

2

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED CASH FLOWS

(Unaudited)

	For the Six Months Ended June 30,
	2014			2013
	(In millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income including noncontrolling interest	$	947		$	1,752
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations		517			63
Depreciation, depletion, and amortization		2,663			2,662
Asset retirement obligation accretion		89			127
Provision for deferred income taxes		203			432
Other		31			(186	)
Changes in operating assets and liabilities:
Receivables		463			122
Inventories		(7	)		(33	)
Drilling advances		28			289
Deferred charges and other		(114	)		(149	)
Accounts payable		(140	)		195
Accrued expenses		(158	)		6
Deferred credits and noncurrent liabilities		28			(4	)
NET CASH PROVIDED BY CONTINUING OPERATING ACTIVITIES		4,550			5,276
NET CASH PROVIDED BY DISCONTINUED OPERATIONS		82			104
NET CASH PROVIDED BY OPERATING ACTIVITIES		4,632			5,380
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(4,871	)		(5,050	)
Additions to gas gathering, transmission, and processing facilities		(721	)		(491	)
Proceeds from sale of Deepwater Gulf of Mexico assets		1,367			—
Restricted cash related to divestitures		(1,367	)		—
Proceeds from Kitimat LNG transaction, net		—			405
Proceeds from sale of other oil and gas properties		381			—
Acquisitions		(5	)		(148	)
Other, net		(23	)		14
NET CASH USED IN CONTINUING INVESTING ACTIVITIES		(5,239	)		(5,270	)
NET CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS		748			(94	)
NET CASH USED IN INVESTING ACTIVITIES		(4,491	)		(5,364	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net		(1	)		945
Payments on fixed rate debt		—			(500	)
Distributions to noncontrolling interest		(66	)		—
Dividends paid		(176	)		(183	)
Treasury stock activity, net		(1,263	)		(249	)
Other		25			3
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES		(1,481	)		16
NET CASH USED IN DISCONTINUED OPERATIONS		(42	)		(8	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(1,523	)		8
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(1,382	)		24
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		1,906			160
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	524		$	184
SUPPLEMENTARY CASH FLOW DATA:
Interest paid, net of capitalized interest	$	62		$	79
Income taxes paid, net of refunds		781			802

The accompanying notes to consolidated financial statements

are an integral part of this statement.

3

APACHE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)

	June 30,			December 31,
	2014			2013
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	524		$	1,906
Short-term restricted cash		778			—
Receivables, net of allowance		2,407			2,952
Inventories		794			891
Drilling advances		331			371
Prepaid assets and other		292			246
		5,126			6,366
PROPERTY AND EQUIPMENT:
Oil and gas, on the basis of full-cost accounting:
Proved properties		84,033			83,390
Unproved properties and properties under development, not being amortized		7,789			8,363
Gathering, transmission and processing facilities		7,587			6,995
Other		1,103			1,071
		100,512			99,819
Less: Accumulated depreciation, depletion and amortization		(48,042	)		(47,398	)
		52,470			52,421
OTHER ASSETS:
Long-term restricted cash		589			—
Goodwill		1,369			1,369
Deferred charges and other		1,617			1,481
	$	61,171		$	61,637
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	1,491		$	1,616
Current debt		1			53
Current asset retirement obligation		178			121
Derivative instruments		272			299
Other current liabilities		2,628			2,611
		4,570			4,700
LONG-TERM DEBT		9,674			9,672
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Income taxes		8,566			8,364
Asset retirement obligation		3,050			3,101
Other		419			407
		12,035			11,872
COMMITMENTS AND CONTINGENCIES (Note 8)
EQUITY:
Common stock, $0.625 par, 860,000,000 shares authorized, 409,441,006 and 408,041,088 shares issued, respectively		256			255
Paid-in capital		12,324			12,251
Retained earnings		22,581			22,032
Treasury stock, at cost, 27,110,079 and 12,268,180 shares, respectively		(2,290	)		(1,027	)
Accumulated other comprehensive loss		(116	)		(115	)
APACHE SHAREHOLDERS’ EQUITY		32,755			33,396
Noncontrolling interest		2,137			1,997
TOTAL EQUITY		34,892			35,393
	$	61,171		$	61,637

The accompanying notes to consolidated financial statements

are an integral part of this statement.

4

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED CHANGES IN EQUITY

(Unaudited)

	Series D Preferred Stock		Common Stock		Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			APACHE SHAREHOLDERS’ EQUITY			Non Controlling Interest			TOTAL EQUITY
	(In millions)
BALANCE AT DECEMBER 31, 2012	$	1,227	$	245	$	9,859		$	20,161		$	(30	)	$	(131	)	$	31,331		$	—		$	31,331
Net income		—		—		—			1,752			—			—			1,752			—			1,752
Commodity hedges, net of tax		—		—		—			—			—			13			13			—			13
Dividends:
Preferred		—		—		—			(38	)		—			—			(38	)		—			(38	)
Common ($0.40 per share)		—		—		—			(157	)		—			—			(157	)		—			(157	)
Common stock activity, net		—		1		(18	)		—			—			—			(17	)		—			(17	)
Treasury stock activity, net		—		—		—			—			(250	)		—			(250	)		—			(250	)
Compensation expense		—		—		87			—			—			—			87			—			87
BALANCE AT JUNE 30, 2013	$	1,227	$	246	$	9,928		$	21,718		$	(280	)	$	(118	)	$	32,721		$	—		$	32,721
BALANCE AT DECEMBER 31, 2013	$	—	$	255	$	12,251		$	22,032		$	(1,027	)	$	(115	)	$	33,396		$	1,997		$	35,393
Net income		—		—		—			741			—			—			741			206			947
Distributions to noncontrolling interest		—		—		—			—			—			—			—			(66	)		(66	)
Commodity hedges, net of tax		—		—		—			—			—			(1	)		(1	)		—			(1	)
Dividends:
Common ($0.50 per share)		—		—		—			(192	)		—			—			(192	)		—			(192	)
Common stock activity, net		—		1		(25	)		—			—			—			(24	)		—			(24	)
Treasury stock activity, net		—		—		(1	)		—			(1,263	)		—			(1,264	)		—			(1,264	)
Compensation expense		—		—		99			—			—			—			99			—			99
BALANCE AT JUNE 30, 2014	$	—	$	256	$	12,324		$	22,581		$	(2,290	)	$	(116	)	$	32,755		$	2,137		$	34,892

The accompanying notes to consolidated financial statements

are an integral part of this statement.

5

APACHE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

These financial statements have been prepared by Apache Corporation (Apache or the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). They reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods, on a basis consistent with the annual audited financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10-Q should be read along with Apache’s Current Report on Form 8-K dated July 17, 2014 for the fiscal year ended December 31, 2013, which contains a summary of the Company’s significant accounting policies and other disclosures.

The Company’s financial statements for prior periods include reclassifications that were made to conform to the current-period presentation. In March 2014, Apache completed the sale of all of its operations in Argentina. Results of operations and cash flows for Argentina operations are reflected as discontinued operations in the Company’s financial statements for all periods presented. For more information regarding this divestiture, please refer to Note 2–Acquisitions and Divestitures.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

As of June 30, 2014, Apache’s significant accounting policies are consistent with those discussed in Note 1—Summary of Significant Accounting Policies to the consolidated financial statements contained in Apache’s Current Report on Form 8-K dated July 17, 2014 for the fiscal year ended December 31, 2013.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates with regard to these financial statements include the fair value determination of acquired assets and liabilities, the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom, assessing asset retirement obligations, and the estimate of income taxes. Actual results could differ from those estimates.

Restricted Cash

The Company classifies cash balances as restricted cash when cash is restricted as to withdrawal or usage. As of June 30, 2014, the Company had approximately $1.4 billion of proceeds from the sale of our deepwater Gulf of Mexico properties held by a qualified intermediary and available for use in a like-kind exchange under Section 1031 of the U.S. Internal Revenue Code. The Company has the option to use these funds for the acquisition of properties or receive the funds in cash after a short-term contractual period. As of the date of this filing, the Company expects to close on the acquisition of like-kind properties for $589 million, and as such, the balance is classified as long-term restricted cash on Apache’s consolidated balance sheet as of June 30, 2014. The remaining proceeds of approximately $778 million are classified as short-term restricted cash as of June 30, 2014. Should the Company elect to use additional funds for a like-kind exchange, the balance will be reclassified to long-term restricted cash until the funds are expended. For more information regarding the sale of the deepwater Gulf of Mexico properties, please refer to Note 2—Acquisitions and Divestitures.

Oil and Gas Property

The Company follows the full-cost method of accounting for its oil and gas property. Under this method of accounting, all costs incurred for both successful and unsuccessful exploration and development activities, including salaries, benefits and other internal costs directly identified with these activities, and oil and gas property acquisitions are capitalized. The net book value of oil and gas properties, less related deferred income taxes, may not exceed a calculated “ceiling.” The ceiling limitation is the estimated after-tax future net cash flows from proved oil and gas reserves, discounted at 10 percent per annum and adjusted for designated cash flow hedges. Estimated future net cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months, held flat for the life of the production, except where prices are defined by contractual arrangements.

Any excess of the net book value of proved oil and gas properties, less related deferred income taxes, over the ceiling is charged to expense and reflected as “Additional depreciation, depletion and amortization” (DD&A) in the accompanying statement of consolidated operations. Such limitations are imposed separately on a country-by-country basis and are tested quarterly. For a discussion of the calculation of estimated future net cash flows, please refer to Note 14—Supplemental Oil and Gas Disclosures to the consolidated financial statements contained in Apache’s Current Report on Form 8-K dated July 17, 2014 for the fiscal year ended December 31, 2013.

6

In the second quarter of 2014, the Company recorded a $203 million ($77 million net of tax) non-cash write-down of the carrying value of the Company’s North Sea proved oil and gas properties.

New Pronouncements Issued But Not Yet Adopted

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-08—Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 modifies the criteria for disposals to qualify as discontinued operations and expands related disclosures. The guidance is effective for annual and interim reporting periods beginning after December 15, 2014. Adoption of this amendment will not have a material effect on our financial position or results of operations.

In May 2014, the FASB and the International Accounting Standards Board (IASB) issued a joint revenue recognition standard, ASU 2014-09. The new standard removes inconsistencies in existing standards, changes the way companies recognize revenue from contracts with customers, and increases disclosure requirements. The guidance requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2016. The standard is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to retained earnings on the opening balance sheet. The Company is currently evaluating the level of effort needed to implement the standard, the impact of adopting this standard on its consolidated financial statements, and whether to use the full retrospective approach or the modified retrospective approach.

2. ACQUISITIONS AND DIVESTITURES

2014 Activity

Gulf of Mexico Deepwater Divestiture

On June 30, 2014, Apache completed the sale of non-operated interests in the Lucius and Heidelberg development projects and 11 primary term deepwater exploration blocks in the Gulf of Mexico for $1.4 billion. The effective date of the transaction was May 1, 2014. Apache’s net book value of oil and gas properties was reduced by approximately $850 million of proved property costs and $518 million of unproved property costs as a result of the transaction.

Canada Divestiture

On April 30, 2014, Apache completed the sale of primarily dry gas producing hydrocarbon assets in the Deep Basin area of western Alberta and British Columbia, Canada, for $374 million. The assets comprise 328,400 net acres in the Ojay, Noel, and Wapiti areas. Apache retained 100 percent of its working interest in horizons below the Cretaceous in the Wapiti area, including rights to the liquids-rich Montney and other deeper horizons. The effective date of the transaction was January 1, 2014.

7

Argentina Divestiture

On March 12, 2014, Apache’s subsidiaries completed the sale of all of the Company’s operations in Argentina to YPF Sociedad Anónima for cash consideration of $800 million (subject to customary closing adjustments) plus the assumption of $52 million of bank debt as of June 30, 2013. The results of operations related to Argentina have been classified as discontinued operations in all periods presented in this Quarterly Report on Form 10-Q. The carrying amounts of the major classes of assets and liabilities associated with the disposition were as follows:

	December 31,
	2013
	(In millions)
ASSETS
Current assets	$	150
Net property and equipment		1,416
Other assets		12
Total assets	$	1,578
LIABILITIES
Current debt	$	51
Other current liabilities		95
Asset retirement obligations		91
Other long-term liabilities		21
Total liabilities	$	258

Sales and other operating revenues and loss from discontinued operations related to the Argentina disposition were as follows:

	For the Quarter Ended					For the Six Months Ended
	June 30,					June 30,
	2014		2013			2014			2013
	(In millions)
Revenues and other from discontinued operations	$	—	$	115		$	87		$	246
Loss from Argentina divestiture		—		—			(539	)		—
Loss from operations in Argentina		—		(2	)		(1	)		(63	)
Income tax benefit		—		—			23			—
Loss from discontinued operations, net of tax	$	—	$	(2	)	$	(517	)	$	(63	)

2013 Activity

Egypt Partnership

On November 14, 2013, Apache completed the sale of a one-third minority participation in its Egypt oil and gas business to a subsidiary of Sinopec International Petroleum Exploration and Production Corporation (Sinopec). Apache received cash consideration of $2.95 billion after customary closing adjustments. Apache continues to operate its Egypt upstream oil and gas business. Apache recorded $1.9 billion of the proceeds as a noncontrolling interest, which is reflected as a separate component of equity in the Company’s consolidated balance sheet. This represents one-third of Apache’s net book value of its Egypt holdings at the time of the transaction. The remaining proceeds were recorded as additional paid-in capital. Included in “Net income including noncontrolling interest” for the quarter ended June 30, 2014, is net income attributable to Sinopec’s interest totaling $108 million. For the first half of 2014, net income attributable to Sinopec’s interest totaled $206 million, of which the Company has distributed $66 million to Sinopec.

8

Gulf of Mexico Shelf Divestiture

On September 30, 2013, Apache completed the sale of its Gulf of Mexico Shelf operations and properties to Fieldwood Energy LLC (Fieldwood), an affiliate of Riverstone Holdings. Under the terms of the agreement, Apache received cash consideration of $3.7 billion, and Fieldwood assumed $1.5 billion of discounted asset abandonment liabilities. Additionally, Apache retained 50 percent of its ownership interest in all exploration blocks and in horizons below production in developed blocks.

Canada LNG Project

In February 2013, Apache completed a transaction with Chevron Canada Limited (Chevron Canada) under which each company became a 50-percent owner of the Kitimat LNG plant, the Pacific Trail Pipelines Limited Partnership (PTP), and 644,000 gross undeveloped acres in the Horn River and Liard basins. Chevron Canada will operate the LNG plant and pipeline while Apache Canada will continue to operate the upstream assets. Apache’s net proceeds from the transaction were $396 million after post-closing adjustments, and no gain or loss was recorded.

3. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Objectives and Strategies

The Company is exposed to fluctuations in crude oil and natural gas prices on the majority of its worldwide production. Apache manages the variability in its cash flows by occasionally entering into derivative transactions on a portion of its crude oil and natural gas production. The Company utilizes various types of derivative financial instruments, including swaps and options, to manage fluctuations in cash flows resulting from changes in commodity prices.

Counterparty Risk

The use of derivative instruments exposes the Company to counterparty credit risk, or the risk that a counterparty will be unable to meet its commitments. To reduce the concentration of exposure to any individual counterparty, Apache utilizes a diversified group of investment-grade rated counterparties, primarily financial institutions, for its derivative transactions. As of June 30, 2014, Apache had derivative positions with 14 counterparties. The Company monitors counterparty creditworthiness on an ongoing basis; however, it cannot predict sudden changes in counterparties’ creditworthiness. In addition, even if such changes are not sudden, the Company may be limited in its ability to mitigate an increase in counterparty credit risk. Should one of these counterparties not perform, Apache may not realize the benefit of some of its derivative instruments resulting from lower commodity prices.

The Company executes commodity derivative transactions under master agreements that have netting provisions that provide for offsetting payables against receivables. In general, if a party to a derivative transaction incurs a material deterioration in its credit ratings, as defined in the applicable agreement, the other party has the right to demand the posting of collateral, demand a transfer, or terminate the arrangement. The Company’s net derivative liability position at June 30, 2014, represents the aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position. The Company has not provided any collateral to any of its counterparties as of June 30, 2014.

Derivative Instruments

As of June 30, 2014, Apache had the following commodity derivative positions:

			Fixed-Price Swaps
					MMBtu		Weighted Average
Production Period	Commodity	Settlement Index	Mbbls		(in 000’s)		Fixed Price
2014	Crude Oil	NYMEX WTI		11,500		—	$	90.83
2014	Crude Oil	Dated Brent		11,500		—		100.05
2014	Natural Gas	Various(1)		—		32,470		4.37

⁽¹⁾  The natural gas price represents a weighted-average of several contracts entered into on a per-million British thermal units (MMBtu) basis. These contracts are settled against NYMEX Henry Hub and various Inside FERC indices.

Apache has currently elected not to designate any of its qualifying natural gas and oil derivatives as cash flow hedges. Changes in the fair value of these derivatives for the current period are recorded in the Company’s statement of consolidated operations.

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Fair Value Measurements

Apache’s commodity derivative instruments consist of variable-to-fixed price commodity swaps. The fair values of the Company’s derivatives are not actively quoted in the open market. The Company uses a market approach to estimate the fair values of its derivative instruments, utilizing commodity futures price strips for the underlying commodities provided by a reputable third party.

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)
June 30, 2014
Assets:
Commodity Derivative Instruments	$	—	$	1	$	—	$	1	$	(1	)	$	—
Liabilities:
Commodity Derivative Instruments		—		273		—		273		(1	)		272
December 31, 2013
Assets:
Commodity Derivative Instruments	$	—	$	3	$	—	$	3	$	(2	)	$	1
Liabilities:
Commodity Derivative Instruments		—		301		—		301		(2	)		299

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

Derivative Assets and Liabilities Recorded in the Consolidated Balance Sheet

All derivative instruments are reflected as either assets or liabilities at fair value in the consolidated balance sheet. These fair values are recorded by netting asset and liability positions where counterparty master netting arrangements contain provisions for net settlement. The carrying value of the Company’s derivative assets and liabilities and their locations on the consolidated balance sheet are as follows:

	June 30,		December 31,
	2014		2013
	(In millions)
Current Assets: Prepaid assets and other	$	—	$	1
Current Liabilities: Derivative instruments	$	272	$	299

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Derivative Activity Recorded in the 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	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	Recognized in Income	2014			2013			2014			2013
		(In millions)
Loss on cash flow hedges reclassified from accumulated other comprehensive loss	Oil and Gas Production Revenues	$	—		$	(11	)	$	—		$	(20	)
Derivatives not designated as cash flow hedges:
Realized gain (loss)		$	(125	)	$	5		$	(221	)	$	(47	)
Unrealized gain (loss)			(49	)		242			27			194
Gain (loss) on derivatives not designated as cash flow hedges	Derivative instrument gains (losses), net	$	(174	)	$	247		$	(194	)	$	147

Unrealized gains and losses for derivative activity recorded in the statement of consolidated operations is reflected in the statement of consolidated cash flows as a component of “Other” in “Adjustments to reconcile net income to net cash provided by operating activities.”

Derivative Activity in Accumulated Other Comprehensive Loss

A reconciliation of the components of accumulated other comprehensive loss in the statement of consolidated changes in equity related to Apache’s cash flow hedges is presented in the table below. The Company has no derivatives designated as cash flow hedges as of June 30, 2014.

	For the Six Months Ended June 30,
	2014						2013
	Before tax			After tax			Before tax			After tax
	(In millions)
Unrealized gain (loss) on derivatives at beginning of period	$	1		$	1		$	(10	)	$	(6	)
Realized amounts reclassified into earnings		—			—			20			14
Net change in derivative fair value		(1	)		(1	)		—			(1	)
Unrealized gain on derivatives at end of period	$	—		$	—		$	10		$	7

4. OTHER CURRENT LIABILITIES

The following table provides detail of our other current liabilities:

	June 30,		December 31,
	2014		2013
	(In millions)
Accrued operating expenses	$	131	$	190
Accrued exploration and development		1,616		1,582
Accrued compensation and benefits		167		242
Accrued interest		161		161
Accrued income taxes		266		248
Accrued U.K. Petroleum Revenue Tax		64		9
Other		223		179
Total Other current liabilities	$	2,628	$	2,611

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5. ASSET RETIREMENT OBLIGATION

The following table describes changes to the Company’s asset retirement obligation (ARO) liability for the six-month period ended June 30, 2014:

	(In millions)
Asset retirement obligation at December 31, 2013	$	3,222
Liabilities incurred		63
Liabilities divested		(91	)
Liabilities settled		(55	)
Accretion expense		89
Asset retirement obligation at June 30, 2014		3,228
Less current portion		(178	)
Asset retirement obligation, long-term	$	3,050

6. DEBT AND FINANCING COSTS

The following table presents the carrying amounts and estimated fair values of the Company’s outstanding debt:

	June 30, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Uncommitted credit lines	$	1	$	1	$	53	$	53
Notes and debentures		9,674		10,828		9,672		10,247
Total Debt	$	9,675	$	10,829	$	9,725	$	10,300

The Company’s debt is recorded at the carrying amount, net of unamortized discount, on its consolidated balance sheet. The carrying amount of the Company’s commercial paper and uncommitted credit facilities and overdraft lines approximates fair value because the interest rates are variable and reflective of market rates. Apache uses a market approach to determine the fair value of its notes and debentures using estimates provided by an independent investment financial data services firm (a Level 2 fair value measurement).

As of June 30, 2014, the Company had unsecured committed revolving credit facilities totaling $3.3 billion, of which $1.0 billion matures in August 2016 and $2.3 billion matures in June 2018 pursuant to a one-year extension approved in May 2014 under the terms of the $2.3 billion facilities. The facilities consist of a $1.7 billion facility and $1.0 billion facility for the U.S., a $300 million facility for Australia, and a $300 million facility for Canada. As of June 30, 2014, available borrowing capacity under the Company’s credit facilities was $3.3 billion. The Company’s committed credit facilities are used to support Apache’s commercial paper program.

The Company has available a $3.0 billion commercial paper program, which generally enables Apache to borrow funds for up to 270 days at competitive interest rates. The commercial paper program is fully supported by available borrowing capacity under our committed credit facilities. At June 30, 2014 and December 31, 2013, the Company had no outstanding commercial paper.

As of June 30, 2014, the Company had approximately $1 million of current debt outstanding borrowed on uncommitted credit facilities and overdraft lines, compared with $53 million as of December 31, 2013.

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Financing Costs, Net

The following table presents the components of Apache’s financing costs, net:

	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(In millions)
Interest expense	$	124		$	141		$	248		$	287
Amortization of deferred loan costs		1			2			3			4
Capitalized interest		(90	)		(88	)		(185	)		(178	)
Interest income		—			(3	)		(4	)		(6	)
Financing costs, net	$	35		$	52		$	62		$	107

7. INCOME TAXES

The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. Accordingly, the Company recorded the income tax impact of a $203 million non-cash write-down of its North Sea proved oil and gas properties as a discrete item in the second quarter of 2014.

Apache and its subsidiaries are subject to U.S. federal income tax as well as income or capital taxes in various state and foreign jurisdictions. The Company’s tax reserves are related to tax years that may be subject to examination by the relevant taxing authority. The Company is under audit with the Internal Revenue Service for the 2011 and 2012 tax years. The Company is also under audit in various states and in most of the Company’s foreign jurisdictions as part of its normal course of business.

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8. COMMITMENTS AND CONTINGENCIES

Legal Matters

Apache is party to various legal actions arising in the ordinary course of business, including litigation and governmental and regulatory controls. As of June 30, 2014, the Company has an accrued liability of approximately $21 million for all legal contingencies that are deemed to be probable of occurring and can be reasonably estimated. Apache’s estimates are based on information known about the matters and its experience in contesting, litigating, and settling similar matters. Although actual amounts could differ from management’s estimate, none of the actions are believed by management to involve future amounts that would be material to Apache’s financial position, results of operations, or liquidity after consideration of recorded accruals. For material matters that Apache believes an unfavorable outcome is reasonably possible, the Company has disclosed the nature of the matter and a range of potential exposure, unless an estimate cannot be made at this time. It is management’s opinion that the loss for any other litigation matters and claims that are reasonably possible to occur will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity.

For additional information on each of the Legal Matters described below, please see Note 8—Commitments and Contingencies to the consolidated financial statements contained in Apache’s Current Report on Form 8-K dated July 17, 2014 for the fiscal year ended December 31, 2013.

Argentine Environmental Claims and Argentina Tariff

In 2003, the Asociación de Superficiarios de la Patagonia (ASSUPA) filed lawsuits against Company subsidiaries in Argentina courts relating to various environmental and remediation claims concerning certain geographic areas of Argentina, including the Neuquén and Austral basins. In addition, effective December 1, 2011, Enargas, an autonomous entity that functions under the Argentine Ministry of Economy, created a tariff charge on all fuel gas used by oil and gas producers in field operations, which is likewise the subject of legal proceedings in Argentina.

On March 12, 2014, the Company and its subsidiaries completed the sale of all of the Company’s subsidiaries’ operations and properties in Argentina to YPF Sociedad Anonima (YPF). As part of that sale, YPF assumed responsibility for all of the past, present, and future litigation in Argentina involving Company subsidiaries, including the ASSUPA and Enargas matters, except that Company subsidiaries have agreed to indemnify YPF for certain environmental, tax, and royalty obligations capped at an aggregate of $100 million. The indemnity is subject to specific agreed conditions precedent, thresholds, contingencies, limitations, claim deadlines, loss sharing, and other terms and conditions. On April 11, 2014, YPF provided its first notice of claims pursuant to the indemnity. Company subsidiaries have not paid any amounts under the indemnity, but will continue to review and consider claims presented by YPF. Further, Company subsidiaries retain the right to enforce certain Argentina-related indemnification obligations against Pioneer Natural Resources Company (Pioneer) up to $67.5 million pursuant to the terms and conditions of stock purchase agreements entered in 2006 between Company subsidiaries and Pioneer subsidiaries. No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Louisiana Restoration 

Numerous surface owners have filed claims or sent demand letters to various oil and gas companies, including Apache, claiming that, under either expressed or implied lease terms or Louisiana law, they are liable for damage measured by the cost of restoration of leased premises to their original condition as well as damages for contamination and cleanup.

In a case captioned Heloise, LLC, et al. v. BP America Production Company, et al., Case No. 120113 in the District Court for the Parish of Lafourche, plaintiff landowners allege that defendants’ oil and gas operations contaminated their property primarily with chlorides. Apache, a defendant in the case, acquired its interest in the oil and gas operations on plaintiffs’ property from the former operator, Amoco Production Company, when the Company purchased the stock of Amoco’s subsidiary, MW Petroleum Corporation, in 1991. BP America Production Company, as Amoco’s successor in interest, and Apache dispute whether and to what extent they might owe each other indemnity in the case. Plaintiffs’ expert has recently opined that the cost of remediating plaintiffs’ 825 acres exceeds $200 million. Trial is set for December 2014. While an adverse judgment against the Company might be possible, Apache intends to vigorously defend the case.

With respect to Board of Commissioners of the Southeast Louisiana Flood Protection Authority – East v. Tennessee Gas Pipeline Company et al., Civil Action no. 13-5410, in the United States District Court for the Eastern District of Louisiana, the federal court has retained jurisdiction over the matter after denying plaintiff’s motion to remand on June 27, 2014. Further, the Louisiana state government has passed a new law (SB 469) clarifying that only entities authorized under the Coastal Zone Management Act may bring litigation to assert claims arising out of the permitted activities. Plaintiff is not one of those authorized entities. The Company and other defendants will seek dismissal of the case, including pursuant to SB 469.

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No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Australia Gas Pipeline Force Majeure 

In 2008, Company subsidiaries reported a pipeline explosion that interrupted deliveries of natural gas in Australia to customers under various long-term contracts.

In the case captioned Alcoa of Australia Limited v. Apache Energy Limited, Apache Northwest Pty Ltd, Tap (Harriet) Pty Ltd, and Kufpec Australia Pty Ltd, Civ. 1481 of 2011, in the Supreme Court of Western Australia, on June 20, 2012, the Supreme Court struck out Alcoa’s claim that the liquidated damages provisions under two long-term contracts are unenforceable as a penalty and also struck out Alcoa’s claim for damages for breach of statutory duty. On September 17, 2013, the Western Australia Court of Appeal dismissed the Company subsidiaries’ appeal concerning Alcoa’s remaining tort claim for economic loss. On October 15, 2013, the Company subsidiaries applied to the High Court of Australia for special leave to appeal. On April 11, 2014, the High Court refused special leave to appeal. All of the Company subsidiaries’ defenses remain intact for further proceedings at the trial court level, including the defenses that were the subject of the special leave application. Further, in January 2014, an Alcoa affiliate pleaded guilty in United States of America v. Alcoa World Alumina LLC, Criminal No. 14-7, in the United States District Court for the Western District of Pennsylvania, to a charge under the Foreign Corrupt Practices Act (FCPA) anti-bribery provisions, 15 U.S.C. Section 78dd-2 and 18 U.S.C. Section 2. This matter overlaps with Alcoa’s claims against Company subsidiaries in that both cases concern alumina produced from Alcoa’s alumina refineries in Western Australia during the period of the gas supply disruption in 2008-2009. In the circumstances of the admitted, agreed, and stipulated facts set forth in the Alcoa affiliate’s Plea Agreement, which is a public document, Company subsidiaries will defend against Alcoa’s claims on the basis that Alcoa is barred by law from recovering economic losses.

In the week prior to expiration of the applicable six-year limitations period on June 3, 2014, the following civil lawsuits were filed in connection with the Varanus Island pipeline explosion (the Incident):

• As previously reported, a lawsuit filed by Burrup Fertilisers Pty Ltd (Burrup Fertilisers) in Texas in December 2009 was dismissed in March 2013 on the ground of forum non conveniens. On May 29, 2014, Burrup Fertilisers (now known as Yara Pilbara Fertilisers Pty Ltd, YPFPL) re-filed the lawsuit in Western Australia, captioned Yara Pilbara Fertilisers Pty Ltd vs. Apache Energy Limited et al., Civ. 1742 of 2014, in the Supreme Court of Western Australia. In the lawsuit, which is being pressed by YPFPL’s insurers, YPFPL alleges that a joint venture whose members include an Apache subsidiary supplied YPFPL with natural gas and that, as a consequence of a disruption in gas supply following the Incident, plaintiff incurred damages in the amount of nearly $166 million USD for economic losses and, alternatively, contractual liquidated damages and “abnormal costs” in the amount of approximately $13 million USD. In addition to all of their other defenses, the Company and its subsidiaries will defend against YPFPL’s claims on the basis that during the gas supply disruption there was no enforceable gas supply contract between YPFPL and Company subsidiaries.

• In Wesfarmers LPG Pty Ltd et al. vs. Apache Energy Limited et al., Civ. 1740 of 2014, in the Supreme Court of Western Australia, plaintiffs allege that Alinta Sales Pty Ltd (Alinta) supplied them (and associated entities) with natural gas and that, as a consequence of a disruption in gas supply following the Incident, plaintiffs incurred an unspecified amount of damages for alleged lost profits, alternative gas, and associated expenses. Plaintiffs’ Indorsement of Claim (a short form of pleading) has been filed with the court but not yet served on the Apache defendants.

• In Iluka Resources Limited vs. Apache Energy Limited et al., Civ. 1748 of 2014, in the Supreme Court of Western Australia, plaintiff alleges that Alinta supplied it with natural gas and power and that, as a consequence of a disruption in gas supply following the Incident, plaintiff incurred damages of approximately $23 million (no currency is specified) for alleged lost profits, alternative energy, and associated expenses. Plaintiff’s Indorsement of Claim has been filed with the court but not yet served on the Apache defendants.

• In Harvey Industries Group Pty Ltd vs. Apache Energy Limited et al., Civ. 1749 of 2014, in the Supreme Court of Western Australia, plaintiff alleges that Alinta supplied it with natural gas and power and that, as a consequence of a disruption in gas supply following the Incident, plaintiff incurred an unspecified amount of damages for alleged lost profits, the cost of alternative gas and power, and associated expenses. Plaintiff’s Indorsement of Claim has been filed with the court but not yet served on the Apache defendants.

• In EDL LNG (WA) Pty Ltd et al. vs. Apache Energy Limited et al., Civ. 1751 of 2014, in the Supreme Court of Western Australia, plaintiffs allege that an Apache subsidiary and Santos (BOL) Pty Ltd supplied one such plaintiff with natural gas and that, as a consequence of a disruption in gas supply following the Incident, plaintiffs incurred damages of approximately $17.5 million (no currency is specified) for alleged alternative gas and diesel, and, alternatively, plaintiffs seek an unspecified amount of liquidated damages from their gas sellers.

• In Newmont Mining Services Pty Ltd et al. vs. Apache Energy Limited et al., Civ. 1727 of 2014, in the Supreme Court of Western Australia, plaintiffs allege that Santos (BOL) Pty Ltd supplied one such plaintiff with natural gas and that, as a consequence of a disruption in gas supply following the Incident, plaintiffs incurred an unspecified amount of damages for alleged alternative energy and associated expenses, except that as an alternative measure of damage plaintiffs seek to recover $6.4 million (no currency is specified) in liquidated damages from Santos (BOL) Pty Ltd. Plaintiffs’ Indorsement of Claim has been filed with the court but not yet served on the Apache defendants.

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With respect to the claims in which the plaintiffs have not specified an amount of alleged damages, the exposure related to such claims is not currently determinable but, in each case, the alleged damages are not expected to be material. Insurance statistics maintained by the Insurance Council of Australia show that the total insured loss resulting from the gas supply disruption was $230 million AUD.

The applicable six-year limitations period has expired. In six years none of the above-referenced plaintiffs presented a claim to Apache or its subsidiaries prior to filing suit and instead allowed the same plaintiff law firm to file suit in Western Australia at the latest possible moment. The Apache defendants do not believe that any of the claims have merit and will vigorously pursue their defenses against such claims. The plaintiffs seek relief primarily in tort, in circumvention of their own positive arrangements regarding risk allocation. In respect of the pending claims filed prior to expiration of the limitations period, contractual liquidated damages under the long-term contracts with such provisions, and under which an Apache subsidiary is a gas supplier, would not be expected to exceed $20 million AUD exclusive of interest. This is a reduction from previous estimates.

No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Breton Lawsuit

On October 29, 2012, plaintiffs filed an amended complaint in Breton Energy, L.L.C. et al. v. Mariner Energy Resources, Inc., et al., Case 4:11-cv-03561, in the United States District Court for the Southern District of Texas, Houston Division, seeking compensation from defendants for allegedly depriving plaintiffs of rights to hydrocarbons in a reservoir described by plaintiffs as a common reservoir in West Cameron Blocks 171 and 172 offshore Louisiana in the Gulf of Mexico. On May 28, 2013, the United States District Court for the Southern District of Texas dismissed the plaintiffs’ claims and entered judgment in favor of the defendants. On June 3, 2013, the plaintiffs filed a notice of appeal in the United States Court of Appeals for the Fifth Circuit. The appeal is pending. No material change in the status of this matter has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Escheat Audits

The State of Delaware, Department of Finance, Division of Revenue (Unclaimed Property), has notified numerous companies, including Apache Corporation, that the State intends to examine its books and records and those of its subsidiaries and related entities to determine compliance with the Delaware Escheat Laws. The review is ongoing, and no material change in the status of this matter has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Burrup-Related Gas Supply Lawsuits

On October 11, 2013, a lawsuit captioned Pankaj Oswal v. Apache Corporation, No. WAD 389/2013, in the Federal Court of Australia, District of Western Australia, General Division, was filed in which plaintiff asserts claims against the Company under the Australian Trade Practices Act. The Company does not believe the lawsuit has merit and will vigorously defend against it. No other material change in the status of this matter has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

In the case captioned Radhika Oswal v. Australia and New Zealand Banking Group Limited (ANZ) et al., No. SCI 2011 4653, in the Supreme Court of Victoria, plaintiff filed an application seeking to amend her statement of claim in order to add parties as defendants to the proceedings, including the Company and certain of its subsidiaries. Similarly, in a companion case captioned Pankaj Oswal v. Australia and New Zealand Banking Group Limited (ANZ) et al., No. SCI 2012 01995, in the Supreme Court of Victoria, plaintiff also filed an application seeking to amend his statement of claim in order to add parties as defendants to the proceedings, including the Company and certain of its subsidiaries. This is the second attempt by the plaintiffs to amend their pleadings, with their first attempt having been unsuccessful. While reserving all rights, including all defenses to the plaintiffs’ proposed amended pleadings, the Company and its subsidiaries did not object to the plaintiffs’ revised applications to amend their pleadings, which is a procedural matter. The court granted plaintiffs’ applications and entered a scheduling order with respect to the filing of all amended pleadings. On July 23, 2014, the Apache defendants filed their responsive pleadings, which include substantial counterclaims against the Oswals by a Company subsidiary. No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

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Concerning the action filed by Tap (Harriet) Pty Ltd (Tap) against Burrup Fertilisers Pty Ltd et al., Civ. 2329 of 2009, in the Supreme Court of Western Australia, no material change in the status of this matter has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Environmental Matters

As of June 30, 2014, the Company had an undiscounted reserve for environmental remediation of approximately $89 million. The Company is not aware of any environmental claims existing as of June 30, 2014, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity. There can be no assurance, however, that current regulatory requirements will not change or past non-compliance with environmental laws will not be discovered on the Company’s properties.

9. CAPITAL STOCK

Net Income per Common Share

A reconciliation of the components of basic and diluted net income per common share for the quarters and six-month periods ended June 30, 2014 and 2013 is presented in the table below.

	For the Quarter Ended June 30,
	2014								2013
	Income			Shares		Per Share			Income			Shares		Per Share
	(In millions, except per share amounts)
Basic:
Income from continuing operations	$	505			385	$	1.31		$	1,018			392	$	2.60
Loss from discontinued operations		—			385		—			(2	)		392		(0.01	)
Income attributable to common stock	$	505			385	$	1.31		$	1,016			392	$	2.59
Effect of Dilutive Securities:
Mandatory Convertible Preferred Stock	$	—			—				$	19			14
Stock options and other		—			2					—			2
Diluted:
Income from continuing operations	$	505			387	$	1.31		$	1,037			408	$	2.54
Loss from discontinued operations		—			387		—			(2	)		408		—
Income attributable to common stock	$	505			387	$	1.31		$	1,035			408	$	2.54
	For the Six Months Ended June 30,
	2014								2013
	Income			Shares		Per Share			Income			Shares		Per Share
	(In millions, except per share amounts)
Basic:
Income from continuing operations	$	1,258			390	$	3.23		$	1,777			392	$	4.53
Loss from discontinued operations		(517	)		390		(1.33	)		(63	)		392		(0.16	)
Income attributable to common stock	$	741			390	$	1.90		$	1,714			392	$	4.37
Effect of Dilutive Securities:
Mandatory Convertible Preferred Stock		—			—					38			14
Stock options and other		—			2					—			2
Diluted:
Income from continuing operations	$	1,258			392	$	3.21		$	1,815			408	$	4.45
Loss from discontinued operations		(517	)		392		(1.32	)		(63	)		408		(0.15	)
Income attributable to common stock	$	741			392	$	1.89		$	1,752			408	$	4.30

The diluted earnings per share calculation excludes options and restricted stock units that were anti-dilutive totaling 3.2 million and 6.7 million for the quarters ending June 30, 2014 and 2013, and 5 million and 7.4 million for the six months ended June 30, 2014 and 2013, respectively.

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Common and Preferred Stock Dividends

For the quarters ended June 30, 2014 and 2013, Apache paid $97 million and $78 million, respectively, in dividends on its common stock. For the six months ended June 30, 2014 and 2013, Apache paid $176 million and $145 million, respectively.

During the first quarter of 2014, Apache’s Board of Directors approved a 25 percent increase for the regular quarterly cash dividend on the Company’s common stock to $0.25 per share. This increase applied to the dividend on common stock payable on May 22, 2014, to stockholders of record on April 22, 2014, and will apply to all subsequent dividends paid.

In the first six months of 2013, the Company also paid $38 million in dividends on its Series D Preferred Stock, which was converted to common stock in August 2013.

Stock Repurchase Program

Apache’s Board of Directors has authorized the purchase of up to 40 million shares of the Company’s common stock. Shares may be purchased either in the open market or through privately held negotiated transactions. The Company initiated the buyback program on June 10, 2013, and has since repurchased a total of 26.1 million shares at an average price of $86.75. For the six-months period ended June 30, 2014, the Company repurchased a total of 14.9 million shares at an average price of $85.14. The Company is not obligated to acquire any specific number of shares.

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10. BUSINESS SEGMENT INFORMATION

Apache is engaged in a single line of business. Both domestically and internationally, the Company explores for, develops, and produces natural gas, crude oil and natural gas liquids. At June 30, 2014, the Company had production in five countries: the United States, Canada, Egypt, Australia, and the United Kingdom (U.K.) North Sea. Apache also pursues exploration interests in other countries that may, over time, result in reportable discoveries and development opportunities. Financial information for each country is presented below:

	United States		Canada		Egypt(2)		Australia		North Sea			Other International		Total
	(In millions)
For the Quarter Ended
June 30, 2014
Oil and Gas Production Revenues	$	1,529	$	293	$	989	$	237	$	660		$	—	$	3,708
Operating Income (Loss) (1)	$	679	$	47	$	585	$	74	$	(39	)	$	—	$	1,346
Other Income (Expense):
Derivative instrument gains (losses), net															(174	)
Other															(50	)
General and administrative															(94	)
Acquisition, divestiture, and separation costs															(14	)
Financing costs, net															(35	)
Income Before Income Taxes														$	979
For the Six Months Ended
June 30, 2014
Oil and Gas Production Revenues	$	3,034	$	611	$	1,939	$	493	$	1,278		$	—	$	7,355
Operating Income (Loss) (1)	$	1,342	$	119	$	1,121	$	169	$	144		$	—	$	2,895
Other Income (Expense):
Derivative instrument gains (losses), net															(194	)
Other															(2	)
General and administrative															(199	)
Acquisition, divestiture, and separation costs															(30	)
Financing costs, net															(62	)
Income Before Income Taxes														$	2,408
Total Assets	$	31,547	$	6,842	$	7,264	$	8,763	$	6,713		$	42	$	61,171
For the Quarter Ended
June 30, 2013
Oil and Gas Production Revenues(3)	$	1,836	$	329	$	893	$	291	$	652		$	—	$	4,001
Operating Income (Loss)(1)(3)	$	712	$	14	$	512	$	119	$	202		$	—	$	1,559
Other Income (Expense):
Derivative instrument gains (losses), net															247
Other															20
General and administrative															(126	)
Financing costs, net															(52	)
Income Before Income Taxes(3)														$	1,648
For the Six Months Ended
June 30, 2013
Oil and Gas Production Revenues(3)	$	3,513	$	627	$	1,902	$	588	$	1,392		$	—	$	8,022
Operating Income (Loss) (1)(3)	$	1,298	$	11	$	1,170	$	254	$	448		$	—	$	3,181
Other Income (Expense):
Derivative instrument gains (losses), net															147
Other															45
General and administrative															(238	)
Financing costs, net															(107	)
Income Before Income Taxes(3)														$	3,028
Total Assets(3)	$	33,376	$	6,927	$	6,951	$	7,124	$	7,114		$	130	$	61,622

⁽¹⁾  Operating Income (Loss) consists of oil and gas production revenues less depreciation, depletion and amortization, asset retirement obligation accretion, lease operating expenses, gathering and transportation costs, and taxes other than income. North Sea’s operating income (loss) for the second quarter and first six months of 2014 includes a $203 million non-cash write-down of the carrying value of oil and gas properties.

⁽²⁾  Includes a noncontrolling interest in Egypt for the quarter and six months ended June 30, 2014.

⁽³⁾  Amounts for 2013 have been recast to exclude discontinued operations.

19

11. SUPPLEMENTAL GUARANTOR INFORMATION

In December 1999, Apache Finance Canada issued approximately $300 million of publicly-traded notes due in 2029. The notes are fully and unconditionally guaranteed by Apache. The following condensed consolidating financial statements are provided as an alternative to filing separate financial statements.

Apache Finance Canada has been fully consolidated in Apache’s consolidated financial statements. As such, these condensed consolidating financial statements should be read in conjunction with Apache’s consolidated financial statements and the notes thereto, of which this note is an integral part.

20

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Quarter Ended June 30, 2014

							All Other
				Apache			Subsidiaries
	Apache			Finance			of Apache			Reclassifications
	Corporation			Canada			Corporation			& Eliminations			Consolidated
	(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	895		$	—		$	2,813		$	—		$	3,708
Equity in net income (loss) of affiliates		491			24			11			(526	)		—
Derivative instrument losses, net		(125	)		—			(49	)		—			(174	)
Other		(69	)		13			2			4			(50	)
		1,192			37			2,777			(522	)		3,484
OPERATING EXPENSES:
Depreciation, depletion and amortization		356			—			1,101			—			1,457
Asset retirement obligation accretion		8			—			37			—			45
Lease operating expenses		121			—			492			—			613
Gathering and transportation		14			—			52			—			66
Taxes other than income		47			—			134			—			181
General and administrative		96			—			(6	)		4			94
Acquisition, divestiture, and separation costs		14			—			—			—			14
Financing costs, net		41			10			(16	)		—			35
		697			10			1,794			4			2,505
NET INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		495			27			983			(526	)		979
Provision (benefit) for income taxes		(10	)		(8	)		384			—			366
NET INCOME FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		505			35			599			(526	)		613
Net loss from discontinued operations, net of tax		—			—			—			—			—
NET INCOME INCLUDING NONCONTROLLING INTEREST		505			35			599			(526	)		613
Net income attributable to noncontrolling interest		—			—			108			—			108
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	505		$	35		$	491		$	(526	)	$	505
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCK (1)	$	505		$	35		$	491		$	(526	)	$	505

⁽¹⁾  Comprehensive income (loss) activity is recorded on the Apache Corporation entity and consists of derivative instrument reclassifications and changes in fair value as reflected on our Statement of Consolidated Comprehensive Income.

21

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Quarter Ended June 30, 2013

						All Other
			Apache			Subsidiaries
	Apache		Finance			of Apache			Reclassifications
	Corporation		Canada			Corporation			& Eliminations			Consolidated
	(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	1,255	$	—		$	2,746		$	—		$	4,001
Equity in net income (loss) of affiliates		718		(6	)		2			(714	)		—
Derivative instrument gains (losses), net		247		—			—			—			247
Other		3		15			3			(1	)		20
		2,223		9			2,751			(715	)		4,268
OPERATING EXPENSES:
Depreciation, depletion and amortization		470		—			880			—			1,350
Asset retirement obligation accretion		20		—			44			—			64
Lease operating expenses		267		—			514			—			781
Gathering and transportation		17		—			60			—			77
Taxes other than income		57		—			113			—			170
General and administrative		102		—			25			(1	)		126
Financing costs, net		34		14			4			—			52
		967		14			1,640			(1	)		2,620
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		1,256		(5	)		1,111			(714	)		1,648
Provision (benefit) for income taxes		221		(1	)		391			—			611
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		1,035		(4	)		720			(714	)		1,037
Net loss from discontinued operations, net of tax		—		—			(2	)		—			(2	)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		1,035		(4	)		718			(714	)		1,035
Preferred stock dividends		19		—			—			—			19
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	1,016	$	(4	)	$	718		$	(714	)	$	1,016
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK (1)	$	1,031	$	(4	)	$	718		$	(714	)	$	1,031

⁽¹⁾  Comprehensive income (loss) activity is recorded on the Apache Corporation entity and consists of derivative instrument reclassifications and changes in fair value as reflected on our Statement of Consolidated Comprehensive Income.

22

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2014

						All Other
				Apache		Subsidiaries
	Apache			Finance		of Apache			Reclassifications
	Corporation			Canada		Corporation			& Eliminations			Consolidated
	(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	1,787		$	—	$	5,568		$	—		$	7,355
Equity in net income (loss) of affiliates		743			53		5			(801	)		—
Derivative instrument gains (losses), net		(145	)		—		(49	)		—			(194	)
Other		(72	)		27		40			3			(2	)
		2,313			80		5,564			(798	)		7,159
OPERATING EXPENSES:
Depreciation, depletion and amortization		684			—		1,979			—			2,663
Asset retirement obligation accretion		15			—		74			—			89
Lease operating expenses		249			—		961			—			1,210
Gathering and transportation		28			—		108			—			136
Taxes other than income		126			—		236			—			362
General and administrative		189			—		7			3			199
Acquisition, divestiture, and separation costs		30			—		—			—			30
Financing costs, net		73			20		(31	)		—			62
		1,394			20		3,334			3			4,751
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		919			60		2,230			(801	)		2,408
Provision for income taxes		52			2		890			—			944
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		867			58		1,340			(801	)		1,464
Net loss from discontinued operations, net of tax		(127	)		—		(390	)		—			(517	)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		740			58		950			(801	)		947
Net income attributable to noncontrolling interest		—			—		206			—			206
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	740		$	58	$	744		$	(801	)	$	741
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK(1)	$	739		$	58	$	744		$	(801	)	$	740

⁽¹⁾  Comprehensive income (loss) activity is recorded on the Apache Corporation entity and consists of derivative instrument reclassifications and changes in fair value as reflected on our Statement of Consolidated Comprehensive Income.

23

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2013

						All Other
			Apache			Subsidiaries
	Apache		Finance			of Apache			Reclassifications
	Corporation		Canada			Corporation			& Eliminations			Consolidated
	(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	2,401	$	—		$	5,621		$	—		$	8,022
Equity in net income (loss) of affiliates		1,328		(17	)		5			(1,316	)		—
Derivative instrument gains (losses), net		147		—			—			—			147
Other		1		30			17			(3	)		45
		3,877		13			5,643			(1,319	)		8,214
OPERATING EXPENSES:
Depreciation, depletion and amortization		871		—			1,791			—			2,662
Asset retirement obligation accretion		40		—			87			—			127
Lease operating expenses		548		—			955			—			1,503
Gathering and transportation		31		—			119			—			150
Taxes other than income		101		—			298			—			399
General and administrative		202		—			39			(3	)		238
Financing costs, net		68		28			11			—			107
		1,861		28			3,300			(3	)		5,186
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		2,016		(15	)		2,343			(1,316	)		3,028
Provision (benefit) for income taxes		264		(3	)		952			—			1,213
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		1,752		(12	)		1,391			(1,316	)		1,815
Net loss from discontinued operations, net of tax		—		—			(63	)		—			(63	)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		1,752		(12	)		1,328			(1,316	)		1,752
Preferred stock dividends		38		—			—			—			38
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	1,714	$	(12	)	$	1,328		$	(1,316	)	$	1,714
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK (1)	$	1,727	$	(12	)	$	1,328		$	(1,316	)	$	1,727

⁽¹⁾  Comprehensive income (loss) activity is recorded on the Apache Corporation entity and consists of derivative instrument reclassifications and changes in fair value as reflected on our Statement of Consolidated Comprehensive Income.

24

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2014

							All Other
				Apache			Subsidiaries
	Apache			Finance			of Apache			Reclassifications
	Corporation			Canada			Corporation			& Eliminations			Consolidated
	(In millions)
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	$	70		$	(33	)	$	4,513		$	—		$	4,550
CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			82			—			82
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		70			(33	)		4,595			—			4,632
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(1,703	)		—			(3,168	)		—			(4,871	)
Additions to gas gathering, transmission and processing facilities		(2	)		—			(719	)		—			(721	)
Proceeds from sale of Deepwater Gulf of Mexico assets		1,367			—			—			—			1,367
Restricted cash related to divestitures		(1,367	)		—			—			—			(1,367	)
Proceeds from sale of other oil and gas properties		69			—			312			—			381
Acquisitions		(5	)		—			—			—			(5	)
Investment in subsidiaries, net		2,899			—			—			(2,899	)		—
Other		(35	)		—			12			—			(23	)
NET CASH PROVIDED BY (USED IN) CONTINUING INVESTING ACTIVITIES		1,223			—			(3,563	)		(2,899	)		(5,239	)
NET CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			748			—			748
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		1,223			—			(2,815	)		(2,899	)		(4,491	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net		—			—			(1	)		—			(1	)
Intercompany borrowings		—			11			(2,909	)		2,898			—
Distributions to noncontrolling interest		—			—			(66	)		—			(66	)
Dividends paid		(176	)		—			—			—			(176	)
Treasury stock activity, net		(1,263	)		—			—			—			(1,263	)
Other		—			19			5			1			25
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES		(1,439	)		30			(2,971	)		2,899			(1,481	)
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(42	)		—			(42	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(1,439	)		30			(3,013	)		2,899			(1,523	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(146	)		(3	)		(1,233	)		—			(1,382	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		155			3			1,748			—			1,906
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	9		$	—		$	515		$	—		$	524

25

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2013

							All Other
				Apache			Subsidiaries
	Apache			Finance			of Apache			Reclassifications
	Corporation			Canada			Corporation			& Eliminations			Consolidated
	(In millions)
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	$	688		$	(76	)	$	4,664		$	—		$	5,276
CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			104			—			104
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		688			(76	)		4,768			—			5,380
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(1,854	)		—			(3,196	)		—			(5,050	)
Additions to gas gathering, transmission and processing facilities		(54	)		—			(437	)		—			(491	)
Proceeds from Kitimat LNG transaction, net		—			—			405			—			405
Acquisitions		—			—			(148	)		—			(148	)
Investment in subsidiaries, net		1,258			—			—			(1,258	)		—
Other		(58	)		—			72			—			14
NET CASH USED IN CONTINUING INVESTING ACTIVITIES		(708	)		—			(3,304	)		(1,258	)		(5,270	)
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(94	)		—			(94	)
NET CASH USED IN INVESTING ACTIVITIES		(708	)		—			(3,398	)		(1,258	)		(5,364	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net		945			—			—			—			945
Intercompany borrowings		—			1			(1,253	)		1,252			—
Payments on fixed rate debt		(500	)		—			—			—			(500	)
Dividends paid		(183	)		—			—			—			(183	)
Treasury stock activity, net		(249	)		—			—			—			(249	)
Other		7			75			(85	)		6			3
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES		20			76			(1,338	)		1,258			16
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(8	)		—			(8	)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		20			76			(1,346	)		1,258			8
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		—			—			24			—			24
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		—			—			160			—			160
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	—		$	—		$	184		$	—		$	184

26

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2014

					All Other
			Apache		Subsidiaries
	Apache		Finance		of Apache		Reclassifications
	Corporation		Canada		Corporation		& Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	9	$	—	$	515	$	—		$	524
Short-term restricted cash		—		—		778		—			778
Receivables, net of allowance		873		—		1,534		—			2,407
Inventories		24		—		770		—			794
Drilling advances		29		2		300		—			331
Prepaid assets and other		90		—		202		—			292
Intercompany receivable		6,065		—		—		(6,065	)		—
		7,090		2		4,099		(6,065	)		5,126
PROPERTY AND EQUIPMENT, NET		17,436		—		35,034		—			52,470
OTHER ASSETS:
Intercompany receivable		—		—		1,327		(1,327	)		—
Equity in affiliates		25,486		1,203		445		(27,134	)		—
Long-term restricted cash		—		—		589		—			589
Goodwill, net		173		—		1,196		—			1,369
Deferred charges and other		191		1,005		1,421		(1,000	)		1,617
	$	50,376	$	2,210	$	44,111	$	(35,526	)	$	61,171
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	831	$	13	$	647	$	—		$	1,491
Current debt		—		—		1		—			1
Asset retirement obligation		115		—		63		—			178
Derivative instruments		272		—		—		—			272
Other current liabilities		1,128		1		1,499		—			2,628
Intercompany payable		—		—		6,065		(6,065	)		—
		2,346		14		8,275		(6,065	)		4,570
LONG-TERM DEBT		9,375		298		1		—			9,674
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable		1,327		—		—		(1,327	)		—
Income taxes		3,641		—		4,925		—			8,566
Asset retirement obligation		455		—		2,595		—			3,050
Other		477		250		692		(1,000	)		419
		5,900		250		8,212		(2,327	)		12,035
COMMITMENTS AND CONTINGENCIES APACHE SHAREHOLDERS’ EQUITY		32,755		1,648		25,486		(27,134	)		32,755
Noncontrolling interest		—		—		2,137		—			2,137
TOTAL EQUITY		32,755		1,648		27,623		(27,134	)		34,892
	$	50,376	$	2,210	$	44,111	$	(35,526	)	$	61,171

27

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2013

					All Other
			Apache		Subsidiaries
	Apache		Finance		of Apache		Reclassifications
	Corporation		Canada		Corporation		& Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	155	$	3	$	1,748	$	—		$	1,906
Receivables, net of allowance		1,043		—		1,909		—			2,952
Inventories		48		—		843		—			891
Drilling advances		49		—		322		—			371
Derivative instruments		1		—		—		—			1
Prepaid assets and other		99		—		146		—			245
Intercompany receivable		5,357		—		—		(5,357	)		—
		6,752		3		4,968		(5,357	)		6,366
PROPERTY AND EQUIPMENT, NET		16,092		—		36,329		—			52,421
OTHER ASSETS:
Intercompany receivable		1,572		—		—		(1,572	)		—
Equity in affiliates		24,743		1,155		449		(26,347	)		—
Goodwill, net		173		—		1,196		—			1,369
Deferred charges and other		166		1,006		1,309		(1,000	)		1,481
	$	49,498	$	2,164	$	44,251	$	(34,276	)	$	61,637
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	956	$	2	$	658	$	—		$	1,616
Current debt		—		—		53		—			53
Asset retirement obligation		115		—		6		—			121
Derivative instruments		299		—		—		—			299
Other current liabilities		896		10		1,705		—			2,611
Intercompany payable		—		—		5,357		(5,357	)		—
		2,266		12		7,779		(5,357	)		4,700
LONG-TERM DEBT		9,374		298		—		—			9,672
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable		—		—		1,572		(1,572	)		—
Income taxes		3,586		—		4,778		—			8,364
Asset retirement obligation		430		—		2,671		—			3,101
Other		446		250		711		(1,000	)		407
		4,462		250		9,732		(2,572	)		11,872
COMMITMENTS AND CONTINGENCIES APACHE SHAREHOLDERS’ EQUITY		33,396		1,604		24,743		(26,347	)		33,396
Noncontrolling interest		—		—		1,997		—			1,997
TOTAL EQUITY		33,396		1,604		26,740		(26,347	)		35,393
	$	49,498	$	2,164	$	44,251	$	(34,276	)	$	61,637

28

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Apache Corporation, a Delaware corporation formed in 1954, is an independent energy company that explores for, develops and produces natural gas, crude oil, and natural gas liquids. The Company has exploration and production interests in five countries: the United States (U.S.), Canada, Egypt, Australia, and the United Kingdom (U.K.) North Sea. Apache also pursues exploration interests in other countries that may over time result in reportable discoveries and development opportunities.

This discussion relates to Apache Corporation and its consolidated subsidiaries and should be read in conjunction with our consolidated financial statements and accompanying notes included under Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q, as well as our consolidated financial statements, accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Current Report on Form 8-K dated July 17, 2014 for our 2013 fiscal year.

Strategic Overview

Over the last five years, Apache has greatly enlarged and enhanced its North American onshore resource base, which we believe is capable of driving our growth and performance over the next several years. During the last 18 months, we have further increased the focus on our North American Onshore business by divesting $10 billion of properties. In North America, we completed the sale of our Gulf of Mexico Shelf region assets, certain non-producing assets in the deepwater Gulf of Mexico, and non-strategic, primarily dry-gas, assets in Canada. Internationally, we sold a one-third noncontrolling interest in our Egypt operations and all of our assets in Argentina. In addition, we intend to completely exit the Wheatstone and Kitimat LNG projects, and, in light of our expanding opportunity set in North American Onshore, we are evaluating our international assets and exploring multiple opportunities, including the potential separation of some or all of them through the capital markets.

In addition, we have launched a share repurchase program. Since June 2013, we have repurchased a total of 26 million of the 40 million shares authorized by our Board of Directors. Under the program, we are not obligated to acquire any specific number of shares.

Financial Highlights

• Apache reported earnings for the quarter of $505 million, or $1.31 per diluted common share, compared with $1.0 billion, or $2.54 per diluted share, for the prior-year period.

• First-half 2014 earnings totaled $741 million, or $1.89 per diluted common share, compared with $1.7 billion, or $4.30 per diluted share, in the comparable prior-year period. Earnings for first half of 2014 reflect an after-tax loss of $517 million on discontinued operations in Argentina.

• Net cash provided by operating activities (operating cash flows or cash flows) totaled $4.6 billion for the first half of 2014, driven by the strength of our North American drilling program.

Second Quarter Operational Developments

Average daily production in the second quarter of 2014 totaled 636 thousand barrels of oil equivalent (Mboe), a decrease of 111 Mboe from the comparative 2013 quarter. The prior-year quarter includes volumes from properties in the Gulf of Mexico Shelf and Canada that have since been divested.

North America

• North American onshore liquids averaged 202,861 barrels per day, up 16 percent over the prior-year quarter.

• North American onshore liquids production represented nearly 54 percent of our worldwide liquids production and 32 percent of our overall production.

• Permian region surpassed a significant milestone as production averaged over 150,000 barrels of oil equivalent per day (boe/d) in the second quarter of 2014, a nearly 200 percent increase since we launched the region just over four years ago.

• Permian region averaged 37 rigs during the quarter, resulting in a production increase of 26 percent relative to the prior-year period.

29

• Gulf Coast region increased its acreage position to 200,000 net acres in the East Texas Eagle Ford play and drilled 26 horizontal wells. Based on strong well results to date, we plan on having 10 rigs running in the play by year-end.

• In the Canyon Lime play within our Central region, we have had strong early results. Our most recent well, the Bivins 94-1H, had a 30-day initial production (IP) rate of 1,718 boe/d. We hold approximately 100,000 net acres in this emerging area and are planning to drill a total of six wells this year as we further delineate the play.

• Central region’s Anadarko basin, however, experienced several challenges over the last two quarters, and total wells drilled are 26 percent behind plan. We are scaling back activity and reducing capital and rigs as we retool the region to ensure proper investment decisions.

• Canada region had positive drilling results in the first quarter, as we ramped up activity in the Montney and Duvernay plays. We increased our acreage position to 146,000 net acres in the Montney and 177,000 net acres in the Duvernay, and we plan to spud 10 wells and 2 wells in the Duvernay and Montney plays, respectively, by year-end.

• We completed the sale of our Lucius and Heidelberg deepwater development projects and 11 primary term deepwater exploration blocks in the Gulf of Mexico for $1.4 billion.

• We completed the sale of non-strategic producing oil and gas assets in Canada for $374 million.

International

• North Sea region drilled eight new wells, including a new well in the Beryl field that achieved a 30-day IP rate of 4,500 boe/d and a new Forties area well that achieved a 30-day IP rate of 5,100 boe/d.

• Egypt region made two notable discoveries: the Herunefer-1X discovery located in the Matruh Basin had tests in the Lower Safa and Upper Safa intervals that flowed at a combined rate of 49 million cubic feet of natural gas per day (MMcf/d) and 7,700 barrels of condensate per day, and the BAT-1X in the northern Shushan Basin, which tested at rates of 31 MMcf/d and 390 barrels of condensate per day.

• Our Balnaves project in Western Australia is expected to come online in the third quarter.

• Australia region’s Coniston development project, originally scheduled for first oil in the third quarter of 2014, is delayed until early 2015 as a result of additional repairs identified during upgrades and capacity expansion on the floating, production, storage, and offloading vessel required to bring our new wells online.

30

Results of Operations

Oil and Gas Revenues

Oil and gas production revenues for the second quarter of 2014 totaled $3.7 billion, a $293 million decrease from the comparative 2013 quarter. The table below presents revenues by region and each region’s percent contribution to revenues for 2014 and 2013.

	For the Quarter Ended June 30,										For the Six Months Ended June 30,
	2014					2013					2014					2013
	$		%			$		%			$		%			$		%
	Value		Contribution			Value		Contribution			Value		Contribution			Value		Contribution
	($ in millions)
Total Oil Revenues:
United States	$	1,145		39	%	$	1,390		44	%	$	2,237		39	%	$	2,659		42	%
Canada		154		5	%		148		5	%		294		5	%		275		4	%
North America		1,299		44	%		1,538		49	%		2,531		44	%		2,934		46	%
Egypt (1)		885		30	%		796		26	%		1,731		30	%		1,708		27	%
Australia		153		5	%		199		6	%		323		6	%		402		7	%
North Sea		613		21	%		597		19	%		1,180		20	%		1,278		20	%
International (1)		1,651		56	%		1,592		51	%		3,234		56	%		3,388		54	%
Total(1)(2)	$	2,950		100	%	$	3,130		100	%	$	5,765		100	%	$	6,322		100	%
Total Gas Revenues:
United States	$	245		41	%	$	319		44	%	$	511		41	%	$	607		43	%
Canada		122		21	%		166		23	%		270		22	%		318		23	%
North America		367		62	%		485		67	%		781		63	%		925		66	%
Egypt (1)		99		17	%		97		13	%		202		16	%		194		14	%
Australia		84		14	%		92		13	%		170		14	%		186		13	%
North Sea		39		7	%		47		7	%		82		7	%		97		7	%
International (1)		222		38	%		236		33	%		454		37	%		477		34	%
Total(1)(3)	$	589		100	%	$	721		100	%	$	1,235		100	%	$	1,402		100	%
Natural Gas Liquids (NGL) Revenues:
United States	$	139		82	%	$	127		85	%	$	286		81	%	$	247		83	%
Canada		17		10	%		15		10	%		47		13	%		34		11	%
North America		156		92	%		142		95	%		333		94	%		281		94	%
Egypt (1)		5		3	%		—		0	%		6		2	%		—		0	%
North Sea		8		5	%		8		5	%		16		4	%		17		6	%
International (1)		13		8	%		8		5	%		22		6	%		17		6	%
Total (1)	$	169		100	%	$	150		100	%	$	355		100	%	$	298		100	%
Total Oil and Gas Revenues:
United States	$	1,529		41	%	$	1,836		46	%	$	3,034		41	%	$	3,513		44	%
Canada		293		8	%		329		8	%		611		9	%		627		8	%
North America		1,822		49	%		2,165		54	%		3,645		50	%		4,140		52	%
Egypt (1)		989		27	%		893		23	%		1,939		26	%		1,902		24	%
Australia		237		6	%		291		7	%		493		7	%		588		7	%
North Sea		660		18	%		652		16	%		1,278		17	%		1,392		17	%
International (1)		1,886		51	%		1,836		46	%		3,710		50	%		3,882		48	%
Total (1)	$	3,708		100	%	$	4,001		100	%	$	7,355		100	%	$	8,022		100	%
Discontinued Operations - Argentina
Oil Revenues	$	—				$	67				$	45				$	130
Gas Revenues		—					47					39					101
NGL Revenues		—					4					3					12
Total	$	—				$	118				$	87				$	243

⁽¹⁾  Includes revenues attributable to a noncontrolling interest in Egypt for the quarter and six months ended June 30, 2014.

⁽²⁾  Financial derivative hedging activities decreased oil revenues $1 million and $2 million for the 2014 second quarter and six-month period, respectively, and $18 million and $37 million for the 2013 second quarter and six-month period, respectively.

⁽³⁾  Financial derivative hedging activities increased natural gas revenues $1 million and $2 million for the 2014 second quarter and six-month period, respectively, and $7 million and $17 million for the 2013 second quarter and six-month period, respectively.

31

Production

The table below presents the second-quarter and year-to-date 2014 and 2013 production and the relative increase or decrease from the prior period.

	For the Quarter Ended June 30,							For the Six Months Ended June 30,
					Increase							Increase
	2014		2013		(Decrease)			2014		2013		(Decrease)
Oil Volume – b/d
United States		130,398		157,298		(17	%)		129,181		153,303		(16	%)
Canada		17,981		18,573		(3	%)		17,786		17,878		(1	%)
North America		148,379		175,871		(16	%)		146,967		171,181		(14	%)
Egypt(1)(2)		88,643		88,002		1	%		88,370		89,649		(1	%)
Australia		14,555		21,810		(33	%)		15,683		20,911		(25	%)
North Sea		61,610		63,667		(3	%)		60,358		66,051		(9	%)
International		164,808		173,479		(5	%)		164,411		176,611		(7	%)
Total		313,187		349,350		(10	%)		311,378		347,792		(10	%)
Natural Gas Volume – Mcf/d
United States		596,970		860,661		(31	%)		594,840		857,195		(31	%)
Canada		316,740		520,797		(39	%)		347,057		519,991		(33	%)
North America		913,710		1,381,458		(34	%)		941,897		1,377,186		(32	%)
Egypt(1)(2)		367,950		357,291		3	%		372,628		361,428		3	%
Australia		210,470		212,022		(1	%)		213,116		213,202		0	%
North Sea		54,848		48,411		13	%		49,986		51,704		(3	%)
International		633,268		617,724		3	%		635,730		626,334		2	%
Total		1,546,978		1,999,182		(23	%)		1,577,627		2,003,520		(21	%)
NGL Volume – b/d
United States		56,625		57,018		(1	%)		54,851		53,180		3	%
Canada		5,921		6,686		(11	%)		6,840		6,675		2	%
North America		62,546		63,704		0	%		61,691		59,855		3	%
Egypt(1)(2)		884		—		NM			560		—		NM
North Sea		1,367		1,201		14	%		1,230		1,346		(9	%)
International		2,251		1,201		87	%		1,790		1,346		33	%
Total		64,797		64,905		0	%		63,481		61,201		4	%
BOE per day(3)
United States		286,518		357,759		(20	%)		283,173		349,349		(19	%)
Canada		76,692		112,059		(32	%)		82,469		111,218		(26	%)
North America		363,210		469,818		(23	%)		365,642		460,567		(21	%)
Egypt(2)		150,853		147,551		2	%		151,035		149,887		1	%
Australia		49,633		57,147		(13	%)		51,203		56,444		(9	%)
North Sea		72,118		72,936		(1	%)		69,918		76,015		(8	%)
International		272,604		277,634		(2	%)		272,156		282,346		(4	%)
Total		635,814		747,452		(15	%)		637,798		742,913		(8	%)
Discontinued Operations - Argentina
Oil (b/d)		—		9,365		NM			3,424		9,331		NM
Gas (Mcf/d)		—		184,528		NM			70,286		186,383		NM
NGL (b/d)		—		2,239		NM			640		2,529		NM
BOE/d		—		42,359		NM			15,778		42,924		NM

⁽¹⁾  Gross oil, natural gas, and NGL production in Egypt for the second quarter and six-month period of 2014 and 2013 were as follows:

	For the quarter ended June 30,				For the six months ended June 30,
	2014		2013		2014		2013
Oil (b/d)		197,069		193,341		197,839		196,242
Gas (Mcf/d)		907,752		901,181		914,558		907,871
NGL (b/d)		2,698		—		1,679		—

⁽²⁾  Includes production volumes per day attributable to a noncontrolling interest in Egypt for the second quarter and six-month period of 2014 of:

	For the quarter ended June 30,		For the six months ended June 30,
	2014		2014
Oil (b/d)		29,508		29,288
Gas (Mcf/d)		122,665		123,726
NGL (b/d)		295		187

⁽³⁾  The table shows production on a barrel of oil equivalent basis (boe) in which natural gas is converted to an equivalent barrel of oil based on a 6:1 energy equivalent ratio. This ratio is not reflective of the price ratio between the two products.

NM — Not meaningful

32

Pricing

The table below presents second-quarter and year-to-date 2014 and 2013 pricing and the relative increase or decrease from the prior periods.

	For the Quarter Ended June 30,							For the Six Months Ended June 30,
	2014		2013		Increase (Decrease)			2014		2013		Increase (Decrease)
Average Oil Price - Per barrel
United States	$	96.46	$	97.14		(1	%)	$	95.66	$	95.84		0	%
Canada		94.66		87.38		8	%		91.47		84.97		8	%
North America		96.24		96.11		0	%		95.15		94.70		0	%
Egypt		109.74		99.36		10	%		108.24		105.25		3	%
Australia		115.34		100.79		14	%		113.70		106.29		7	%
North Sea		109.33		102.95		6	%		108.00		106.85		1	%
International		110.08		100.86		9	%		108.67		105.97		3	%
Total(1)		103.53		98.47		5	%		102.29		100.43		2	%
Average Natural Gas Price - Per Mcf
United States	$	4.51	$	4.07		11	%	$	4.75	$	3.92		21	%
Canada		4.21		3.52		20	%		4.30		3.37		28	%
North America		4.41		3.86		14	%		4.58		3.71		23	%
Egypt		2.96		3.00		(1	%)		2.99		2.97		1	%
Australia		4.40		4.70		(6	%)		4.41		4.82		(9	%)
North Sea		7.75		10.86		(29	%)		9.07		10.41		(13	%)
International		3.85		4.20		(8	%)		3.94		4.21		(6	%)
Total(2)		4.18		3.97		5	%		4.33		3.87		12	%
Average NGL Price - Per barrel
United States	$	27.06	$	24.46		11	%	$	28.86	$	25.61		13	%
Canada		31.67		24.60		29	%		37.56		28.35		32	%
North America		27.50		24.48		12	%		29.83		25.92		15	%
Egypt		57.67		—		NM			59.05		—		NM
North Sea		61.81		70.39		(12	%)		69.77		70.81		(1	%)
International		60.19		70.39		(14	%)		66.41		70.81		(6	%)
Total		28.64		25.33		13	%		30.86		26.91		15	%
Discontinued Operations - Argentina
Oil price ($/Bbl)	$	—	$	77.74		NM		$	72.70	$	76.56		(5	%)
Gas price ($/Mcf)		—		2.79		NM			3.04		2.99		2	%
NGL price ($/Bbl)		—		20.94		NM			24.57		26.12		(6	%)

⁽¹⁾  Reflects a per-barrel decrease of $0.03 from derivative hedging activities for both the 2014 second quarter and six-month period and a decrease of $0.54 and $0.57 from derivative hedging activities for the comparative 2013 second quarter and six-month period, respectively.

⁽²⁾  Reflects a per-Mcf increase of $0.01 from derivative hedging activities for both the 2014 second quarter and six-month period and an increase of $0.03 and $0.04 from derivative hedging activities for the comparative 2013 second quarter and six-month period, respectively.

NM — Not meaningful

Second-Quarter 2014 compared to Second-Quarter 2013

Crude Oil Revenues Crude oil revenues for the second quarter of 2014 totaled $3.0 billion, a $180 million decrease from the comparative 2013 quarter. A 5 percent decrease in average daily production decreased second-quarter 2014 revenues by $341 million compared to the prior-year quarter, while 5 percent higher realized prices increased revenues by $161 million. Crude oil prices realized in the second quarter of 2014 averaged $103.53 per barrel, compared with $98.47 in the comparative prior-year quarter. Crude oil accounted for 80 percent of oil and gas production revenues and 49 percent of worldwide production in the second quarter of 2014.

Worldwide production decreased 36 thousand barrels of oil per day (Mb/d) from the second quarter of 2013 to 313 Mb/d, primarily as a result of the divestiture of our Gulf of Mexico Shelf assets in the second half of 2013. Exclusive of production from these divested assets, oil production increased 11.5 Mb/d, primarily on drilling and recompletion activity in the U.S. Permian region, partially offset by production decreases in Australia and the North Sea. Australia’s production decreased 7 Mb/d primarily on downtime for planned maintenance on the Ningaloo Vision FPSO. Production decreased 2 Mb/d in the North Sea primarily due to natural decline.

33

Natural Gas Revenues Gas revenues for the second quarter of 2014 totaled $589 million, down 18 percent from the second quarter of 2013. A 23 percent decrease in average production reduced natural gas revenues by $172 million as compared to the prior-year quarter, while a 5 percent increase in average realized prices increased revenues by $40 million. Natural gas accounted for 16 percent of our oil and gas production revenues and 41 percent of our equivalent production.

Worldwide natural gas production was 452 million cubic feet per day (MMcf/d) lower than the second quarter of 2013, primarily as a result of the divestiture of our Gulf of Mexico Shelf assets and certain Western Canadian assets in the second half of 2013. Exclusive of production from these divested assets, our worldwide gas production was essentially flat.

NGL Revenues NGL revenues for the second quarter of 2014 totaled $169 million, up $19 million from the second quarter of 2013. Average NGL production remained flat compared to the prior-year quarter, while a 13 percent increase in average realized prices increased revenues by $19 million. NGLs accounted for nearly 5 percent of our oil and gas production revenues and 10 percent of our equivalent production during the second quarter of 2014.

Worldwide production of NGLs decreased 108 b/d to 64.8 Mb/d in the second quarter of 2014, primarily as a result of the divestiture of our Gulf of Mexico Shelf assets and certain Western Canadian assets in the second half of 2013. Exclusive of production from these divested assets, our worldwide NGL production increased 8.5 Mb/d.

Year-to-Date 2014 compared to Year-to-Date 2013

Crude Oil Revenues Crude oil revenues for the first six months of 2014 totaled $5.8 billion, $557 million lower than the comparative 2013 period, the result of a 10 percent decrease in worldwide production partially offset by a 2 percent increase in average realized prices. Crude oil accounted for 78 percent of oil and gas production revenues and 49 percent of worldwide production for the first six months of 2014, and 79 percent of production revenues and 47 percent of worldwide production for the 2013 comparative period. Lower production volumes reduced revenue by $674 million compared to the first six months of 2013, while higher realized prices added $117 million to revenues. Crude oil prices realized in the first six months of 2014 averaged $102.29 per barrel, compared with $100.43 in the comparative prior-year period.

Worldwide production declined 36 Mb/d to 311 Mb/d in the first six months of this year from the same period last year, primarily as a result of the divestiture of our Gulf of Mexico Shelf assets in the second half of 2013. Exclusive of production from these divested assets, worldwide production increased 8.9 Mb/d. Production increased 21 Mb/d in our Permian region on drilling and recompletion activity. Net production in the North Sea was 6 Mb/d lower on natural decline, and Australia production decreased 5 Mb/d as a result of downtime for planned maintenance.

Natural Gas Revenues Gas revenues for the first six months of 2014 totaled $1.2 billion, down 12 percent from the comparative 2013 period. A 21 percent decline in average production reduced natural gas revenues by $333 million, offset by a 12 percent increase in average realized prices that added $166 million to revenues. Natural gas accounted for 17 percent of our oil and gas production revenues and 41 percent of our equivalent production, compared to 17 percent and 45 percent, respectively, for the 2013 period.

Our worldwide natural gas production was 425 MMcf/d lower than the first six months of 2013, as a result of the divestiture of our Gulf of Mexico Shelf assets and certain Western Canadian assets in the second half of 2013. Exclusive of production from these divested assets, worldwide production was essentially flat.

NGL Revenues NGL revenues for the first six months of 2014 totaled $355 million, up $57 million from the comparative 2013 period. A 4 percent increase in average production increased NGL revenues by $13 million as compared to the prior-year period, while a 14 percent increase in average realized prices increased revenues by $44 million. NGLs accounted for nearly 5 percent of our oil and gas production revenues and 10 percent of our equivalent production during the first six months of 2014.

Worldwide production of NGLs increased 2.3 Mb/d to 63.5 Mb/d in the first six months of 2014, primarily from drilling and recompletion activity in the Central and Permian regions. Exclusive of production from divested assets, our worldwide NGL production increased 9.7 Mb/d.

34

Operating Expenses

The table below presents a comparison of our expenses on an absolute dollar basis and a boe basis. Our discussion may reference expenses on a boe basis, on an absolute dollar basis or both, depending on their relevance. Operating expenses include costs attributable to a noncontrolling interest in Egypt but exclude discontinued operations in Argentina.

	For the Quarter Ended June 30,								For the Six Months Ended June 30,
	2014		2013		2014		2013		2014		2013		2014		2013
	(In millions)				(Per boe)				(In millions)				(Per boe)
Depreciation, depletion and amortization:
Oil and gas property and equipment
Recurring	$	1,155	$	1,258	$	19.96	$	18.49	$	2,264	$	2,468	$	19.61	$	18.35
Additional		203		—		3.51		—		203		—		1.76		—
Other assets		99		92		1.71		1.34		196		194		1.69		1.44
Asset retirement obligation accretion		45		64		0.78		0.94		89		127		0.77		0.95
Lease operating costs		613		781		10.59		11.48		1,210		1,503		10.48		11.17
Gathering and transportation costs		66		77		1.16		1.15		136		150		1.19		1.12
Taxes other than income		181		170		3.12		2.51		362		399		3.14		2.97
General and administrative expense		94		126		1.63		1.85		199		238		1.72		1.77
Acquisition, divestiture, and separation costs		14		—		0.24		—		30		—		0.26		—
Financing costs, net		35		52		0.60		0.76		62		107		0.54		0.79
Total	$	2,505	$	2,620	$	43.30	$	38.52	$	4,751	$	5,186	$	41.16	$	38.56

Recurring Depreciation, Depletion and Amortization (DD&A) The following table details the changes in recurring DD&A of oil and gas properties between the second quarters and six-month periods of 2014 and 2013:

	For the Quarter Ended June 30,			For the Six Months Ended June 30,
	(In millions)			(In millions)
2013 DD&A	$	1,258		$	2,468
Volume change		(164	)		(329	)
DD&A rate change		61			125
2014 DD&A	$	1,155		$	2,264

Oil and gas property recurring DD&A expense of $1.2 billion in the second quarter of 2014 decreased $103 million compared to the prior-year quarter on an absolute dollar basis: $164 million from lower volumes offset by $61 million increase on rate. Oil and gas property recurring DD&A expense of $2.3 billion in the first six months of 2014 decreased $204 million compared to the prior-year period on an absolute dollar basis: $329 million from lower volumes offset by $125 million increase on rate. The Company’s oil and gas property recurring DD&A rate increased $1.47 and $1.26 per boe for the second quarter and first six months of 2014, respectively, compared to the prior-year periods.

Additional DD&A Under the full-cost method of accounting, the Company is required to review the carrying value of its proved oil and gas properties each quarter on a country-by-country basis. Under these rules, capitalized costs of oil and gas properties, net of accumulated DD&A and deferred income taxes, may not exceed the present value of estimated future net cash flows from proved oil and gas reserves, net of related tax effects and discounted 10 percent per annum. Estimated future net cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months, held flat for the life of the production, except where prices are defined by contractual arrangements. Any excess of the net book value of proved oil and gas properties, less related deferred income taxes, over the ceiling is charged to expense and reflected as “Additional DD&A” in the statement of consolidated operations.

In the second quarter of 2014, the Company recorded a $203 million ($77 million net of tax) non-cash write-down of the carrying value of the Company’s North Sea proved oil and gas properties.

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Lease Operating Expenses (LOE) LOE decreased $168 million, or 22 percent, for the quarter, and $293 million, or 19 percent, for the six month period, on an absolute dollar basis relative to the comparable periods of 2013. On a per unit basis, LOE decreased 7 percent to $10.59 per boe for the second quarter of 2014, as compared to the same prior-year period, and decreased 6 percent to $10.48 per boe for the first six months of 2014, as compared to the prior-year six-month period. The following table identifies changes in Apache’s LOE rate between the second quarters and six-month periods of 2014 and 2013.

For the Quarter Ended June 30,				For the Six Months Ended June 30,
	Per boe				Per boe
2013 LOE	$	11.48		2013 LOE	$	11.17
Transportation		0.13		Transportation		0.14
Materials		0.13		Materials		0.12
Saltwater disposal		0.09		Labor and overhead costs		0.10
Divestitures(1)		(1.28	)	Saltwater disposal		0.07
Power and fuel		(0.20	)	Divestitures(1)		(1.64	)
Other		0.29		Other		0.36
Other increased production		(0.05	)	Other decreased production		0.16
2014 LOE	$	10.59		2014 LOE	$	10.48

⁽¹⁾  Per-unit impact of divestitures is shown net of associated production.

Gathering and Transportation Gathering and transportation costs totaled $66 million and $136 million in the second quarter and first six months of 2014, respectively, down $11 million and $14 million from the second quarter and first six months of 2013, respectively. The following table presents gathering and transportation costs paid by Apache directly to third-party carriers for each of the periods presented:

	For the Quarter Ended				For the Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(In millions)
Canada	$	30	$	40	$	64	$	80
U.S.		23		23		45		44
Egypt		11		11		21		20
North Sea		2		3		6		6
Total Gathering and transportation	$	66	$	77	$	136	$	150

Taxes other than Income Taxes other than income totaled $181 million and $362 million for the second quarter and the first six months of 2014, respectively, an increase of $11 million and a decrease of $37 million, respectively, from the comparative prior-year periods. The following table presents a comparison of these expenses:

	For the Quarter Ended				For the Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(In millions)
U.K. PRT	$	91	$	72	$	154	$	207
Severance taxes		52		63		125		114
Ad valorem taxes		22		26		62		59
Other		16		9		21		19
Total Taxes other than income	$	181	$	170	$	362	$	399

The North Sea Petroleum Revenue Tax (PRT) is assessed on qualifying fields in the U.K. North Sea. U.K. PRT for the second quarter of 2014 was $19 million higher than the 2013 period based on an increase in revenues as a result of higher production on qualifying fields. Severance tax expense decreased $11 million as a result of marketing cost recoveries.

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U.K. PRT for the first six months of 2014 was $53 million lower when compared to the 2013 period based on a decrease in production revenue. For the first half of 2014, higher drilling activity increased severance taxes by $11 million as compared to the first six months of 2013.

General and Administrative Expenses General and administrative expenses (G&A) for the second quarter of 2014 decreased $32 million from the second quarter of 2013 on an absolute basis and $0.22 per boe on a per-unit basis. For the first six months of 2014 G&A decreased $39 million on an absolute basis from the comparable 2013 period and decreased $0.05 per boe on a per-unit basis. Expense for the three- and six-month 2014 periods includes a $25 million benefit from nonrecurring third party cost reimbursements.

Acquisition, Divestiture, and Separation Costs During the second quarter of 2014, the Company recognized $14 million in acquisition, divestiture, and separation costs related to our recent divestiture activity. For the six-month 2014 period, the Company recognized $30 million in acquisition, divestiture, and separation costs.

Financing Costs, Net Financing costs incurred during the period comprised the following:

	For the Quarter Ended						For the Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
	(In millions)
Interest expense	$	124		$	141		$	248		$	287
Amortization of deferred loan costs		1			2			3			4
Capitalized interest		(90	)		(88	)		(185	)		(178	)
Interest income		—			(3	)		(4	)		(6	)
Financing costs, net	$	35		$	52		$	62		$	107

Net financing costs were down $17 million and $45 million in the second quarter and first six months of 2014, respectively, compared to the same 2013 periods. The $17 million and $39 million decreases in interest expense in the second quarter and first six months of 2014, respectively, were a result of lower average debt balances.

Provision for Income Taxes The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. Accordingly, the Company recorded the income tax impact of a $203 million non-cash write-down of its North Sea proved oil and gas properties as a discrete item in the second quarter of 2014.

The 2014 second-quarter provision for income taxes was $366 million, representing an effective income tax rate of 37 percent for the quarter, unchanged from the 2013 period. The 2014 second-quarter effective rate reflects the impact of a $203 million non-cash write-down in the North Sea. The effective rate for both quarters also reflects a valuation allowance in Canada, foreign currency fluctuations on deferred taxes, and deferred tax expense related to mark-to-market commodity derivatives. Excluding these items, the second-quarter 2014 and 2013 effective rates would have been 40 percent and 41 percent, respectively.

The 2014 first six-months provision for income taxes was $944 million, representing an effective income tax rate of 39 percent for the period compared to 40 percent during the 2013 period. The 2014 effective rate reflects the impact of a $203 million non-cash write-down in the North Sea. The effective rate for both quarters also reflects a valuation allowance in Canada, foreign currency fluctuations on deferred taxes, and deferred tax expense related to mark-to-market commodity derivatives. Excluding these items, the 2014 and 2013 effective rates would have been 40 percent and 42 percent, respectively.

Capital Resources and Liquidity

Operating cash flows are the Company’s primary source of liquidity. We may also elect to utilize available committed borrowing capacity, access to both debt and equity capital markets, or proceeds from the sale of nonstrategic assets for all other liquidity and capital resource needs. As a majority of our capital investment activity is discretionary, we routinely adjust our capital budget on a quarterly basis in response to changing market conditions and operating cash flow forecasts.

Apache’s operating cash flows, both in the short-term and the long-term, are impacted by volatile oil and natural gas prices. Significant deterioration in commodity prices negatively impacts our revenues, earnings and cash flows, and potentially our liquidity if spending does not trend downward as well. Sales volumes and costs also impact cash flows; however, these historically have not been as volatile and have less impact than commodity prices in the short-term.

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Apache’s long-term operating cash flows are dependent on reserve replacement and the level of costs required for ongoing operations. Cash investments are required to fund activity necessary to offset the inherent declines in production and proved crude oil and natural gas reserves. Future success in maintaining and growing reserves and production is highly dependent on the success of our drilling program and our ability to add reserves at reasonable costs.

We believe the liquidity and capital resource alternatives available to Apache, combined with internally generated cash flows, will be adequate to fund short-term and long-term operations, including our capital spending program, repayment of debt maturities, and any amount that may ultimately be paid in connection with contingencies.

For additional information, please see Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q and Part I, Items 1 and 2, “Business and Properties,” and Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for our 2013 fiscal year.

Sources and Uses of Cash and Restricted Cash

The following table presents the sources and uses of our cash, cash equivalents, and restricted cash for the periods presented.

	For the Six Months Ended
	June 30,
	2014			2013
	(In millions)
Sources of Cash and Cash Equivalents:
Net cash provided by continuing operating activities	$	4,550		$	5,276
Proceeds from the sale of Argentina		786			—
Net cash provided by Argentina operations		2			2
Net commercial paper and bank loan borrowings		—			945
Proceeds from Kitimat LNG transaction, net		—			405
Proceeds from sale of other oil and gas properties		381			—
Other		2			17
		5,721			6,645
Uses of Cash and Cash Equivalents:
Capital expenditures for exploration and development (E&D) activity	$	4,871		$	5,050
Capital expenditures for gas gathering, transmission, and processing facilities		721			491
Acquisitions		5			148
Payments on fixed rate debt		—			500
Net commercial paper and bank loan repayments		1			—
Dividends		176			183
Treasury stock activity, net		1,263			249
Distributions to noncontrolling interest		66			—
		7,103			6,621
Increase (decrease) in cash and cash equivalents	$	(1,382	)	$	24
Sources of Restricted Cash:
Short-term restricted cash from sale of Deepwater Gulf of Mexico assets		778			—
Long-term restricted cash from sale of Deepwater Gulf of Mexico assets		589			—
Increase in restricted cash	$	1,367		$	—

Net Cash Provided by Continuing Operating Activities Operating cash flows are our primary source of capital and liquidity and are impacted, both in the short-term and the long-term, by volatile oil and natural gas prices. The factors that determine operating cash flow are largely the same as those that affect net earnings, with the exception of non-cash expenses such as DD&A, asset retirement obligation (ARO) accretion, and deferred income tax expense, which affect earnings but do not affect cash flows.

Net cash provided by continuing operating activities for the first six months of 2014 totaled $4.6 billion, a decrease of $726 million from the first six months of 2013. The decrease primarily reflects the impact of 2013 divestitures and comparative changes in working capital during the periods.

For a detailed discussion of commodity prices, production, and expenses, refer to the “Results of Operations” of this Item 2. For additional detail on the changes in operating assets and liabilities and the non-cash expenses that do not impact net cash provided by operating activities, please see the statement of consolidated cash flows in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q.

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Proceeds from the Sale of Argentina In March 2014, we completed the previously disclosed sale of our Argentina operations and properties to YPF Sociedad Anònima for cash consideration of $800 million (subject to customary closing adjustments) plus the assumption of $52 million of bank debts as of June 30, 2013. The results of operations related to Argentina have been classified as discontinued operations in all periods presented in this Quarterly Report on Form 10-Q.

Capital Expenditures During the first six months of 2014, capital spending for E&D activities totaled $4.9 billion compared to $5.0 billion in the prior year period. Apache’s E&D capital spending was primarily focused on our North American onshore assets. In the Permian region we averaged 37 operated drilling rigs during the quarter. Our recent drilling successes in the Permian has led the region to increase the number of horizontal drilling rigs being utilized, and now almost two-thirds of our rigs are drilling horizontal wells that, given their nature, are more costly than vertical wells. In our Gulf Coast region, we are increasing activity on our Eagle Ford acreage in Texas and have nearly doubled E&D spending over the prior-year period.

Apache’s investment in gas gathering, transmission, and processing facilities totaled $721 million during the first six months of 2014 compared to $491 million in the prior year period. Apache’s 2014 capital expenditures were primarily for the Wheatstone and Kitimat LNG facilities.

For the year, we have invested a total of $894 million for E&D and facility costs in the Wheatstone and Kitimat LNG projects. We recently announced our intentions to completely exit both of these projects.

Dividends For the six-month periods ended June 30, 2014 and 2013, the Company paid $176 million and $145 million, respectively, in dividends on its common stock. In the first six months of 2013, the Company also paid $38 million in dividends on its Series D Preferred Stock, which was converted to common stock in August 2013.

Shares Repurchased Apache’s Board of Directors has authorized the purchase of up to 40 million shares of the Company’s common stock. Shares may be purchased either in the open market or through privately held negotiated transactions. The Company initiated the buyback program on June 10, 2013, and has since repurchased a total of 26.1 million shares at an average price of $86.75. For the six-months period ended June 30, 2014, the Company repurchased a total of 14.9 million shares at an average price of $85.14. The Company is not obligated to acquire any specific number of shares.

Restricted Cash The Company classifies cash balances as restricted cash when cash is restricted as to withdrawal or usage. As of June 30, 2014, the Company had approximately $1.4 billion of proceeds from the sale of our deepwater Gulf of Mexico properties held by a qualified intermediary and available for use in a like-kind exchange under Section 1031 of the U.S. Internal Revenue Code. The Company has the option to use these funds for the acquisition of properties or receive the funds in cash after a short-term contractual period. As of the date of this filing, the Company expects to close on the acquisition of like-kind properties for $589 million, and as such, the balance is classified as long-term restricted cash on Apache’s consolidated balance sheet as of June 30, 2014. The remaining proceeds of $778 million are classified as short-term restricted cash as of June 30, 2014. Should the Company elect to use additional funds for a like-kind exchange, the balance will be reclassified to long-term restricted cash until the funds are expended.

Liquidity

The following table presents a summary of our key financial indicators at the dates presented:

	June 30,			December 31,
	2014			2013
	(In millions of dollars, except as indicated)
Cash and cash equivalents	$	524		$	1,906
Short-term restricted cash		778			—
Total debt		9,675			9,725
Equity		34,892			35,393
Available committed borrowing capacity		3,300			3,300
Percent of total debt-to-capitalization		22	%		22	%

Cash and cash equivalents The Company had $524 million in cash and cash equivalents as of June 30, 2014, compared to $1.9 billion at December 31, 2013. Approximately $512 million of the cash was held by foreign subsidiaries. The cash held by foreign subsidiaries may be subject to additional U.S. income taxes if repatriated. Almost all of the cash is denominated in U.S. dollars and, at times, is invested in highly liquid investment grade securities with maturities of three months or less at the time of purchase.

39

Short-term restricted cash The Company has approximately $778 million classified as short-term restricted cash as of June 30, 2014. The Company has the option to use these funds for the acquisition of properties or receive the funds in cash after a short-term contractual period. Should the Company elect to use these funds for a like-kind exchange, the balance will be reclassified to long-term restricted cash until the funds are expended.

Debt As of June 30, 2014, outstanding debt, which consisted of notes, debentures, and uncommitted bank lines, totaled $9.7 billion. The Company had approximately $1 million of current debt outstanding borrowed on uncommitted credit facilities and overdraft lines as of June 30, 2014, compared with $53 million as of December 31, 2013.

Available committed borrowing capacity As of June 30, 2014, the Company had unsecured committed revolving syndicated bank credit facilities totaling $3.3 billion, of which $1.0 billion matures in August 2016 and $2.3 billion matures in June 2018 pursuant to a one-year extension approved in May 2014 under the terms of the $2.3 billion facilities. The facilities consist of a $1.7 billion facility and a $1.0 billion facility in the U.S., a $300 million facility in Australia, and a $300 million facility in Canada. As of June 30, 2014, available borrowing capacity under the Company’s credit facilities was $3.3 billion. The Company’s committed credit facilities are used to support Apache’s commercial paper program.

The Company has available a $3.0 billion commercial paper program, which generally enables Apache to borrow funds for up to 270 days at competitive interest rates. The commercial paper program is fully supported by available borrowing capacity under the Company’s committed credit facilities. At June 30, 2014 and December 31, 2013, the Company had no outstanding commercial paper.

The Company was in compliance with the terms of all credit facilities as of June 30, 2014.

Percent of total debt-to-capitalization The Company’s debt-to-capitalization ratio at June 30, 2014 and December 31, 2013 was 22 percent.

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ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Risk

The Company’s revenues, earnings, cash flow, capital investments and, ultimately, future rate of growth are highly dependent on the prices we receive for our crude oil, natural gas and NGLs, which have historically been very volatile because of unpredictable events such as economic growth or retraction, weather, and political climate. Our average crude oil realizations have increased to $103.53 per barrel in the second quarter of 2014 from $98.47 per barrel in the comparable period of 2013. Our average natural gas price realizations have also risen, increasing 5 percent to $4.18 per Mcf in the second quarter of 2014 from $3.97 per Mcf in the comparable period of 2013.

We periodically enter into derivative positions on a portion of our projected oil and natural gas production through a variety of financial and physical arrangements intended to manage fluctuations in cash flows resulting from changes in commodity prices. For the second quarter and first six months of 2014, approximately 11 percent and 8 percent, respectively, of our natural gas production and approximately 40 percent of our crude oil production in each period was subject to financial derivatives. Apache does not hold or issue derivative instruments for trading purposes.

On June 30, 2014, the Company had open natural gas derivatives in a liability position with a fair value of $1 million. A 10 percent increase in natural gas prices would increase the liability by approximately $14 million, while a 10 percent decrease in prices would move the derivatives to an asset position of $13 million. The Company also had open oil derivatives in a liability position with a fair value of $271 million. A 10 percent movement in oil prices would move the fair value by approximately $250 million. These fair value changes assume volatility based on prevailing market parameters at June 30, 2014. See Note 3—Derivative Instruments and Hedging Activities of the Notes to Consolidated Financial Statements in Item 1 of this Form 10-Q for notional volumes and terms associated with the Company’s derivative contracts.

Interest Rate Risk

The Company considers its interest rate risk exposure to be minimal as a result of fixing interest rates on greater than 99 percent of the Company’s debt. At June 30, 2014, total debt included approximately $1 million of floating-rate debt. As a result, Apache’s annual interest costs will fluctuate based on short-term interest rates on less than 1 percent of our total debt outstanding at June 30, 2014. The impact on cash flow of a 10 percent change in the floating interest rate based on debt balances at June 30, 2014, would be approximately $573 per quarter.

Foreign Currency Risk

The Company’s cash flow stream relating to certain international operations is based on the U.S. dollar equivalent of cash flows measured in foreign currencies. In Australia, oil production is sold under U.S. dollar contracts, and gas production is sold under a combination of Australian dollar and U.S. dollar fixed-price contracts. Approximately 40 percent of the costs incurred for Australian operations are paid in U.S. dollars. In Canada, oil and gas prices and costs, such as equipment rentals and services, are generally denominated in Canadian dollars but heavily influenced by U.S. markets. Our North Sea production is sold under U.S. dollar contracts, and the majority of costs incurred are paid in British pounds. In Egypt, all oil and gas production is sold under U.S. dollar contracts, and the majority of the costs incurred are denominated in U.S. dollars. Revenue and disbursement transactions denominated in Australian dollars, Canadian dollars, and British pounds are converted to U.S. dollar equivalents based on average exchange rates during the period.

Foreign currency gains and losses also arise when monetary assets and monetary liabilities denominated in foreign currencies are translated at the end of each month. Currency gains and losses are included as either a component of “Other” under “Revenues and Other” or, as is the case when we re-measure our foreign tax liabilities, as a component of the Company’s provision for income tax expense on the statement of consolidated operations. A foreign currency net gain or loss of $136 million would result from a 10 percent weakening or strengthening, respectively, in the Australian dollar, Canadian dollar, and British pound as of June 30, 2014.

41

Forward-Looking Statements and Risk

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected revenues, projected costs, and plans and objectives of management for future operations, are forward-looking statements. Such forward-looking statements are based on our examination of historical operating trends, the information that was used to prepare our estimate of proved reserves as of December 31, 2013, and other data in our possession or available from third parties. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “could,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “plan,” “believe,” or “continue” or similar terminology. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, our assumptions about:

• the market prices of oil, natural gas, NGLs, and other products or services;

• our commodity hedging arrangements;

• the integration of acquisitions;

• the supply and demand for oil, natural gas, NGLs, and other products or services;

• production and reserve levels;

• drilling risks;

• economic and competitive conditions;

• the availability of capital resources;

• capital expenditure and other contractual obligations;

• currency exchange rates;

• weather conditions;

• inflation rates;

• the availability of goods and services;

• legislative or regulatory changes;

• the impact on our operations from changes in the Egyptian government;

• terrorism or cyber attacks;

• occurrence of property acquisitions or divestitures;

• the securities or capital markets and related risks such as general credit, liquidity, market, and interest-rate risks; and

• other factors disclosed under Items 1 and 2—Business and Properties—Estimated Proved Reserves and Future Net Cash Flows, Item 1A—Risk Factors in our most recently filed Form 10-K, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 7A—Quantitative and Qualitative Disclosures About Market Risk and elsewhere in our Current Report on Form 8-K dated July 17, 2014, other risks and uncertainties in our second-quarter 2014 earnings release, other factors disclosed under Part II, Item 1A—Risk Factors of this Quarterly Report on Form 10-Q, and other filings that we make with the Securities and Exchange Commission.

All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements. We assume no duty to update or revise our forward-looking statements based on changes in internal estimates or expectations or otherwise.

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ITEM 4 – CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

G. Steven Farris, the Company’s Chairman of the Board, Chief Executive Officer, and President, in his capacity as principal executive officer, and Alfonso Leon, the Company’s Executive Vice President and Chief Financial Officer, in his capacity as principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2014, the end of the period covered by this report. Based on that evaluation and as of the date of that evaluation, these officers concluded that the Company’s disclosure controls and procedures were effective, providing effective means to ensure that information we are required to disclose under applicable laws and regulations is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

We periodically review the design and effectiveness of our disclosure controls, including compliance with various laws and regulations that apply to our operations both inside and outside the United States. We make modifications to improve the design and effectiveness of our disclosure controls, and may take other corrective action, if our reviews identify deficiencies or weaknesses in our controls.

Changes in Internal Control over Financial Reporting

There was no change in our internal controls over financial reporting during the period covered by this Quarterly Report on Form 10-Q that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Please refer to both Part I, Item 3 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (filed with the SEC on February 28, 2014) and Note 8—Commitments and Contingencies of the notes to the consolidated financial statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q, for a description of material legal proceedings.

ITEM 1A. RISK FACTORS

Please refer to Part I, Item 1A—Risk Factors of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and as noted above in Part I, Item 3—Quantitative and Qualitative Disclosures About Market Risk of this Quarterly Report on Form 10-Q.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents information on shares of common stock repurchased by the Company during the quarter ended June 30, 2014:

Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(1)
April 1 to April 30, 2014		4,431,031	$	84.46		4,431,031		8,427,967
May 1 to May 31, 2014		2,876,000		88.04		2,876,000		15,551,967
June 1 to June 30, 2014		1,629,305		93.70		1,629,305		13,922,662
Total		8,936,336	$	87.30

⁽¹⁾  On May 9, 2013, the Company announced that its Board of Directors authorized the repurchase of up to 30 million shares of the Company’s common stock. Additionally, on May 15, 2014, the Company announced that the Board of Directors had authorized the repurchase of an additional 10 million shares, supplementing the May 2013 authorization. The Company may buy shares from time to time on the open market, in privately negotiated transactions, or a combination of both. The timing and amounts of any repurchases will be at the discretion of Apache’s management and will depend on a variety of factors, including the stock price, corporate and regulatory requirements, and other market and economic conditions. Repurchased shares will be available for general corporate purposes.

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

*10.1	–	Amendment to Apache Corporation 401(k) Savings Plan, effective May 16, 2014.
*10.2	–	Non-Qualified Retirement/Savings Plan of Apache Corporation, as amended and restated, dated July 16, 2014, effective January 1, 2015.
*10.3	–	Apache Corporation Non-Qualified Restorative Retirement Savings Plan, as amended and restated, dated July 16, 2014, effective January 1, 2015.
*10.4	–	Apache Corporation Non-Employee Directors’ Compensation Plan, as amended and restated July 16, 2014, effective July 1, 2014.
*10.5	–	Apache Corporation Outside Directors’ Retirement Plan, as amended and restated July 16, 2014, effective June 30, 2014.
*10.6	–	Apache Corporation Non-Employee Directors’ Restricted Stock Units Program, as amended and restated July 16, 2014.
*10.7	–	Apache Corporation Outside Directors’ Deferral Program, effective July 16, 2014.
*31.1	–	Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act) by Principal Executive Officer.
*31.2	–	Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act) by Principal Financial Officer.
*32.1	–	Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Executive Officer and Principal Financial Officer.
*101.INS	–	XBRL Instance Document.
*101.SCH	–	XBRL Taxonomy Schema Document.
*101.CAL	–	XBRL Calculation Linkbase Document.
*101.LAB	–	XBRL Label Linkbase Document.
*101.PRE	–	XBRL Presentation Linkbase Document.
*101.DEF	–	XBRL Definition Linkbase Document.

* Filed herewith

44

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 hereunto duly authorized.

		APACHE CORPORATION
Dated:	August 8, 2014	/s/ ALFONSO LEON
		Alfonso Leon
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)
Dated:	August 8, 2014	/s/ REBECCA A. HOYT
		Rebecca A. Hoyt
		Senior Vice President, Chief Accounting Officer and Controller
		(Principal Accounting Officer)

45

EX-10.1

Exhibit 10.1

Apache Corporation 401(k) Savings Plan

Amendment, April 2014

Apache Corporation (“Apache”) sponsors the Apache Corporation 401(k) Savings Plan (the “Plan”). Pursuant to section 10.4 of the Plan, Apache hereby exercises its right to amend the Plan by replacing Appendices A through E with the Appendices A through D attached to this document, effective as of May 16, 2014.

EXECUTED this 20th day of May 2014.

APACHE CORPORATION
By:	/s/ Margery M. Harris
	Margery Harris
	Executive Vice President, Human Resources

APPENDIX A

Participating Companies

The following Affiliated Entities were actively participating in the Plan as of the following dates:

Business	Participation Began As Of	Participation Ended As Of
Apache International, Inc.	September 22, 1987	N/A
Apache Energy Resources Corporation (known as Hadson Energy Resources Corporation before January 1, 1995)	January 1, 1994	December 31, 1995
Apache Canada Ltd.	May 17, 1995	April 30, 2014
Apache Deepwater LLC	November 10, 2010	N/A
Apache International Employment, Inc.	May 16, 2014	N/A

— END OF APPENDIX A —

APPENDIX B

Corporate Transactions

Over the years, Apache and its Affiliated Entities have engaged in certain acquisitions and disposition transactions. This Appendix contains provisions that apply to employees (including former employees) affected by certain transactions.

Sales

For an Employee who transferred to Natural Gas Clearinghouse (“NGC”) pursuant to the terms of the Employee Benefits Agreement effective April 1, 1990 between Apache and NGC, a Period of Service shall be calculated by treating as employment with Apache any period(s) of employment after April 1, 1990 with NGC or any business that is then treated as a single employer with NGC pursuant to Code §414(b), §414(c), §414(m), or §414(o).

Employees terminated in connection with the summer 1995 sale of certain properties to Citation 1994 Investment Limited Partnership are fully vested in their Plan Accounts as of September 1, 1995.

An Employee who transferred to Producers Energy Marketing LLC (“ProEnergy”) in the first half of 1996 is fully vested in his Plan Accounts as of the date of transfer. If such an individual becomes an Employee again, all new contributions to his Plan Accounts shall vest according to the regular rules.

The following three paragraphs apply to any Employee who transfers to Fieldwood Energy, LLC (“Fieldwood”) or to any business while it is treated as a single employer with Fieldwood pursuant to Code §414(b), §414(c), §414(m), or §414(o) (collectively, the “Fieldwood Group”), and whose transfer occurs pursuant to the closing of the transaction described in the “Purchase and Sale Agreement by and among Apache Corporation, Apache Shelf, Inc., and Apache Deepwater LLC, and Fieldwood Energy, LLC and GOM Shelf LLC” (the “PSA”) that was entered into on July 18, 2013 (a “Transferred Employee”).

Vesting. Notwithstanding subsection 5.3(a), for vesting purposes, a Period of Service for a Transferred Employee shall include his service with the Fieldwood Group after the closing of the transaction until his termination of employment with the Fieldwood Group. Notwithstanding subsection 5.4(b), the earliest date a forfeiture may occur is the date of the Employee’s termination of employment with the Fieldwood Group.

Distributions. A Transferred Employee may take a distribution of the entire distributable amount at any time after his Termination from Service Date from the Company. The distributable amount, as determined under section 6.3, only includes vested benefits. If the Transferred Employee takes a distribution and his vested percentage later increases, he may take additional distribution(s), each of which shall be equal to the entire distributable amount at the time of the distribution. Notwithstanding subsection 6.6(c), the Plan will not cash out a small Account until the Transferred Employee becomes fully vested or, if earlier, he terminates employment with the Fieldwood Group.

Loans. A Transferred Employee may roll over any outstanding loan from the Plan to a qualified plan sponsored by any member of the Fieldwood Group that agrees to accept such a rollover, as long as the rollover is initiated by the last day of the calendar quarter following the calendar quarter in which occurs the Transferred Employee’s Effective Date (as defined in Exhibit F of the PSA). Any loan not rolled over by such date shall be subject to the usual default rules in section 7.6. Notwithstanding Article VI, a Transferred Employee may roll over a loan under this paragraph without taking any other distribution from the Plan.

Acquisitions

A Period of Service for vesting purposes for a New Employee (listed below) shall be determined by treating all periods of employment with the Former Employer Controlled Group as periods of employment with Apache. The “Former Employer Controlled Group” means the Former Employer (listed below), its predecessor company/ies, and any business while such business was treated as a single employer with the Former Employer or predecessor company pursuant to Code §414(b), §414(c), §414(m), or §414(o).

The following individuals are “New Employees” and the following companies are “Former Employers”:

Former Employer	New Employees
Amoco Production Company (“Amoco”)	All individuals who became an Employee of the Company pursuant to the provisions of the Stock Purchase Agreement effective June 30, 1991, between Amoco Production Company, Apache, and others.
Hadson Energy Resources Corporation (“HERC”) and Hadson Energy Limited (“HEL”)	All individuals employed by HERC or HEL on November 12, 1993.
Crystal Oil Company (“Crystal”)	All individuals hired from Crystal or related companies within a week of the closing date on an asset purchase that was originally scheduled to close on December 31, 1994.
Texaco Exploration & Production, Inc. (“TEPI”)	All individuals hired from TEPI or related companies in late February and early March 1995 in connection with an acquisition of assets from TEPI at that time.
DEKALB Energy Company (“DEKALB”)	All individuals who became an employee of Apache on or after May 17, 1995 — their Period of Service shall include any periods of employment with DEKALB before May 17, 1995
The Phoenix Resource Companies, Inc. (“Phoenix”)	All individuals hired by Apache in 1996 who were Phoenix employees on May 20, 1996.
Crescendo Resources, L.P. (“Crescendo”)	All individuals hired from April 30, 2000 through June 1, 2000 from Crescendo and related companies in connection with an April 30, 2000 asset acquisition from Crescendo.
Collins & Ware (“C&W”) and Longhorn Disposal, Inc. (“Longhorn”)	All individuals hired from C&W and Longhorn and related companies in connection with a May 23, 2000 asset acquisition from C&W and Longhorn.

Occidental Petroleum Corporation (“Oxy”)	All individuals hired from Oxy and related companies in connection with an August 2000 asset acquisition from an Oxy subsidiary.
Private company (“Private”)	All individuals hired in January 2003 from Private and related companies in connection with an asset acquisition of certain property in Louisiana effective as of December 1, 2002.
Devon Energy Corporation (“Devon”)	All individuals hired on June 10, 2010 from Devon and related companies in connection with Apache’s acquisition of certain property on such date.
Mariner Energy, Inc. (“Mariner”)	All individuals who became Covered Employees on the date of the merger between Apache and Mariner are New Employees. The amount of a New Employee’s pre-Apache service with Mariner shall be equal to his service credited under the Mariner Energy, Inc. Employee Capital Accumulation Plan (or the service that would have been credited under such plan if the New Employee had been a participant in it). A New Employee shall be eligible to make Participant Contributions from Compensation paid after the date of the merger. See Appendix C for additional provisions related to the merger of the Mariner Energy Inc. Employee Capital Accumulation Plan into this Plan.
BP, p.l.c. (“BP”)	The New Employees are those who were hired by Apache in connection with property acquisitions from BP during 2010.
Phoenix Exploration Company LP (“Phoenix”)	Individuals hired by Apache on September 1, 2011 from Phoenix. A New Employee shall be eligible to make Participant Contributions from Compensation paid after September 1, 2011.

—END OF APPENDIX B—

APPENDIX C

Mariner Energy, Inc.

Introduction

Through a merger effective as of November 10, 2010 (the “Closing Date”), Apache acquired Mariner Energy, Inc., (“Mariner”) which sponsored the Mariner Energy, Inc. Employee Capital Accumulation Plan (“Mariner’s 401(k) Plan”). Mariner’s 401(k) Plan is merged into this Plan as of November 16, 2010. This Appendix describes the special rules that apply to amounts transferred from Mariner’s 401(k) Plan to this Plan, and also describes how the match is calculated for 2010 in this Plan.

Capitalized terms in this Appendix have the same meanings as those given to them in the Plan. The regular terms of the Plan shall apply, except as provided below.

Match

The Company Matching Contribution for 2010 shall be determined pursuant to section 3.2 of the Plan, based on the Participant Contributions and Compensation paid to a Covered Employee after the date of the merger, except as provided in the next sentence. If a Covered Employee’s Participant Contributions to this Plan and his contributions to Mariner’s 401(k) Plan that are subject to the limits of Code §402(g) are $16,500 or (because of catch-up contributions) more during 2010, his Company Matching Contribution for 2010 will be the greater of (a) the aggregate matching contributions he would have received in both this Plan and Mariner’s 401(k) Plan had equal salary deferrals of $16,500 in the aggregate been withheld from each regular paycheck during 2010, minus the match allocated to him for 2010 in Mariner’s 401(k) Plan, or (b) the amount described in the preceding sentence.

The Company Matching Contribution shall vest pursuant to the usual rules in Article V. See Appendix B for additional (pre-Apache) service that is taken into account for vesting purposes.

Incoming Assets

A participant in Mariner’s 401(k) Plan may have as many as seven different types of accounts in that plan. The following distribution rules apply to those incoming accounts (the “Old Mariner Accounts”).

1. Accounts.

(a) Employee Deferrals. Any Old Mariner Account that is subject to Code §401(k) shall be transferred to the Participant Contributions Account. No special distribution rules apply to such amounts.

(b) Regular Match. Matching contributions to Mariner’s 401(k) Plan and the earnings thereon shall be transferred to a separate subaccount of the Company Contributions Account in this Plan. These amounts vest 33% when his Period of Service is one year, 66% when his Period of Service is two years, and 100% when his Period of Service is three years or more. These amounts are subject to the distribution rules that apply to Company Contributions Accounts, except as noted below in section 2 below.

(c) Discretionary Company Contribution. Discretionary employer contributions to Mariner’s 401(k) Plan and the earnings thereon that were subject to a 6-year vesting schedule shall be transferred to a separate subaccount of the Company Contribution Account in this Plan that is subject to the regular 5-year vesting schedule described in Article V. The additional vesting shall apply to this subaccount on the date of the merger of the plans, even to those subaccounts of individuals who are no longer employees. This subaccount is subject to the distribution rules that apply to Company Contributions Accounts, except as noted in section 2 below.

(d) Pre-Tax Rollover Account. Pre-tax rollovers contributions to Mariner’s 401(k) Plan and the earnings thereon shall be transferred to the Rollover Account. No special distribution rules apply to such amounts.

(e) After-Tax Rollover Account. After-tax rollovers contributions to Mariner’s 401(k) Plan and the earnings thereon shall be transferred to a separate, fully vested, subaccount of the Rollover Account in this Plan. No special distribution rules apply to this subaccount.

(f) After-Tax Account. A participant’s after-tax contributions to Mariner’s 401(k) Plan and the earnings thereon shall be transferred to a separate, fully vested, subaccount of the Participant Contributions Account in this Plan. The same distribution rules that apply to the Rollover Account will apply to this subaccount.

(g) FERI Accounts. Both matching and discretionary employer contributions to a plan sponsored by Forest Oil and transferred to Mariner’s 401(k) Plan and the earnings thereon shall be transferred to separate, fully vested, subaccounts of the Company Contributions Account in this Plan. These subaccounts are subject to the distribution rules that apply to Company Contributions Accounts, except as noted in section 2 below.

2. Special Distribution Rules.

(a) Installments. Except as provided in the next sentence, in subsection 6.4(b) of the Plan (relating to in-service withdrawals, minimum required withdrawals, and installments to beneficiaries), and in subsection 13.9(f) of the Plan (relating to QDROs), all distributions shall be in the form of a lump sum of the Account Owner’s entire vested account balance in the Plan. Any Account Owner who elected installment payments from the Old Mariner Accounts before the merger of Mariner’s 401(k) Plan and this Plan shall be paid the installments in the amount and on the schedule he had elected.

(b) Hardship Withdrawals. A Participant may take an in-service hardship withdrawal that meets the requirements of paragraphs 6.5(c)(i) and 6.5(c)(ii) of the Plan from the subaccounts of the Company Contribution Account that were established in subsections 1(b), 1(c), and 1(g) of this Appendix, to the extent such subaccounts are vested.

(c) Two-Year Rule. Once the funds have actually been in either the Plan or Mariner’s 401(k) Plan for 24 months, a Participant may take an in-service withdrawal from the vested portion of the subaccounts of the Company Contribution Account that were established in subsections 1(b), 1(c), and 1(g) of this Appendix.

(d) Five-Year Rule. Once a Participant has been a Participant in this Plan and Mariner’s 401(k) Plan for 60 months, the Participant may take an in-service withdrawal from the vested portion of the subaccounts of the Company Contribution Account that were established in subsections 1(b), 1(c), and 1(g) of this Appendix.

3. Investments.

The Plan may accept an in-kind transfer of assets from Mariner’s 401(k) Plan, as determined by the Committee.

4. Loans.

Loans in Mariner’s 401(k) Plan will be transferred to the Plan. The repayment schedule of the loans may be modified to accommodate the Borrower’s new pay schedule. Participants cannot borrow from the Plan again until all prior loans have been repaid.

5. Enrollment.

Individuals who were employed by Mariner or related companies and become Covered Employees on the Closing Date will be deemed to have elected to make Participant Contributions to this Plan at the same rate that they had been making similar contributions to Mariner’s 401(k) Plan immediately before the plans’ merger. If any such individual was not contributing to Mariner’s 401(k) Plan when the plan merger occurred, he will not be automatically enrolled in the Plan, even if he was hired by Mariner as recently as one day before the plans’ merger.

6. Vesting.

If (a) the Participant was an employee of Mariner on the Closing Date, (b) his severance from employment occurs on or before June 30, 2011, (c) Apache decided to terminate the Participant or the Participant decided not to accept Apache’s offer of employment, and (d) the Participant’s termination is not for cause, then the Participant’s Old Mariner Accounts shall become fully vested upon his severance from employment.

— END OF APPENDIX C —

APPENDIX D

Apache International Employment Inc.

Introduction

Apache and its subsidiaries have certain employees who are routinely transferred to different sites around the world. As explained below, any Apache International Employment Inc. (“AIEI”) employee who is a US person (one who is a US citizen or a US resident, or who performs services for AIEI that generate US-source income) will generally be eligible to participate in this Plan while he remains a US person. AIEI employees who are not US persons generally participate in the Apache Corporation International Retirement Savings Plan.

Eligibility to Participate

Notwithstanding section 1.15, the term “Covered Employee” for any Employee of AIEI shall only include an AIEI Employee after May 15, 2014 who is a US citizen or US resident, or is a nonresident alien performing services for AIEI whose remuneration from AIEI is treated as income from sources within the United States pursuant to Code §872, with the following exceptions.

(a) Any individual directly employed by an entity other than AIEI shall not be a Covered Employee, even if such individual is considered a common-law employee of AIEI or is treated as an employee of AIEI pursuant to Code §414(n).

(b) An Employee included in a unit of Employees covered by a collective bargaining agreement shall not be a Covered Employee unless the collective bargaining agreement specifically provides for such Employee’s participation in the Plan.

(c) An Employee whose job is classified as “temporary” shall be a Covered Employee only after he has worked for one or more Companies for six consecutive months.

(d) An Employee shall not be a Covered Employee while he is classified as an “intern,” a “consultant,” or an “independent contractor.” An Employee may be classified as an “intern” only if he is currently enrolled (or is expected to be enrolled within the next 12 months) in a high school, college, or university. An Employee may be classified as an intern even if he does not receive academic course credit from his school.

(e) An individual who is employed pursuant to a written agreement with an agency or other third party for a specific job assignment or project shall not be a Covered Employee.

When Participant Contributions Begin

Participant Contributions can be made from any paycheck of a Covered Employee after this amendment is signed.

Calculation of Match

The Company Matching Contribution for a Covered Employee shall be determined pursuant to section 3.2 of the Plan, based on his Participant Contributions for the Plan Year and his “Includable Compensation” for the Plan Year. “Includable Compensation” includes Compensation paid only while the Participant is a Covered Employee, and shall include a Participant’s entire final paycheck that contains any funds attributable to services performed as a Covered Employee.

When Benefits Cease to Be Earned

When an Employee of AIEI ceases to be a Covered Employee, Participant Contributions will be withheld (pursuant to his then-existing deferral election) from Compensation from his entire final paycheck that contains funds attributable to services performed as a Covered Employee.

— END OF APPENDIX D —

EX-10.2

Exhibit 10.2

NON-QUALIFIED RETIREMENT/SAVINGS PLAN

OF

APACHE CORPORATION

Amended and restated as of January 1, 2015, except as otherwise provided herein

Table of Contents

ARTICLE I DEFINITIONS		1
1.01	Account	1
1.02	Affiliated Entity	1
1.03	Apache	1
1.04	Beneficiary	1
1.05	Cash-Incentive Bonus	1
1.06	Change of Control	1
1.07	Code	1
1.08	Committee	1
1.09	Company	1
1.10	Company Deferrals	2
1.11	Compensation	2
1.12	Employee	3
1.13	Enrollment Agreement	3
1.14	ERISA	3
1.15	Participant	3
1.16	Participant Deferrals	3
1.17	Payment Processing Date	3
1.18	Plan	3
1.19	Plan Year	3
1.20	Restorative Plan	3
1.21	Retirement Plan	3
1.22	Savings Plan	3
1.23	Separation from Service and Separate from Service	3
1.24	Spouse	4
1.25	Trust	4
1.26	Trust Agreement	4
1.27	Trustee	4
ARTICLE II ELIGIBILITY AND PARTICIPATION		4
2.01	Eligibility and Participation	4
2.02	Enrollment	5
2.03	Failure of Eligibility	5
ARTICLE III CONTRIBUTION DEFERRALS		5
3.01	Participant Deferrals	5
3.02	Company Deferrals	6
ARTICLE IV CREDITING OF ACCOUNTS		8
4.01	Accounts	8
4.02	Investments	8
ARTICLE V DISTRIBUTIONS		8
5.01	Vesting and Forfeitures	8
5.02	Rehires	9
5.03	Distribution Overview	10

5.04	Distributions after Separation from Service and In-Service Withdrawals	10
5.05	Payments after a Participant Dies	13
5.06	Change of Control	13
5.07	Hardship Withdrawals	14
5.08	Divorce	15
5.09	Administrative Delays in Payments	16
5.10	Noncompliance with Code §409A	16
5.11	Cash Payment and Withholding	16
ARTICLE VI ADMINISTRATION		16
6.01	The Committee — Plan Administrator	16
6.02	Committee Duties	17
6.03	Organization of Committee	17
6.04	Indemnification	17
6.05	Agent for Process	17
6.06	Determination of Committee Final	17
6.07	No Bonding	17
ARTICLE VII TRUST		17
7.01	Trust Agreement	17
7.02	Expenses of Trust	18
ARTICLE VIII AMENDMENT AND TERMINATION		18
8.01	Termination of Plan	18
8.02	Amendment	18
ARTICLE IX MISCELLANEOUS		18
9.01	Funding of Benefits — No Fiduciary Relationship	18
9.02	Right to Terminate Employment	18
9.03	Inalienability of Benefits	18
9.04	Claims Procedure	19
9.05	Disposition of Unclaimed Distributions	20
9.06	Distributions due Infants or Incompetents	20
9.07	Use and Form of Words	20
9.08	Headings	20
9.09	Governing Law	21

NON-QUALIFIED RETIREMENT/SAVINGS PLAN

OF

APACHE CORPORATION

Apache established this Plan effective as of November 16, 1989. Apache is now restating the Plan in its entirety effective as of January 1, 2015, except as otherwise stated herein.

Apache intends for this Plan to provide a select group of management or highly compensated employees of the Company with deferred retirement benefits, in addition to the retirement benefits provided under the Retirement Plan and the Savings Plan, in consideration of the valuable services provided by such employees to the Company and to induce such employees to remain in the employ of the Company.

Apache intends that the Plan not be treated as a “funded” plan for purposes of either the Code or ERISA Apache also intends for this Plan to comply with the requirements of Code §409A. The Plan shall be interpreted in light of those intentions.

ARTICLE I

DEFINITIONS

Defined terms used in this Plan have the meanings set forth below or the same meanings as in the Retirement Plan or the Savings Plan, as the case may be:

1.01 Account

“Account” means the account maintained for each Participant to which is credited all Participant Deferrals made by a Participant, all Company Deferrals on behalf of a Participant, and all adjustments thereto. Each Account is divided into a variety of subaccounts, as detailed in Article V.

1.02 Affiliated Entity

“Affiliated Entity” means any legal entity that is treated as a single employer with Apache pursuant to Code §414(b), §414(c), §414(m), or §414(o).

1.03 Apache

“Apache” means Apache Corporation or any successor thereto.

1.04 Beneficiary

“Beneficiary” means a Participant’s beneficiary, as determined in section 5.05.

1.05 Cash-Incentive Bonus

“Cash-Incentive Bonus” means the regular annual bonus (commonly referred to as incentive compensation), to the extent that it is payable in cash, and also includes any other bonus designated by the Committee to the extent that it is payable in cash.

1.06 Change of Control

“Change of Control” means an event described in Code §409A(a)(2)(A)(v) that pertains to Apache.

1.07 Code

“Code” means the Internal Revenue Code of 1986, as amended.

1.08 Committee

“Committee” means the administrative committee provided for in section 6.01.

1.09 Company

“Company” means Apache and any Affiliated Entity that, with approval of the Board of Directors of Apache, has adopted the Plan.

Page 1 of 21

1.10 Company Deferrals

“Company Deferrals” means the allocations to a Participant’s Account made pursuant to section 3.02.

1.11 Compensation

“Compensation” generally means regular compensation paid by the Company.

(a) Inclusions. Specifically, Compensation includes:

(i) regular salary or wages,

(ii) overtime pay, and

(iii) the Cash-Incentive Bonus.

(b) Exclusions. Compensation excludes:

(i) commissions,

(ii) severance pay,

(iii) moving expenses,

(iv) any gross-up of moving expenses to account for increased income taxes,

(v) foreign service premiums paid as an inducement to work outside of the United States,

(vi) Company contributions under the Retirement Plan

(vii) Company contributions under the Savings Plan,

(viii) other contingent compensation,

(ix) contributions to any other fringe benefit plan (including, but not limited to, overriding royalty payments or any other exploration-related payments),

(x) any amounts relating to the granting of a stock option by the Company or an Affiliated Entity, the exercise of such a stock option, or the sale or deemed sale of any shares thereby acquired,

(xi) any bonus other than a Cash-Incentive Bonus,

(xii) payments from any benefit plan, such as any stock appreciation rights or payments from a Share Appreciation Plan, any payment from the Deferred Delivery Plan or the Executive Restricted Stock Plan, and payments pursuant to grants made under the Omnibus Equity Compensation Plan of 2007, the Omnibus Equity Compensation Plan of 2011, or similar plans, and

(xiii) any benefit accrued under, or any payment from, any nonqualified plan of deferred compensation.

(c) Timing Rules.

(i) Participant Deferrals. For purposes of calculating Participant Deferrals, Compensation includes only those amounts paid after the Employee has made the applicable payout election under section 5.04 and after the deadline for making the applicable Enrollment Agreement under section 3.01. Compensation does not include any amounts paid after the Participant ceased to be eligible to participate in the Plan, except as provided in section 2.01(b). A Participant who begins participating in the middle of a Plan Year cannot make Participant Deferrals from the Cash-Incentive Bonus that is attributable to the Participant’s services during the Plan Year in which his participation begins. For example, a Participant hired in September 2014 cannot make Participant Deferrals from the incentive compensation paid to him in February 2015.

(ii) Company Deferrals. The Company Deferrals for a Participant, including one who begins participating in the middle of a Plan Year, are calculated by taking into account all Compensation paid to him during the entire Plan Year, including any Cash-Incentive Bonus paid during the Plan Year and any Compensation paid between the date he becomes eligible to participate in the Plan and the deadline for making his Enrollment Agreement(s) in section 3.01(c).

Page 2 of 21

1.12 Employee

“Employee” means any common-law employee of Apache or any Affiliated Entity. An Employee ceases to be an Employee on the date he Separates from Service.

1.13 Enrollment Agreement

“Enrollment Agreement” means an agreement made by an eligible employee whereby he elects the amounts to be withheld from his Compensation pursuant to section 3.01.

1.14 ERISA

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.15 Participant

“Participant” means (a) any Employee whom the Committee has selected as eligible to participate in the Plan under section 2.01(a), and (b) any former Employee who has earned benefits in the Plan that have not yet been forfeited or paid out.

1.16 Participant Deferrals

“Participant Deferrals” means the amounts of a Participant’s Compensation that he elects to defer and have allocated to his Account pursuant to section 3.01.

1.17 Payment Processing Date

“Payment Processing Date” means the date selected by the Committee on which payments from this Plan will be processed. Except in extraordinary circumstances, there will be at least one Payment Processing Date each calendar month.

1.18 Plan

“Plan” means the plan set forth in this document, as amended.

1.19 Plan Year

“Plan Year” means the calendar year.

1.20 Restorative Plan

“Restorative Plan” means the Apache Corporation Nonqualified Restorative Retirement Savings Plan, as amended.

1.21 Retirement Plan

“Retirement Plan” means the Apache Corporation Money Purchase Retirement Plan, as amended.

1.22 Savings Plan

“Savings Plan” means the Apache Corporation 401(k) Savings Plan, as amended.

1.23 Separation from Service and Separate from Service

“Separation from Service” has the same meaning as the term “separation from service” in Code §409A(a)(2)(A)(i), determined using the default rules in the regulations and other guidance of general applicability issued pursuant to Code §409A, except that a Separation from Service occurs only if both the Company and the Participant expect the Participant’s level of services to permanently drop by more than half. A Participant who has a Separation from Service “Separates from Service.”

Page 3 of 21

1.24 Spouse

“Spouse” means the individual with whom a Participant entered into marriage (a) as defined or recognized under the laws of the United States state in which the marriage was entered into, or (b) if the marriage was entered into outside of the 50 states, as defined in the jurisdiction in which the marriage was entered into as long as the marriage could have been entered into in at least one of the 50 states in the United States.

1.25 Trust

“Trust” means the trust or trusts, if any, created by the Company to provide funding for the distribution of benefits in accordance with the provisions of the Plan. The assets of any such Trust remain subject to the claims of the Company’s general creditors in the event of the Company’s insolvency.

1.26 Trust Agreement

“Trust Agreement” means the written instrument pursuant to which each separate Trust is created.

1.27 Trustee

“Trustee” means one or more banks, trust companies, or insurance companies designated by the Company to hold and invest the Trust fund and to pay benefits and expenses as authorized by the Committee in accordance with the terms and provisions of the Trust Agreement.

ARTICLE II

ELIGIBILITY AND PARTICIPATION

2.01 Eligibility and Participation

(a) General. The Committee shall from time to time in its sole discretion select those Employees who are eligible to participate in the Plan from those Employees who are among a select group of management or highly compensated employees. An Employee participating in the Restorative Plan may only become eligible to participate in this Plan on the first day of the Plan Year after his active participation in the Restorative Plan has ceased, with the clarifications noted in subsection (b).

(b) Coordination with Restorative Plan. An enrollment agreement applies only to one plan, either this Plan or the Restorative Plan. Once the deadline for making an enrollment agreement has passed, the enrollment agreement cannot be changed, and any participant deferrals shall be accrued in the plan to which the enrollment agreement applied.

(i) Transfer to Restorative Plan. If a Participant transfers from this Plan to the Restorative Plan at the end of a Plan Year and he had made an Enrollment Agreement for a Cash-Incentive Bonus that will be paid, if at all, after his participation in the Restorative Plan has begun, (A) the Enrollment Agreement will be followed and Participant Deferrals, if any, made pursuant to that Enrollment Agreement shall be made to this Plan (“trailing Participant Deferrals”), but (B) the match in section 3.02 shall be calculated by ignoring the trailing Participant Deferrals, although the match in the Restorative Plan may be calculated by treating the trailing Participant Deferrals as if they had been made to the Restorative Plan.

(ii) Transfer from Restorative Plan. If a Participant transfers from the Restorative Plan to this Plan at the end of a Plan Year and he had made an enrollment agreement for a cash-incentive bonus that will be paid, if at all, after his participation in this Plan has begun, (A) the enrollment agreement for the Restorative Plan will be followed, and any participant deferrals made pursuant to that enrollment agreement shall be made to the Restorative Plan (“trailing participant deferrals”), and (B) the match in this Plan in section 3.02 shall be calculated by treating such trailing participant deferrals as if they were Participant Deferrals made to this Plan.

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2.02 Enrollment

Employees who have been selected by the Committee to participate in the Plan shall complete the enrollment procedure specified by the Committee. The enrollment procedure may include written or electronic form(s) for the employee to designate his beneficiary or beneficiaries, provide instructions regarding the investment of his Account, make Participant Deferrals by entering into one or more Enrollment Agreements with the Company, select one or more payment options for the eventual distribution of his benefits, and provide such other information as the Committee may reasonably require.

2.03 Failure of Eligibility

The Committee has the authority to determine that a Participant is no longer eligible to participate in the Plan. No Company Deferrals will be accrued after the Participant ceases to be eligible to participate in the Plan. No Participant Deferrals will be accrued after the Participant ceases to be eligible to participate in the Plan, except for Participant Deferrals made pursuant to an Enrollment Agreement entered into before the Participant ceased to be eligible to participate. See section 2.01(b). The determination of the Committee with respect to the termination of participation in the Plan will be final and binding on all parties affected thereby. Any benefits accrued under the Plan at the time the Participant becomes ineligible to continue participation will be distributed in accordance with the provisions of Article V.

ARTICLE III

CONTRIBUTION DEFERRALS

3.01 Participant Deferrals

(a) General. A Participant may elect to defer a portion of his Compensation by submitting a completed Enrollment Agreement. Each Enrollment Agreement must specify the amount the Participant elects to defer. Participant Deferrals are deducted through payroll withholding from the Participant’s cash Compensation payable by the Company.

(b) Maximum and Minimum Deferrals. A Participant may elect to defer up to 75% of his Cash-Incentive Bonus and up to 50% of his other Compensation. The Committee may establish a minimum dollar amount or percentage of Compensation that a Participant may elect to defer.

(c) Deadlines for Enrollment Agreements.

(i) Enrollment Period. In order to make Participant Deferrals, a Participant must submit an Enrollment Agreement during the enrollment period established by the Committee. The enrollment period must precede the Plan Year in which the services giving rise to the Compensation are performed, except in the following situations.

(A) Performance-Based Compensation. If the Compensation is “performance-based compensation based on services performed over a period of at least 12 months” (within the meaning of Code §409A(a)(4)(B)(iii)), the enrollment period must end at least six months before the end of the performance period.

(B) New Participant. The enrollment period for a new Participant must end no later than 30 days after he became eligible to participate in the Plan; the new Participant’s initial Enrollment Agreement may only apply to Compensation for which he has not yet performed any services.

(ii) Duration. The Enrollment Agreement shall apply to Compensation, or to a specific form of Compensation, paid during one entire Plan Year unless it is earlier canceled or revised by the Committee pursuant to subsection (g), or cancelled pursuant to subsection (f) (relating to hardship withdrawals).

(d) Procedures for Making Elections. The Committee has complete discretion to establish procedures for the completion of Enrollment Agreements, including the acceptable forms and formats of the deferral election (for example, written or electronic, as a whole percentage of Compensation or specific dollar

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amount, and the manner in which the Enrollment Agreement coordinates with the Savings Plan). The Committee has complete discretion to establish the enrollment periods during which Participants may make Enrollment Agreements, within the bounds described in subsections (a) and (c). The Committee may establish different enrollment periods for different types of Compensation or different groups of Participants. The Committee may specify any default choices that will apply unless the Participant affirmatively elects otherwise. For example, the Committee could decide that the failure to complete a new Enrollment Agreement means that (i) the prior Plan Year’s Enrollment Agreement for that type of Compensation will be continued for another year, or (ii) no Participant Deferrals will be made, or (iii) the Participant will defer 8% of his Compensation in excess of the limit on compensation that can be taken into account for benefit-calculation purposes in the Savings Plan and the Retirement Plan pursuant to Code §401(a)(17).

(e) Default Election Procedure. Unless the Committee determines otherwise, the Committee will require each Enrollment Agreement to be made by June 30 of the prior Plan Year and shall require each Enrollment Agreement to be a spill-over election, whereby the initial deferrals pursuant to the Enrollment Agreement will be contributed to the Savings Plan, until the Participant’s elective deferrals (within the meaning of Code §402(g)(3)) to all plans have reached the applicable limit for elective deferrals under Code §402(g), and any additional deferrals under the Enrollment Agreement shall be Participant Deferrals in this Plan. For example, a Participant may elect to defer 27% from his base pay, if contributed to the Savings Plan, and 20% of his base pay if deferred to this Plan, and a deferral of 50% of his Cash-Incentive Bonus (regardless of which plan the benefit is directed towards).

(f) Cancellation or Modification of Enrollment Agreements Following a Hardship Withdrawal.

(i) Hardship Withdrawal from this Plan. If a Participant receives a hardship withdrawal from this Plan pursuant to section 5.07, all his outstanding Enrollment Agreements shall be cancelled. The Participant may subsequently enter into new Enrollment Agreements at the usual times specified in subsection (c).

(ii) Hardship Withdrawal from the Savings Plan. If the Participant receives a hardship withdrawal from the Savings Plan, all outstanding Enrollment Agreements that apply or might apply to Compensation paid in the six months after the hardship withdrawal shall be cancelled. The Participant may subsequently enter into new Enrollment Agreements at the usual times under subsection (c), but the new Enrollment Agreements cannot apply to any Compensation paid within the six-month period following the hardship withdrawal from the Savings Plan.

(g) Committee-Initiated Changes in Enrollment Agreement. If the amounts to be withheld from a Participant’s paycheck (including, without limitation, loan repayments, Participant Deferrals, taxes, contributions to the Savings Plan, and premium payments for various benefits) are greater than the paycheck, (i) the Committee shall establish the order in which the deductions are applied, with the result that Participant Deferrals may be reduced below what the Participant had elected in an Enrollment Agreement, and (ii) the Committee’s procedures shall, if practicable, also automatically increase the Participant Deferrals in subsequent pay period(s) covered by that Enrollment Agreement to make up for any missed Participant Deferrals.

3.02 Company Deferrals

The Company shall credit to a Participant’s Account a matching contribution for the Plan Year and a retirement-6 contribution for the Plan Year. Company Deferrals begin to share in the investment earnings (or losses) at the time specified in section 4.01. The Company may credit matching contributions to a Participant’s Account during the Plan Year on a contingent basis; if the Participant does not satisfy the requirements to receive a matching contribution for the Plan Year, or if the matching contribution credited to the Participant’s Account for the Plan Year is incorrect, the Participant will forfeit any excess matching contribution (adjusted to reflect investment earnings or losses thereon) credited to his Account.

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(a) Matching Contribution.

(i) Basic Match. The basic match for a Participant in this Plan each Plan Year shall equal the lesser of his Participant Deferrals for the Plan Year or 8% of the his Compensation for the Plan Year that is in excess of the limit on compensation that may be taken into account in the Savings Plan pursuant to Code §401(a)(17).

(ii) Possible Additional Match. The Participant’s match in this Plan for the Plan Year shall be increased if the Participant’s elective deferrals (within the meaning of Code §402(g)(3)) to all plans for the Plan Year have reached the applicable limit for elective deferrals under Code §402(g). The increase under this paragraph shall equal the sum of:

(A) The amount necessary for the sum of the Plan Year’s match in the Savings Plan and the match under paragraph (i) to equal the lesser of (I) 8% of the Participant’s Compensation for the Plan Year or (II) the sum of his Participant Deferrals for the Plan Year and his Participant Contributions to the Savings Plan for the Plan Year — in most cases, this additional match will only be earned by those age 50 or older and will equal the difference between his Participant Contributions to the Savings Plan and the match he earns in the Savings Plan for the Plan Year; and

(B) The amount of any forfeited match in the Savings Plan necessary to satisfy the ADP or ACP test, but only if the forfeiture occurred after the match in this Plan had been calculated.

(b) Retirement-6. In order to receive an allocation of the retirement-6 contribution for a Plan Year, a Participant must be an Employee eligible to participate in the Plan on the last business day of the Plan Year.

(i) Basic Retirement-6 Contribution. The retirement-6 contribution for the Plan Year is equal to 6% of the Participant’s Compensation for the Plan Year that is in excess of the limit on compensation that may be taken into account in the Retirement Plan pursuant to Code §401(a)(17).

(ii) Potential Additional Retirement-6 Contribution. The Participant’s retirement-6 contribution in this Plan for the Plan Year shall be increased only if the Participant’s elective deferrals (within the meaning of Code §402(g)(3)) to all plans have reached the applicable limit for elective deferrals under Code §402(g), as follows. If a Participant’s Company Mandatory Contribution in the Retirement Plan is reduced to comply with any requirement of federal law, then the Participant’s retirement-6 contribution for this Plan calculated under paragraph (i) will be increased by the amount of the reduction in the Company Mandatory Contribution in the Retirement Plan. For example, a Participant will receive an extra $1,900 retirement-6 contribution in this Plan for 2014 if he is age 50 or older on December 31, 2014, has Compensation over $260,000 in 2014, makes the maximum contribution permitted under Code §402(g) to the Savings Plan (usually the $17,500 regular contribution increased by the $5,500 catch-up contribution), receives a $20,800 match in the Savings Plan (8% of $260,000), and has his Company Mandatory Contribution in the Retirement Plan reduced from $15,600 (6% of $260,000) to $13,700 because of the limitations of Code §415(c).

(c) Additional Contribution. A Company may make an additional Company Deferral to any Participant’s Account at any time, provided that the Company advises the Committee in writing of the contribution. The Company shall specify the vesting and payout rules that apply to the additional Company Deferral.

(d) USERRA. The provisions of this Article shall be revised to the extent required by USERRA, which generally applies to returning military veterans. The Committee shall determine, in its sole discretion, how to coordinate the provisions of this Article and Article V with USERRA.

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ARTICLE IV

CREDITING OF ACCOUNTS

4.01 Accounts

(a) Establishment of Accounts. The Committee shall establish one Account for each Participant, which will be subdivided into various subaccounts. The Accounts and subaccounts are merely for recordkeeping purposes, and do not represent any actual property that has been set aside for Participants. Nothing contained in this Article may be construed to require the Company or the Committee to fund any Participant’s Account.

(b) Crediting of Contributions. Participant Deferrals are credited to a Participant’s Account as of the date that the Participant Deferral would have been paid to the Participant had there been no Enrollment Agreement. Company Deferrals are credited to a Participant’s Account as of the date that the Company Deferral was accrued by the Participant.

(c) Crediting of Earnings. Each Account is credited with investment earnings or losses calculated in accordance with section 4.02. Participant Deferrals and Company Deferrals start to be credited with investment earnings or losses as soon as administratively convenient after such amounts are credited to Accounts, except that the retirement-6 contribution under section 3.02(b) is not credited with investment earnings or losses until the corresponding Company Mandatory Contribution to the Retirement Plan is actually paid to the Retirement Plan (usually in late February).

4.02 Investments

(a) Investment Options. All amounts credited to a Participant’s Account are credited with investment earnings or losses as if the Participant’s Account was invested in one or more investments. The Committee shall designate the default investment as well as any alternatives, and may change the available alternatives or the default investment from time to time. One or more of the investment alternatives may consist, in whole or in part, of Apache common stock. At such times and under such procedures as the Committee may designate, a Participant may determine the portion of his Account that is to be deemed invested in each alternative. The Participant may make prospective changes for his investment selection as often as the Committee permits and subject to the procedures established by the Committee. A Participant may never make any retroactive changes to his investment selections.

(b) No Ownership Rights. A Participant has no ownership rights with respect to any investment of his Account. Nothing contained in this Article may be construed to give any Participant any power or control to make investment directions or otherwise influence in any manner the investment and reinvestment of assets contained within any investment alternative, such control being at all times retained in the full discretion of the Committee. As a consequence, for example, if a Participant has elected to invest a portion of his Account in Apache stock, the Participant has no voting rights with respect to that stock.

ARTICLE V

DISTRIBUTIONS

5.01 Vesting and Forfeitures

(a) Participant Deferrals. A Participant is fully vested in the portion of his Account that is attributable to his Participant Deferrals.

(b) Company Deferrals, General Rule. A Participant’s years of completed service in this Plan are identical to his “Period of Service” in the Savings Plan. Subject to subsection (e), a Participant will vest in the portion of his Plan Account that is attributable to Company Deferrals according to the following schedule, unless subsection (c) provides for faster vesting:

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Years of Completed Service	Vested Portion
Less than 1		0	%
1		20	%
2		40	%
3		60	%
4		80	%
5 or more		100	%

(c) Company Deferrals, Accelerated Vesting. Except to the extent provided otherwise by subsection (e), a Participant is fully vested in the portion of his Account attributable to Company Deferrals in the following circumstances.

(i) The Participant is fully vested if he attains age 65 while he is an Employee.

(ii) The Participant is fully vested if he becomes an Employee after attaining age 65.

(iii) The Participant is fully vested if, while he is an Employee, he incurs a disability that qualifies the Employee for long-term disability payments under Apache’s Long-Term Disability Plan.

(iv) The Participant is fully vested if he dies while he is an Employee.

(v) All Participants are fully vested if a change of control, as defined in the Income Continuance Plan, occurs.

(d) Forfeiture Timing. The portion of a Participant’s Account that is not vested is forfeited immediately upon his Separation from Service.

(e) Exception. Additional Company Deferrals made under section 3.02(c) shall be subject to the vesting rules decided upon at the time the additional Company Deferral is made, which may differ from the rules of subsections (b) and (c).

5.02 Rehires

(a) Distributions. If a Participant Separated from Service and subsequently becomes eligible to participate in the Plan again, the benefits from his earlier episode of participation will be paid out pursuant to the terms of the Plan on the date he first Separated from Service, including any payout elections then applicable, while the benefits from his later episode of participation will be paid out pursuant to the terms of the Plan, and any payout elections that had been made, with respect to the second episode of participation. The second episode of participation will not affect the timing of any benefit payments from the earlier episode of participation.

(b) Vesting. If a Participant becomes eligible to again make Participant Deferrals more than five years after Separating from Service, (i) the Plan will establish a new Account for the benefits he accrues during his second episode of participation; (ii) his years of completed service for his new Account will include only his service from his second episode; and (iii) his new service will not increase the vesting of any benefits from his first episode of participation. If a Participant becomes eligible to again make Participant Deferrals less than five years after Separating from Service (or if he never Separated from Service), the Participant’s years of completed service for his benefits from his second episode of participation will include his service from both episodes of employment.

(c) Restoration of Forfeiture. If a Participant begins to participate in the Plan again within five years after his Separation from Service, the exact amount of any forfeiture upon his earlier Separation from Service will be restored to his Account, and will be credited to a separate subaccount. The restoration will occur on the 31^st day after the Participant again begins participating in the Plan, but only if the Participant is still eligible to participate in the Plan on that date. The restored subaccount vests based on his service from both episodes of employment (and thus will almost always be partially vested immediately when the Participant again starts to participate). The vested portion of the restored subaccount will be paid to the Participant as the Participant elects in section 5.04 for the payment of his new Account attributable to Company Deferrals, unless section 5.05 or 5.06 require faster payment following the Participant’s death or a Change of Control or the Participant takes a hardship withdrawal under section 5.07.

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5.03 Distribution Overview

(a) General. In general, a single payment will occur, or a series of installment payments will commence, on the Payment Processing Date following the earliest of the following dates, or as soon thereafter as is administratively convenient:

(i) Six months after the Participant Separates from Service. See section 5.04.

(ii) For unmatched Participant Deferrals accrued through December 31, 2015, at the time(s) selected by the Participant. See section 5.04(c)(i).

(iii) The date the Participant dies. See section 5.05.

(iv) The date of a Change of Control. See section 5.06.

(b) Hardships. A Participant may take a withdrawal under section 5.07 if he has a financial hardship.

(c) Divorce. Some or all of a Participant’s benefits in this Plan may be allocated to, and distributed to, his former Spouse, pursuant to section 5.08.

5.04 Distributions after Separation from Service and In-Service Withdrawals

(a) General. A Participant who Separated from Service before January 1, 2015 will be paid according to the payout provisions in the Plan and any payout elections that had been made that were effective when he Separated from Service. This remainder of this section contains the rules for distributions following a Separation from Service that occurs on or after January 1, 2015.

(b) Distribution of Company Deferrals.

(i) Pre-2016 Accruals. The following payout rules in this paragraph (i) apply only to benefits accrued before January 1, 2016.

(A) Initial, One-Time Payout Election. Upon becoming a Participant, an Employee shall make a payout election to have his vested Account attributable to Company Deferrals paid out in a single payment or in two to ten annual installments. To be effective, the Participant’s payout election must be provided to the Plan within 30 days after the date the Participant became a Participant or by such earlier date established by the Committee. The single payment or the first installment payment will be paid on the first Payment Processing Date that occurs six months or more after the Participant’s Separation from Service. Subsequent installments will be paid each 12 months thereafter.

(B) Special 2007 Payout Election. The Committee extended to certain Participants the opportunity to make a new payout election in 2007 to have his vested Account attributable to Company Deferrals paid out in a single payment or in two to ten annual installments. The single payment or the first installment payment will be paid on the first Payment Processing Date that occurs six months or more after the Participant’s Separation from Service; subsequent installments will be paid each 12 months thereafter.

(ii) Post-2015 Accruals. The following payout rules in this paragraph (ii) apply only to benefits accrued on or after January 1, 2016.

(A) Yearly Election. An Employee shall make a payout election for each Plan Year as to when the Company Deferrals accrued during that Plan Year will be distributed. The Participant’s payout election for one Plan Year must be made by June 30 of the prior Plan Year or by such earlier date established by the Committee, except that a new Participant shall have 30 days after becoming a Participant (or any shorter period specified by the Committee) to make a payout election for his first Plan Year, and an Employee who becomes a Participant after the deadline for making the payment election for the next

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Plan Year’s benefits shall have 30 days after becoming a Participant (or any shorter period specified by the Committee) to make his payout election for the benefits accrued during the next Plan Year. If a Participant does not make a payout election for a Plan Year, that Plan Year’s benefits will be paid out in a single payment on the first Payment Processing Date on or after the date six months after his Separation from Service, unless the Committee establishes a different default rule before June 30 of the prior Plan Year.

(B) Payout Choices. A Participant may choose from among the following payout alternatives for the benefits accrued during a Plan Year. The benefits will be paid out in a single payment or in two to ten annual installments. The single payment or the first installment payment will be paid on the first Payment Processing Date that occurs six months or more after the Participant’s Separation from Service, with subsequent installments paid each 12 months thereafter.

(c) Distribution of Participant Deferrals.

(i) Pre-2016 Accruals. The following payout rules in this paragraph (i) apply only to benefits accrued before January 1, 2016.

(A) Matched and Unmatched Participant Deferrals. Because different payout alternatives are available for matched and unmatched Participant Deferrals, the Plan will separately account for matched and unmatched Participant Deferrals. Each Plan Year’s unmatched Participant Deferrals, if any, are equal to the amount by which the sum of the Participant Deferrals to this Plan for the Plan Year and the Before-Tax Contributions to the Savings Plan for the Plan Year are greater than 8% of the Participant’s Compensation for the Plan Year. The Committee has full discretion in determining an appropriate and administratively feasible method for differentiating between matched and unmatched Participant Deferrals. The Committee may wait until the end of the Plan Year to make this determination, and may attribute the investment earnings or losses on the Participant Deferrals to the matched Participant Deferrals, to the unmatched Participant Deferrals, or partly to each.

(B) Matched Participant Deferrals. A Participant’s matched Participant Deferrals will be paid out in the same fashion as the balance of his Account attributable to pre-2016 Company Deferrals under paragraph (b)(i).

(C) Payout Elections for Unmatched Participant Deferrals. A Participant shall make a separate payout election for the next year’s unmatched Participant Deferrals. The payout election must be made no later than June 30 (or such earlier date established by the Committee) of the year preceding the year in which the unmatched Participant Deferral occurs. Newly eligible Participants must complete a payout election at the same time as their initial Enrollment Agreement. The Participant may choose from among the following payout alternatives for the subaccount containing that Plan Year’s unmatched Participant Deferrals.

(I) No In-Service Withdrawal. The subaccount will be paid out in a single payment or in two to ten annual installments. The single payment or the first installment payment will be paid on the first Payment Processing Date that occurs six months or more after the Participant’s Separation from Service; subsequent installments will be paid each 12 months thereafter. Each installment will be equal to the balance in the subaccount measured as short a period of time before the installment is paid as is administratively convenient, divided by the number of remaining annual installments.

(II) In-Service Withdrawal, Single Payment. The subaccount will be paid in a single payment on the first Payment Processing Date that occurs during the month and year selected by the Participant. The Participant cannot choose to receive the

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single payment until the second year following the year in which the Participant Deferral occurred. For example, unmatched Participant Deferrals made in 2008 cannot be withdrawn pursuant to this paragraph until January 2010. If the Participant Separates from Service before receiving the single payment, (1) if the single payment is scheduled to be paid during the six months after the Separation from Service, it will be paid as scheduled, and (2) if the single payment is scheduled to be paid more than six months after the Separation from Service, it will instead be paid on the first Payment Processing Date that occurs six months or more after the Separation from Service.

(III) In-Service Withdrawal, Installments. The subaccount will be paid in a two to ten annual installments, with the first installment paid on the first Payment Processing Date that occurs during the month and year selected by the Participant, and subsequent installments paid each 12 months thereafter. The Participant cannot choose to receive his first installment until the second year following the year in which the Participant Deferral occurred. Each installment will be equal to the balance in the subaccount measured as short a period of time before the installment is paid as is administratively convenient, divided by the number of remaining annual installments. If the Participant Separates from Service before receiving all installments, (1) any installment scheduled to be paid during the six months after the Separation from Service will be paid as scheduled, and (2) the remaining subaccount balance will be paid on the first Payment Processing Date that occurs six months or more after the Separation from Service.

(ii) Post-2015 Accruals. The following payout rules in this paragraph (ii) apply only to benefits accrued on or after January 1, 2016. The Participant’s annual payout election with respect to Company Deferrals for the Plan Year described in paragraph (b)(ii) shall also apply to his Participant Deferrals for the Plan Year.

(d) Cash-Out of Small Accounts. If the value of the Participant’s Account is less than $50,000 six months after the Participant’s Separation from Service, the Participant will be paid a lump sum of his Account on the first Payment Processing Date that occurs six months or more after his Separation from Service even if he had elected installments for some or all of his benefits.

(e) Calculating Installments. For benefits accrued on or before December 31, 2015, each installment, other than installments of unmatched Participant Deferrals will be equal to the vested pre-2016 Account balance (ignoring the subaccount(s) containing unmatched Participant Deferrals) measured as short a period of time before the installment is paid as is administratively convenient, divided by the number of remaining annual installments. For each Plan Year’s unmatched Participant Deferrals, each installment shall be equal to the remaining unmatched Participant Deferrals for the Plan Year, measured as short a period of time before the installment is paid as is administratively convenient, divided by the number of remaining installments. For all benefits accrued during a Plan Year beginning on or after January 1, 2016, each installment shall be equal to the remaining benefits accrued during that Plan Year, measured as short a period of time before the installment is paid as is administratively convenient, divided by the number of remaining installments.

(f) Additional Rules for Payout Elections. The Committee has complete discretion to establish procedures for the completion of payout elections, including the acceptable forms and formats of the payout election. The Committee has complete discretion to establish deadlines for the completion of payout elections, within the bounds described in this section. The Committee may establish default choices in the absence of an affirmative Participant election.

(g) Coordination with Other Distribution Sections.

(i) Change of Control. Section 5.06 will apply to determine the timing and amount of certain payments made on or after a Change of Control.

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(ii) Death. Section 5.05 will apply to determine the timing and amount of all payments made after the Participant dies.

(iii) Hardships. A Participant may take a withdrawal under section 5.07 if he has a financial hardship.

(iv) Divorce. Some or all of a Participant’s benefits in this Plan may be allocated to, and distributed to, his former Spouse, pursuant to section 5.08.

5.05 Payments after a Participant Dies

(a) Payout. When a Participant dies, his remaining vested Account balance will be distributed to each of his Beneficiaries on the Payment Processing Date in the fourth month following the Participant’s death, provided that the Beneficiary has completed the tax-withholding forms and supplied such other information as the Committee may reasonably require. For example, if the Participant dies in November, the Beneficiary will be paid in March. This four-month delay should give the Beneficiary adequate time to decide whether to disclaim all or any part of his interest under subsection (d)). Each Beneficiary will receive a single payment.

(b) Beneficiary Designation. Each Participant shall designate one or more persons, trusts, or other entities as his Beneficiary to receive any amounts distributable hereunder at the time of the Participant’s death. In the absence of an effective beneficiary designation as to part or all of a Participant’s interest in the Plan, such amount will be distributed to the Participant’s surviving Spouse, if any, otherwise to the personal representative of the Participant’s estate.

(c) Special Rules for Spouses. A beneficiary designation may be changed by the Participant at any time and without the consent of any previously designated Beneficiary. However, if the Participant is married, his Spouse will be his Beneficiary unless such Spouse has consented to the designation of a different Beneficiary. To be effective, the Spouse’s consent must be in writing, witnessed by a notary public, and filed with the Committee. If the Participant has designated his Spouse as a primary or contingent Beneficiary, and the Participant and Spouse later divorce (or their marriage is annulled), then the former Spouse will be treated as having pre-deceased the Participant for purposes of interpreting a beneficiary designation that was completed prior to the divorce or annulment; this provision will apply only if the Committee is informed of the divorce or annulment before payment to the former Spouse is authorized.

(d) Disclaiming. Any individual or legal entity who is a beneficiary may disclaim all or any portion of his interest in the Plan, provided that the disclaimer satisfies the requirements of Code §2518(b) and applicable state law. The legal guardian of a minor or legally incompetent person may disclaim for such person. The personal representative (or the individual or legal entity acting in the capacity of the personal representative according to applicable state law) may disclaim on behalf of a beneficiary who has died. The amount disclaimed will be distributed as if the disclaimant had predeceased the individual whose death caused the disclaimant to become a beneficiary.

5.06 Change of Control

(a) Former Employees.

(i) Separated More than Six Months. Each Participant who Separated from Service more than six months before the date of a Change of Control, including those already receiving installment payments, will be paid a single payment of his entire remaining vested Account balance on the date of a Change of Control or as soon thereafter as is administratively practicable.

(ii) Recent Separations. Each Participant who Separated from Service within six months before the date of the Change of Control will be paid his normally scheduled payments for the first six months after he Separated from Service and the remainder of his vested Account balance will be paid to him six months after his Separation from Service or as soon thereafter as is administratively practicable.

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(b) Current Employees.

(i) Payout upon Separation From Service. Except as provided in paragraph (ii), each Participant who is an Employee on the date of a Change of Control, and who Separates from Service before the first anniversary of the Change of Control, will be paid a single payment of his entire vested Account balance as soon as administratively practicable after the Separation from Service; however, if the Participant is a “specified employee,” (A) his normally scheduled payments for the first six months after he Separated from Service will be paid as scheduled and (B) the remainder of his vested Account balance will be paid as soon as administratively practicable six months after the Separation from Service. As used in this section, the term “specified employee” has the same meaning as in Code §409A(a)(2)(B)(i) and is determined using the default rules contained in the regulations and other guidance of general applicability issued pursuant to Code §409A. Except as provided in paragraph (ii), a Participant who does not Separate from Service within one year of a Change of Control will be paid his benefits pursuant to section 5.04, 5.05, 5.07, or 5.08.

(ii) Payout upon a Change of Control. This paragraph applies only to benefits accrued after December 31, 2010 and on or before December 31, 2015. A Participant may elect to have all his vested benefits accrued after December 31, 2010 and on or before December 31, 2015 paid to him in a single payment on the date of the Change of Control or as soon as administratively practicable thereafter; to the extent the Participant does not elect to receive payment upon the Change of Control, his benefits shall be paid pursuant to whichever of sections 5.04, 5.05, 5.06(b)(i), 5.07, or 5.08 applies. The payout election under this paragraph for an Employee who becomes a Participant after December 31, 2010 and before December 1, 2015 must be made no later than the deadline for the Participant’s initial payout election pursuant to section 5.04(b)(i) (that is, within 30 days of becoming eligible to participate in the Plan or such earlier date as the Committee may establish).

5.07 Hardship Withdrawals

A Participant may withdraw all or part of the vested portion of his Account if he has a financial hardship, subject to the following rules. A Participant may take a hardship withdrawal while he is an Employee and also after he has Separated from Service. Payment shall be made as soon as practicable after the Committee has approved the withdrawal, except that payment for a financial hardship that occurs less than six months after the Participant’s Separation from Service shall be made as soon as practicable after the Participant has been Separated from Service for six months.

(a) Request for Hardship Withdrawal. The Participant must file a request for withdrawal with the Committee, along with such information and documentation as the Committee may request for this purpose. The Committee shall review the information filed as soon as practicable after it is received and shall promptly inform the Participant of the results of the Committee’s determination.

(b) Unforeseeable Emergency. A hardship withdrawal may be made only for the purpose of meeting an unforeseeable emergency, which is a severe financial hardship to the Participant resulting from (i) a sudden and unexpected illness or accident of the Participant, the Participant’s Spouse, the Participant’s dependent (within the meaning of Code §152(a) without regard to Code §152(b)(1), §152(b)(2), or §152(d)(1)(B)), or the Participant’s Beneficiary; (ii) loss of the Participant’s property due to casualty; (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, such as the imminent foreclosure of or eviction from the Participant’s primary residence or the payment of medical expenses, or (iv) the funeral expenses of the Participant’s Spouse, Beneficiary, or dependent (within the meaning of Code §152(a) without regard to Code §152(b)(1), §152(b)(2), or §152(d)(1)(B)). The Committee shall determine whether an unforeseeable emergency exists based on all relevant facts and circumstances, all documentation provided by the Participant, and any guidance provided by the IRS.

Page 14 of 21

(c) Amount of Withdrawal. The amount withdrawn with respect to an unforeseeable emergency may not exceed the amount necessary to satisfy the emergency plus amounts necessary to pay taxes reasonably anticipated to be incurred because of the withdrawal. The withdrawal will be reduced to take into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

(d) Coordination with Savings Plan. If the Participant’s circumstances are such that he can take a hardship withdrawal from both the Savings Plan and from this Plan, the withdrawal will first be taken from this Plan and, if the Participant exhausts his vested Account in this Plan, the Participant may elect to satisfy any remaining hardship by taking a hardship withdrawal from the Savings Plan.

(e) Cancellation or Modification of Participant Deferrals. See section 3.01(f) for the cancellation or modification of Enrollment Agreements after a hardship withdrawal from this Plan or the Savings Plan.

(f) Source of Funds. A Participant’s hardship withdrawal will be taken on a pro-rata basis from each of his subaccounts, based on the vested balance of each subaccount.

5.08 Divorce

(a) General. If a Participant has divorced his Spouse, all or a portion of his Account may be allocated to his former Spouse. The Participant may be a former or current employee of the Company.

(b) Contents of Order. The allocation will occur as soon as practicable after the Plan receives a judgment, decree, or order (collectively, an “order”) that (i) is made pursuant to a state domestic relations law or community property law, (ii) relates to the marital property rights of the former Spouse, (iii) unambiguously specifies the amount or percentage of the Participant’s Account that is to be allocated to the former Spouse, or unambiguously specifies the manner in which the amount or percentage is to be calculated, (iv) does not allocate any benefits that have already been allocated to a different former Spouse, (v) contains the name and last known mailing address of the Participant and the former Spouse, (vi) the name of the Plan, (vii) does not contain any provision that violates subsections (c), (d), or (e), and (viii) contains the former Spouse’s Social Security number (or other similar taxpayer identification number) unless such number has been provided by the former Spouse to the Plan in a manner acceptable to the Committee.

(c) Payout Provisions. The vested portion of the amount allocated to the former Spouse will be paid to the former Spouse in a single payment on the first Payment Processing Date that is administratively practicable after (i) the Plan has determined that the order meets the requirements of subsection (b), (ii) the Plan has communicated its interpretation of the order to the Participant and former Spouse, and given them a reasonable amount of time (such as 30 days) to object to the Plan’s interpretation, (and if there is a timely objection, the parties must submit a revised order or withdraw their objections), and (iii) the parties agree to the Plan’s interpretation of the order.

(d) Not Fully Vested. If the former Spouse is allocated any unvested amounts, the Plan will establish a separate account for the former Spouse and she may direct the Plan as to how those amounts will be deemed to be invested, in the same manner as a Participant directs the Plan in Article IV. Unvested amounts are forfeited at the same time as the Participant’s unvested amounts are forfeited. If an amount allocated to the former Spouse subsequently become vested, the newly-vested amount will be paid to the former Spouse in a single payment on the first Payment Processing Date that is administratively practicable following the additional vesting. If the former Spouse dies before award is fully vested, she shall forfeit her remaining Account balance, and that exact amount shall be returned to the Participant’s subaccount containing Company Deferrals.

(e) Source of Funds. The amount allocated to the former Spouse will be taken on a pro-rata basis from each of the Participant’s subaccounts, based on the vested balance of each subaccount.

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5.09 Administrative Delays in Payments

The Committee may delay any payment from this Plan for as short a period as is administratively necessary. For example, a delay may be imposed upon all payments when there is a change of recordkeeper or trustee, and a delay may be imposed on payments to any recipient until the recipient has provided (a) the information needed to determine the appropriate tax withholding and tax reporting and (b) any other information reasonably requested by the Committee.

5.10 Noncompliance with Code §409A

To the extent that the Company or the Committee takes any action that causes a violation of Code §409A or fails to take any reasonable action required to comply with Code §409A, Apache shall pay an additional amount (the “gross-up”) to the individual(s) who are subject to the penalty tax under Code §409A(a)(1); the gross-up will be sufficient to put the individual in the same after-tax position he would have been in had there been no violation of Code §409A. The Company shall not pay a gross-up if the cause of the violation of Code §409A is the due to the recipient’s action or due to the recipient’s failure to take reasonable actions (such as failing to timely provide the information required for tax withholding or failing to timely provide other information reasonably requested by the Committee – with the result that the delay in payment violates Code §409A). Any gross-up will be paid as soon as administratively convenient after the Committee determines the gross-up is owed, and no later than the end of the calendar year immediately following the calendar year in which the additional taxes are remitted. However, if the gross-up is due to a tax audit or litigation addressing the existence or amount of a tax liability, the gross-up will be paid as soon as administratively convenient after the litigation or audit is completed, and no later than the end of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation.

5.11 Cash Payment and Withholding

All payments from the Plan will be made in cash or, if elected by a Participant who has been employed solely by Apache (and not by any Affiliated Entities) during his period of Plan participation, in whole shares of Apache stock, with the value of a fractional share paid in cash. The Plan will withhold any taxes or other amounts that it is required to withhold pursuant to any applicable law.

ARTICLE VI

ADMINISTRATION

6.01 The Committee — Plan Administrator

(a) Current. The Committee is currently comprised of the members of the Retirement Plan Advisory Committee.

(b) Before a Change of Control. Before a change of control, as defined in the Income Continuance Plan, the board of directors of Apache shall appoint an administrative Committee consisting of no fewer than three individuals who may be, but need not be, Participants, officers, directors, or employees of the Company. Apache’s board of directors may remove Committee members at will. In the absence of any Committee members, Apache shall become the sole Committee member.

(c) After a Change of Control. This subsection applies on and after the date of a change of control, as defined in the Income Continuance Plan. The only individuals who are able to serve on the Committee after the date of the change of control are those who are not then employed by Apache, its successor, or any related legal entities. No Committee members may be added on or after the day of the change of control, except that, if the Committee is comprised solely of individuals, (i) the Committee may appoint a legal entity as a Committee member, and (ii) if the number of Committee members drops below three, the remaining member(s) may not resign until having appointed a legal entity or another individual as a Committee member. If all Committee members leave the Committee (if, for example, all Committee members die before the last one appoints a new Committee member or if the sole Committee member is a legal entity that goes out of business), the Committee shall automatically consist of the three Participants with the largest Accounts who are not then employed by Apache, its successor, or any related legal entities, and who are willing to act as Committee members.

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(d) Plan Administrator. The Committee is the Plan’s “administrator” within the meaning of ERISA §3(16)(A). The sole named fiduciaries of the Plan are the Committee and any Trustees.

6.02 Committee Duties

The Committee shall administer the Plan and shall have all discretion and powers necessary for that purpose, including, but not by way of limitation, full discretion and power to interpret the Plan, to determine the eligibility, status, and rights of all persons under the Plan and, in general, to decide any dispute and all questions arising in connection with the Plan. The Committee shall direct the Company, the Trustee, or both, as the case may be, concerning distributions in accordance with the provisions of the Plan. The Committee shall maintain all Plan records except records of any Trust. The Committee shall publish, file, or disclose — or cause to be published, filed, or disclosed — all reports and disclosures required by federal or state laws. The Committee may authorize one or more of its members or agents to sign instructions, notices, and determinations on its behalf.

6.03 Organization of Committee

The Committee shall adopt such rules as it deems desirable for the conduct of its affairs and for the administration of the Plan. It may appoint agents (who need not be members of the Committee) to whom it may delegate such powers as it deems appropriate, except that any dispute shall be determined by the Committee. The Committee may make its determinations with or without meetings. It may authorize one or more of its members or agents to sign instructions, notices, and determinations on its behalf. If a Committee decision or action affects a relatively small percentage of Plan Participants including a Committee member, such Committee member will not participate in the Committee decision or action. The action of a majority of the disinterested Committee members constitutes the action of the Committee.

6.04 Indemnification

The Committee and all of the agents and representatives of the Committee shall be indemnified and saved harmless by the Company against any claims, and the expenses of defending against such claims, resulting from any action or conduct relating to the administration of the Plan, except claims judicially determined to be attributable to gross negligence or willful misconduct.

6.05 Agent for Process

Apache’s General Counsel and Corporate Secretary shall be the agents of the Plan for service of all process on the Plan.

6.06 Determination of Committee Final

The decisions made by the Committee are final and conclusive on all persons.

6.07 No Bonding

Neither the Committee nor any committee member is required to give any bond or other security in any jurisdiction in connection with the administration of the Plan, unless Apache determines otherwise or any applicable federal or state law so requires.

ARTICLE VII

TRUST

7.01 Trust Agreement

The Company may, but is not required to, adopt one or more Trust Agreements for the holding, investment, and administration of funds for Plan benefits. The Trustee may maintain and allocate assets to a separate account for each Participant under the Plan. The assets of any Trust remain subject to the claims of the Company’s general creditors in the event of the Company’s insolvency.

Page 17 of 21

7.02 Expenses of Trust

The parties expect that any Trust created pursuant to section 7.01 will be treated as a “grantor” trust for federal and state income tax purposes and that, as a consequence, the Company will recognize taxable income from the Trust assets, but the Trust itself will not separately be subject to income tax with respect to its income. However, if the Trust should be separately taxable, the Trustee will pay all such taxes out of the Trust. All expenses of administering any Trust, if not paid by the Company, will be a charge against and will be paid from the assets of the Trust.

ARTICLE VIII

AMENDMENT AND TERMINATION

8.01 Termination of Plan

Apache expects to continue the Plan indefinitely, but each Company may terminate its participation in the Plan at any time with Apache’s permission, and Apache may terminate the entire Plan at any time.

8.02 Amendment

(a) Before a Change of Control. Before a change of control, as defined in the Income Continuance Plan, Apache may amend the Plan at any time and from time to time, retroactively or otherwise, on behalf of all Companies, but no amendment may reduce any vested benefit that has accrued on the later of (a) the effective date of the amendment, or (b) the date the amendment is adopted.

(b) After a Change of Control. The Plan may be amended after a change of control, as defined in the Income Continuance Plan, (i) at any time but only to the extent necessary to alleviate a material adverse tax consequence to one or more Participants, former Spouses, or Beneficiaries, and (ii) at any time after the second anniversary of such change of control, but only with respect to the benefits of Participants who are then employed by Apache, its successor, or any related entity.

(c) Procedure. Each amendment must be in writing. Each amendment must be approved by the board of directors of Apache or its successor, or by an officer of Apache or its successor who is authorized by its board of directors to amend the Plan. Each amendment must be executed by an officer of Apache or its successor who is authorized to execute the amendment.

ARTICLE IX

MISCELLANEOUS

9.01 Funding of Benefits — No Fiduciary Relationship

All benefits payable under the Plan will be paid either from the Trust or by the Company out of its general assets. Nothing contained in the Plan may be deemed to create any fiduciary relationship between the Company and the Participants. Notwithstanding anything herein to the contrary, to the extent that any person acquires a right to receive benefits under the Plan, such right will be no greater than the right of any unsecured general creditor of the Company, except to the extent provided in the Trust Agreement, if any.

9.02 Right to Terminate Employment

The Company may terminate the employment of any Participant as freely and with the same effect as if the Plan were not in existence.

9.03 Inalienability of Benefits

Except for disclaimers under section 5.05(d) and payments to a former Spouse pursuant to section 5.08, no Participant or Beneficiary has the right to assign, alienate, pledge, transfer, hypothecate, encumber, or anticipate his interest in any benefits under the Plan, nor are the benefits subject to garnishment by any creditor, nor may the benefits under the Plan be levied upon or attached. The preceding sentence does not apply to the enforcement of a federal tax levy made pursuant to Code §6331, the collection by the United States on a judgment resulting from an unpaid tax assessment, or any debt or obligation that is permitted to be collected from the Plan under federal law (such as the Federal Debt Collection Procedures Act of 1977).

Page 18 of 21

9.04 Claims Procedure

(a) General. Each claim for benefits will be processed in accordance with the procedures established by the Committee. The procedures will comply with the guidelines specified in this section. The Committee may delegate its duties under this section.

(b) Representatives. A claimant may appoint a representative to act on his behalf. The Plan will only recognize a representative if the Plan has received a written authorization signed by the claimant and on a form prescribed by the Committee, with the following exceptions. The Plan will recognize a claimant’s legal representative, once the Plan is provided with documentation of such representation. If the claimant is a minor child, the Plan will recognize the claimant’s parent or guardian as the claimant’s representative. Once an authorized representative is appointed, the Plan will direct all information and notification regarding the claim to the authorized representative and the claimant will not be copied on any notifications regarding decisions, unless the claimant provides specific written direction otherwise.

(c) Extension of Deadlines. The claimant may agree to an extension of any deadline that is mentioned in this section that applies to the Plan. The Committee or the relevant decision-maker may agree to an extension of any deadline that is mentioned in this section that applies to the claimant.

(d) Fees. The Plan may not charge any fees to a claimant for utilizing the claims process described in this section.

(e) Filing a Claim. A claim is made when the claimant files a claim in accordance with the procedures specified by the Committee. Any communication regarding benefits that is not made in accordance with the Plan’s procedures will not be treated as a claim.

(f) Initial Claims Decision. The Plan will decide a claim within a reasonable time up to 90 days after receiving the claim. The Plan will have a 90-day extension, but only if the Plan is unable to decide within 90 days for reasons beyond its control, the Plan notifies the claimant of the special circumstances requiring the need for the extension by the 90th day after receiving the claim, and the Plan notifies the claimant of the date by which the Plan expects to make a decision.

(g) Notification of Initial Decision. The Plan will provide the claimant with written notification of the Plan’s full or partial denial of a claim, reduction of a previously approved benefit, or termination of a benefit. The notification will include a statement of the reason(s) for the decision; references to the plan provision(s) on which the decision was based; a description of any additional material or information necessary to perfect the claim and why such information is needed; a description of the procedures and deadlines for appeal; a description of the right to obtain information about the appeal procedures; and a statement of the claimant’s right to sue.

(h) Appeal. The claimant may appeal any adverse or partially adverse decision. To appeal, the claimant must follow the procedures specified by the Committee. The appeal must be filed within 60 days of the date the claimant received notice of the initial decision. If the appeal is not timely and properly filed, the initial decision will be the final decision of the Plan. The claimant may submit documents, written comments, and other information in support of the appeal. The claimant will be given reasonable access at no charge to, and copies of, all documents, records, and other relevant information.

(i) Appellate Decision. The Plan will decide the appeal of a claim within a reasonable time of no more than 60 days from the date the Plan receives the claimant’s appeal. The 60-day deadline will be extended by an additional 60 days, but only if the Committee determines that special circumstances require an extension, the Plan notifies the claimant of the special circumstances requiring the need for the extension by the 60^th day after receiving the appeal, and the Plan notifies the claimant of the date by which the Plan expects to make a decision. If an appeal is missing any information from the

Page 19 of 21

claimant that is needed to decide the appeal, the Plan will notify the claimant of the missing information and grant the claimant a reasonable period to provide the missing information. If the missing information is not timely provided, the Plan will deny the claim. If the missing information is timely provided, the 60-day deadline (or 120-day deadline with the extension) for the Plan to make its decision will be increased by the length of time between the date the Plan requested the missing information and the date the Plan received it.

(j) Notification of Decision. The Plan will provide the claimant with written notification of the Plan’s appellate decision (positive or adverse). The notification of any adverse or partially adverse decision must include a statement of the reason(s) for the decision; reference to the plan provision(s) on which the decision was based; a description of the procedures and deadlines for a second appeal, if any; a description of the right to obtain information about the second-appeal procedures; a statement of the claimant’s right to sue; and a statement that the claimant is entitled to receive, free of charge and upon request, reasonable access to and copies of all documents, records, and other information relevant to the claim.

(k) Limitations on Bringing Actions in Court. Once an appellate decision that is adverse or partially adverse to the claimant has been made, the claimant may file suit in court only if he does so by the earlier of the following dates: (i) the one-year anniversary of the date of an appellate decision made on or before a Change of Control or the three-year anniversary of the date of an appellate decision made after a Change of Control, or (ii) the date on which the statute of limitations for such claim expires.

9.05 Disposition of Unclaimed Distributions

It is the affirmative duty of each Participant to inform the Plan of, and to keep on file with the Plan, his current mailing address and the mailing address of any beneficiaries. If a Participant fails to inform the Plan of these current mailing addresses, neither the Plan nor the Company is responsible for any late payment of benefits or loss of benefits. The Plan, the Committee, and the Company have no duty to search for a missing individual until the date of a Change of Control, at which point the Company has the duty to undertake reasonable measures to search for the proper recipient of any payment under the Plan that is scheduled to be paid on or after the date of the Change of Control. If the missing individual is not found within a year after a payment should have been made to him, all his benefits will be forfeited. If the missing individual later is found, the exact amount forfeited will be restored to his Account as soon as administratively convenient, without any adjustment for forgone investment earnings or losses.

9.06 Distributions due Infants or Incompetents

If any person entitled to a distribution under the Plan is an infant, or if the Committee determines that any such person is incompetent by reason of physical or mental disability, whether or not legally adjudicated an incompetent, the Committee has the power to cause the distributions becoming due to such person to be made to another for his benefit, without responsibility of the Committee to see to the application of such distributions. Distributions made pursuant to such power will operate as a complete discharge of the Company, the Trustee, the Plan, and the Committee.

9.07 Use and Form of Words

When any words are used herein in the masculine gender, they are to be construed as though they were also used in the feminine gender in all cases where they would so apply, and vice versa. Whenever any words are used herein in the singular form, they are to be construed as though they were also used in the plural form in all cases where they would so apply, and vice versa.

9.08 Headings

Headings of Articles and sections are inserted solely for convenience and reference, and constitute no part of the Plan.

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9.09 Governing Law

The Plan shall be construed in accordance with ERISA, the Code, and, to the extent applicable, the laws of the State of Texas excluding any conflicts-of-law provisions.

APACHE CORPORATION

/s/ Margery M. Harris

Margery M. Harris

Executive Vice President, Human Resources

July 16, 2014

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EX-10.3

Exhibit 10.3

APACHE CORPORATION

NON-QUALIFIED RESTORATIVE

RETIREMENT SAVINGS PLAN

Effective as of January 1, 2015

Table of Contents

Article I Definitions		4
1.01	Account	4
1.02	Affiliated Entity	4
1.03	Apache	4
1.04	Beneficiary	4
1.05	Change of Control	5
1.06	Code	5
1.07	Committee	5
1.08	Company	5
1.09	Company Deferrals	5
1.10	Compensation	5
1.11	Employee	6
1.12	Enrollment Agreement	7
1.13	ERISA	7
1.14	Non-Qualified Retirement Savings Plan	7
1.15	Participant	7
1.16	Participant Deferrals	7
1.17	Payment Processing Date	7
1.18	Plan	7
1.19	Plan Year	7
1.20	Retirement Plan	7
1.21	Savings Plan	8
1.22	Separation from Service and Separate from Service	8
1.23	Trust	8
1.24	Trust Agreement	8
1.25	Trustee	8
Article II Eligibility and Participation		9
2.01	Eligibility and Participation	9
2.02	Enrollment	10
2.03	Failure of Eligibility	10

1

Article III Contribution Deferrals		11
3.01	Participant Deferrals	11
3.02	Company Deferrals	13
Article IV Crediting of Accounts		15
4.01	Accounts	15
4.02	Investments	15
Article V Distributions		17
5.01	Vesting and Forfeitures	17
5.02	Rehires	17
5.03	Distribution Overview	17
5.04	Distributions after Separation from Service	18
5.05	Payments after a Participant Dies	19
5.06	Change of Control	20
5.07	Divorce	21
5.08	Administrative Delays	22
5.09	Noncompliance with Code §409A	22
5.10	Cash Payment and Withholding	22
Article VI Administration		23
6.01	The Committee — Plan Administrator	23
6.02	Committee Duties	23
6.03	Organization of Committee	24
6.04	Indemnification	24
6.05	Agent for Process	24
6.06	Determination of Committee Final	24
6.07	No Bonding	24
Article VII Trust		25
7.01	Trust Agreement	25
7.02	Expenses of Trust	25
Article VIII Amendment and Termination		26
8.01	Termination of Plan	26
8.02	Amendment	26

2

Article IX Miscellaneous		27
9.01	Funding of Benefits — No Fiduciary Relationship	27
9.02	Right to Terminate Employment	27
9.03	Inalienability of Benefits	27
9.04	Claims Procedure	27
9.05	Disposition of Unclaimed Distributions	29
9.06	Distributions due Infants or Incompetents	30
9.07	Use and Form of Words	30
9.08	Headings	30
9.09	Governing Law	30

3

APACHE CORPORATION

NON-QUALIFIED RESTORATIVE

RETIREMENT SAVINGS PLAN

Apache Corporation (“Apache”) established this Apache Corporation Non-Qualified Restorative Retirement Savings Plan (“Plan”) effective as of January 1, 2012. Apache hereby amends and restates the Plan in its entirety effective as of January 1, 2015, except as otherwise stated herein. Apache intends for this Plan to provide a select group of management or highly compensated employees of the Company with deferred retirement benefits, in addition to the retirement benefits provided under the Apache Corporation Money Purchase Retirement Plan and the Apache Corporation 401(k) Savings Plan, in consideration of the valuable services provided by such employees to the Company and to induce such employees to remain in the employ of the Company.

Apache intends that the Plan not be treated as a “funded” plan for purposes of either the Code or ERISA. Apache also intends for this Plan to comply with the requirements of Code §409A. The Plan shall be interpreted in light of these intentions.

ARTICLE I DEFINITIONS

1.01 Account

“Account” means the account maintained for each Participant to which is credited all Participant Deferrals made by a Participant, all Company Deferrals on behalf of a Participant, and all adjustments thereto. Each Account is divided into a variety of subaccounts, as detailed in Article V.

1.02 Affiliated Entity

“Affiliated Entity” means any legal entity that is treated as a single employer with Apache pursuant to Code §414(b), §414(c), §414(m), or §414(o).

1.03 Apache

“Apache” means Apache Corporation or any successor thereto.

1.04 Beneficiary

“Beneficiary” means a Participant’s beneficiary, as determined in Section 5.05.

1.05 Cash-Incentive Bonus

“Cash-Incentive Bonus” means the regular annual bonus (commonly referred to as incentive compensation), to the extent that it is payable in cash, and also includes any other bonus designated by the Committee to the extent that it is payable in cash.

4

1.06 Change of Control

“Change of Control” means an event described in Code §409A(a)(2)(A)(v) that pertains to Apache.

1.07 Code

“Code” means the Internal Revenue Code of 1986, as amended.

1.08 Committee

“Committee” means the administrative committee provided for in Section 6.01.

1.09 Company

“Company” means Apache and any Affiliated Entity that, with approval of the Board of Directors of Apache, has adopted the Plan.

1.10 Company Deferrals

“Company Deferrals” means the allocations to a Participant’s Account made pursuant to Section 3.02.

1.11 Compensation

“Compensation” generally means regular compensation paid by the Company.

(a) Inclusions. Specifically, Compensation includes:

(i) regular salary or wages;

(ii) overtime pay; and

(iii) the Cash-Incentive Bonus.

(b) Exclusions. Compensation excludes:

(i) commissions;

(ii) severance pay;

(iii) moving expenses;

(iv) any gross-up of moving expenses to account for increased income taxes;

(v) foreign service premiums paid as an inducement to work outside of the United States;

5

(vi) Company contributions under the Retirement Plan;

(vii) Company contributions under the Savings Plan;

(viii) other contingent compensation;

(ix) contributions to any other fringe benefit plan (including, but not limited to, overriding royalty payments or any other exploration-related payments);

(x) any amounts relating to the granting of a stock option by the Company or an Affiliated Entity, the exercise of such a stock option, or the sale or deemed sale of any shares thereby acquired;

(xi) any bonus other than a Cash-Incentive Bonus;

(xii) payments from any benefit plan, such as any stock appreciation right or payments from a Share Appreciation Plan, any payment from the Deferred Delivery Plan or the Executive Restricted Stock Plan, and payments pursuant to grants made under the Omnibus Equity Compensation Plan of 2007, the Omnibus Equity Compensation Plan of 2011, or similar plans; and

(xiii) any benefit accrued under, or any payment from, any nonqualified plan of deferred compensation.

(c) Timing Rules.

(i) Participant Deferrals. For purposes of calculating Participant Deferrals, Compensation includes only those amounts paid after the Employee has made the applicable payout election under Section 5.04 and after the deadline for making the applicable Enrollment Agreement under Section 3.01. Compensation does not include any amounts paid after the Participant ceased to be eligible to participate in the Plan, except as provided in Section 2.01(b). A Participant who begins participating in the middle of a Plan Year cannot make Participant Deferrals from the Cash-Incentive Bonus that is attributable to the Participant’s services during the Plan Year in which his participation begins. For example, a Participant hired in September 2014 cannot make Participant Deferrals from the incentive compensation paid to him in February 2015.

(ii) Company Deferrals. The Company Deferrals for a Participant, including one who begins participating in the middle of a Plan Year, are calculated by taking into account all Compensation paid to him during the entire Plan Year, including any Cash-Incentive Bonus paid during the Plan Year and any Compensation paid between the date he becomes eligible to participate in the Plan and the deadline for making his Enrollment Agreement(s) in Section 3.01(c).

1.12 Employee

“Employee” means any common-law employee of Apache or any Affiliated Entity. An Employee ceases to be an Employee on the date he Separates from Service.

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1.13 Enrollment Agreement

“Enrollment Agreement” means an agreement made by an eligible employee whereby he elects the amounts to be withheld from his Compensation pursuant to Section 3.01.

1.14 ERISA

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.15 Non-Qualified Retirement Savings Plan

“Non-Qualified Retirement Savings Plan” means the Non-Qualified Retirement/Savings Plan of Apache Corporation, as amended.

1.16 Participant

“Participant” means (a) any Employee whom the Committee has selected as eligible to participate in the Plan under Section 2.01(a), and (b) any former Employee who has earned benefits in the Plan that have not yet been forfeited or paid out.

1.17 Participant Deferrals

“Participant Deferrals” means the amounts of a Participant’s Compensation that he elects to defer and have allocated to his Account pursuant to Section 3.01.

1.18 Payment Processing Date

“Payment Processing Date” means the date selected by the Committee on which payments from this Plan will be processed. Except in extraordinary circumstances, there will be at least one Payment Processing Date each calendar month.

1.19 Plan

“Plan” means the plan as set forth in this document, and as amended from time to time.

1.20 Plan Year

“Plan Year” means the calendar year.

1.21 Retirement Plan

“Retirement Plan” means the Apache Corporation Money Purchase Retirement Plan, as amended.

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1.22 Savings Plan

“Savings Plan” means the Apache Corporation 401(k) Savings Plan, as amended

1.23 Separation from Service and Separate from Service

“Separation from Service” has the same meaning as the term “separation from service” in Code §409A(a)(2)(A)(i), determined using the default rules in the regulations and other guidance of general applicability issued pursuant to Code §409A, except that a Separation from Service occurs only if both the Company and the Participant expect the Participant’s level of services to permanently drop by more than half. A Participant who has a Separation from Service “Separates from Service.”

1.24 Spouse

“Spouse” means the individual with whom a Participant entered into marriage (a) as defined or recognized under the laws of the United States state in which the marriage was entered into, or (b) if the marriage was entered into outside of the 50 states, as defined in the jurisdiction in which the marriage was entered into as long as the marriage could have been entered into in at least one of the 50 states in the United States.

1.25 Trust

“Trust” means the trust or trusts, if any, created by the Company to provide funding for the distribution of benefits in accordance with the provisions of the Plan. The assets of any such Trust remain subject to the claims of the Company’s general creditors in the event of the Company’s insolvency.

1.26 Trust Agreement

“Trust Agreement” means the written instrument pursuant to which each separate Trust, or a sub-trust thereunder, is created.

1.27 Trustee

“Trustee” means one or more banks, trust companies, or insurance companies designated by the Company to hold and invest the Trust fund and to pay benefits and expenses as authorized by the Committee in accordance with the terms and provisions of the Trust Agreement.

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ARTICLE II ELIGIBILITY AND PARTICIPATION

Article II.

2.01 Eligibility and Participation

(a) General. The Committee shall from time to time in its sole discretion select those Employees who are eligible to participate in the Plan for a Plan Year from those Employees who are among a select group of management or highly compensated employees. An Employee participating in the Non-Qualified Retirement Savings Plan may only become eligible to participate in this Plan on the first day of the Plan Year after his active participation in the Non-Qualified Retirement Savings Plan has ceased, with the clarifications noted in subsection (b).

(b) Coordination with Non-Qualified Retirement Savings Plan. An enrollment agreement applies only to one plan, either this Plan or the Non-Qualified Retirement Savings Plan. Once the deadline for making an enrollment agreement has passed, the enrollment agreement cannot be changed, and any participant deferrals shall be accrued in the plan to which the enrollment agreement applied.

(i) Transfer to Non-Qualified Retirement Savings Plan. If a Participant transfers from this Plan to the Non-Qualified Retirement Savings Plan at the end of a Plan Year and he had made an Enrollment Agreement for a Cash-Incentive Bonus that will be paid, if at all, after his participation in the Restorative Plan has begun, (A) the Enrollment Agreement will be followed and Participant Deferrals, if any, made pursuant to that Enrollment Agreement shall be made to this Plan (“trailing Participant Deferrals”), but (B) the match in Section 3.02 shall be calculated by ignoring the trailing Participant Deferrals, although the match in the Non-Qualified Retirement Savings Plan may be calculated by treating the trailing Participant Deferrals as if they had been made to the Non-Qualified Retirement Savings Plan.

(ii) Transfer from Non-Qualified Retirement Savings Plan. If a Participant transfers from the Non-Qualified Retirement Savings Plan to this Plan at the end of a Plan Year and he had made an enrollment agreement for a cash-incentive bonus that will be paid, if at all, after his participation in this Plan has begun, (A) the enrollment agreement for the Non-Qualified Retirement Savings Plan will be followed, and any participant deferrals made pursuant to that enrollment agreement shall be made to the Non-Qualified Retirement Savings Plan (“trailing participant deferrals”), and (B) the match in this Plan in Section 3.02 shall be calculated by treating such trailing participant deferrals as if they were Participant Deferrals made to this Plan.

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2.02 Enrollment

Employees who have been selected by the Committee to participate in the Plan shall complete the enrollment procedure specified by the Committee. The enrollment procedure may include written or electronic form(s) for the employee to designate his beneficiary or beneficiaries, provide instructions regarding the investment of his Account, make Participant Deferrals by entering into one or more Enrollment Agreements with the Company, select one or more payment options for the eventual distribution of his benefits, and provide such other information as the Committee may reasonably require.

2.03 Failure of Eligibility

The Committee has the authority to determine that a Participant is no longer eligible to participate in the Plan. No Company Deferrals will be accrued after the Participant ceases to be eligible to participate in the Plan. No Participant Deferrals will be accrued after the Participant ceases to be eligible to participate in the Plan, except for Participant Deferrals made pursuant to an Enrollment Agreement entered into before the Participant ceased to be eligible to participate. See section 2.01(b). The determination of the Committee with respect to the termination of participation in the Plan will be final and binding on all parties affected thereby. Any benefits accrued under the Plan at the time the Participant becomes ineligible to continue participation will be distributed in accordance with the provisions of Article V.

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ARTICLE III CONTRIBUTION DEFERRALS

Article III.

3.01 Participant Deferrals

(a) General. A Participant may elect to defer a portion of his Compensation by submitting a completed Enrollment Agreement. Each Enrollment Agreement must specify the amount that the Participant elects to defer. Participant Deferrals are deducted through payroll withholding from the Participant’s cash Compensation payable by the Company.

(b) Maximum and Minimum Deferrals. A Participant may elect to defer up to 75% of his Cash-Incentive Bonus and up to 50% of his other Compensation. The Committee may establish a minimum dollar amount or percentage of Compensation that a Participant may elect to defer.

(c) Deadlines for Enrollment Agreements.

(i) Enrollment Period. In order to make Participant Deferrals, a Participant must submit an Enrollment Agreement during the enrollment period established by the Committee. The enrollment period must precede the Plan Year in which the services giving rise to the Compensation are performed, except in the following situations.

(A) Performance-Based Compensation. If the Compensation is “performance-based compensation based on services performed over a period of at least 12 months” (within the meaning of Code §409A(a)(4)(B)(iii)), the enrollment period must end at least six months before the end of the performance period.

(B) New Participant. The enrollment period for a new Participant must end no later than 30 days after he became eligible to participate in the Plan; the new Participant’s initial Enrollment Agreement may only apply to Compensation for which he has not yet performed any services.

(ii) Duration. The Enrollment Agreement shall apply to Compensation, or to a specific form of Compensation, paid during one entire Plan Year unless it is earlier canceled or revised by the Committee pursuant to subsection (g) or cancelled pursuant to subsection (f) (relating to hardship withdrawals from the Savings Plan).

(d) Procedures for Making Elections. The Committee has complete discretion to establish procedures for the completion of Enrollment Agreements, including the acceptable forms and formats of the deferral election (for example, written or electronic, as a whole percentage of Compensation or specific dollar amount, and the manner in which the Enrollment Agreement coordinates with the Savings Plan). The Committee has complete discretion to establish the enrollment periods during which

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Participants may make Enrollment Agreements, within the bounds described in subsections (a) and (c). The Committee may establish different enrollment periods for different types of Compensation or different groups of Participants. The Committee may specify any default choices that will apply unless the Participant affirmatively elects otherwise. For example, the Committee could decide that the failure to complete a new Enrollment Agreement for that type of Compensation means that (i) the prior Plan Year’s Enrollment Agreement will be continued for another year, or (ii) no Participant Deferrals will be made, or (iii) the Participant will defer 8% of his Compensation in excess of the limit on compensation that can be taken into account for benefit-calculation purposes in the Savings Plan and the Retirement Plan pursuant to Code §401(a)(17).

(e) Default Election Procedure. Unless the Committee determines otherwise, the Committee will require each Enrollment Agreement to be made by June 30 of the prior Plan Year and shall require each Enrollment Agreement to be a spill-over election, whereby the initial deferrals pursuant to the Enrollment Agreement will be contributed to the Savings Plan, until the Participant’s elective deferrals (within the meaning of Code §402(g)(3)) to all plans have reached the applicable limit for elective deferrals under Code §402(g), and any additional deferrals under the Enrollment Agreement shall be Participant Deferrals in this Plan. For example, a Participant may elect to defer 27% from his base pay, if contributed to the Savings Plan, and 20% of his base pay if deferred to this Plan, and a deferral of 50% of his Cash-Incentive Bonus (regardless of which plan the benefit is directed towards).

(f) Cancellation of Enrollment Agreements Following a Hardship Withdrawal from Savings Plan. If the Participant receives a hardship withdrawal from the Savings Plan, all outstanding Enrollment Agreements that apply or might apply to Compensation paid in the six months after the hardship withdrawal shall be cancelled. The Participant may subsequently enter into new Enrollment Agreements at the usual times under subsection (c), but the new Enrollment Agreements cannot apply to any Compensation paid within the six-month period following the hardship withdrawal from the Savings Plan.

(g) Committee-Initiated Changes in Enrollment Agreement. If the amounts to be withheld from a Participant’s paycheck (including, without limitation, loan repayments, Participant Deferrals, taxes, contributions to the Savings Plan, and premium payments for various benefits) are greater than the paycheck, (i) the Committee shall establish the order in which the deductions are applied, with the result that Participant Deferrals may be reduced below what the Participant had elected in an Enrollment Agreement, and (ii) the Committee’s procedures shall, if practicable, also automatically increase the Participant Deferrals in subsequent pay period(s) covered by that Enrollment Agreement to make up for any missed Participant Deferrals.

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3.02 Company Deferrals

The Company shall credit to a Participant’s Account a matching contribution for the Plan Year and a 6% retirement contribution for the Plan Year. Company Deferrals begin to share in the investment earnings (or losses) at the time specified in Section 4.01. The Company may credit matching contributions to a Participant’s Account during the Plan Year on a contingent basis; if the Participant does not satisfy the requirements to receive a matching contribution for the Plan Year, or if the matching contribution credited to the Participant’s Account for the Plan Year is incorrect, the Participant will forfeit any excess matching contribution (adjusted to reflect investment earnings or losses thereon) credited to his Account.

(a) Matching Contribution.

(i) Basic Match. The basic match for a Participant in this Plan each Plan Year shall equal the lesser of his Participant Deferrals for the Plan Year or 8% of the his Compensation for the Plan Year that is in excess of the limit on compensation that may be taken into account in the Savings Plan pursuant to Code §401(a)(17).

(ii) Possible Additional Match. The Participant’s match in this Plan for the Plan Year shall be increased if the Participant’s elective deferrals (within the meaning of Code §402(g)(3)) to all plans for the Plan Year have reached the applicable limit for elective deferrals under Code §402(g). The increase under this paragraph shall equal the sum of:

(A) The amount necessary for the sum of the Plan Year’s match in the Savings Plan and the match under paragraph (i) to equal the lesser of (I) 8% of the Participant’s Compensation for the Plan Year or (II) the sum of his Participant Deferrals for the Plan Year and his Participant Contributions to the Savings Plan for the Plan Year — in most cases, this additional match will only be earned by those age 50 or older and will equal the difference between his Participant Contributions to the Savings Plan and the match he earns in the Savings Plan for the Plan Year; and

(B) The amount of any forfeited match in the Savings Plan necessary to satisfy the ADP or ACP test, but only if the forfeiture occurred after the match in this Plan had been calculated.

(b) Retirement Contribution. In order to receive an allocation of the 6% retirement contribution for a Plan Year, a Participant must be an Employee eligible to participate in the Plan on the last business day of the Plan Year.

(iii) Basic 6% Retirement Contribution. The basic 6% retirement contribution for the Plan Year is equal to 6% of the Participant’s Compensation for the Plan Year that is in excess of the limit on compensation that may be taken into account in the Retirement Plan pursuant to Code §401(a)(17).

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(iv) Potential Additional 6% Retirement Contribution. The Participant’s 6% retirement contribution in this Plan for the Plan Year shall be increased only if the Participant’s elective deferrals (within the meaning of Code §402(g)(3)) to all plans have reached the applicable limit for elective deferrals under Code §402(g), as follows. If a Participant’s Company Mandatory Contribution in the Retirement Plan is reduced to comply with any requirement of federal law, then the Participant’s 6% retirement contribution for this Plan calculated under paragraph (i) will be increased by the amount of the reduction in the Company Mandatory Contribution in the Retirement Plan. For example, a Participant will receive an extra $1,900 retirement-6 contribution in this Plan for 2014 if he is age 50 or older on December 31, 2014, has Compensation over $260,000 in 2014, makes the maximum contribution permitted under Code §402(g) to the Savings Plan (usually the $17,500 regular contribution increased by the $5,500 catch-up contribution), receives a $20,800 match in the Savings Plan (8% of $260,000), and has his Company Mandatory Contribution in the Retirement Plan reduced from $15,600 (6% of $260,000) to $13,700 because of the limitations of Code §415(c).

(c) Additional Contribution. A Company may make an additional Company Deferral to any Participant’s Account at any time, provided that the Company advises the Committee in writing of the contribution. The Company shall specify the vesting and payout rules that apply to the additional Company Deferral.

(d) USERRA. The provisions of this Article shall be revised to the extent required by USERRA, which generally applies to returning military veterans. The Committee shall determine, in its sole discretion, how to coordinate the provisions of this Article and Article V with USERRA.

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ARTICLE IV CREDITING OF ACCOUNTS

ARTICLE IV.

4.01 Accounts

(a) Establishment of Accounts. The Committee shall establish one Account for each Participant, which will be subdivided into various subaccounts. The Accounts and subaccounts are merely for recordkeeping purposes, and do not represent any actual property that has been set aside for Participants. Nothing contained in this Article may be construed to require the Company or the Committee to fund any Participant’s Account.

(b) Crediting of Contributions. Participant Deferrals are credited to a Participant’s Account as of the date that the Participant Deferral would have been paid to the Participant had there been no Enrollment Agreement. Company Deferrals are credited to a Participant’s Account as of the date that the Company Deferral was accrued by the Participant.

(c) Crediting of Earnings. Each Account is credited with investment earnings or losses calculated in accordance with Section 4.02. Participant Deferrals and Company Deferrals start to be credited with investment earnings or losses as soon as administratively convenient after such amounts are credited to Accounts, except that the 6% retirement contribution under Section 3.02(b) is not credited with investment earnings or losses until the corresponding Company Mandatory Contribution to the Retirement Plan is actually paid to the Retirement Plan (usually in late February).

4.02 Investments

(a) Investment Options. All amounts credited to a Participant’s Account are credited with investment earnings or losses as if the Participant’s Account was invested in one or more investments. The Committee shall designate the default investment as well as any alternatives, and may change the available alternatives or the default investment from time to time. One or more of the investment alternatives may consist, in whole or in part, of Apache common stock. At such times and under such procedures as the Committee may designate, a Participant may determine the portion of his Account that is to be deemed invested in each alternative. The Participant may make prospective changes for his investment selection as often as the Committee permits and subject to the procedures established by the Committee. A Participant may never make any retroactive changes to his investment selections.

(b) No Ownership Rights. A Participant has no ownership rights with respect to any investment of his Account. Nothing contained in this Article may be construed to give any Participant any power or control to make investment directions or otherwise influence in any manner the investment and reinvestment of assets contained within any investment alternative, such control being at all times retained in the full discretion of the Committee. As a consequence, for example, if a Participant has elected to invest a portion of his Account in Apache stock, the Participant has no voting rights with respect to that stock.

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ARTICLE V DISTRIBUTIONS

ARTICLE V.

5.01 Vesting and Forfeitures

(a) Participant Deferrals. A Participant is fully vested in the portion of his Account that is attributable to his Participant Deferrals.

(b) Company Deferrals, General Rule. A Participant’s years of completed service in this Plan are identical to his “Period of Service” in the Savings Plan. Subject to subsection (e), a Participant will vest in the portion of his Plan Account that is attributable to Company Deferrals according to the following schedule, unless subsection (c) provides for faster vesting:

Years of Completed Service	Vested Portion
Less than 1		0	%
1		20	%
2		40	%
3		60	%
4		80	%
5 or more		100	%

(c) Company Deferrals, Accelerated Vesting. Except to the extent provided otherwise by subsection (e), a Participant is fully vested in the portion of his Account attributable to Company Deferrals in the following circumstances.

(i) The Participant is fully vested if he attains age 65 while he is an Employee.

(ii) The Participant is fully vested if he becomes an Employee after attaining age 65.

(iii) The Participant is fully vested if, while he is an Employee, he incurs a disability that qualifies the Employee for long-term disability payments under Apache’s Long-Term Disability Plan.

(iv) The Participant is fully vested if he dies while he is an Employee.

(v) All Participants are fully vested if a change of control, as defined in the Income Continuance Plan, occurs.

(d) Forfeiture Timing. The portion of a Participant’s Account that is not vested is forfeited immediately upon his Separation from Service.

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(e) Exception. Additional Company Deferrals made under Section 3.02(c) shall be subject to the vesting rules decided upon at the time the additional Company Deferral is made, which may differ from the rules of subsections (b) and (c).

5.02 Rehires

(a) Distributions. If a Participant Separated from Service and subsequently becomes eligible to participate in the Plan again, the benefits from his earlier episode of participation will be paid out pursuant to the terms of the Plan on the date he first Separated from Service, including any payout elections then applicable, while the benefits from his later episode of participation will be paid out pursuant to the terms of the Plan, and any payout elections that had been made, with respect to the second episode of participation. The second episode of participation will not affect the timing of any benefit payments from the earlier episode of participation.

(b) Vesting. If a Participant becomes eligible to again make Participant Deferrals more than five years after Separating from Service, (i) the Plan will establish a new Account for the benefits he accrues during his second episode of participation; (ii) his years of completed service for his new Account will include only his service from his second episode; and (iii) his new service will not increase the vesting of any benefits from his first episode of participation. If a Participant becomes eligible to again make Participant Deferrals less than five years after Separating from Service (or if he never Separated from Service), the Participant’s years of completed service for his benefits from his second episode of participation will include his service from both episodes of employment.

(c) Restoration of Forfeiture. If a Participant begins to participate in the Plan again within five years after his Separation from Service, the exact amount of any forfeiture upon his earlier Separation from Service will be restored to his Account, and will be credited to a separate subaccount. The restoration will occur on the 31st day after the Participant again begins participating in the Plan, but only if the Participant is still eligible to participate in the Plan on that date. The restored subaccount vests based on his service from both episodes of employment (and thus will almost always be partially vested immediately when the Participant again starts to participate). The vested portion of the restored subaccount will be paid to the Participant as the Participant elects in Section 5.04(a) for the payment of his new Account attributable to Company Deferrals, unless Section 5.05 or 5.06 require faster payment following the Participant’s death or a Change of Control.

5.03 Distribution Overview

(a) General. In general, payment will commence on the Payment Processing Date following the earliest of the following dates, or as soon thereafter as is administratively convenient:

(i) Six months after the Participant Separates from Service. See Section 5.04.

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(ii) The date the Participant dies. See Section 5.05.

(b) Loans and Hardship Withdrawals. Participant loans and hardship withdrawals are not permitted.

(c) Divorce. Some or all of a Participant’s benefits in this Plan may be allocated to, and distributed to, his former Spouse, pursuant to Section 5.07.

(d) Change of Control. Special timing rules may apply for distributions following a Change of Control. See Section 5.06.

5.04 Distributions after Separation from Service

(a) Distribution of Participant and Company Deferrals.

(i) Pre-2016 Accruals. This paragraph applies only to benefits accrued through December 31, 2015. Upon becoming a Participant, an Employee shall make a payout election to have his vested Account paid out in a single payment or in two to ten annual installments. To be effective, the Participant’s payout election must be provided to the Plan within 30 days after the date the Participant became a Participant or by such earlier date established by the Committee. The single payment or the first installment payment will be paid on the first Payment Processing Date that occurs six months or more after the Participant’s Separation from Service. Subsequent installments will be paid each 12 months thereafter.

(ii) Post-2015 Accruals. This paragraph applies only to benefits accrued on or after January 1, 2016. An Employee shall make a payout election for each Plan Year as to when the Participant Deferrals and Company Deferrals accrued during that Plan Year will be distributed. The Participant’s payout election for one Plan Year must be made by June 30 of the prior Plan Year or by such earlier date established by the Committee, except that a new Participant shall have 30 days after becoming a Participant (or any shorter period specified by the Committee) to make his payout election for benefits accrued during his first Plan Year, and if he became a Participant after the deadline for making the payment election for the next Plan Year’s benefits, he shall have 30 days after becoming a Participant (or any shorter period specified by the Committee) to make his payout election for the benefits accrued during the next Plan Year. If a Participant does not make a payout election for a Plan Year, that Plan Year’s benefits will be paid out in a single payment on the first Payment Processing Date on or after the date six months after his Separation from Service, unless the Committee establishes a different default rule before June 30 of the prior Plan Year. A Participant may choose from among the following payout alternatives for the benefits accrued during a Plan Year. The benefits will be paid out in a single payment or in two to ten annual installments. The single payment or the first installment will be paid on the first Payment Processing Date that occurs six months or more after the Participant’s Separation from Service, with subsequent installments paid each 12 months thereafter.

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(b) Cash-Out of Small Accounts. If the value of the Participant’s Account is less than $50,000 six months after the Participant’s Separation from Service, the Participant will be paid a lump sum of his Account on the first Payment Processing Date that occurs six months or more after his Separation from Service, even if he had elected installments for some of all of his benefits.

(c) Calculating Installment Payments. For benefits accrued before 2016, each installment will be equal to the remaining portion of the vested pre-2016 Account measured as short a period of time before the installment is paid as is administratively convenient, divided by the number of remaining annual installments. For all benefits accrued during a Plan Year beginning on or after January 1, 2016, each installment shall be equal to the remaining benefits accrued during that Plan Year, measured as short a period of time before the installment is paid as is administratively convenient, divided by the number of remaining installments.

(d) Additional Rules for Payout Elections. The Committee has complete discretion to establish procedures for the completion of payout elections, including the acceptable forms and formats of the payout election. The Committee has complete discretion to establish deadlines for the completion of payout elections, within the bounds described in this section. The Committee may establish default choices in the absence of an affirmative Participant election.

(e) Coordination with Other Distribution Sections.

(i) Change of Control. Section 5.06 will apply to determine the timing and form and amount of certain payments made on or after a Change of Control.

(ii) Death. Section 5.05 will apply to determine the timing and form and amount of all payments made after the Participant dies.

(iii) Divorce. Some or all of a Participant’s benefits in this Plan may be allocated to, and distributed to, his former Spouse, pursuant to Section 5.07.

5.05 Payments after a Participant Dies

(a) Payout. When a Participant dies, his remaining vested Account balance will be distributed to each of his Beneficiaries on the Payment Processing Date in the fourth month following the Participant’s death, provided that the Beneficiary has completed the tax-withholding forms and supplied such other information as the Committee may reasonably require. For example, if the Participant dies in November, the Beneficiary will be paid in March. This four-month delay should give the Beneficiary adequate time to decide whether to disclaim all or any part of his interest under subsection (d)). Each Beneficiary will receive a single payment.

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(b) Beneficiary Designation. Each Participant shall designate one or more persons, trusts, or other entities as his Beneficiary to receive any amounts distributable hereunder at the time of the Participant’s death. In the absence of an effective beneficiary designation as to part or all of a Participant’s interest in the Plan, such amount will be distributed to the Participant’s surviving Spouse, if any, otherwise to the personal representative of the Participant’s estate.

(c) Special Rules for Spouses. A beneficiary designation may be changed by the Participant at any time and without the consent of any previously designated Beneficiary. However, if the Participant is married, his Spouse will be his Beneficiary unless such Spouse has consented to the designation of a different Beneficiary. To be effective, the Spouse’s consent must be in writing, witnessed by a notary public, and filed with the Committee. If the Participant has designated his Spouse as a primary or contingent Beneficiary, and the Participant and Spouse later divorce (or their marriage is annulled), then the former Spouse will be treated as having pre-deceased the Participant for purposes of interpreting a beneficiary designation that was completed prior to the divorce or annulment; this provision will apply only if the Committee is informed of the divorce or annulment before payment to the former Spouse is authorized.

(d) Disclaiming. Any individual or legal entity who is a beneficiary may disclaim all or any portion of his interest in the Plan, provided that the disclaimer satisfies the requirements of Code §2518(b) and applicable state law. The legal guardian of a minor or legally incompetent person may disclaim for such person. The personal representative (or the individual or legal entity acting in the capacity of the personal representative according to applicable state law) may disclaim on behalf of a beneficiary who has died. The amount disclaimed will be distributed as if the disclaimant had predeceased the individual whose death caused the disclaimant to become a beneficiary.

5.06 Change of Control

(a) Former Employees.

(i) Separated More than Six Months. Each Participant who Separated from Service more than six months before the date of a Change of Control, including those already receiving installment payments, will be paid a single payment of his entire remaining vested Account balance on the date of a Change of Control or as soon thereafter as is administratively practicable.

(ii) Recent Separations. Each Participant who Separated from Service within six months before the date of the Change of Control will be paid his normally scheduled payments for the first six months after he Separated from Service and the remainder of his vested Account balance will be paid to him six months after his Separation from Service or as soon thereafter as is administratively practicable.

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(b) Current Employees. Each Participant who is an Employee on the date of a Change of Control, and who Separates from Service before the first anniversary of the Change of Control, will be paid a single payment of his entire vested Account balance as soon as administratively practicable after the Separation from Service; however, if the Participant is a “specified employee,” his vested Account balance will be paid as soon as administratively practicable six months after the Separation from Service. As used in this section, the term “specified employee” has the same meaning as in Code §409A(a)(2)(B)(i) and is determined using the default rules contained in the regulations and other guidance of general applicability issued pursuant to Code §409A. Except as provided in paragraph (ii), a Participant who does not Separate from Service within one year of a Change of Control will be paid his benefits pursuant to Section 5.04, 5.05, or 5.07.

5.07 Divorce

(a) General. If a Participant has divorced his Spouse, all or a portion of his Account may be allocated to his former Spouse. The Participant may be a former or current employee of the Company.

(b) Contents of Order. The allocation will occur as soon as practicable after the Plan receives a judgment, decree, or order (collectively, an “order”) that (i) is made pursuant to a state domestic relations law or community property law, (ii) relates to the marital property rights of the former Spouse, (iii) unambiguously specifies the amount or percentage of the Participant’s Account that is to be allocated to the former Spouse, or unambiguously specifies the manner in which the amount or percentage is to be calculated, (iv) does not allocate any benefits that have already been allocated to a different former Spouse, (v) contains the name and last known mailing address of the Participant and the former Spouse, (vi) the name of the Plan, (vii) does not contain any provision that violates subsections (c), (d), or (e), and (viii) contains the former Spouse’s Social Security number (or other similar taxpayer identification number) unless such number has been provided by the former Spouse to the Plan in a manner acceptable to the Committee.

(c) Payout Provisions. The vested portion of the amount allocated to the former Spouse will be paid to the former Spouse in a single payment on the first Payment Processing Date that is administratively practicable after (i) the Plan has determined that the order meets the requirements of subsection (b), (ii) the Plan has communicated its interpretation of the order to the Participant and former Spouse, and given them a reasonable amount of time (such as 30 days) to object to the Plan’s interpretation, (and if there is a timely objection, the parties must submit a revised order or withdraw their objections), and (iii) the parties agree to the Plan’s interpretation of the order.

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(d) Not Fully Vested. If the former Spouse is allocated any unvested amounts, the Plan will establish a separate account for the former Spouse and she may direct the Plan as to how those amounts will be deemed to be invested, in the same manner as a Participant directs the Plan in Article IV. Unvested amounts are forfeited at the same time as the Participant’s unvested amounts are forfeited. If an amount allocated to the former Spouse subsequently become vested, the newly-vested amount will be paid to the former Spouse in a single payment on the first Payment Processing Date that is administratively practicable following the additional vesting. If the former Spouse dies before award is fully vested, she shall forfeit her remaining Account balance, and that exact amount shall be returned to the Participant’s subaccount containing Company Deferrals.

(e) Source of Funds. The amount allocated to the former Spouse will be taken on a pro-rata basis from each of the Participant’s subaccounts, based on the vested balance of each subaccount.

5.08 Administrative Delays

The Committee may delay any payment from this Plan for as short a period as is administratively necessary. For example, a delay may be imposed upon all payments when there is a change of recordkeeper or trustee, and a delay may be imposed on payments to any recipient until the recipient has provided (a) the information needed to determine the appropriate tax withholding and tax reporting and (b) any other information reasonably requested by the Committee.

5.09 Noncompliance with Code §409A

To the extent that the Company or the Committee takes any action that causes a violation of Code §409A or fails to take any reasonable action required to comply with Code §409A, Apache shall pay an additional amount (the “gross-up”) to the individual(s) who are subject to the penalty tax under Code §409A(a)(1); the gross-up will be sufficient to put the individual in the same after-tax position he would have been in had there been no violation of Code §409A. The Company shall not pay a gross-up if the cause of the violation of Code §409A is due to the recipient’s action or due to the recipient’s failure to take reasonable actions (such as failing to timely provide the information required for tax withholding or failing to timely provide other information reasonably requested by the Committee — with the result that the delay in payment violates Code §409A). Any gross-up will be paid as soon as administratively convenient after the Committee determines the gross-up is owed, and no later than the end of the calendar year immediately following the calendar year in which the additional taxes are remitted. However, if the gross-up is due to a tax audit or litigation addressing the existence or amount of a tax liability, the gross-up will be paid as soon as administratively convenient after the litigation or audit is completed, and no later than the end of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation.

5.10 Cash Payment and Withholding

All payments from the Plan will be made in cash. The Plan will withhold any taxes or other amounts that it is required to withhold pursuant to any applicable law.

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ARTICLE VI ADMINISTRATION

ARTICLE VI.

6.01 The Committee — Plan Administrator

(a) Current. The Committee is currently comprised of the members of the Retirement Plan Advisory Committee.

(b) Before a Change of Control. Before a change of control, as defined in the Income Continuance Plan, the board of directors of Apache shall appoint an administrative Committee consisting of no fewer than three individuals who may be, but need not be, Participants, officers, directors, or employees of the Company. Apache’s board of directors may remove Committee members at will. In the absence of any Committee members, Apache shall become the sole Committee member.

(c) After a Change of Control. This subsection applies on and after the date of a change of control, as defined in the Income Continuance Plan. The only individuals who are able to serve on the Committee after the date of such change of control are those who are not then employed by Apache, its successor, or any related legal entities. No Committee members may be added on or after the day of such change of control, except that, if the Committee is comprised solely of individuals, (i) the Committee may appoint a legal entity as a Committee member, and (ii) if the number of Committee members drops below three, the remaining member(s) may not resign until having appointed a legal entity or another individual as a Committee member. If all Committee members leave the Committee (if, for example, all Committee members die before the last one appoints a new Committee member or if the sole Committee member is a legal entity that goes out of business), the Committee shall automatically consist of the three Participants with the largest Accounts who are not then employed by Apache, its successor, or any related legal entities, and who are willing to act as Committee members.

(d) Plan Administrator. The Committee is the Plan’s “administrator” within the meaning of ERISA §3(16)(A). The sole named fiduciaries of the Plan are the Committee and any Trustees.

6.02 Committee Duties

The Committee shall administer the Plan and shall have all discretion and powers necessary for that purpose, including, but not by way of limitation, full discretion and power to interpret the Plan, to determine the eligibility, status, and rights of all persons under the Plan and, in general, to decide any dispute and all questions arising in connection with the Plan. The Committee shall direct the Company, the Trustee, or both, as the case may be, concerning distributions in accordance with the provisions of the Plan. The Committee shall maintain all Plan records except records of any Trust. The Committee shall publish, file, or disclose — or cause to be published, filed, or disclosed — all reports and disclosures required by federal or state laws. The Committee may authorize one or more of its members or agents to sign instructions, notices, and determinations on its behalf.

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6.03 Organization of Committee

The Committee shall adopt such rules as it deems desirable for the conduct of its affairs and for the administration of the Plan. It may appoint agents (who need not be members of the Committee) to whom it may delegate such powers as it deems appropriate, except that any dispute shall be determined by the Committee. The Committee may make its determinations with or without meetings. It may authorize one or more of its members or agents to sign instructions, notices, and determinations on its behalf. If a Committee decision or action affects a relatively small percentage of Plan Participants including a Committee member, such Committee member will not participate in the Committee decision or action. The action of a majority of the disinterested Committee members constitutes the action of the Committee.

6.04 Indemnification

The Committee and all of the agents and representatives of the Committee shall be indemnified and saved harmless by the Company against any claims, and the expenses of defending against such claims, resulting from any action or conduct relating to the administration of the Plan, except claims judicially determined to be attributable to gross negligence or willful misconduct.

6.05 Agent for Process

Apache’s General Counsel and Corporate Secretary shall be the agents of the Plan for service of all process on the Plan.

6.06 Determination of Committee Final

The decisions made by the Committee are final and conclusive on all persons.

6.07 No Bonding

Neither the Committee nor any committee member is required to give any bond or other security in any jurisdiction in connection with the administration of the Plan, unless Apache determines otherwise or any applicable federal or state law so requires.

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ARTICLE VII TRUST

Article VII.

7.01 Trust Agreement

The Company may, but is not required to, adopt one or more Trust Agreements for the holding, investment, and administration of funds for Plan benefits. The Trustee may maintain and allocate assets to a separate account for each Participant under the Plan. The assets of any Trust remain subject to the claims of the Company’s general creditors in the event of the Company’s insolvency.

7.02 Expenses of Trust

The parties expect that any Trust created pursuant to Section 7.01 will be treated as a “grantor” trust for federal and state income tax purposes and that, as a consequence, the Company will recognize taxable income from the Trust assets, but the Trust itself will not separately be subject to income tax with respect to its income. However, if the Trust should be separately taxable, the Trustee will pay all such taxes out of the Trust. All expenses of administering any Trust, if not paid by the Company, will be a charge against and will be paid from the assets of the Trust.

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ARTICLE VIII AMENDMENT AND TERMINATION

ARTICLE VIII.

8.01 Termination of Plan

Apache expects to continue the Plan indefinitely, but each Company may terminate its participation in the Plan at any time with Apache’s permission, and Apache may terminate the entire Plan at any time.

8.02 Amendment

(a) Before a Change of Control. Before a change of control”, as defined in the Income Continuance Plan, Apache may amend the Plan at any time and from time to time, retroactively or otherwise, on behalf of all Companies, but no amendment may reduce any vested benefit that has accrued on the later of (a) the effective date of the amendment, or (b) the date the amendment is adopted.

(b) After a Change of Control. The Plan may be amended after a change of control, as defined in the Income Continuance Plan, (i) at any time but only to the extent necessary to alleviate a material adverse tax consequence to one or more Participants, former Spouses, or Beneficiaries, and (ii) at any time after the second anniversary of such change of control, but only with respect to the benefits of Participants who are then employed by Apache, its successor, or any related entity.

(c) Procedure. Each amendment must be in writing. Each amendment must be approved by the board of directors of Apache or its successor, or by an officer of Apache or its successor who is authorized by its board of directors to amend the Plan. Each amendment must be executed by an officer of Apache or its successor who is authorized to execute the amendment.

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ARTICLE IX MISCELLANEOUS

Article IX.

9.01 Funding of Benefits — No Fiduciary Relationship

All benefits payable under the Plan will be paid either from the Trust or by the Company out of its general assets. Nothing contained in the Plan may be deemed to create any fiduciary relationship between the Company and the Participants. Notwithstanding anything herein to the contrary, to the extent that any person acquires a right to receive benefits under the Plan, such right will be no greater than the right of any unsecured general creditor of the Company, except to the extent provided in the Trust Agreement, if any.

9.02 Right to Terminate Employment

The Company may terminate the employment of any Participant as freely and with the same effect as if the Plan were not in existence.

9.03 Inalienability of Benefits

Except for disclaimers under Section 5.05(d) and payments to a former Spouse pursuant to Section 5.07, no Participant or Beneficiary has the right to assign, alienate, pledge, transfer, hypothecate, encumber, or anticipate his interest in any benefits under the Plan, nor are the benefits subject to garnishment by any creditor, nor may the benefits under the Plan be levied upon or attached. The preceding sentence does not apply to the enforcement of a federal tax levy made pursuant to Code §6331, the collection by the United States on a judgment resulting from an unpaid tax assessment, or any debt or obligation that is permitted to be collected from the Plan under federal law (such as the Federal Debt Collection Procedures Act of 1977).

9.04 Claims Procedure

(a) General. Each claim for benefits will be processed in accordance with the procedures established by the Committee. The procedures will comply with the guidelines specified in this Section. The Committee may delegate its duties under this Section.

(b) Representatives. A claimant may appoint a representative to act on his behalf. The Plan will only recognize a representative if the Plan has received a written authorization signed by the claimant and on a form prescribed by the Committee, with the following exceptions. The Plan will recognize a claimant’s legal representative, once the Plan is provided with documentation of such representation. If the claimant is a minor child, the Plan will recognize the claimant’s parent or guardian as the claimant’s representative. Once an authorized representative is appointed, the Plan will direct all information and notification regarding the claim to the authorized representative and the claimant will not be copied on any notifications regarding decisions, unless the claimant provides specific written direction otherwise.

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(c) Extension of Deadlines. The claimant may agree to an extension of any deadline that is mentioned in this Section that applies to the Plan. The Committee or the relevant decision-maker may agree to an extension of any deadline that is mentioned in this Section that applies to the claimant.

(d) Fees. The Plan may not charge any fees to a claimant for utilizing the claims process described in this Section.

(e) Filing a Claim. A claim is made when the claimant files a claim in accordance with the procedures specified by the Committee. Any communication regarding benefits that is not made in accordance with the Plan’s procedures will not be treated as a claim.

(f) Initial Claims Decision. The Plan will decide a claim within a reasonable time up to 90 days after receiving the claim. The Plan will have a 90-day extension, but only if the Plan is unable to decide within 90 days for reasons beyond its control, the Plan notifies the claimant of the special circumstances requiring the need for the extension by the 90th day after receiving the claim, and the Plan notifies the claimant of the date by which the Plan expects to make a decision.

(g) Notification of Initial Decision. The Plan will provide the claimant with written notification of the Plan’s full or partial denial of a claim, reduction of a previously approved benefit, or termination of a benefit. The notification will include a statement of the reason(s) for the decision; references to the plan provision(s) on which the decision was based; a description of any additional material or information necessary to perfect the claim and why such information is needed; a description of the procedures and deadlines for appeal; a description of the right to obtain information about the appeal procedures; and a statement of the claimant’s right to sue.

(h) Appeal. The claimant may appeal any adverse or partially adverse decision. To appeal, the claimant must follow the procedures specified by the Committee. The appeal must be filed within 60 days of the date the claimant received notice of the initial decision. If the appeal is not timely and properly filed, the initial decision will be the final decision of the Plan. The claimant may submit documents, written comments, and other information in support of the appeal. The claimant will be given reasonable access at no charge to, and copies of, all documents, records, and other relevant information.

(i) Appellate Decision. The Plan will decide the appeal of a claim within a reasonable time of no more than 60 days from the date the Plan receives the claimant’s appeal. The 60-day deadline will be extended by an additional 60 days, but only if the Committee determines that special circumstances require an extension, the Plan notifies the claimant of the special circumstances requiring the need for the

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extension by the 60th day after receiving the appeal, and the Plan notifies the claimant of the date by which the Plan expects to make a decision. If an appeal is missing any information from the claimant that is needed to decide the appeal, the Plan will notify the claimant of the missing information and grant the claimant a reasonable period to provide the missing information. If the missing information is not timely provided, the Plan will deny the claim. If the missing information is timely provided, the 60-day deadline (or 120-day deadline with the extension) for the Plan to make its decision will be increased by the length of time between the date the Plan requested the missing information and the date the Plan received it.

(j) Notification of Decision. The Plan will provide the claimant with written notification of the Plan’s appellate decision (positive or adverse). The notification of any adverse or partially adverse decision must include a statement of the reason(s) for the decision; reference to the plan provision(s) on which the decision was based; a description of the procedures and deadlines for a second appeal, if any; a description of the right to obtain information about the second-appeal procedures; a statement of the claimant’s right to sue; and a statement that the claimant is entitled to receive, free of charge and upon request, reasonable access to and copies of all documents, records, and other information relevant to the claim.

(k) Limitations on Bringing Actions in Court. Once an appellate decision that is adverse or partially adverse to the claimant has been made, the claimant may file suit in court only if he does so by the earlier of the following dates: (i) the one-year anniversary of the date of an appellate decision made on or before a Change of Control or the three-year anniversary of the date of an appellate decision made after a Change of Control, or (ii) the date on which the statute of limitations for such claim expires.

9.05 Disposition of Unclaimed Distributions

It is the affirmative duty of each Participant to inform the Plan of, and to keep on file with the Plan, his current mailing address and the mailing address of any beneficiaries. If a Participant fails to inform the Plan of these current mailing addresses, neither the Plan nor the Company is responsible for any late payment of benefits or loss of benefits. The Plan, the Committee, and the Company have no duty to search for a missing individual until the date of a Change of Control, at which point the Company has the duty to undertake reasonable measures to search for the proper recipient of any payment under the Plan that is scheduled to be paid on or after the date of the Change of Control. If the missing individual is not found within a year after a payment should have been made to him, all his benefits will be forfeited. If the missing individual later is found, the exact amount forfeited will be restored to his Account as soon as administratively convenient, without any adjustment for forgone investment earnings or losses.

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9.06 Distributions due Infants or Incompetents

If any person entitled to a distribution under the Plan is an infant, or if the Committee determines that any such person is incompetent by reason of physical or mental disability, whether or not legally adjudicated an incompetent, the Committee has the power to cause the distributions becoming due to such person to be made to another for his benefit, without responsibility of the Committee to see to the application of such distributions. Distributions made pursuant to such power will operate as a complete discharge of the Company, the Trustee, the Plan, and the Committee.

9.07 Use and Form of Words

When any words are used herein in the masculine gender, they are to be construed as though they were also used in the feminine gender in all cases where they would so apply, and vice versa. Whenever any words are used herein in the singular form, they are to be construed as though they were also used in the plural form in all cases where they would so apply, and vice versa.

9.08 Headings

Headings of Articles and Sections are inserted solely for convenience and reference, and constitute no part of the Plan.

9.09 Governing Law

The Plan shall be construed in accordance with ERISA, the Code, and, to the extent applicable, the laws of the State of Texas excluding any conflicts-of-law provisions.

IN WITNESS WHEREOF, the Company has caused this duly adopted Plan to be executed below by its duly authorized officer or representative to be effective as of January 1, 2015.

APACHE CORPORATION
By:	/s/ Margery M. Harris
	Margery M. Harris
	Executive Vice President, Human Resources
Date: July 16, 2014

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EX-10.4

Exhibit 10.4

APACHE CORPORATION

NON-EMPLOYEE DIRECTORS’ COMPENSATION PLAN

As Amended and Restated July 16, 2014, Effective as of July 1, 2014

PURPOSE

The purpose of the Non-Employee Directors’ Compensation Plan (the “Plan”) is to set forth certain of the compensation arrangements for members of the board of directors (the “Board”) of Apache Corporation (“Apache”) who are not also employees of Apache (“Non-Employee Directors”). The Plan does not supersede or amend in any way any other arrangements relating to Non-Employee Directors including specifically, without limitation, the Outside Directors’ Retirement Plan, the 2007 and 2011 Omnibus Equity Compensation Plans, indemnification provisions of Apache’s charter or bylaws, or policies with respect to reimbursement of expenses.

It is Apache’s express intention that this Plan comply with the requirements of Code §409A, and the Plan shall be interpreted in that light.

PLAN PROVISIONS

1. Board Retainer. Each Non-Employee Director shall be paid $25,000 at the end of each calendar quarter (or as soon thereafter as is administratively practicable) during which he or she served as a member of Apache’s Board (“Cash Retainer Fee”). If a Non-Employee Director serves as a member of Apache’s Board for less than an entire calendar quarter, the Cash Retainer Fee for that quarter shall be prorated on the basis of the number of weeks served during that calendar quarter.

2. Lead Director Retainer. Subject to section 4 below, each Non-Employee Director serving as lead director of Apache’s Board shall be paid $6,250 at the end of each calendar quarter (or as soon thereafter as is administratively practicable) (“Lead Director Retainer Fee”). If a Non-Employee Director serves as lead director for less than an entire calendar quarter, the Lead Director Retainer Fee for that quarter shall be prorated on the basis of the number of weeks as lead director during that calendar quarter.

3. Committee Chairperson Retainers. Subject to section 4 below, each Non-Employee Director serving as chairperson of any committee of Apache’s Board shall be paid the fee indicated below at the end of each calendar quarter (or as soon thereafter as is administratively practicable) (“Committee Chairperson Retainer Fee”):

• Audit Committee—$5,000

• Corporate Governance and Nominating Committee—$3,750

• Management Development and Compensation Committee—$5,000

• Stock Plan Committee—$1,250

If a Non-Employee Director serves as chairperson of any committee of Apache’s Board for less than an entire calendar quarter, the applicable Committee Chairperson Retainer Fee for that quarter shall be prorated on the basis of the number of weeks as chairperson during that calendar quarter.

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4. Combined Lead Director and Committee Chairperson Retainer. If the Non-Employee Director serving as lead director of Apache’s Board is also serving as chairperson of any committee of Apache’s Board, the Non-Employee Director shall be paid $7,500 at the end of each calendar quarter (or as soon thereafter as is administratively practicable) (“Combined Retainer Fee”). If a Non-Employee Director serves as both lead director and committee chairperson for less than an entire calendar quarter, the Combined Retainer Fee for that quarter shall be prorated on the basis of the number of weeks serving as both lead director and chairperson during that calendar quarter.

5. Attendance Fees. No attendance fee shall be paid to any Non-Employee Director for any meeting of the Board or any committee thereof attended in person or by teleconference, video conference, or other similar means.

6. Optional Deferral of Fees.

(a) Deferrable Fees. A Non-Employee Director may defer all or any portion of any unpaid Cash Retainer Fees, Lead Director Retainer Fees, Committee Chairperson Retainer Fees, and Combined Retainer Fees (“Deferrable Fees”).

(b) Election to Defer. A Non-Employee Director’s election to defer all or any portion of Deferrable Fees (“Deferral Election”) shall be effected by the completion of a Deferral Election form. A Deferral Election form must be executed by the deferring Non-Employee Director and received by Apache on or before December 31 of the year prior to the year in which the Deferrable Fees are earned, except that a new Non-Employee Director may enter into a Deferral Election within 30 days of becoming a Non-Employee Director. A Deferral Election shall apply only to Deferrable Fees paid for services rendered after the date of the Deferral Election. Each December 31, a Deferral Election made for the following year shall become irrevocable. A new Deferral Election must be made each year for the upcoming year.

(c) Memorandum Account. Apache shall maintain a separate account (“Memorandum Account”) for each deferring Non-Employee Director. Each Memorandum Account shall be subdivided into a “Cash Account” and a “Stock Account.” The Memorandum Accounts are merely for recordkeeping purposes, and do not represent any actual property that has been set aside for Non-Employee Directors. Nothing contained in this Plan shall be construed to require Apache to fund any Memorandum Account. Neither the deferring Non-Employee Director nor his or her Beneficiary shall have any property interest whatsoever in any specific assets of Apache. A Non-Employee Director shall have no ownership rights with respect to any balance in his or her Memorandum Account, and thus shall have no right to vote any Stock in his or her Stock Account.

(d) Crediting of Cash Accounts. Any deferred Cash Retainer Fees and deferred Committee Chairperson Retainer Fees shall be credited to the Cash Account. Any dividends paid on Stock in the Stock Accounts shall be credited to the Cash Account. All amounts credited to a Cash Account shall be credited with investment earnings at the rate of interest earned by Apache’s short-term marketable securities portfolio or an equivalent index or market rate for similar investments in short-term marketable securities.

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(e) Crediting of Stock Accounts. No deferrals shall be credited to a Stock Account; however, see section 6(f) for transfers from the Cash Account to the Stock Account. All amounts credited to a Stock Account shall be treated as if such amounts were invested in Stock. Apache shall at all times have reserved from its treasury shares for issuance under this Plan a number of shares at least equal to the number of shares of Stock in the Stock Accounts.

(f) Transfers from Cash Account to Stock Account. Each year, a Non-Employee Director may elect to transfer all or a portion of his or her Cash Account to his or her Stock Account (but only in whole-share increments) by completing an election form that must be received by Apache on or before December 31. Any such transfer shall be made as of the first trading day of the following year, and shall be based on the per share closing price of the Stock as reported on the Composite Tape for the first trading day of the year. Transfers are not permitted from a Stock Account to a Cash Account.

(g) Payout Elections. If a Non-Employee Director’s directorship terminated before January 1, 2005, his or her benefit payments shall be determined under the terms of the Plan on December 31, 2004 and the payout elections in effect at the time his or her directorship terminated. If a Non-Employee Director had a Separation from Service after December 31, 2004 and before January 1, 2009, his or her benefits shall be determined under the terms of the Plan in effect at the time of his or her Separation from Service (defined in paragraph (v) below). The remainder of this section 6(g) shall only apply to individuals who continue as Non-Employee Directors after December 31, 2008, or who become Non-Employee Directors after December 31, 2008.

(i) Election. Each individual who is Non-Employee Director on January 1, 2009 has made a payout election for his or her Memorandum Account, which specified both the timing and form of distribution. A new Non-Employee Director shall make a payout election at the same time that he or she makes his or her first Deferral Election. If no payout election is timely made, the Non-Employee Director shall be deemed to have elected to be paid a single lump-sum payment in January after his or her Separation from Service. The payout election with respect to a Memorandum Account is irrevocable after the deadline for making the payout election. The payout election will not apply if there is a change of control (see section 6(h)) or the Non-Employee Director dies (see section 6(i)).

(ii) Form of Payout. A Non-Employee Director may elect to be paid out in a single lump-sum payment or in two to ten annual installments. Each installment from a Stock Account shall be equal to the number of shares in the Stock Account on the second trading day of that year, divided by the number of remaining installments, rounded down to the nearest whole share. For example, the first installment from a Stock Account payable in seven installments beginning in 2010 shall be one-seventh of the shares in the

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account on the second trading day of 2010; the second installment shall be one-sixth of the shares in the account on the second trading date of 2011; etc. Each installment from a Cash Account shall be equal to the balance of the Cash Account on the second trading day of the year, divided by the number of remaining installments, except that the last installment shall equal the balance of the Cash Account at the time the distribution is processed. Distributions from the Stock Account shall be paid in whole shares of Stock. Distributions from the Cash Account shall be paid in cash.

(iii) Timing of Payment(s). A Non-Employee Director may select a specific year in which the single lump-sum payment is made or the installment payments begin (“In-Service Distribution”), in which case the payment will be made as soon as administratively practicable in January of the earlier of the selected year or the year after the Non-Employee Director’s Separation from Service. Alternatively, a Non-Employee Director may elect for his or her single lump-sum payment or first installment to be paid as soon as administratively practicable in the January after his or her Separation from Service. Subsequent installment payments shall be made in January of each year, beginning with the year after the first installment was paid.

(iv) Special Rules Where Payments Begin While Still a Director. This paragraph (iv) applies to a Non-Employee Director who elected an In-Service Distribution. A second Memorandum Account shall be established for the Non-Employee Director for any amounts deferred into the Plan during or after the year in which the In-Service Distribution is scheduled to begin. Distributions from the second Memorandum Account shall be subject to the rules specified in this section 6(g), except that a Non-Employee Director must complete a payout election for the second Memorandum Account by the December 31 that immediately precedes the year in which amounts are first deferred into the second Memorandum Account.

(v) Definition of Separation from Service. The term “Separation from Service” has the same meaning as the term “separation from service” in Code §409A(a)(2)(A)(i), determined using the default rules in the regulations and other guidance of general applicability issued pursuant to Code §409A, including the special rules for members of a board of directors found in Treasury Regulation §1.409A-1(h)(5) and §1.409A-1(c)(2)(ii). In general, a Separation from Service will occur when a Non-Employee Director ceases to be a member of the Board.

(vi) Special Rules for Specified Employees.

If a Non-Employee Director is a Specified Employee, (A) any payments under paragraph (iii) above that are triggered by his or her Separation from Service and scheduled to occur within six months after the Separation from Service shall be delayed and paid six months after the Separation from Service, and (B) section 6(h) is modified for a Non-Employee Director whose Separation from Service preceded a change of control by less than six months to provide that the lump sum payment will not occur until six months after the Separation from Service.

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The term “Specified Employee” has the same meaning as the term “specified employee” in Code §409A(a)(2)(B)(i), and is determined using the default rules in the regulations and other guidance of general applicability issued pursuant to Code §409A.

(h) Change of Control. If there is a change of control of Apache that is described in Code §409A(a)(2)(A)(v), each Memorandum Account shall be paid to the appropriate Non-Employee Director (or to the Beneficiary of a deceased Non-Employee Director) in a single lump-sum payment made on the date of the change of control or as soon thereafter as is administratively practicable and in no event later than the end of the calendar year in which the change of control occurs.

(i) Beneficiaries. If a Non-Employee Director dies while there is still a balance in his or her Memorandum Account, that amount shall be paid to his or her Beneficiary in a single lump-sum payment that is made as soon as administratively convenient four months after the Non-Employee Director’s death, but in no event later than the end of the calendar year that contains the day that is four months after the Non-Employee Director’s death. This four-month period is designed to provide the Beneficiary with a sufficient opportunity to disclaim all or part of the benefit, as explained in paragraph (iv) below. No payment shall be made until Apache has been furnished with proof of death and such other information as it may reasonably require.

(i) Designation. Each Non-Employee Director shall designate one or more persons, trusts, or other entities as his or her beneficiary (“Beneficiary”). In the absence of an effective Beneficiary designation as to part or all of a Memorandum Account, such amount shall be distributed to the Non-Employee Director’s surviving Spouse, if any, otherwise to the Non-Employee Director’s estate. Unless the Non-Employee Director’s Beneficiary designation form specifies otherwise, if a Beneficiary dies after the Non-Employee Director but before being paid by the Plan, the Plan shall pay the Beneficiary’s estate.

(ii) Changing Beneficiaries. A Beneficiary designation may be changed by the Non-Employee Director at any time and without the consent of any previously designated Beneficiary. However, if the Non-Employee Director is married, the Non-Employee Director’s Spouse shall be the Beneficiary unless the Spouse has consented to the designation of a different Beneficiary. To be effective, the Spouse’s consent must have been made before January 1, 2005 or, if made on or after January 1, 2005, the Spouse’s consent must be in writing, witnessed by a notary public, and filed with Apache. If the Non-Employee Director has designated his or her Spouse as a primary or contingent Beneficiary, and the Non-Employee Director and Spouse later divorce (or their marriage is annulled), then the former Spouse will be treated as having pre-deceased the Non-Employee Director for purposes of interpreting a Beneficiary designation form completed prior to the divorce or annulment; this provision will apply only if Apache is notified of the divorce or annulment before payment to the former Spouse is made.

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(iii) “Spouse” shall mean the individual to whom a Non-Employee Director is lawfully married according to the laws of the state of the Non-Employee Director’s domicile.

(iv) Disclaimers. Any individual or legal entity who is a Beneficiary may disclaim all or any portion of his or her interest in the Plan, provided that the disclaimer satisfies the requirements of Code §2518(b) and applicable state law. The legal guardian of a minor or legally incompetent person may disclaim for such person. The personal representative (or the individual or legal entity acting in the capacity of the personal representative according to applicable state law) may disclaim on behalf of a Beneficiary who has died. The amount disclaimed shall be distributed as if the disclaimant had predeceased the individual whose death caused the disclaimant to become a Beneficiary.

(j) Adjustments in Stock. In the event of any merger, consolidation, liquidation, dissolution, recapitalization, or reorganization of Apache, split, subdivision, or consolidation of shares of Stock, the payment of a stock dividend, or any other material change in Apache’s capital structure, the number of shares of Stock shown in each deferring Non-Employee Director’s Stock Account shall be adjusted to reflect that number of shares of Stock or such cash, securities, or other property to which such Non-Employee Director would have been entitled if, immediately prior thereto, such Non-Employee Director had been the holder of record of the number of shares of Stock shown in the Stock Account. Notwithstanding the foregoing, the issuance by Apache of Stock, rights, options, or warrants to acquire Stock, or securities convertible or exchangeable into Stock in consideration of cash, property, labor, or services, whether or not for fair value, shall not result in an adjustment pursuant to this section 6(j).

7. Assignment and Transfer. The right of the Non-Employee Director or any other person to receive payments under the Plan shall not be assigned, transferred, pledged, or encumbered.

8. Amendment of Plan. The Plan may be amended from time to time or terminated by vote of the Board. Upon such amendment or termination, Non-Employee Directors shall not be entitled to receive pursuant to the Plan any compensation or other rights or benefits not accrued hereunder prior to the time of amendment or termination hereof; provided, however, that no such Plan amendment or termination shall impair any rights of Non-Employee Directors to amounts previously accrued pursuant to the Plan or accumulated in such Non-Employee Director’s Memorandum Account. A Plan termination shall not affect the timing of any benefit payments from a Memorandum Account; payment may occur substantially after the Plan is terminated.

9. Successors and Assigns. The Plan is binding upon Apache and its successors and assigns. The Plan shall continue in effect until terminated by the Board. Any such termination shall operate only prospectively and shall not affect the rights and obligations under elections previously made.

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10. Administrative Delays. The Plan shall be administered by the Management Development and Compensation Committee (the “MD&C Committee”) of the Board. The MD&C Committee may delay any payment from this Plan for as short a period as is administratively necessary. For example, a delay may be imposed upon all payments from the Plan when there is a change of recordkeeper, and a delay may be imposed on payments to any recipient until they have provided the information needed for tax withholding and tax reporting, as well as any other information reasonably requested by the MD&C Committee. If possible, the delay will satisfy one of the conditions to be considered a permissible delay under Code §409A.

11. 409A Noncompliance. To the extent that Apache or the MD&C Committee takes any action that causes a violation of Code §409A or fails to take reasonable actions required to comply with Code §409A, Apache shall pay an additional amount (the “gross-up”) to the individual(s) who are subject to the penalty tax under Code §409A(a)(1) that is sufficient to put the individual in the same after-tax position he or she would have been in had there been no violation of Code §409A. Apache shall not pay a gross-up if the cause of the violation of Code §409A is the recipient’s failure to take reasonable actions (such as failing to timely provide the information required for tax withholding or failing to timely provide other information reasonably requested by the MD&C Committee – with the result that the delay in payment violates Code §409A). Any gross-up will be made as soon as administratively convenient after the MD&C Committee determines the gross-up is owed, and no later than the end of the calendar year immediately following the calendar year in which the additional taxes are remitted. However, if the gross-up is due to a tax audit or litigation addressing the existence or amount of a tax liability, the gross-up will be paid as soon as administratively convenient after the litigation or audit is completed, and no later than the end of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation.

12. Notices. Any notice, form, or election required or permitted to be given under the Plan shall be in writing and shall be given by first class mail, by Federal Express, UPS, or other carrier, by fax or other electronic means, or by personal delivery to the appropriate party, addressed:

(a) If to Apache, to Apache Corporation at its principal place of business at 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400 (Attention: Corporate Secretary) or at such other address as may have been furnished in writing by Apache to a Non-Employee Director; or

(b) If to a Non-Employee Director or Spouse, at the address the Non-Employee Director has furnished to Apache in writing.

(c) If to a Beneficiary, at the address the Non-Employee Director has furnished to Apache in writing for such Beneficiary, unless the Beneficiary has furnished his or her own address in writing to Apache.

Any such notice to a Non-Employee Director, Spouse, or Beneficiary shall be deemed to have been given as of the third day after deposit in the United States Postal Service, postage prepaid, properly addressed as set forth above, in the case of a mailed notice, or as of the date delivered in the case of any other method of delivery.

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13. Gender. Any term used herein in the singular shall also include the plural, and the masculine gender shall also include the feminine gender, and vice versa.

14. Statutory References. Any reference to a specific section of the Code shall be deemed to refer to that section or to the appropriate successor section.

15. Governing Law. The Plan shall be governed by the laws of the State of Texas, ignoring any conflicts-of-law provisions.

Dated: July 16, 2014, effective July 1, 2014

ATTEST:	APACHE CORPORATION
/s/ Cheri L. Peper	By:	/s/ Margery M. Harris
Cheri L. Peper	Margery M. Harris
Corporate Secretary	Executive Vice President,
	Human Resources

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EX-10.5

Exhibit 10.5

APACHE CORPORATION

OUTSIDE DIRECTORS’ RETIREMENT PLAN

(As Amended and Restated July 16, 2014; Effective as of June 30, 2014)

APACHE CORPORATION (the “Company”) established the Apache Corporation Outside Directors’ Retirement Plan (the “Plan”), effective as of December 15, 1992, to provide non-employee Directors of the Company (“Outside Directors”) with certain retirement and death payments.

The purpose of the Plan was to advance the interests of the Company, its subsidiaries, and its stockholders by continuing to attract and retain outstanding individuals as Outside Directors. The Company is amending the plan, effective as of June 30, 2014, to cease accruals for new board members but to continue accruals for current board members.

It is the Company’s express intention that this Plan comply with the requirements of Code §409A, and the Plan shall be interpreted in that light.

ARTICLE I

Eligibility, Participation and Contributions

1.1 Eligibility and Participation.

Through June 30, 2014, each Outside Director participates in the Plan as of the date his or her Service began. No Outside Director first elected after June 30, 2014, shall be eligible to participate in the Plan.

Only Outside Directors who are board members on June 30, 2014 shall be eligible to continue accruing benefits in the Plan after June 30, 2014; individuals who become Outside Directors after June 30, 2014 shall not accrue benefits in the Plan.

1.2 Contributions.

All amounts payable under the Plan shall be paid from the general assets of the Company. Nothing contained in the Plan shall be deemed to create any fiduciary relationship between the Company and the participating Outside Director (“Participant”). The rights of a Participant under the Plan are no greater than the rights of an unsecured general creditor of the Company.

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ARTICLE II

Retirement Payments

2.1 Definitions.

The term “Separation from Service” has the same meaning as the term “separation from service” in Code §409A(a)(2)(A)(i). A Separation from Service is determined using the default rules in the regulations and other guidance of general applicability issued pursuant to Code §409A, including the special rules for a member of a board of directors found in Treasury Regulation §1.409A-1(h)(5) and §1.409A-1(c)(2)(ii). In general, a Separation from Service will occur when a Participant ceases to be a member of the Company’s Board of Directors.

The term “Specified Employee” has the same meaning as the term “specified employee” in Code §409A(a)(2)(B)(i), and is determined using the default rules in the regulations and other guidance of general applicability issued pursuant to Code §409A.

2.2 Retirement Payments.

(a) Eligibility for Benefits. A Participant who Retires with four or more Quarters of Service is entitled to receive benefits under the Plan.

(b) Amount of Benefits. The amount of benefits under the Plan is equal to the value of a series of quarterly payments, with each payment equal in amount to one-fourth of the Participant’s Annual Director’s Retainer, and with the number of quarterly payments equal to the number of the Participant’s Quarters of Service.

(c) “Annual Director’s Retainer” means the aggregate annual amount of an Outside Director’s board retainer fee payable in cash pursuant to section 1 of the Company’s Non-Employee Directors’ Compensation Plan (or comparable section of any successor plan), whether or not all or a portion of such amount is deferred or delayed. Such amount will be determined as of the earlier of the date a Participant ceases to be an Outside Director or June 30, 2014, at which date the quarterly retainer was $37,500.

(d) “Quarter of Service” means the aggregate total full months of Service as an Outside Director divided by three and rounded up to the next whole number, up to a maximum of 40 Quarters of Service.

(e) “Retirement, Retired or Retires” means a Participant’s ceasing to hold office as an Outside Director, for any reason other than death.

(f) “Service” means the aggregate total, not to exceed 120, of (i) the number of full months beginning on or after July 1, 1992 (whether or not consecutive) that a Participant held office as an Outside Director, whether or not a Participant at the time, and (ii)  ¹⁄₂ the number of full months prior to July 1, 1992 (whether or not consecutive) that a Participant held office as an Outside Director; provided, however, that a Participant who, as of December 15, 1992, has held office as an Outside Director for an aggregate total of 15 years shall automatically be credited with 120 full months of Service.

(g) Episodic Participation. If a Participant has a Separation from Service and then becomes an Outside Director again, (i) the Participant’s benefits from his or her initial episode of participation shall be paid according to the terms of the Plan on the date of his or her Separation from Service and shall not be affected by any subsequent

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Service, and (ii) the Participant’s benefits from his or her later episodes of participation shall be calculated by ignoring his or her Service from earlier episodes of participation. In calculating the amount of benefits for the most recent episode of participation, the maximum Quarters of Service is 40, reduced by the number of Quarters of Service for which he or she earned benefits under this Plan from earlier episodes of participation.

2.3 Retirement Payments Following a Change of Control.

In the event of a “change of control” of the Company, as defined in the Company’s Income Continuance Plan (as amended or the corresponding provisions of any successor plan), each then current Outside Director shall be eligible for the benefits described in section 2.2 even if the Outside Director has less than four Quarters of Service. If the change of control is a transaction described in §409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (“Code”), each Participant shall be paid a single lump-sum payment on the date of the change of control, or as soon as practicable thereafter, equal to the net present value of the benefit to which the Participant is entitled, calculated in the manner described in section 2.5, as of the date of the change of control; however, if the Participant was a Specified Employee whose Separation from Service occurred less than six months before the change of control, he or she shall be paid a single lump-sum payment six months after the Separation from Service, or as soon as practicable thereafter, equal to the net present value of the benefit to which the Participant is entitled, calculated in the manner described in section 2.5, as of the date six months after the Separation from Service. If the change of control is not a transaction described in Code §409A(a)(2)(A)(v), each Participant shall be paid at the time(s) specified in section 2.4 or 2.5, whichever is applicable.

2.4 Quarterly Payments.

A Participant may elect to be paid quarterly installments that are paid on the last day of each calendar quarter (or as near to that date as administratively practicable, except that any installment scheduled to be paid during one calendar year shall be paid during such calendar year). See section 2.5 for the deadline for the Participant’s payout election. The first quarterly payment shall be made as of the last day of the calendar quarter after the date of the Participant’s Separates from Service, unless the Participant is a Specified Employee, in which case the first two quarterly payments shall be delayed until, and paid with, the third regularly scheduled quarterly payment.

2.5 Lump-Sum Payments.

A Participant shall receive a single lump-sum payment unless the Participant elects quarterly installments. Participants on December 31, 2008 have already made their payout election. A new Participant’s payout election must be made within 30 days after the individual becomes an Outside Director. Once the deadline for making a payout election has passed, the payout election is irrevocable.

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The lump sum shall be paid as soon as administratively practicable after the Participant’s Separation from Service (and no later than the last day of the calendar year containing the day after the Separation from Service), unless the Participant is a Specified Employee, in which case the lump sum shall be paid as soon as administratively practicable after six months after the Participant’s Separation from Service (and no later than the last day of the calendar year containing the date that is six months after the Separation from Service). The amount of the lump sum shall be calculated by the Committee as of the date of the Participant’s Separation from Service. The amount of the lump sum shall be equal to the net present value of the quarterly payments to which the Participant would otherwise be entitled, determined using an annual interest rate equal to the rate on ten-year treasury bonds/notes as reported in The Wall Street Journal published on or most recently prior to the date of the Participant’s Separation from Service.

2.6 Retirement before This Restatement.

A Participant who Retired before January 1, 2005, shall receive his or her benefit in accordance with the terms of the Plan in effect at the time of the Retirement. A Participant whose Separation from Service occurred on or after January 1, 2005 shall receive his or her benefit in accordance with the terms of the Plan in effect, including any payout elections in effect, at the time of the Separation from Service.

ARTICLE III

Death Payments

3.1 Death Benefits.

(a) Eligibility for Death Benefits. If a Participant dies before receiving all of his or her benefits under Article II, the Participant’s Beneficiary, as determined in section 3.2, shall receive the remaining benefits. If a Participant elected quarterly payments, the Participant’s Beneficiary shall be paid a lump sum equal to the net present value of any remaining payments, calculated as of the date of the Participant’s death, and calculated in the manner specified in section 2.5. If a Participant is scheduled to receive a single lump-sum payment, but dies before doing so, the Participant’s Beneficiary shall be paid the lump sum.

(b) Timing. Payment to the Beneficiary shall be made as soon as administratively practicable four months after the Participant’s death, but in no event later than the end of the calendar year that contains the day that is four months after the Participant’s death. This four-month period is designed to provide the Beneficiary with a sufficient opportunity to disclaim all or part of the benefit, as explained in section 3.2(e). No payment shall be made until the Company has been furnished with proof of death and such other information as it may reasonably require.

(c) Beneficiary in Pay Status. The Beneficiary of a Participant shall receive his or her death benefits in accordance with the terms of the Plan in effect on the date of the Participant’s death.

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3.2 Beneficiaries.

(a) “Beneficiary” means the recipient of the Participant’s death benefits under section 3.1.

(b) Designation. Each Participant shall designate one or more persons, trusts, or other entities as his or her Beneficiary. In the absence of an effective Beneficiary designation as to part or all of a Participant’s death benefits, the Participant’s surviving Spouse, if any, shall be the Participant’s Beneficiary, and in the absence of a surviving Spouse, the Participant’s estate shall be the Beneficiary. Unless the Participant’s Beneficiary designation form specifies otherwise, if a Beneficiary dies after the Participant but before being paid by the Plan, the Plan shall pay the Beneficiary’s estate.

(c) Changing Beneficiaries. A Beneficiary designation may be changed by the Participant at any time and without the consent of any previously designated Beneficiary. However, if the Participant is married, the Participant’s Spouse shall be the Participant’s Beneficiary unless the Spouse has consented to the designation of a different Beneficiary. To be effective, the Spouse’s consent must have been made before January 1, 2005 or, if made on or after January 1, 2005, the Spouse’s consent must be in writing, witnessed by a notary public, and filed with the Company. If the Participant has designated his or her Spouse as a primary or contingent Beneficiary, and the Participant and Spouse later divorce (or their marriage is annulled), then the former Spouse will be treated as having pre-deceased the Participant for purposes of interpreting a Beneficiary designation form completed prior to the divorce or annulment; this provision will apply only if the Company is notified of the divorce or annulment before payment to the former Spouse is made.

(d) “Spouse” shall mean the individual to whom a Participant is lawfully married according to the laws of the state of the Participant’s domicile.

(e) Disclaimers. Any individual or legal entity who is a Beneficiary may disclaim all or any portion of his or her interest in the Plan, provided that the disclaimer satisfies the requirements of Code §2518(b) and applicable state law. The legal guardian of a minor or legally incompetent person may disclaim for such person. The personal representative (or the individual or legal entity acting in the capacity of the personal representative according to applicable state law) may disclaim on behalf of a Beneficiary who has died. The amount disclaimed shall be distributed as if the disclaimant had predeceased the individual whose death caused the disclaimant to become a Beneficiary.

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ARTICLE IV

Administration, Amendment and Termination

4.1 The Management Development and Compensation Committee.

The Plan shall be administered by the Management Development and Compensation Committee (the “Committee”) of the Company’s Board of Directors. All administrative duties, including but not limited to, the power to interpret the Plan and to decide any dispute, shall be carried out by the Committee, which shall have full discretion and authority hereunder. All claims under the Plan shall be filed with the Company and shall be decided by the Committee. The decisions made by the Committee shall be final and binding on all persons having or claiming to have rights under the Plan.

4.2 Termination or Amendment of Plan.

The Plan may be terminated or amended at any time through action of the Company’s Board of Directors. No termination or amendment, however, shall reduce the payments (a) to a Participant or Beneficiary where a Participant has already died or reached Retirement, (b) to which a Participant is or may become entitled, based on such Participant’s Service and Annual Director’s Retainer as determined on the effective date of such termination or amendment, or (c) to which a Participant is or may become entitled pursuant to section 2.3 as a result of a change of control. The termination of the Plan shall not affect the timing of any benefit payments; payments after the Plan has terminated will be made at the time(s) specified in Articles II and III.

ARTICLE V

Miscellaneous

5.1 Inalienability of Payments.

No Participant shall have the right to assign, transfer, hypothecate, encumber or anticipate his or her interest in any payments under the Plan, nor shall the payments under the Plan be subject to any legal process to levy upon or attach such payments for any claim against the Participant, Spouse, or Beneficiary.

5.2 Notices.

Any notice, form, or election required or permitted to be given under the Plan shall be in writing and shall be given by first class mail, by Federal Express, UPS, or other carrier, by fax or other electronic means, or by personal delivery to the appropriate party, addressed:

(a) If to the Company, to Apache Corporation at its principal place of business at 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400 (Attention: Corporate Secretary) or at such other address as may have been furnished in writing by the Company to a Participant; or

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(b) If to a Participant or Spouse, at the address the Participant has furnished to the Company in writing.

(c) If to a Beneficiary, at the address the Participant has furnished to the Company in writing for such Beneficiary, unless the Beneficiary has furnished his or her own address to the Company.

Any such notice to a Participant, Spouse, or Beneficiary shall be deemed to have been given as of the third day after deposit in the United States Postal Service, postage prepaid, properly addressed as set forth above, in the case of a mailed notice, or as of the date delivered in the case of any other method of delivery.

5.3 Disposition of Unclaimed Payments.

Any communication, statement or notice addressed to a Participant at his or her last post office address, as provided to the Company under section 5.2, will be binding on the Participant, Spouse, or Beneficiary for all purposes of the Plan. If the Company cannot ascertain the whereabouts of any person to whom a payment is due under the Plan within three years from the date such payment is due, such payment shall be cancelled on the records of the Plan and the amount thereof forfeited to the Company.

5.4 Administrative Delays.

The Committee may delay any payment from this Plan for as short a period as is administratively necessary. For example, a delay may be imposed upon all payments from the Plan when there is a change of recordkeeper, and a delay may be imposed on payments to any recipient until they have provided the information needed for tax withholding and tax reporting, as well as any other information reasonably requested by the Committee. If possible, the delay will satisfy one of the conditions to be considered a permissible delay under Code §409A.

5.5 409A Noncompliance.

To the extent that the Company takes any action that causes a violation of Code §409A or fails to take reasonable actions required to comply with Code §409A, the Company shall pay an additional amount (the “gross-up”) to the individual(s) who are subject to the penalty tax under Code §409A(a)(1) that is sufficient to put the individual in the same after-tax position he or she would have been in had there been no violation of Code §409A. The Company shall not pay a gross-up if the cause of the violation of Code §409A is the recipient’s failure to take reasonable actions (such as failing to timely provide the information required for tax withholding or failing to timely provide other information reasonably requested by the Committee – with the result that the delay in payment violates Code §409A). Any gross-up will be made as soon as administratively convenient after the Committee determines the gross-up is owed, and no later than the end of the calendar year immediately following the calendar year in which the additional taxes are remitted. However, if the gross-up is due to a tax audit or litigation addressing

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the existence or amount of a tax liability, the gross-up will be paid as soon as administratively convenient after the litigation or audit is completed, and no later than the end of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation.

5.6 Gender.

Any term herein used in the singular shall also include the plural, and the masculine gender shall also include the feminine gender, and vice versa.

5.7 Statutory References.

Any reference to a specific section of the Code shall be deemed to refer to that section or to the appropriate successor section.

5.8 Governing Law.

The Plan shall be governed by the laws of the State of Texas, ignoring any conflicts-of-law provisions.

Dated: July 16, 2014

ATTEST:			APACHE CORPORATION
By:	/s/ Cheri L. Peper	By:	/s/ Margery M. Harris
	Cheri L. Peper		Margery M. Harris
	Corporate Secretary		Executive Vice President,
			Human Resources

8

EX-10.6

Exhibit 10.6

Apache Corporation

Non-Employee Directors’ Restricted Stock Units Program Specifications

As Amended and Restated July 16, 2014

Share Plan:	2011 Omnibus Equity Compensation Plan (the “Omnibus Plan”), the terms of which are incorporated herein by reference.
Administration:	This Program will be administered by the Stock Plan Committee of the Company’s Board of Directors.
Eligible Participants:	Members of the Company’s Board of Directors, as of the applicable grant date, who are neither officers nor employees of the Company.
Objective:	The program is designed to be administered in conjunction with the provisions of the current Non-Employee Directors’ Compensation Plan as a means to recognize the non-employee directors for services rendered through the awarding of equity compensation.
Grant* upon Program Approval:	On July 16, 2014, restricted stock units (“RSUs”) the number of which is calculated by dividing $75,000 by the Fair Market Value (as defined in the Omnibus Plan) of a share of Apache Common Stock on the grant date. If applicable, the grant shall be prorated for a non-employee director’s service during the period January 1 – June 30, 2014. If the calculated number of RSUs includes a fraction, the number shall be rounded down to the nearest whole number.
Quarterly Grant Dates:	Beginning September 30, 2014, on the last day of each calendar quarter.
Quarterly Grant*:	RSUs the number of which is calculated by dividing $50,000 by the Fair Market Value (as defined in the Omnibus Plan) of a share of Apache Common Stock on the grant date. If applicable, the grant shall be prorated for a non-employee director’s service during the calendar quarter. If the calculated number of RSUs includes a fraction, the number shall be rounded down to the nearest whole number.
Program Term:	Until termination of the Omnibus Plan
Vesting:	100% as of grant date, with 100% automatic, mandatory deferral as described below.
Automatic Deferral	Upon vesting, the RSUs will be deferred into the Outside Directors’ Deferral Program and the RSUs and the associated dividend amounts (converted to shares of the Company’s common stock) will be distributed in a lump sum at the times specified in the Outside Directors’ Deferral Program.

* These grants do not result in any change to the cash retainers for board, lead director, and committee service paid under the provisions of the Non-Employee Directors’ Compensation Plan.

EX-10.7

Exhibit 10.7

Apache Corporation

Outside Directors’ Deferral Program

Apache hereby establishes this Program, effective as of July 16, 2014, under the provisions of the Apache Corporation 2011 Omnibus Equity Compensation Plan.

Apache intends for this Program to provide its Outside Directors with the opportunity to defer income in conjunction with the Non-Employee Directors’ Restricted Stock Units Program established under the provisions of the Apache Corporation 2011 Omnibus Equity Compensation Plan.

Apache intends that the Program not be treated as a “funded” plan for purposes of the Code. Apache also intends for this Program to comply with the requirements of Code §409A. The Program shall be interpreted in light of Apache’s intentions.

ARTICLE I DEFINITIONS

1.01 Definitions

Defined terms used in this Program shall have the meanings set forth below:

(a) “Account” means the memorandum account maintained for each Participant that is credited with all Deferrals.

(b) “Apache” means Apache Corporation or any successor thereto.

(c) “Beneficiary” means a Participant’s beneficiary, as determined in section 5.03.

(d) “Change of Control” means a change of control as defined in the Income Continuance Plan that is also described in Code §409A(a)(2)(A)(v).

(e) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a particular section of the Code or the regulations issued thereunder shall be treated as a reference to any successor section.

(f) “Committee” means the Stock Plan Committee of Apache’s Board of Directors. The Committee shall be constituted at all times so as to permit the Apache Corporation 2011 Omnibus Equity Compensation Plan to be administered by “non-employee directors” (as defined in Rule 16b-3 of the Securities Exchange Act of 1934, as amended).

(g) “Deferrals” means any contributions to this Program.

(h) “Fair Market Value” means the per share closing price of the Stock as reported on The New York Stock Exchange, Inc. Composite Transactions Reporting System for a particular date or, if the Stock is not so listed on such date, as reported on NASDAQ or on such other exchange or electronic trading system which, on the date in question, reports the largest number of traded shares of Stock, provided, however, that if on the date Fair Market Value is to be determined there are no transactions in the Stock, Fair Market Value shall be determined as of the immediately preceding date on which there were transactions in the Stock; provided further, however, that if the foregoing provisions are not applicable, the fair market value of a share of the Stock as determined by the Committee by the reasonable application of such reasonable valuation method, consistently applied, as the Committee deems appropriate. For purposes of the foregoing, a valuation prepared in accordance with any of the methods set forth in Treasury Regulation §1.409A-1(b)(5)(iv)(B)(2), consistently used, shall be rebuttably presumed to result in a reasonable valuation. This definition is intended to comply with the definition of “fair market value” contained in Treasury Regulation §1.409A-1(b)(5)(iv) and should be interpreted consistently therewith.

(i) “NED RSU Program” means the Non-Employee Directors’ Restricted Stock Units Program that was established under the Apache Corporation 2011 Omnibus Equity Compensation Plan.

(j) “Outside Director” means any non-employee member of Apache’s board of directors.

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(k) “Participant” means any Outside Director as well as any former Outside Director who has accrued benefits in the Program that have not been fully paid out.

(l) “Program” means the program set forth in this document, as amended from time to time.

(m) “Separation from Service” has the same meaning as the term “separation from service” in Code §409A(a)(2)(A)(i), determined using the default rules in the regulations and other guidance of general applicability issued pursuant to Code §409A, including the special rules for directors in Treasury Regulation §1.409A-1(h)(5). A Participant who has a Separation from Service “Separates from Service.”

(n) “Specified Employee” has the same meaning as the term “specified employee” in Code §409A(a)(2)(B)(i), and is determined using the default rules in the regulations and other guidance of general applicability issued pursuant to Code §409A.

(o) “Spouse” means the individual to whom a Participant is lawfully married according to the laws of the state of the Participant’s domicile.

(p) “Stock” means the $0.625 par value common stock of Apache.

(q) “Stock Units” mean investment units and any related units from dividend amounts. Each Stock Unit is equivalent in value to one share of Stock.

1.02 Headings; Gender and Number

The headings contained in the Program are for reference purposes only and shall not affect in any way the meaning or interpretation of the Program. Except when otherwise indicated by the context, the masculine gender shall also include the feminine gender, and the singular shall also include the plural.

ARTICLE II ELIGIBILITY AND PARTICIPATION

2.01 Eligibility and Participation

Each Outside Director on July 16, 2014 is eligible to participate in this Program on such date. Each individual who subsequently becomes an Outside Director shall be eligible to participate in the Program upon becoming an Outside Director.

2.02 Enrollment

Participants shall complete the enrollment procedures specified by the Committee. The enrollment procedures may include form(s) for the Participant to designate a Beneficiary and provide such other information as the Committee may reasonably require.

2.03 Failure of Eligibility

An Outside Director shall cease to be eligible to accrue benefits in the Program when she or she ceases to be an Outside Director. Any Program benefits accrued by the time the Participant becomes ineligible to continue participation shall be distributed in accordance with the provisions of Article V.

ARTICLE III CONTRIBUTION DEFERRALS

Before each grant of Restricted Stock Units pursuant to the NED RSU Program, the Committee shall determine (a) the number of Restricted Stock Units, if any, that will be converted into Stock and paid to each Participant upon vesting, and (b) the number of Restricted Stock Units that will be automatically contributed to this Program for the Participant upon vesting, thereby becoming Stock Units in this Program.

ARTICLE IV INVESTMENT OF DEFERRALS AND ACCOUNTING; VOTING

4.01 Investments

All amounts credited to a Participant’s Account shall be invested in Stock Units, with the number of Stock Units determined using the Fair Market Value of the Stock for the date as of which the amount is credited to the Participant’s Account. Amounts equal to any cash dividends declared on the Stock shall be credited to

Page 2 of 8

the Participant’s Account as of the payment date for such dividend in proportion to the number of Stock Units in the Participant’s Account as of the record date for such dividend. Such dividend amounts shall be invested in Stock Units, with the number of Stock Units determined using the Fair Market Value of the Stock on the dividend payment date. Nothing contained in this section shall be construed to require Apache or the Committee to fund any Participant’s Account.

4.02 Voting

No Participant shall have the right to vote any Stock Units prior to the date on which such Stock Units are subject to distribution and shares of Stock are issued therefor.

ARTICLE V DISTRIBUTIONS

5.01 Vesting

Each grant of Restricted Stock Units is subject to the vesting terms described in the grant agreement. Each Stock Unit is fully vested.

5.02 Payouts

(a) General. The Committee shall specify, on or before any award of Restricted Stock Units, the timing of the payout of any such Restricted Stock Units that are contributed to this Program when they vest; such payout provisions would apply in lieu of any payout provision otherwise specified in this section.

(b) Payout Upon Separation from Service. The Stock Units in the Program will be converted to Stock and paid to the Participant on the business day after the Participant Separates from Service, or as soon thereafter as is administratively convenient. See section 5.03 if the Participant dies before receiving all Program benefits; see section 5.04 if there is a Change of Control; see section 5.08 if the Participant is divorced and payments are made to his or her former Spouse. See the terms of the grant agreement for any special payment provisions that apply to a Participant who becomes disabled within the meaning of Code §409A(a)(2)(A)(ii).

(c) Payouts of Dividend Amounts. The Stock Units acquired with dividend amounts shall be paid out at the same time as the Stock Units they relate to are paid out.

(d) Delayed Payment for Specified Employees. In the rare event that a Participant is a Specified Employee when he or she Separates from Service, any benefit payments triggered by his or her Separation from Service will be delayed until six months after his or her Separation from Service.

5.03 Distributions After Participant’s Death

This section applies once a Participant dies.

(a) Immediate Payment. When a Participant dies, his or her remaining vested Account balance shall be paid to each Beneficiary in one lump sum four months after the Participant’s death, which should give each beneficiary adequate time to decide whether to disclaim as set forth in section 5.03(d). However, no payment may be made before the Committee’s designee has been furnished with proof of death and such other information as it may reasonably require, including information needed for tax reporting purposes. Such distribution shall be paid in whole shares of Stock, with any fractional shares paid in cash.

(b) Designating Beneficiaries. Each Participant shall designate one or more persons, trusts, or other entities as his or her Beneficiary to receive any amounts distributable hereunder after the Participant’s death, by furnishing the Committee with a beneficiary designation form. In the absence of an effective Beneficiary designation as to part or all of a Participant’s interest in the Program, such amount will be distributed to the Participant’s surviving Spouse, if any, otherwise to the Participant’s estate. Unless the Participant’s beneficiary designation form specifies otherwise, if a Beneficiary dies after the Participant but before being paid by the Program, the Program shall pay the Beneficiary’s estate.

(c) Changing Beneficiaries. A Beneficiary designation may be changed by the Participant at any time and without the consent of any previously designated Beneficiary. However, if the Participant is married, his or her Spouse shall be his or her Beneficiary unless such Spouse has consented to the designation

Page 3 of 8

of a different Beneficiary. To be effective, the Spouse’s consent must be in writing, witnessed by a notary public, and filed with the Committee’s designee. If a Participant has designated his or her Spouse as a Beneficiary or as a contingent Beneficiary, and the Participant and that Spouse subsequently divorce, then the former Spouse will be treated as having pre-deceased the Participant for purposes of interpreting a beneficiary designation form completed prior to the divorce; this sentence shall apply only if the Committee’s designee is informed of the divorce before payment to the former Spouse is authorized.

(d) Disclaimers. Any individual or legal entity who is a Beneficiary may disclaim all or any portion of his or her interest in the Program, provided that the disclaimer satisfies the requirements of applicable state law and Code §2518(b). The legal guardian of a minor or legally incompetent person may disclaim for such person. The personal representative (or the individual or legal entity acting in the capacity of the personal representative according to applicable state law) may disclaim on behalf of a Beneficiary who has died. The amount disclaimed shall be distributed as if the disclaimant had predeceased the Participant.

5.04 Change of Control. Each Participant on the date of a Change of Control will be paid a lump sum of his or her or her entire Account balance on the date of the Change of Control or as soon thereafter as is administratively practicable.

5.05 Reappointments. If a Participant Separated from Service and then becomes eligible to again accrue benefits, the payment of his or her benefits from his or her first episode of participation will not be affected by his or her subsequent participation. He or she will be treated as a new Participant for receiving grants under Article III.

5.06 Form of Distribution. Except as otherwise provided in this section, each payment shall be made in whole shares of Stock, with each Stock Unit being converted into one share of Stock. Any fractional Stock Units will be converted into cash based on the Fair Market Value of a share of Stock on the day preceding the day the payment is processed. Upon a change of control as defined in the Income Continuance Plan or its successor, the payment for each Stock Unit shall be one share of Stock unless the material characteristics of the Stock were affected by the change of control, in which case the payment for each Stock Unit shall be in the form of cash equal to the fair market value, determined as of the date of the change of control, of the property an Apache shareholder receives upon the change of control in exchange for one of his or her Shares.

5.07 Withholding

At the time of vesting or payment, as applicable, either the recipient shall pay the Program cash sufficient to cover any required withholding or the Program shall withhold from such payment any taxes or other amounts that are required to be withheld pursuant to any applicable law; any Stock Units withheld shall be converted into cash based on the Fair Market Value of a share of Stock on the day preceding the day the payment is processed.

5.08 Divorce

(a) General. If a Participant has divorced his or her Spouse, all or a portion of his or her Account may be allocated to his or her former Spouse.

(b) Contents of Order. The allocation will occur as soon as practicable after the Program receives a judgment, decree, or order (collectively, an “order”) that (i) is made pursuant to a state domestic relations law or community property law, (ii) relates to the marital property rights of the former Spouse, (iii) unambiguously specifies the amount or percentage of the Participant’s Account that is to be allocated to the former Spouse, or unambiguously specifies the manner in which the amount or percentage is to be calculated, (iv) does not allocate any benefits that have already been allocated to a different former Spouse, (v) contains the name and last known mailing address of the Participant and eh former Spouse, (vi) the name of the Program, (vii) does not contain any provision that violates subsections (c), (d), or (e), and (viii) contains the former Spouse’s Social Security number (or other similar taxpayer identification number) unless such number has been provided by the former Spouse to the Program in a manner acceptable to the Committee.

Page 4 of 8

(c) Payout Provisions. The amount allocated to the former Spouse will be paid to the former Spouse in a single payment as soon as administratively practicable after (i) the Program has determined that the order meets the requirements of subsection (b), (ii) the Program has communicated its interpretation of the order to the Participant and former Spouse, and given them a reasonable amount of time (such as 30 days) to object to the Program’s interpretation, (and if there is a timely objection, the parties must submit a revised order or withdraw their objections), and (iii) the parties agree to the Program’s interpretation of the order.

(d) Source of Funds. The order may specify which subaccounts the former Spouse’s benefits shall be taken from; if the order is silent on this matter, the amount awarded to the former Spouse shall be taken pro rata from each subaccount.

5.09 Timing of Payments

The previous sections in this Article specify when payments will be made pursuant to the Program, and generally provide the Program with some flexibility, for example by providing that the payment will occur on a specific date or as near to that date as is administratively convenient. Notwithstanding such flexibility, any payment that is scheduled to occur in one calendar year shall occur in that calendar year.

5.10 Administrative Delays in Payments

The Committee may delay any payment from this Program for as short a period as is administratively necessary. For example, a delay may be imposed upon all payments when there is a change of recordkeeper or trustee, and a delay may be imposed on payments to any recipient until the recipient has provided (a) the information needed to determine the appropriate tax withholding and tax reporting and (b) any other information reasonably requested by the Committee. If possible, the delay will satisfy one of the conditions to be considered a permissible delay under Code §409A.

5.11 Noncompliance with Code §409A

To the extent that Apache or the Committee takes any action that causes a violation of Code §409A or fails to take any reasonable action required to comply with Code §409A, Apache shall pay an additional amount (the “gross-up”) to the individual(s) who are subject to the penalty tax under Code §409A(a)(1); the gross-up will be sufficient to put the individual in the same after-tax position he or she would have been in had there been no violation of Code §409A. Apache shall not pay a gross-up if the cause of the violation of Code §409A is the due to the recipient’s action or due to the recipient’s failure to take reasonable actions (such as failing to timely provide the information required for tax reporting – with the result that the delay in payment violates Code §409A). Any gross-up will be paid as soon as administratively convenient after the Committee determines the gross-up is owed, and no later than the end of the calendar year immediately following the calendar year in which the additional taxes are remitted. However, if the gross-up is due to a tax audit or litigation addressing the existence or amount of a tax liability, the gross-up will be paid as soon as administratively convenient after the litigation or audit is completed, and no later than the end of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation.

ARTICLE VI ADMINISTRATION

6.01 Committee to Administer and Interpret Program

The Program shall be administered by the Committee. The Committee shall have all discretion and powers necessary for administering the Program, including, but not by way of limitation, full discretion and power to interpret the Program, to determine the eligibility, status and rights of all persons under the Program and, in general, to decide any dispute. The Committee shall direct Apache concerning distributions in accordance with the provisions of the Program. The Committee’s designee shall maintain all Program records. The Committee may delegate any of its administrative duties to a designee.

Page 5 of 8

6.02 Organization of Committee

The Committee shall adopt such rules as it deems desirable for the conduct of its affairs and for the administration of the Program. The Committee may appoint a designee and/or agent (who need not be a member of the Committee or an employee of Apache) to assist the Committee in administration of the Program and to whom it may delegate such powers as the Committee deems appropriate, except that the Committee shall determine any dispute. The Committee may make its determinations with or without meetings. The Committee may authorize one or more of its members, designees or agents to sign instructions, notices and determinations on its behalf. The action of a majority of the Committee’s members shall constitute the action of the Committee.

6.03 Agent for Process

Apache’s General Counsel and Apache’s Corporate Secretary shall each be an agent of the Program for service of all process.

6.04 Determination of Committee Final

The decisions made by the Committee shall be final and conclusive on all persons.

ARTICLE VII AMENDMENT AND TERMINATION

7.01 Amendment

The Program may be amended at any time and from time to time, retroactively or otherwise; however, no amendment shall reduce any vested benefit that has accrued on the later of the actual date or the effective date of such amendment. Each Program amendment shall be in writing and shall be approved by the Committee and/or Apache’s Board of Directors. An officer of Apache to whom the Committee and/or Apache’s Board of Directors has delegated the authority to execute Program amendments shall execute each such amendment or the Program document restated to include all such Program amendment(s).

The Committee shall have the authority to adopt such modifications and procedures as may be necessary or desirable to comply with the provisions of the laws (including, but not limited to, tax laws and regulations) of countries other than the United States in which Apache may operate, so as to assure the viability of the benefits of the Program to Participants employed in such countries.

In only certain limited circumstances, as described in the Treasury Regulations and other guidance of general applicability issued pursuant to Code §409A, may the full or partial termination of the Program affect the timing of the payment of Program benefits.

7.02 Successors and Assigns; Termination of Program

The Program is binding upon Apache and its successors and assigns. The Program shall continue in effect from year to year unless and until terminated by the Committee and/or Apache’s Board of Directors. Any such termination shall operate only prospectively and shall not reduce any vested benefit that has accrued on the effective date of such termination.

ARTICLE VIII MISCELLANEOUS

8.01 Funding of Benefits — No Fiduciary Relationship

Benefits shall be paid by Apache out of its general assets or available shares. Nothing contained in the Program shall be deemed to create any fiduciary relationship between Apache and the Participants. Notwithstanding anything herein to the contrary, to the extent that any person acquires a right to receive benefits under the Program, such right shall be no greater than the right of any unsecured general creditor of Apache.

8.02 Inalienability of Benefits

Except for disclaimers under section 5.03(d) and payments to a former Spouse pursuant to section 5.08, no Participant or Beneficiary has the right to assign, alienate, pledge, transfer, hypothecate, encumber, or anticipate his or her interest in any benefits under the Program, nor are the benefits subject to garnishment by any creditor, nor may the benefits under the Program be levied upon or attached. The preceding sentence does not apply to the enforcement of a federal tax levy made pursuant to Code §6331, the collection by the United States on a judgment resulting from an unpaid tax assessment, or any debt or obligation that is permitted to be collected from the Program under federal law (such as the Federal Debt Collection Procedures Act of 1977).

Page 6 of 8

8.03 Claims Procedure

(a) General. The Committee shall develop a reasonable claims procedure.

(b) Limitations on Bringing Actions in Court. Once a final decision that is adverse or partially adverse to the claimant has been made, the claimant may file suit in court only if he or she does so by the earlier of the following dates: (i) the one-year anniversary of the date of the final decision made on or before a Change of Control or the three-year anniversary of the date of a final decision made after a Change of Control, or (ii) the date on which the statute of limitations for such claim expires.

8.04 Disposition of Unclaimed Distributions

It is the affirmative duty of each Participant to inform the Program of, and to keep on file with the Program, his or her current mailing address and the mailing address of his or her Spouse and any Beneficiaries. If a Participant fails to inform the Program of these current mailing addresses, neither the Program nor Apache is responsible for any late payment of benefits or loss of benefits. The Program, the Committee, and Apache have no duty to search for a missing individual until the date of a Change of Control, at which point Apache has the duty to undertake reasonable measures to search for the proper recipient of any payment under the Program that is scheduled to be paid on or after the date of the Change of Control or that was scheduled to be paid before the Change of Control. If the missing individual is not found within a year after a payment should have been made to him or her, all his or her benefits will be forfeited. If the missing individual later is found, the exact number of Stock Units forfeited will be restored to the Account as soon as administratively convenient, without any adjustment for dividends paid in the interim.

8.05 Distributions due Infants or Incompetents

If any person entitled to a distribution under the Program is an infant, or if the Committee determines that any such person is incompetent by reason of physical or mental disability, whether or not legally adjudicated an incompetent, the Committee shall have the power to cause the distributions becoming due to such person to be made to another for his or her benefit, without responsibility of the Committee to see to the application of such distributions. Distributions made pursuant to such power shall operate as a complete discharge of Apache and the Committee.

8.06 Addresses

Any notice, form, or election required or permitted to be given under the Program shall be in writing and shall be given by first class mail, by Federal Express, UPS, or other carrier, by fax or other electronic means, or by personal delivery to the appropriate party, addressed:

(a) If to Apache, to Apache Corporation at its principal place of business at 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400 (Attention: Corporate Secretary) or at such other address as may be furnished in writing by Apache to a Participant; or

(b) If to a Participant, at the address the Participant has furnished to Apache in writing.

(c) If to a Beneficiary or former Spouse, at the address the Participant has furnished to Apache in writing, or at the address the Beneficiary or former Spouse subsequently provided in writing.

8.07 Statutory References

Any reference to a specific section of the Code or other statute shall be deemed to refer to the cited section or to the appropriate successor section.

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8.08 Governing Law

The Program shall be construed in accordance with the Code and, to the extent applicable, the laws of the State of Texas excluding any conflicts-of-law provisions.

Dated July 16, 2014

ATTEST:	APACHE CORPORATION
/s/ Cheri L. Peper	/s/ Margery M. Harris
Cheri L. Peper	Margery M. Harris
Corporate Secretary	Executive Vice President, Human Resources

Page 8 of 8

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, G. Steven Farris, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Apache Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ G. Steven Farris

G. Steven Farris

Chairman of the Board, Chief Executive Officer and President

(principal executive officer)

Date: August 8, 2014

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Alfonso Leon, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Apache Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Alfonso Leon

Alfonso Leon

Executive Vice President and Chief Financial Officer

(principal financial officer)

Date: August 8, 2014

EX-32.1

EXHIBIT 32.1

APACHE CORPORATION

Certification of Principal Executive Officer

and Principal Financial Officer

I, G. Steven Farris, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the quarterly report on Form 10-Q of Apache Corporation for the quarterly period ending June 30, 2014, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §78m or §78o (d)) and that information contained in such report fairly represents, in all material respects, the financial condition and results of operations of Apache Corporation.

/s/ G. Steven Farris
By:	G. Steven Farris
Title:	Chairman of the Board, Chief Executive Officer and President
	(principal executive officer)

Date: August 8, 2014

I, Alfonso Leon, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the quarterly report on Form 10-Q of Apache Corporation for the quarterly period ending June 30, 2014, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §78m or §78o (d)) and that information contained in such report fairly represents, in all material respects, the financial condition and results of operations of Apache Corporation.

/s/ Alfonso Leon
By:	Alfonso Leon
Title:	Executive Vice President and Chief Financial Officer
	(principal financial officer)

Date: August 8, 2014

XML

Other Current Liabilities - Details of Other Current Liabilities (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Payables And Accruals [Abstract]
Accrued operating expenses	$ 131	$ 190
Accrued exploration and development	1,616	1,582
Accrued compensation and benefits	167	242
Accrued interest	161	161
Accrued income taxes	266	248
Accrued U.K. Petroleum Revenue Tax	64	9
Other	223	179
Total Other current liabilities	$ 2,628	$ 2,611

XML

Supplemental Guarantor Information - Supplemental Condensed Consolidating Balance Sheet (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012
CURRENT ASSETS:
Cash and cash equivalents	$ 524	$ 1,906	$ 184	$ 160
Short-term restricted cash	778
Receivables, net of allowance	2,407	2,952
Inventories	794	891
Drilling advances	331	371
Derivative instruments		1
Prepaid assets and other	292	246
Intercompany receivable	0
Total current assets	5,126	6,366
PROPERTY AND EQUIPMENT, NET	52,470	52,421
OTHER ASSETS:
Intercompany receivable	0
Equity in affiliates	0
Long-term restricted cash	589
Goodwill	1,369	1,369
Deferred charges and other	1,617	1,481
Total assets	61,171	61,637	61,622
CURRENT LIABILITIES:
Accounts payable	1,491	1,616
Current debt	1	53
Asset retirement obligation	178	121
Derivative instruments	272	299
Other current liabilities	2,628	2,611
Intercompany payable	0
Total current liabilities	4,570	4,700
LONG-TERM DEBT	9,674	9,672
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable	0
Income taxes	8,566	8,364
Asset retirement obligation	3,050	3,101
Other	419	407
Total deferred credits and other noncurrent liabilities	12,035	11,872
COMMITMENTS AND CONTINGENCIES
APACHE SHAREHOLDERS' EQUITY	32,755	33,396
Noncontrolling interest	2,137	1,997
TOTAL EQUITY	34,892	35,393	32,721	31,331
Total liabilities and shareholders' equity	61,171	61,637
Reclassifications & Eliminations [Member]
CURRENT ASSETS:
Cash and cash equivalents	0	0
Short-term restricted cash	0
Receivables, net of allowance	0
Inventories	0
Drilling advances	0
Prepaid assets and other	0
Intercompany receivable	(6,065)	(5,357)
Total current assets	(6,065)	(5,357)
PROPERTY AND EQUIPMENT, NET	0
OTHER ASSETS:
Intercompany receivable	(1,327)	(1,572)
Equity in affiliates	(27,134)	(26,347)
Long-term restricted cash	0
Goodwill	0
Deferred charges and other	(1,000)	(1,000)
Total assets	(35,526)	(34,276)
CURRENT LIABILITIES:
Accounts payable	0
Current debt	0
Asset retirement obligation	0
Derivative instruments	0
Other current liabilities	0
Intercompany payable	(6,065)	(5,357)
Total current liabilities	(6,065)	(5,357)
LONG-TERM DEBT	0
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable	(1,327)	(1,572)
Income taxes	0
Asset retirement obligation	0
Other	(1,000)	(1,000)
Total deferred credits and other noncurrent liabilities	(2,327)	(2,572)
COMMITMENTS AND CONTINGENCIES
APACHE SHAREHOLDERS' EQUITY	(27,134)	(26,347)
Noncontrolling interest	0
TOTAL EQUITY	(27,134)	(26,347)
Total liabilities and shareholders' equity	(35,526)	(34,276)
Apache Corporation [Member]
CURRENT ASSETS:
Cash and cash equivalents	9	155
Short-term restricted cash	0
Receivables, net of allowance	873	1,043
Inventories	24	48
Drilling advances	29	49
Derivative instruments		1
Prepaid assets and other	90	99
Intercompany receivable	6,065	5,357
Total current assets	7,090	6,752
PROPERTY AND EQUIPMENT, NET	17,436	16,092
OTHER ASSETS:
Intercompany receivable	0	1,572
Equity in affiliates	25,486	24,743
Long-term restricted cash	0
Goodwill	173	173
Deferred charges and other	191	166
Total assets	50,376	49,498
CURRENT LIABILITIES:
Accounts payable	831	956
Current debt	0
Asset retirement obligation	115	115
Derivative instruments	272	299
Other current liabilities	1,128	896
Intercompany payable	0
Total current liabilities	2,346	2,266
LONG-TERM DEBT	9,375	9,374
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable	1,327
Income taxes	3,641	3,586
Asset retirement obligation	455	430
Other	477	446
Total deferred credits and other noncurrent liabilities	5,900	4,462
COMMITMENTS AND CONTINGENCIES
APACHE SHAREHOLDERS' EQUITY	32,755	33,396
Noncontrolling interest	0
TOTAL EQUITY	32,755	33,396
Total liabilities and shareholders' equity	50,376	49,498
Apache Finance Canada [Member]
CURRENT ASSETS:
Cash and cash equivalents	0	3
Short-term restricted cash	0
Receivables, net of allowance	0
Inventories	0
Drilling advances	2
Prepaid assets and other	0
Intercompany receivable	0
Total current assets	2	3
PROPERTY AND EQUIPMENT, NET	0
OTHER ASSETS:
Intercompany receivable	0
Equity in affiliates	1,203	1,155
Long-term restricted cash	0
Goodwill	0
Deferred charges and other	1,005	1,006
Total assets	2,210	2,164
CURRENT LIABILITIES:
Accounts payable	13	2
Current debt	0
Asset retirement obligation	0
Derivative instruments	0
Other current liabilities	1	10
Intercompany payable	0
Total current liabilities	14	12
LONG-TERM DEBT	298	298
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable	0
Income taxes	0
Asset retirement obligation	0
Other	250	250
Total deferred credits and other noncurrent liabilities	250	250
COMMITMENTS AND CONTINGENCIES
APACHE SHAREHOLDERS' EQUITY	1,648	1,604
Noncontrolling interest	0
TOTAL EQUITY	1,648	1,604
Total liabilities and shareholders' equity	2,210	2,164
All Other Subsidiaries of Apache Corporation [Member]
CURRENT ASSETS:
Cash and cash equivalents	515	1,748	184	160
Short-term restricted cash	778
Receivables, net of allowance	1,534	1,909
Inventories	770	843
Drilling advances	300	322
Prepaid assets and other	202	146
Intercompany receivable	0
Total current assets	4,099	4,968
PROPERTY AND EQUIPMENT, NET	35,034	36,329
OTHER ASSETS:
Intercompany receivable	1,327
Equity in affiliates	445	449
Long-term restricted cash	589
Goodwill	1,196	1,196
Deferred charges and other	1,421	1,309
Total assets	44,111	44,251
CURRENT LIABILITIES:
Accounts payable	647	658
Current debt	1	53
Asset retirement obligation	63	6
Derivative instruments	0
Other current liabilities	1,499	1,705
Intercompany payable	6,065	5,357
Total current liabilities	8,275	7,779
LONG-TERM DEBT	1
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable	0	1,572
Income taxes	4,925	4,778
Asset retirement obligation	2,595	2,671
Other	692	711
Total deferred credits and other noncurrent liabilities	8,212	9,732
COMMITMENTS AND CONTINGENCIES
APACHE SHAREHOLDERS' EQUITY	25,486	24,743
Noncontrolling interest	2,137	1,997
TOTAL EQUITY	27,623	26,740
Total liabilities and shareholders' equity	$ 44,111	$ 44,251

XML

Business Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2014 Country
Segment Reporting [Abstract]
Production in number of countries	5

XML

Capital Stock - Net Income Per Common Share (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Earnings Per Share [Abstract]
Income from continuing operations	$ 505	$ 1,018	$ 1,258	$ 1,777
Loss from discontinued operations		(2)	(517)	(63)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	505	1,016	741	1,714
Mandatory Convertible Preferred Stock	0	19	0	38
Income from continuing operations	505	1,037	1,258	1,815
Loss from discontinued operations		(2)	(517)	(63)
Net income attributable to common stock	$ 505	$ 1,035	$ 741	$ 1,752
Income from continuing operations	385	392	390	392
Loss from discontinued operations	385	392	390	392
Net income attributable to common stock, shares	385	392	390	392
Mandatory Convertible Preferred Stock	0	14		14
Stock options and other	2	2	2	2
Income from continuing operations, shares	387	408	392	408
Loss from discontinued operations, shares	387	408	392	408
Net income attributable to common stock	387	408	392	408
Basic net income from continuing operations per share	$ 1.31	$ 2.60	$ 3.23	$ 4.53
Basic net loss from discontinued operations per share	$ 0.00	$ (0.01)	$ (1.33)	$ (0.16)
Net income attributable to common stock, per share	$ 1.31	$ 2.59	$ 1.90	$ 4.37
Diluted net income from continuing operations per share	$ 1.31	$ 2.54	$ 3.21	$ 4.45
Diluted net loss from discontinued operations per share	$ 0.00		$ (1.32)	$ (0.15)
Net income attributable to common stock	$ 1.31	$ 2.54	$ 1.89	$ 4.30

XML

Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014 Counterparty	Jun. 30, 2013	Jun. 30, 2014 Counterparty	Jun. 30, 2013
Derivative [Line Items]
Number of counterparties	14		14
Derivatives designated as cash flow hedges	$ (174,000,000)	$ 247,000,000	$ (194,000,000)	$ 147,000,000
Cash Flow Hedging [Member]
Derivative [Line Items]
Derivatives designated as cash flow hedges			$ 0

XML

DEBT AND FINANCING COSTS (Tables)

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Non-Recurring Fair Value Measurement

The following table presents the carrying amounts and estimated fair values of the Company’s outstanding debt:

	June 30, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Uncommitted credit lines	$	1	$	1	$	53	$	53
Notes and debentures		9,674		10,828		9,672		10,247
Total Debt	$	9,675	$	10,829	$	9,725	$	10,300

Components of Financing Costs, Net

Financing Costs, Net

The following table presents the components of Apache’s financing costs, net:

	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(In millions)
Interest expense	$	124		$	141		$	248		$	287
Amortization of deferred loan costs		1			2			3			4
Capitalized interest		(90	)		(88	)		(185	)		(178	)
Interest income		—			(3	)		(4	)		(6	)
Financing costs, net	$	35		$	52		$	62		$	107

XML

Business Segment Information - Financial Segment Information (Parenthetical) (Detail) (North Sea [Member], USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014
North Sea [Member]
Segment Reporting Information [Line Items]
Write-down of the carrying value of Oil and Gas properties	$ 203	$ 203

XML

Debt and Financing Cost - Additional Information (Detail) (USD $)	6 Months Ended					6 Months Ended		3 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 United States [Member]	Jun. 30, 2014 Australia [Member]	Jun. 30, 2014 Canada [Member]	Jun. 30, 2014 Revolving Credit Facility Due August 2016 [Member]	Jun. 30, 2014 Revolving Credit Facility Due June 2018 [Member]	Jun. 30, 2014 Notes Payable, Other Payables [Member]
Debt Instrument [Line Items]
Unsecured credit facility available to Company	$ 3,300,000,000					$ 1,000,000,000	$ 2,300,000,000
Credit facility maturity date						Aug. 31, 2016	Jun. 30, 2018
Revolving bank facility	1,700,000,000		1,000,000,000	300,000,000	300,000,000
Line of credit facility, remaining borrowing capacity	3,300,000,000
Financing period extension period	1 year
Commercial paper program	3,000,000,000
Period For Borrowing Funds								270 days
Carrying Amount, Commercial paper	0	0
Current debt	$ 1,000,000	$ 53,000,000

XML

Derivative Instruments and Hedging Activities - Commodity Derivative Activity Recorded in Statement of Consolidated Operations (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Loss on cash flow hedges reclassified from accumulated other comprehensive loss		$ (11)		$ (20)
Loss on derivatives recognized in income			Oil and Gas Production Revenues
Realized gain (loss)	(174)	247	(194)	147
Loss on derivatives recognized in income			Derivative instrument gains (losses), net
Derivatives Not Designated as Cash Flow Hedges [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized gain (loss)	(125)	5	(221)	(47)
Unrealized gain (loss)	(49)	242	27	194
Gain (loss) on derivatives not designated as cash flow hedges	$ (174)	$ 247	$ (194)	$ 147

XML

Supplemental Guarantor Information - Supplemental Condensed Consolidating Statement of Operations And Comprehensive Income (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
REVENUES AND OTHER:
Oil and gas production revenues	$ 3,708	$ 4,001	$ 7,355	$ 8,022
Equity in net income (loss) of affiliates	0		0
Derivative instrument gains (losses), net	(174)	247	(194)	147
Other	(50)	20	(2)	45
Total revenues and other	3,484	4,268	7,159	8,214
OPERATING EXPENSES:
Depreciation, depletion and amortization	1,457	1,350	2,663	2,662
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, and separation costs	14		30
Financing costs, net	35	52	62	107
Total operating expenses	2,505	2,620	4,751	5,186
NET INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	979	1,648	2,408	3,028
Provision (benefit) for income taxes	366	611	944	1,213
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST	613	1,037	1,464	1,815
Net loss from discontinued operations, net of tax	0	(2)	(517)	(63)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST	613	1,035	947	1,752
Net income attributable to noncontrolling interest	108		206
Preferred stock dividends	0	19	0	38
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	505	1,016	741	1,714
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	505	1,031	740	1,727
Reclassifications & Eliminations [Member]
REVENUES AND OTHER:
Oil and gas production revenues	0		0
Equity in net income (loss) of affiliates	(526)	(714)	(801)	(1,316)
Derivative instrument gains (losses), net	0		0
Other	4	(1)	3	(3)
Total revenues and other	(522)	(715)	(798)	(1,319)
OPERATING EXPENSES:
Depreciation, depletion and amortization	0		0
Asset retirement obligation accretion	0		0
Lease operating expenses	0		0
Gathering and transportation	0		0
Taxes other than income	0		0
General and administrative	4	(1)	3	(3)
Acquisition, divestiture, and separation costs	0		0
Financing costs, net	0		0
Total operating expenses	4	(1)	3	(3)
NET INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	(526)	(714)	(801)	(1,316)
Provision (benefit) for income taxes	0		0
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST	(526)	(714)	(801)	(1,316)
Net loss from discontinued operations, net of tax	0		0
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST	(526)	(714)	(801)	(1,316)
Net income attributable to noncontrolling interest	0		0
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	(526)	(714)	(801)	(1,316)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	(526)	(714)	(801)	(1,316)
Apache Corporation [Member]
REVENUES AND OTHER:
Oil and gas production revenues	895	1,255	1,787	2,401
Equity in net income (loss) of affiliates	491	718	743	1,328
Derivative instrument gains (losses), net	(125)	247	(145)	147
Other	(69)	3	(72)	1
Total revenues and other	1,192	2,223	2,313	3,877
OPERATING EXPENSES:
Depreciation, depletion and amortization	356	470	684	871
Asset retirement obligation accretion	8	20	15	40
Lease operating expenses	121	267	249	548
Gathering and transportation	14	17	28	31
Taxes other than income	47	57	126	101
General and administrative	96	102	189	202
Acquisition, divestiture, and separation costs	14		30
Financing costs, net	41	34	73	68
Total operating expenses	697	967	1,394	1,861
NET INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	495	1,256	919	2,016
Provision (benefit) for income taxes	(10)	221	52	264
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST	505	1,035	867	1,752
Net loss from discontinued operations, net of tax	0		(127)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST	505	1,035	740	1,752
Net income attributable to noncontrolling interest	0		0
Preferred stock dividends		19		38
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	505	1,016	740	1,714
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	505	1,031	739	1,727
Apache Finance Canada [Member]
REVENUES AND OTHER:
Oil and gas production revenues	0		0
Equity in net income (loss) of affiliates	24	(6)	53	(17)
Derivative instrument gains (losses), net	0		0
Other	13	15	27	30
Total revenues and other	37	9	80	13
OPERATING EXPENSES:
Depreciation, depletion and amortization	0		0
Asset retirement obligation accretion	0		0
Lease operating expenses	0		0
Gathering and transportation	0		0
Taxes other than income	0		0
General and administrative	0		0
Acquisition, divestiture, and separation costs	0		0
Financing costs, net	10	14	20	28
Total operating expenses	10	14	20	28
NET INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	27	(5)	60	(15)
Provision (benefit) for income taxes	(8)	(1)	2	(3)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST	35	(4)	58	(12)
Net loss from discontinued operations, net of tax	0		0
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST	35	(4)	58	(12)
Net income attributable to noncontrolling interest	0		0
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	35	(4)	58	(12)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	35	(4)	58	(12)
All Other Subsidiaries of Apache Corporation [Member]
REVENUES AND OTHER:
Oil and gas production revenues	2,813	2,746	5,568	5,621
Equity in net income (loss) of affiliates	11	2	5	5
Derivative instrument gains (losses), net	(49)		(49)
Other	2	3	40	17
Total revenues and other	2,777	2,751	5,564	5,643
OPERATING EXPENSES:
Depreciation, depletion and amortization	1,101	880	1,979	1,791
Asset retirement obligation accretion	37	44	74	87
Lease operating expenses	492	514	961	955
Gathering and transportation	52	60	108	119
Taxes other than income	134	113	236	298
General and administrative	(6)	25	7	39
Acquisition, divestiture, and separation costs	0		0
Financing costs, net	(16)	4	(31)	11
Total operating expenses	1,794	1,640	3,334	3,300
NET INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	983	1,111	2,230	2,343
Provision (benefit) for income taxes	384	391	890	952
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST	599	720	1,340	1,391
Net loss from discontinued operations, net of tax	0	(2)	(390)	(63)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST	599	718	950	1,328
Net income attributable to noncontrolling interest	108		206
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	491	718	744	1,328
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$ 491	$ 718	$ 744	$ 1,328

XML

Capital Stock - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	0 Months Ended	3 Months Ended		6 Months Ended
	Jun. 10, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Equity [Abstract]
Options and restricted stock, anti-dilutive		3.2	6.7	5.0	7.4
Common stock dividend paid		$ 97	$ 78	$ 176	$ 145
Increase in quarterly cash dividend		25.00%
Dividend, Common Stock		$ 0.25	$ 0.20	$ 0.50	$ 0.40
Dividend, Preferred Stock, Cash					$ 38
Common stock share purchase, shares		40		40
Common stock share repurchase, shares	26.1			14.9
Common stock share repurchase, per share	$ 86.75			$ 85.14

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

As of June 30, 2014, Apache’s significant accounting policies are consistent with those discussed in Note 1—Summary of Significant Accounting Policies to the consolidated financial statements contained in Apache’s Current Report on Form 8-K dated July 17, 2014 for the fiscal year ended December 31, 2013.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates with regard to these financial statements include the fair value determination of acquired assets and liabilities, the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom, assessing asset retirement obligations, and the estimate of income taxes. Actual results could differ from those estimates.

Restricted Cash

The Company classifies cash balances as restricted cash when cash is restricted as to withdrawal or usage. As of June 30, 2014, the Company had approximately $1.4 billion of proceeds from the sale of our deepwater Gulf of Mexico properties held by a qualified intermediary and available for use in a like-kind exchange under Section 1031 of the U.S. Internal Revenue Code. The Company has the option to use these funds for the acquisition of properties or receive the funds in cash after a short-term contractual period. As of the date of this filing, the Company expects to close on the acquisition of like-kind properties for $589 million, and as such, the balance is classified as long-term restricted cash on Apache’s consolidated balance sheet as of June 30, 2014. The remaining proceeds of approximately $778 million are classified as short-term restricted cash as of June 30, 2014. Should the Company elect to use additional funds for a like-kind exchange, the balance will be reclassified to long-term restricted cash until the funds are expended. For more information regarding the sale of the deepwater Gulf of Mexico properties, please refer to Note 2—Acquisitions and Divestitures.

Oil and Gas Property

The Company follows the full-cost method of accounting for its oil and gas property. Under this method of accounting, all costs incurred for both successful and unsuccessful exploration and development activities, including salaries, benefits and other internal costs directly identified with these activities, and oil and gas property acquisitions are capitalized. The net book value of oil and gas properties, less related deferred income taxes, may not exceed a calculated “ceiling.” The ceiling limitation is the estimated after-tax future net cash flows from proved oil and gas reserves, discounted at 10 percent per annum and adjusted for designated cash flow hedges. Estimated future net cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months, held flat for the life of the production, except where prices are defined by contractual arrangements.

Any excess of the net book value of proved oil and gas properties, less related deferred income taxes, over the ceiling is charged to expense and reflected as “Additional depreciation, depletion and amortization” (DD&A) in the accompanying statement of consolidated operations. Such limitations are imposed separately on a country-by-country basis and are tested quarterly. For a discussion of the calculation of estimated future net cash flows, please refer to Note 14—Supplemental Oil and Gas Disclosures to the consolidated financial statements contained in Apache’s Current Report on Form 8-K dated July 17, 2014 for the fiscal year ended December 31, 2013.

In the second quarter of 2014, the Company recorded a $203 million ($77 million net of tax) non-cash write-down of the carrying value of the Company’s North Sea proved oil and gas properties.

New Pronouncements Issued But Not Yet Adopted

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-08—Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 modifies the criteria for disposals to qualify as discontinued operations and expands related disclosures. The guidance is effective for annual and interim reporting periods beginning after December 15, 2014. Adoption of this amendment will not have a material effect on our financial position or results of operations.

In May 2014, the FASB and the International Accounting Standards Board (IASB) issued a joint revenue recognition standard, ASU 2014-09. The new standard removes inconsistencies in existing standards, changes the way companies recognize revenue from contracts with customers, and increases disclosure requirements. The guidance requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2016. The standard is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to retained earnings on the opening balance sheet. The Company is currently evaluating the level of effort needed to implement the standard, the impact of adopting this standard on its consolidated financial statements, and whether to use the full retrospective approach or the modified retrospective approach.

XML

Debt and Financing Costs - Components of Financing Costs, Net (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Debt Disclosure [Abstract]
Interest expense	$ 124	$ 141	$ 248	$ 287
Amortization of deferred loan costs	1	2	3	4
Capitalized interest	(90)	(88)	(185)	(178)
Interest income	0	(3)	(4)	(6)
Financing costs, net	$ 35	$ 52	$ 62	$ 107

XML

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014
Schedule Of Significant Accounting Policies [Line Items]
Proceeds from sale of Deepwater Gulf of Mexico assets		$ 1,367
Long-term restricted cash	589	589
Short-term restricted cash	778	778
Discount rate		10.00%
North Sea [Member]
Schedule Of Significant Accounting Policies [Line Items]
Write-down of the carrying value of Oil and Gas properties	203	203
Write-down of the carrying value of Oil and Gas properties, net of tax	$ 77	$ 77

XML

SUPPLEMENTAL GUARANTOR INFORMATION (Tables)

6 Months Ended

Jun. 30, 2014

Guarantees [Abstract]

Supplemental Condensed Consolidating Statement of Operations

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Quarter Ended June 30, 2014

							All Other
				Apache			Subsidiaries
	Apache			Finance			of Apache			Reclassifications
	Corporation			Canada			Corporation			& Eliminations			Consolidated
	(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	895		$	—		$	2,813		$	—		$	3,708
Equity in net income (loss) of affiliates		491			24			11			(526	)		—
Derivative instrument losses, net		(125	)		—			(49	)		—			(174	)
Other		(69	)		13			2			4			(50	)
		1,192			37			2,777			(522	)		3,484
OPERATING EXPENSES:
Depreciation, depletion and amortization		356			—			1,101			—			1,457
Asset retirement obligation accretion		8			—			37			—			45
Lease operating expenses		121			—			492			—			613
Gathering and transportation		14			—			52			—			66
Taxes other than income		47			—			134			—			181
General and administrative		96			—			(6	)		4			94
Acquisition, divestiture, and separation costs		14			—			—			—			14
Financing costs, net		41			10			(16	)		—			35
		697			10			1,794			4			2,505
NET INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		495			27			983			(526	)		979
Provision (benefit) for income taxes		(10	)		(8	)		384			—			366
NET INCOME FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		505			35			599			(526	)		613
Net loss from discontinued operations, net of tax		—			—			—			—			—
NET INCOME INCLUDING NONCONTROLLING INTEREST		505			35			599			(526	)		613
Net income attributable to noncontrolling interest		—			—			108			—			108
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	505		$	35		$	491		$	(526	)	$	505
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCK (1)	$	505		$	35		$	491		$	(526	)	$	505

⁽¹⁾  Comprehensive income (loss) activity is recorded on the Apache Corporation entity and consists of derivative instrument reclassifications and changes in fair value as reflected on our Statement of Consolidated Comprehensive Income.

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Quarter Ended June 30, 2013

						All Other
			Apache			Subsidiaries
	Apache		Finance			of Apache			Reclassifications
	Corporation		Canada			Corporation			& Eliminations			Consolidated
	(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	1,255	$	—		$	2,746		$	—		$	4,001
Equity in net income (loss) of affiliates		718		(6	)		2			(714	)		—
Derivative instrument gains (losses), net		247		—			—			—			247
Other		3		15			3			(1	)		20
		2,223		9			2,751			(715	)		4,268
OPERATING EXPENSES:
Depreciation, depletion and amortization		470		—			880			—			1,350
Asset retirement obligation accretion		20		—			44			—			64
Lease operating expenses		267		—			514			—			781
Gathering and transportation		17		—			60			—			77
Taxes other than income		57		—			113			—			170
General and administrative		102		—			25			(1	)		126
Financing costs, net		34		14			4			—			52
		967		14			1,640			(1	)		2,620
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		1,256		(5	)		1,111			(714	)		1,648
Provision (benefit) for income taxes		221		(1	)		391			—			611
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		1,035		(4	)		720			(714	)		1,037
Net loss from discontinued operations, net of tax		—		—			(2	)		—			(2	)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		1,035		(4	)		718			(714	)		1,035
Preferred stock dividends		19		—			—			—			19
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	1,016	$	(4	)	$	718		$	(714	)	$	1,016
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK (1)	$	1,031	$	(4	)	$	718		$	(714	)	$	1,031

⁽¹⁾  Comprehensive income (loss) activity is recorded on the Apache Corporation entity and consists of derivative instrument reclassifications and changes in fair value as reflected on our Statement of Consolidated Comprehensive Income.

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2014

						All Other
				Apache		Subsidiaries
	Apache			Finance		of Apache			Reclassifications
	Corporation			Canada		Corporation			& Eliminations			Consolidated
	(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	1,787		$	—	$	5,568		$	—		$	7,355
Equity in net income (loss) of affiliates		743			53		5			(801	)		—
Derivative instrument gains (losses), net		(145	)		—		(49	)		—			(194	)
Other		(72	)		27		40			3			(2	)
		2,313			80		5,564			(798	)		7,159
OPERATING EXPENSES:
Depreciation, depletion and amortization		684			—		1,979			—			2,663
Asset retirement obligation accretion		15			—		74			—			89
Lease operating expenses		249			—		961			—			1,210
Gathering and transportation		28			—		108			—			136
Taxes other than income		126			—		236			—			362
General and administrative		189			—		7			3			199
Acquisition, divestiture, and separation costs		30			—		—			—			30
Financing costs, net		73			20		(31	)		—			62
		1,394			20		3,334			3			4,751
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		919			60		2,230			(801	)		2,408
Provision for income taxes		52			2		890			—			944
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		867			58		1,340			(801	)		1,464
Net loss from discontinued operations, net of tax		(127	)		—		(390	)		—			(517	)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		740			58		950			(801	)		947
Net income attributable to noncontrolling interest		—			—		206			—			206
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	740		$	58	$	744		$	(801	)	$	741
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK(1)	$	739		$	58	$	744		$	(801	)	$	740

⁽¹⁾  Comprehensive income (loss) activity is recorded on the Apache Corporation entity and consists of derivative instrument reclassifications and changes in fair value as reflected on our Statement of Consolidated Comprehensive Income.

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2013

						All Other
			Apache			Subsidiaries
	Apache		Finance			of Apache			Reclassifications
	Corporation		Canada			Corporation			& Eliminations			Consolidated
	(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	2,401	$	—		$	5,621		$	—		$	8,022
Equity in net income (loss) of affiliates		1,328		(17	)		5			(1,316	)		—
Derivative instrument gains (losses), net		147		—			—			—			147
Other		1		30			17			(3	)		45
		3,877		13			5,643			(1,319	)		8,214
OPERATING EXPENSES:
Depreciation, depletion and amortization		871		—			1,791			—			2,662
Asset retirement obligation accretion		40		—			87			—			127
Lease operating expenses		548		—			955			—			1,503
Gathering and transportation		31		—			119			—			150
Taxes other than income		101		—			298			—			399
General and administrative		202		—			39			(3	)		238
Financing costs, net		68		28			11			—			107
		1,861		28			3,300			(3	)		5,186
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		2,016		(15	)		2,343			(1,316	)		3,028
Provision (benefit) for income taxes		264		(3	)		952			—			1,213
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		1,752		(12	)		1,391			(1,316	)		1,815
Net loss from discontinued operations, net of tax		—		—			(63	)		—			(63	)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		1,752		(12	)		1,328			(1,316	)		1,752
Preferred stock dividends		38		—			—			—			38
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	1,714	$	(12	)	$	1,328		$	(1,316	)	$	1,714
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK (1)	$	1,727	$	(12	)	$	1,328		$	(1,316	)	$	1,727

⁽¹⁾  Comprehensive income (loss) activity is recorded on the Apache Corporation entity and consists of derivative instrument reclassifications and changes in fair value as reflected on our Statement of Consolidated Comprehensive Income.

Supplemental Condensed Consolidating Statement of Cash Flows

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2014

							All Other
				Apache			Subsidiaries
	Apache			Finance			of Apache			Reclassifications
	Corporation			Canada			Corporation			& Eliminations			Consolidated
	(In millions)
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	$	70		$	(33	)	$	4,513		$	—		$	4,550
CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			82			—			82
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		70			(33	)		4,595			—			4,632
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(1,703	)		—			(3,168	)		—			(4,871	)
Additions to gas gathering, transmission and processing facilities		(2	)		—			(719	)		—			(721	)
Proceeds from sale of Deepwater Gulf of Mexico assets		1,367			—			—			—			1,367
Restricted cash related to divestitures		(1,367	)		—			—			—			(1,367	)
Proceeds from sale of other oil and gas properties		69			—			312			—			381
Acquisitions		(5	)		—			—			—			(5	)
Investment in subsidiaries, net		2,899			—			—			(2,899	)		—
Other		(35	)		—			12			—			(23	)
NET CASH PROVIDED BY (USED IN) CONTINUING INVESTING ACTIVITIES		1,223			—			(3,563	)		(2,899	)		(5,239	)
NET CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			748			—			748
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		1,223			—			(2,815	)		(2,899	)		(4,491	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net		—			—			(1	)		—			(1	)
Intercompany borrowings		—			11			(2,909	)		2,898			—
Distributions to noncontrolling interest		—			—			(66	)		—			(66	)
Dividends paid		(176	)		—			—			—			(176	)
Treasury stock activity, net		(1,263	)		—			—			—			(1,263	)
Other		—			19			5			1			25
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES		(1,439	)		30			(2,971	)		2,899			(1,481	)
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(42	)		—			(42	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(1,439	)		30			(3,013	)		2,899			(1,523	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(146	)		(3	)		(1,233	)		—			(1,382	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		155			3			1,748			—			1,906
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	9		$	—		$	515		$	—		$	524

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2013

							All Other
				Apache			Subsidiaries
	Apache			Finance			of Apache			Reclassifications
	Corporation			Canada			Corporation			& Eliminations			Consolidated
	(In millions)
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	$	688		$	(76	)	$	4,664		$	—		$	5,276
CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			104			—			104
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		688			(76	)		4,768			—			5,380
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(1,854	)		—			(3,196	)		—			(5,050	)
Additions to gas gathering, transmission and processing facilities		(54	)		—			(437	)		—			(491	)
Proceeds from Kitimat LNG transaction, net		—			—			405			—			405
Acquisitions		—			—			(148	)		—			(148	)
Investment in subsidiaries, net		1,258			—			—			(1,258	)		—
Other		(58	)		—			72			—			14
NET CASH USED IN CONTINUING INVESTING ACTIVITIES		(708	)		—			(3,304	)		(1,258	)		(5,270	)
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(94	)		—			(94	)
NET CASH USED IN INVESTING ACTIVITIES		(708	)		—			(3,398	)		(1,258	)		(5,364	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net		945			—			—			—			945
Intercompany borrowings		—			1			(1,253	)		1,252			—
Payments on fixed rate debt		(500	)		—			—			—			(500	)
Dividends paid		(183	)		—			—			—			(183	)
Treasury stock activity, net		(249	)		—			—			—			(249	)
Other		7			75			(85	)		6			3
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES		20			76			(1,338	)		1,258			16
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(8	)		—			(8	)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		20			76			(1,346	)		1,258			8
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		—			—			24			—			24
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		—			—			160			—			160
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	—		$	—		$	184		$	—		$	184

Supplemental Condensed Consolidating Balance Sheet

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2014

					All Other
			Apache		Subsidiaries
	Apache		Finance		of Apache		Reclassifications
	Corporation		Canada		Corporation		& Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	9	$	—	$	515	$	—		$	524
Short-term restricted cash		—		—		778		—			778
Receivables, net of allowance		873		—		1,534		—			2,407
Inventories		24		—		770		—			794
Drilling advances		29		2		300		—			331
Prepaid assets and other		90		—		202		—			292
Intercompany receivable		6,065		—		—		(6,065	)		—
		7,090		2		4,099		(6,065	)		5,126
PROPERTY AND EQUIPMENT, NET		17,436		—		35,034		—			52,470
OTHER ASSETS:
Intercompany receivable		—		—		1,327		(1,327	)		—
Equity in affiliates		25,486		1,203		445		(27,134	)		—
Long-term restricted cash		—		—		589		—			589
Goodwill, net		173		—		1,196		—			1,369
Deferred charges and other		191		1,005		1,421		(1,000	)		1,617
	$	50,376	$	2,210	$	44,111	$	(35,526	)	$	61,171
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	831	$	13	$	647	$	—		$	1,491
Current debt		—		—		1		—			1
Asset retirement obligation		115		—		63		—			178
Derivative instruments		272		—		—		—			272
Other current liabilities		1,128		1		1,499		—			2,628
Intercompany payable		—		—		6,065		(6,065	)		—
		2,346		14		8,275		(6,065	)		4,570
LONG-TERM DEBT		9,375		298		1		—			9,674
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable		1,327		—		—		(1,327	)		—
Income taxes		3,641		—		4,925		—			8,566
Asset retirement obligation		455		—		2,595		—			3,050
Other		477		250		692		(1,000	)		419
		5,900		250		8,212		(2,327	)		12,035
COMMITMENTS AND CONTINGENCIES APACHE SHAREHOLDERS’ EQUITY		32,755		1,648		25,486		(27,134	)		32,755
Noncontrolling interest		—		—		2,137		—			2,137
TOTAL EQUITY		32,755		1,648		27,623		(27,134	)		34,892
	$	50,376	$	2,210	$	44,111	$	(35,526	)	$	61,171

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2013

					All Other
			Apache		Subsidiaries
	Apache		Finance		of Apache		Reclassifications
	Corporation		Canada		Corporation		& Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	155	$	3	$	1,748	$	—		$	1,906
Receivables, net of allowance		1,043		—		1,909		—			2,952
Inventories		48		—		843		—			891
Drilling advances		49		—		322		—			371
Derivative instruments		1		—		—		—			1
Prepaid assets and other		99		—		146		—			245
Intercompany receivable		5,357		—		—		(5,357	)		—
		6,752		3		4,968		(5,357	)		6,366
PROPERTY AND EQUIPMENT, NET		16,092		—		36,329		—			52,421
OTHER ASSETS:
Intercompany receivable		1,572		—		—		(1,572	)		—
Equity in affiliates		24,743		1,155		449		(26,347	)		—
Goodwill, net		173		—		1,196		—			1,369
Deferred charges and other		166		1,006		1,309		(1,000	)		1,481
	$	49,498	$	2,164	$	44,251	$	(34,276	)	$	61,637
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	956	$	2	$	658	$	—		$	1,616
Current debt		—		—		53		—			53
Asset retirement obligation		115		—		6		—			121
Derivative instruments		299		—		—		—			299
Other current liabilities		896		10		1,705		—			2,611
Intercompany payable		—		—		5,357		(5,357	)		—
		2,266		12		7,779		(5,357	)		4,700
LONG-TERM DEBT		9,374		298		—		—			9,672
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable		—		—		1,572		(1,572	)		—
Income taxes		3,586		—		4,778		—			8,364
Asset retirement obligation		430		—		2,671		—			3,101
Other		446		250		711		(1,000	)		407
		4,462		250		9,732		(2,572	)		11,872
COMMITMENTS AND CONTINGENCIES APACHE SHAREHOLDERS’ EQUITY		33,396		1,604		24,743		(26,347	)		33,396
Noncontrolling interest		—		—		1,997		—			1,997
TOTAL EQUITY		33,396		1,604		26,740		(26,347	)		35,393
	$	49,498	$	2,164	$	44,251	$	(34,276	)	$	61,637

XML

Income Taxes - Additional Information (Detail) (North Sea [Member], USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014
North Sea [Member]
Income Tax [Line Items]
Income tax impact	$ 203	$ 203

XML

Acquisitions and Divestitures - Additional Information (Detail) (USD $)	0 Months Ended	3 Months Ended	6 Months Ended		0 Months Ended		3 Months Ended	6 Months Ended	0 Months Ended	1 Months Ended		1 Months Ended	0 Months Ended
	Apr. 30, 2014 acre	Jun. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Mar. 12, 2014 YPF Sociedad Anonima [Member]	Jun. 30, 2013 YPF Sociedad Anonima [Member]	Jun. 30, 2014 Sinopec [Member]	Jun. 30, 2014 Sinopec [Member]	Sep. 30, 2013 Fieldwood Energy Llc [Member]	Feb. 28, 2013 Kitimat LNG [Member]	Feb. 28, 2013 Kitimat LNG [Member] Horn River and Liard Basins [Member] acre	Feb. 28, 2013 Kitimat LNG [Member] Chevron Canada and Apache Canada [Member]	Nov. 14, 2013 Egypt Oil And Gas [Member] Sinopec [Member]
Business Acquisition [Line Items]
Proceeds from sale of Deepwater Gulf of Mexico assets			$ 1,367,000,000
Decrease in net book value of proved oil and gas properties			(850,000,000)
Decrease in net book value of unproved oil and gas properties			(518,000,000)
Sale of oil and gas assets	374,000,000
Gas properties sold	328,400
Working interest percentage	100.00%
Effective date of the transaction			Jan. 01, 2014
Proceeds from sale of Operations					800,000,000				3,700,000,000				2,950,000,000
Liabilities assumed						52,000,000			1,500,000,000
Proceeds as noncontrolling interest		2,137,000,000	2,137,000,000	1,997,000,000			1,900,000,000	1,900,000,000
Net income attributable to noncontrolling interest		108,000,000	206,000,000				108,000,000	206,000,000
Distribution to partners			(66,000,000)					66,000,000
Percentage of ownership interest in assets									50.00%
Percentage of ownership												50.00%
Business properties held											644,000
Proceeds from transaction										396,000,000
Proceeds from limited partnership												$ 0

XML

Acquisitions and Divestitures - Summary of Carrying Amount of Major Assets and Liabilities Associated with Disposition (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013
ASSETS
Current assets	$ 5,126	$ 6,366
Total assets	61,171	61,637	61,622
LIABILITIES
Current debt	1	53
Other current liabilities	2,628	2,611
Asset retirement obligations	3,050	3,101
Argentina Divestiture [Member]
ASSETS
Current assets		150
Net property and equipment		1,416
Other assets		12
Total assets		1,578
LIABILITIES
Current debt		51
Other current liabilities		95
Asset retirement obligations		91
Other long-term liabilities		21
Total liabilities		$ 258

XML

STATEMENT OF CONSOLIDATED CHANGES IN EQUITY (Unaudited) (Parenthetical) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Common stock, dividends, per share	$ 0.50	$ 0.40
Retained Earnings [Member]
Common stock, dividends, per share	$ 0.50	$ 0.40
Parent [Member]
Common stock, dividends, per share	$ 0.50	$ 0.40

XML

Acquisitions and Divestitures - Summary of Sales and Other Operating Revenue and Loss From Discontinued Operation Related to Disposition (Detail) (Argentina Divestiture [Member], USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Argentina Divestiture [Member]
Discontinued Operations [Line Items]
Revenues and other from discontinued operations	$ 0	$ 115	$ 87	$ 246
Loss from Argentina divestiture	0		(539)
Loss from operations in Argentina	0	(2)	(1)	(63)
Income tax benefit	0		23
Loss from discontinued operations, net of tax	$ 0	$ (2)	$ (517)	$ (63)

XML

Asset Retirement Obligation - Asset Retirement Obligation (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Asset Retirement Obligation Disclosure [Abstract]
Asset retirement obligation at December 31, 2013			$ 3,222
Liabilities incurred			63
Liabilities divested			(91)
Liabilities settled			(55)
Accretion expense	45	64	89	127
Asset retirement obligation at June 30,2014	3,228		3,228
Asset retirement obligation at June 30,2014	3,228		3,228
Less current portion	(178)		(178)		(121)
Asset retirement obligation, long-term	$ 3,050		$ 3,050		$ 3,101

XML

Supplemental Guarantor Information - Supplemental Condensed Consolidating Statement of Cash Flows (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Condensed Financial Statements, Captions [Line Items]
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	$ 4,550	$ 5,276
CASH PROVIDED BY DISCONTINUED OPERATIONS	82	104
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	4,632	5,380
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property	(4,871)	(5,050)
Additions to gas gathering, transmission and processing facilities	(721)	(491)
Proceeds from sale of Deepwater Gulf of Mexico assets	1,367
Proceeds from Kitimat LNG transaction, net	0	405
Restricted cash related to divestitures	(1,367)
Proceeds from sale of other oil and gas properties	381
Acquisitions	(5)	(148)
Investment in subsidiaries, net	0
Other	(23)	14
NET CASH PROVIDED BY (USED IN) CONTINUING INVESTING ACTIVITIES	(5,239)	(5,270)
NET CASH PROVIDED BY DISCONTINUED OPERATIONS	748	(94)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(4,491)	(5,364)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net	(1)	945
Intercompany borrowings	0
Distributions to noncontrolling interest	(66)
Payments on fixed rate debt	0	(500)
Dividends paid	(176)	(183)
Treasury stock activity, net	(1,263)	(249)
Other common stock activity	25	3
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES	(1,481)	16
NET CASH USED IN DISCONTINUED OPERATIONS	(42)	(8)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(1,523)	8
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(1,382)	24
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	1,906	160
CASH AND CASH EQUIVALENTS AT END OF PERIOD	524	184
Reclassifications & Eliminations [Member]
Condensed Financial Statements, Captions [Line Items]
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	0
CASH PROVIDED BY DISCONTINUED OPERATIONS	0
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	0
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property	0
Additions to gas gathering, transmission and processing facilities	0
Proceeds from sale of Deepwater Gulf of Mexico assets	0
Restricted cash related to divestitures	0
Proceeds from sale of other oil and gas properties	0
Acquisitions	0
Investment in subsidiaries, net	(2,899)	(1,258)
Other	0
NET CASH PROVIDED BY (USED IN) CONTINUING INVESTING ACTIVITIES	(2,899)	(1,258)
NET CASH PROVIDED BY DISCONTINUED OPERATIONS	0
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(2,899)	(1,258)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net	0
Intercompany borrowings	2,898	1,252
Distributions to noncontrolling interest	0
Dividends paid	0
Treasury stock activity, net	0
Other common stock activity	1	6
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES	2,899	1,258
NET CASH USED IN DISCONTINUED OPERATIONS	0
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	2,899	1,258
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	0
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	0
CASH AND CASH EQUIVALENTS AT END OF PERIOD	0
Apache Corporation [Member]
Condensed Financial Statements, Captions [Line Items]
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	70	688
CASH PROVIDED BY DISCONTINUED OPERATIONS	0
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	70	688
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property	(1,703)	(1,854)
Additions to gas gathering, transmission and processing facilities	(2)	(54)
Proceeds from sale of Deepwater Gulf of Mexico assets	1,367
Restricted cash related to divestitures	(1,367)
Proceeds from sale of other oil and gas properties	69
Acquisitions	(5)
Investment in subsidiaries, net	2,899	1,258
Other	(35)	(58)
NET CASH PROVIDED BY (USED IN) CONTINUING INVESTING ACTIVITIES	1,223	(708)
NET CASH PROVIDED BY DISCONTINUED OPERATIONS	0
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	1,223	(708)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net	0	945
Intercompany borrowings	0
Distributions to noncontrolling interest	0
Payments on fixed rate debt		(500)
Dividends paid	(176)	(183)
Treasury stock activity, net	(1,263)	(249)
Other common stock activity	0	7
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES	(1,439)	20
NET CASH USED IN DISCONTINUED OPERATIONS	0
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(1,439)	20
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(146)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	155
CASH AND CASH EQUIVALENTS AT END OF PERIOD	9
Apache Finance Canada [Member]
Condensed Financial Statements, Captions [Line Items]
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	(33)	(76)
CASH PROVIDED BY DISCONTINUED OPERATIONS	0
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(33)	(76)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property	0
Additions to gas gathering, transmission and processing facilities	0
Proceeds from sale of Deepwater Gulf of Mexico assets	0
Restricted cash related to divestitures	0
Proceeds from sale of other oil and gas properties	0
Acquisitions	0
Investment in subsidiaries, net	0
Other	0
NET CASH PROVIDED BY (USED IN) CONTINUING INVESTING ACTIVITIES	0
NET CASH PROVIDED BY DISCONTINUED OPERATIONS	0
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net	0
Intercompany borrowings	11	1
Distributions to noncontrolling interest	0
Dividends paid	0
Treasury stock activity, net	0
Other common stock activity	19	75
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES	30	76
NET CASH USED IN DISCONTINUED OPERATIONS	0
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	30	76
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(3)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	3
CASH AND CASH EQUIVALENTS AT END OF PERIOD	0
All Other Subsidiaries of Apache Corporation [Member]
Condensed Financial Statements, Captions [Line Items]
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	4,513	4,664
CASH PROVIDED BY DISCONTINUED OPERATIONS	82	104
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	4,595	4,768
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property	(3,168)	(3,196)
Additions to gas gathering, transmission and processing facilities	(719)	(437)
Proceeds from sale of Deepwater Gulf of Mexico assets	0
Proceeds from Kitimat LNG transaction, net		405
Restricted cash related to divestitures	0
Proceeds from sale of other oil and gas properties	312
Acquisitions	0	(148)
Investment in subsidiaries, net	0
Other	12	72
NET CASH PROVIDED BY (USED IN) CONTINUING INVESTING ACTIVITIES	(3,563)	(3,304)
NET CASH PROVIDED BY DISCONTINUED OPERATIONS	748	(94)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(2,815)	(3,398)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net	(1)
Intercompany borrowings	(2,909)	(1,253)
Distributions to noncontrolling interest	(66)
Dividends paid	0
Treasury stock activity, net	0
Other common stock activity	5	(85)
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES	(2,971)	(1,338)
NET CASH USED IN DISCONTINUED OPERATIONS	(42)	(8)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(3,013)	(1,346)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(1,233)	24
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	1,748	160
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$ 515	$ 184

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STATEMENT OF CONSOLIDATED OPERATIONS (Unaudited) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Oil and gas production revenues
Oil and gas production revenues	$ 3,708	$ 4,001	$ 7,355	$ 8,022
Derivative instrument gains (losses), net	(174)	247	(194)	147
Other	(50)	20	(2)	45
Total revenues and other	3,484	4,268	7,159	8,214
Oil and gas property and equipment
Depreciation, depletion and amortization	1,457	1,350	2,663	2,662
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, and separation costs	14		30
Financing costs, net	35	52	62	107
Total operating expenses	2,505	2,620	4,751	5,186
NET INCOME FROM CONTINUING OPERATIONS 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
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST	613	1,037	1,464	1,815
Net loss from discontinued operations, net of tax	0	(2)	(517)	(63)
NET INCOME INCLUDING NONCONTROLLING INTEREST	613	1,035	947	1,752
Preferred stock dividends	0	19	0	38
Net income attributable to noncontrolling interest	108		206
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	505	1,016	741	1,714
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Net income from continuing operations attributable to common shareholders	505	1,018	1,258	1,777
Net loss from discontinued operations	0	(2)	(517)	(63)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	505	1,016	741	1,714
NET INCOME 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	$ 0.00	$ (0.01)	$ (1.33)	$ (0.16)
Basic net income per share	$ 1.31	$ 2.59	$ 1.90	$ 4.37
DILUTED NET INCOME 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	$ 0.00		$ (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
Other Assets [Member]
Oil and gas property and equipment
Depreciation, depletion and amortization	99	92	196	194
Oil And Gas Property And Equipment Recurring [Member]
Oil and gas property and equipment
Depreciation, depletion and amortization	1,155	1,258	2,264	2,468
Oil And Gas Property And Equipment Additional [Member]
Oil and gas property and equipment
Depreciation, depletion and amortization	203		203
Oil Reserves [Member]
Oil and gas production revenues
Revenues	2,950	3,130	5,765	6,322
Natural Gas [Member]
Oil and gas production revenues
Revenues	589	721	1,235	1,402
Natural Gas Liquids Revenues [Member]
Oil and gas production revenues
Revenues	$ 169	$ 150	$ 355	$ 298

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Commitments and Contingencies - Additional Information (Detail)	6 Months Ended						6 Months Ended
	Jun. 30, 2014 USD ($) acre	Jun. 30, 2014 AUD	Mar. 12, 2014 USD ($)	Jun. 30, 2014 Yara Pilbara Fertilisers [Member] USD ($)	Jun. 30, 2014 Iluka Resources Limited [Member] USD ($)	Jun. 30, 2014 Edl Lng [Member] USD ($)	Jun. 30, 2014 Newmont Mining Services [Member] USD ($)
Commitment And Contingencies [Line Items]
Accrued liability for legal contingencies	$ 21,000,000
Environmental tax and royalty obligations			100,000,000
Retain right of obligations	67,500,000
Cost for restoration of plaintiffs property	200,000,000
Area of land	825	825
Expected contractual general damages				166,000,000	23,000,000	17,500,000
Expected contractual liquidated damages				13,000,000
Amount seek to recover							6,400,000
Total insured loss		230,000,000
Maximum loss expected		20,000,000
Undiscounted reserve for environmental remediation	$ 89,000,000

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CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.625	$ 0.625
Common stock, shares authorized	860,000,000	860,000,000
Common stock, shares issued	409,441,006	408,041,088
Treasury stock, shares	27,110,079	12,268,180

XML

Derivative Instruments and Hedging Activities - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (Recurring [Member], USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Quoted Price in Active Markets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity Derivative Instruments, Assets
Commodity Derivative Instruments, Liabilities
Significant Other Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity Derivative Instruments, Assets	1	3
Commodity Derivative Instruments, Liabilities	273	301
Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity Derivative Instruments, Assets
Commodity Derivative Instruments, Liabilities
Total Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity Derivative Instruments, Assets	1	3
Commodity Derivative Instruments, Liabilities	273	301
Netting [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity Derivative Instruments, Assets	(1)	(2)
Commodity Derivative Instruments, Liabilities	(1)	(2)
Carrying Amount [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity Derivative Instruments, Assets		1
Commodity Derivative Instruments, Liabilities	$ 272	$ 299

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

6 Months Ended

Jun. 30, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Commodity Derivative Instruments

As of June 30, 2014, Apache had the following commodity derivative positions:

			Fixed-Price Swaps
					MMBtu		Weighted Average
Production Period	Commodity	Settlement Index	Mbbls		(in 000’s)		Fixed Price
2014	Crude Oil	NYMEX WTI		11,500		—	$	90.83
2014	Crude Oil	Dated Brent		11,500		—		100.05
2014	Natural Gas	Various(1)		—		32,470		4.37

⁽¹⁾  The natural gas price represents a weighted-average of several contracts entered into on a per-million British thermal units (MMBtu) basis. These contracts are settled against NYMEX Henry Hub and various Inside FERC indices.

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)
June 30, 2014
Assets:
Commodity Derivative Instruments	$	—	$	1	$	—	$	1	$	(1	)	$	—
Liabilities:
Commodity Derivative Instruments		—		273		—		273		(1	)		272
December 31, 2013
Assets:
Commodity Derivative Instruments	$	—	$	3	$	—	$	3	$	(2	)	$	1
Liabilities:
Commodity Derivative Instruments		—		301		—		301		(2	)		299

⁽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:

	June 30,		December 31,
	2014		2013
	(In millions)
Current Assets: Prepaid assets and other	$	—	$	1
Current Liabilities: Derivative instruments	$	272	$	299

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	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	Recognized in Income	2014			2013			2014			2013
		(In millions)
Loss on cash flow hedges reclassified from accumulated other comprehensive loss	Oil and Gas Production Revenues	$	—		$	(11	)	$	—		$	(20	)
Derivatives not designated as cash flow hedges:
Realized gain (loss)		$	(125	)	$	5		$	(221	)	$	(47	)
Unrealized gain (loss)			(49	)		242			27			194
Gain (loss) on derivatives not designated as cash flow hedges	Derivative instrument gains (losses), net	$	(174	)	$	247		$	(194	)	$	147

Commodity Derivative Activity in Accumulated Other Comprehensive Loss

A reconciliation of the components of accumulated other comprehensive loss in the statement of consolidated changes in equity related to Apache’s cash flow hedges is presented in the table below. The Company has no derivatives designated as cash flow hedges as of June 30, 2014.

	For the Six Months Ended June 30,
	2014						2013
	Before tax			After tax			Before tax			After tax
	(In millions)
Unrealized gain (loss) on derivatives at beginning of period	$	1		$	1		$	(10	)	$	(6	)
Realized amounts reclassified into earnings		—			—			20			14
Net change in derivative fair value		(1	)		(1	)		—			(1	)
Unrealized gain on derivatives at end of period	$	—		$	—		$	10		$	7

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Derivative Instruments and Hedging Activities - Carrying Values of Derivative Instruments Recorded in Consolidated Balance Sheet (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Prepaid Expenses and Other Current Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Current Assets: Prepaid assets and other		$ 1
Derivative Instruments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Current Liabilities: Derivative instruments	$ 272	$ 299

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ASSET RETIREMENT OBLIGATION (Tables)

6 Months Ended

Jun. 30, 2014

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation

The following table describes changes to the Company’s asset retirement obligation (ARO) liability for the six-month period ended June 30, 2014:

	(In millions)
Asset retirement obligation at December 31, 2013	$	3,222
Liabilities incurred		63
Liabilities divested		(91	)
Liabilities settled		(55	)
Accretion expense		89
Asset retirement obligation at June 30, 2014		3,228
Less current portion		(178	)
Asset retirement obligation, long-term	$	3,050

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STATEMENT OF CONSOLIDATED CHANGES IN EQUITY (Unaudited) (USD $) In Millions	Total	Common Stock [Member]	Paid-In Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Parent [Member]	Noncontrolling Interest [Member]	Series D Preferred Stock [Member]
BALANCE at Dec. 31, 2012	$ 31,331	$ 245	$ 9,859	$ 20,161	$ (30)	$ (131)	$ 31,331	$ 0	$ 1,227
Net income	1,752			1,752			1,752
Commodity hedges, net of tax	13					13	13
Preferred	(38)			(38)			(38)
Common ($0.40 and $0.50 per share for June 30 2013 and June 30 2014)	(157)			(157)			(157)
Common stock activity, net	(17)	1	(18)				(17)
Treasury stock activity, net	(250)				(250)		(250)
Compensation expense	87		87				87
BALANCE at Jun. 30, 2013	32,721	246	9,928	21,718	(280)	(118)	32,721	0	1,227
BALANCE at Dec. 31, 2013	35,393	255	12,251	22,032	(1,027)	(115)	33,396	1,997	0
Net income	947			741			741	206
Distributions to noncontrolling interest	(66)							(66)
Commodity hedges, net of tax	(1)					(1)	(1)
Common ($0.40 and $0.50 per share for June 30 2013 and June 30 2014)	(192)			(192)			(192)
Common stock activity, net	(24)	1	(25)				(24)
Treasury stock activity, net	(1,264)		(1)		(1,263)		(1,264)
Compensation expense	99		99				99
BALANCE at Jun. 30, 2014	$ 34,892	$ 256	$ 12,324	$ 22,581	$ (2,290)	$ (116)	$ 32,755	$ 2,137	$ 0

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STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statement Of Income And Comprehensive Income [Abstract]
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST	$ 613	$ 1,035	$ 947	$ 1,752
Commodity cash flow hedge activity, net of tax:
Reclassification of loss on settled derivative instruments	0	8	0	14
Change in fair value of derivative instruments	0	7	(1)	(1)
Commodity cash flow hedge activity, net of tax	0	15	(1)	13
COMPREHENSIVE INCOME INCLUDING NONCONTROLLING INTEREST	613	1,050	946	1,765
Preferred stock dividends	0	19	0	38
Comprehensive income attributable to noncontrolling interest	108		206
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCK	$ 505	$ 1,031	$ 740	$ 1,727

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CAPITAL STOCK

6 Months Ended

Jun. 30, 2014

Equity [Abstract]

CAPITAL STOCK

9. CAPITAL STOCK

Net Income per Common Share

A reconciliation of the components of basic and diluted net income per common share for the quarters and six-month periods ended June 30, 2014 and 2013 is presented in the table below.

	For the Quarter Ended June 30,
	2014								2013
	Income			Shares		Per Share			Income			Shares		Per Share
	(In millions, except per share amounts)
Basic:
Income from continuing operations	$	505			385	$	1.31		$	1,018			392	$	2.60
Loss from discontinued operations		—			385		—			(2	)		392		(0.01	)
Income attributable to common stock	$	505			385	$	1.31		$	1,016			392	$	2.59
Effect of Dilutive Securities:
Mandatory Convertible Preferred Stock	$	—			—				$	19			14
Stock options and other		—			2					—			2
Diluted:
Income from continuing operations	$	505			387	$	1.31		$	1,037			408	$	2.54
Loss from discontinued operations		—			387		—			(2	)		408		—
Income attributable to common stock	$	505			387	$	1.31		$	1,035			408	$	2.54
	For the Six Months Ended June 30,
	2014								2013
	Income			Shares		Per Share			Income			Shares		Per Share
	(In millions, except per share amounts)
Basic:
Income from continuing operations	$	1,258			390	$	3.23		$	1,777			392	$	4.53
Loss from discontinued operations		(517	)		390		(1.33	)		(63	)		392		(0.16	)
Income attributable to common stock	$	741			390	$	1.90		$	1,714			392	$	4.37
Effect of Dilutive Securities:
Mandatory Convertible Preferred Stock		—			—					38			14
Stock options and other		—			2					—			2
Diluted:
Income from continuing operations	$	1,258			392	$	3.21		$	1,815			408	$	4.45
Loss from discontinued operations		(517	)		392		(1.32	)		(63	)		408		(0.15	)
Income attributable to common stock	$	741			392	$	1.89		$	1,752			408	$	4.30

The diluted earnings per share calculation excludes options and restricted stock units that were anti-dilutive totaling 3.2 million and 6.7 million for the quarters ending June 30, 2014 and 2013, and 5 million and 7.4 million for the six months ended June 30, 2014 and 2013, respectively.

Common and Preferred Stock Dividends

For the quarters ended June 30, 2014 and 2013, Apache paid $97 million and $78 million, respectively, in dividends on its common stock. For the six months ended June 30, 2014 and 2013, Apache paid $176 million and $145 million, respectively.

During the first quarter of 2014, Apache’s Board of Directors approved a 25 percent increase for the regular quarterly cash dividend on the Company’s common stock to $0.25 per share. This increase applied to the dividend on common stock payable on May 22, 2014, to stockholders of record on April 22, 2014, and will apply to all subsequent dividends paid.

In the first six months of 2013, the Company also paid $38 million in dividends on its Series D Preferred Stock, which was converted to common stock in August 2013.

Stock Repurchase Program

Apache’s Board of Directors has authorized the purchase of up to 40 million shares of the Company’s common stock. Shares may be purchased either in the open market or through privately held negotiated transactions. The Company initiated the buyback program on June 10, 2013, and has since repurchased a total of 26.1 million shares at an average price of $86.75. For the six-months period ended June 30, 2014, the Company repurchased a total of 14.9 million shares at an average price of $85.14. The Company is not obligated to acquire any specific number of shares.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Jul. 31, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Trading Symbol	APA
Entity Registrant Name	APACHE CORP
Entity Central Index Key	0000006769
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		382,473,038

XML

BUSINESS SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

BUSINESS SEGMENT INFORMATION

10. BUSINESS SEGMENT INFORMATION

Apache is engaged in a single line of business. Both domestically and internationally, the Company explores for, develops, and produces natural gas, crude oil and natural gas liquids. At June 30, 2014, the Company had production in five countries: the United States, Canada, Egypt, Australia, and the United Kingdom (U.K.) North Sea. Apache also pursues exploration interests in other countries that may, over time, result in reportable discoveries and development opportunities. Financial information for each country is presented below:

	United States		Canada		Egypt(2)		Australia		North Sea			Other International		Total
	(In millions)
For the Quarter Ended
June 30, 2014
Oil and Gas Production Revenues	$	1,529	$	293	$	989	$	237	$	660		$	—	$	3,708
Operating Income (Loss) (1)	$	679	$	47	$	585	$	74	$	(39	)	$	—	$	1,346
Other Income (Expense):
Derivative instrument gains (losses), net															(174	)
Other															(50	)
General and administrative															(94	)
Acquisition, divestiture, and separation costs															(14	)
Financing costs, net															(35	)
Income Before Income Taxes														$	979
For the Six Months Ended
June 30, 2014
Oil and Gas Production Revenues	$	3,034	$	611	$	1,939	$	493	$	1,278		$	—	$	7,355
Operating Income (Loss) (1)	$	1,342	$	119	$	1,121	$	169	$	144		$	—	$	2,895
Other Income (Expense):
Derivative instrument gains (losses), net															(194	)
Other															(2	)
General and administrative															(199	)
Acquisition, divestiture, and separation costs															(30	)
Financing costs, net															(62	)
Income Before Income Taxes														$	2,408
Total Assets	$	31,547	$	6,842	$	7,264	$	8,763	$	6,713		$	42	$	61,171
For the Quarter Ended
June 30, 2013
Oil and Gas Production Revenues(3)	$	1,836	$	329	$	893	$	291	$	652		$	—	$	4,001
Operating Income (Loss)(1)(3)	$	712	$	14	$	512	$	119	$	202		$	—	$	1,559
Other Income (Expense):
Derivative instrument gains (losses), net															247
Other															20
General and administrative															(126	)
Financing costs, net															(52	)
Income Before Income Taxes(3)														$	1,648
For the Six Months Ended
June 30, 2013
Oil and Gas Production Revenues(3)	$	3,513	$	627	$	1,902	$	588	$	1,392		$	—	$	8,022
Operating Income (Loss) (1)(3)	$	1,298	$	11	$	1,170	$	254	$	448		$	—	$	3,181
Other Income (Expense):
Derivative instrument gains (losses), net															147
Other															45
General and administrative															(238	)
Financing costs, net															(107	)
Income Before Income Taxes(3)														$	3,028
Total Assets(3)	$	33,376	$	6,927	$	6,951	$	7,124	$	7,114		$	130	$	61,622

⁽¹⁾  Operating Income (Loss) consists of oil and gas production revenues less depreciation, depletion and amortization, asset retirement obligation accretion, lease operating expenses, gathering and transportation costs, and taxes other than income. North Sea’s operating income (loss) for the second quarter and first six months of 2014 includes a $203 million non-cash write-down of the carrying value of oil and gas properties.

⁽²⁾  Includes a noncontrolling interest in Egypt for the quarter and six months ended June 30, 2014.

⁽³⁾  Amounts for 2013 have been recast to exclude discontinued operations.

XML

STATEMENT OF CONSOLIDATED CASH FLOWS (Unaudited) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST	$ 947	$ 1,752
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations	517	63
Depreciation, depletion, and amortization	2,663	2,662
Asset retirement obligation accretion	89	127
Provision for deferred income taxes	203	432
Other	31	(186)
Changes in operating assets and liabilities:
Receivables	463	122
Inventories	(7)	(33)
Drilling advances	28	289
Deferred charges and other	(114)	(149)
Accounts payable	(140)	195
Accrued expenses	(158)	6
Deferred credits and noncurrent liabilities	28	(4)
NET CASH PROVIDED BY CONTINUING OPERATING ACTIVITIES	4,550	5,276
NET CASH PROVIDED BY DISCONTINUED OPERATIONS	82	104
NET CASH PROVIDED BY OPERATING ACTIVITIES	4,632	5,380
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property	(4,871)	(5,050)
Additions to gas gathering, transmission and processing facilities	(721)	(491)
Proceeds from sale of Deepwater Gulf of Mexico assets	1,367
Restricted cash related to divestitures	(1,367)
Proceeds from Kitimat LNG transaction, net	0	405
Proceeds from sale of other oil and gas properties	381
Acquisitions	(5)	(148)
Other, net	(23)	14
NET CASH PROVIDED BY (USED IN) CONTINUING INVESTING ACTIVITIES	(5,239)	(5,270)
NET CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS	748	(94)
NET CASH USED IN INVESTING ACTIVITIES	(4,491)	(5,364)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net	(1)	945
Payments on fixed rate debt	0	(500)
Distributions to noncontrolling interest	(66)
Dividends paid	(176)	(183)
Treasury stock activity, net	(1,263)	(249)
Other	25	3
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES	(1,481)	16
NET CASH USED IN DISCONTINUED OPERATIONS	(42)	(8)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(1,523)	8
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(1,382)	24
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	1,906	160
CASH AND CASH EQUIVALENTS AT END OF PERIOD	524	184
SUPPLEMENTARY CASH FLOW DATA:
Interest paid, net of capitalized interest	62	79
Income taxes paid, net of refunds	$ 781	$ 802

XML

OTHER CURRENT LIABILITIES

6 Months Ended

Jun. 30, 2014

Payables And Accruals [Abstract]

OTHER CURRENT LIABILITIES

4. OTHER CURRENT LIABILITIES

The following table provides detail of our other current liabilities:

	June 30,		December 31,
	2014		2013
	(In millions)
Accrued operating expenses	$	131	$	190
Accrued exploration and development		1,616		1,582
Accrued compensation and benefits		167		242
Accrued interest		161		161
Accrued income taxes		266		248
Accrued U.K. Petroleum Revenue Tax		64		9
Other		223		179
Total Other current liabilities	$	2,628	$	2,611

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

6 Months Ended

Jun. 30, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

3. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Objectives and Strategies

The Company is exposed to fluctuations in crude oil and natural gas prices on the majority of its worldwide production. Apache manages the variability in its cash flows by occasionally entering into derivative transactions on a portion of its crude oil and natural gas production. The Company utilizes various types of derivative financial instruments, including swaps and options, to manage fluctuations in cash flows resulting from changes in commodity prices.

Counterparty Risk

The use of derivative instruments exposes the Company to counterparty credit risk, or the risk that a counterparty will be unable to meet its commitments. To reduce the concentration of exposure to any individual counterparty, Apache utilizes a diversified group of investment-grade rated counterparties, primarily financial institutions, for its derivative transactions. As of June 30, 2014, Apache had derivative positions with 14 counterparties. The Company monitors counterparty creditworthiness on an ongoing basis; however, it cannot predict sudden changes in counterparties’ creditworthiness. In addition, even if such changes are not sudden, the Company may be limited in its ability to mitigate an increase in counterparty credit risk. Should one of these counterparties not perform, Apache may not realize the benefit of some of its derivative instruments resulting from lower commodity prices.

The Company executes commodity derivative transactions under master agreements that have netting provisions that provide for offsetting payables against receivables. In general, if a party to a derivative transaction incurs a material deterioration in its credit ratings, as defined in the applicable agreement, the other party has the right to demand the posting of collateral, demand a transfer, or terminate the arrangement. The Company’s net derivative liability position at June 30, 2014, represents the aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position. The Company has not provided any collateral to any of its counterparties as of June 30, 2014.

Derivative Instruments

As of June 30, 2014, Apache had the following commodity derivative positions:

			Fixed-Price Swaps
					MMBtu		Weighted Average
Production Period	Commodity	Settlement Index	Mbbls		(in 000’s)		Fixed Price
2014	Crude Oil	NYMEX WTI		11,500		—	$	90.83
2014	Crude Oil	Dated Brent		11,500		—		100.05
2014	Natural Gas	Various(1)		—		32,470		4.37

⁽¹⁾  The natural gas price represents a weighted-average of several contracts entered into on a per-million British thermal units (MMBtu) basis. These contracts are settled against NYMEX Henry Hub and various Inside FERC indices.

Apache has currently elected not to designate any of its qualifying natural gas and oil derivatives as cash flow hedges. Changes in the fair value of these derivatives for the current period are recorded in the Company’s statement of consolidated operations.

Fair Value Measurements

Apache’s commodity derivative instruments consist of variable-to-fixed price commodity swaps. The fair values of the Company’s derivatives are not actively quoted in the open market. The Company uses a market approach to estimate the fair values of its derivative instruments, utilizing commodity futures price strips for the underlying commodities provided by a reputable third party.

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)
June 30, 2014
Assets:
Commodity Derivative Instruments	$	—	$	1	$	—	$	1	$	(1	)	$	—
Liabilities:
Commodity Derivative Instruments		—		273		—		273		(1	)		272
December 31, 2013
Assets:
Commodity Derivative Instruments	$	—	$	3	$	—	$	3	$	(2	)	$	1
Liabilities:
Commodity Derivative Instruments		—		301		—		301		(2	)		299

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

Derivative Assets and Liabilities Recorded in the Consolidated Balance Sheet

All derivative instruments are reflected as either assets or liabilities at fair value in the consolidated balance sheet. These fair values are recorded by netting asset and liability positions where counterparty master netting arrangements contain provisions for net settlement. The carrying value of the Company’s derivative assets and liabilities and their locations on the consolidated balance sheet are as follows:

	June 30,		December 31,
	2014		2013
	(In millions)
Current Assets: Prepaid assets and other	$	—	$	1
Current Liabilities: Derivative instruments	$	272	$	299

Derivative Activity Recorded in the 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	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	Recognized in Income	2014			2013			2014			2013
		(In millions)
Loss on cash flow hedges reclassified from accumulated other comprehensive loss	Oil and Gas Production Revenues	$	—		$	(11	)	$	—		$	(20	)
Derivatives not designated as cash flow hedges:
Realized gain (loss)		$	(125	)	$	5		$	(221	)	$	(47	)
Unrealized gain (loss)			(49	)		242			27			194
Gain (loss) on derivatives not designated as cash flow hedges	Derivative instrument gains (losses), net	$	(174	)	$	247		$	(194	)	$	147

Unrealized gains and losses for derivative activity recorded in the statement of consolidated operations is reflected in the statement of consolidated cash flows as a component of “Other” in “Adjustments to reconcile net income to net cash provided by operating activities.”

Derivative Activity in Accumulated Other Comprehensive Loss

A reconciliation of the components of accumulated other comprehensive loss in the statement of consolidated changes in equity related to Apache’s cash flow hedges is presented in the table below. The Company has no derivatives designated as cash flow hedges as of June 30, 2014.

	For the Six Months Ended June 30,
	2014						2013
	Before tax			After tax			Before tax			After tax
	(In millions)
Unrealized gain (loss) on derivatives at beginning of period	$	1		$	1		$	(10	)	$	(6	)
Realized amounts reclassified into earnings		—			—			20			14
Net change in derivative fair value		(1	)		(1	)		—			(1	)
Unrealized gain on derivatives at end of period	$	—		$	—		$	10		$	7

XML

OTHER CURRENT LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2014

Payables And Accruals [Abstract]

Detail of Other Current Liabilities

The following table provides detail of our other current liabilities:

	June 30,		December 31,
	2014		2013
	(In millions)
Accrued operating expenses	$	131	$	190
Accrued exploration and development		1,616		1,582
Accrued compensation and benefits		167		242
Accrued interest		161		161
Accrued income taxes		266		248
Accrued U.K. Petroleum Revenue Tax		64		9
Other		223		179
Total Other current liabilities	$	2,628	$	2,611

XML

SUPPLEMENTAL GUARANTOR INFORMATION

6 Months Ended

Jun. 30, 2014

Guarantees [Abstract]

SUPPLEMENTAL GUARANTOR INFORMATION

11. SUPPLEMENTAL GUARANTOR INFORMATION

In December 1999, Apache Finance Canada issued approximately $300 million of publicly-traded notes due in 2029. The notes are fully and unconditionally guaranteed by Apache. The following condensed consolidating financial statements are provided as an alternative to filing separate financial statements.

Apache Finance Canada has been fully consolidated in Apache’s consolidated financial statements. As such, these condensed consolidating financial statements should be read in conjunction with Apache’s consolidated financial statements and the notes thereto, of which this note is an integral part.

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Quarter Ended June 30, 2014

							All Other
				Apache			Subsidiaries
	Apache			Finance			of Apache			Reclassifications
	Corporation			Canada			Corporation			& Eliminations			Consolidated
	(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	895		$	—		$	2,813		$	—		$	3,708
Equity in net income (loss) of affiliates		491			24			11			(526	)		—
Derivative instrument losses, net		(125	)		—			(49	)		—			(174	)
Other		(69	)		13			2			4			(50	)
		1,192			37			2,777			(522	)		3,484
OPERATING EXPENSES:
Depreciation, depletion and amortization		356			—			1,101			—			1,457
Asset retirement obligation accretion		8			—			37			—			45
Lease operating expenses		121			—			492			—			613
Gathering and transportation		14			—			52			—			66
Taxes other than income		47			—			134			—			181
General and administrative		96			—			(6	)		4			94
Acquisition, divestiture, and separation costs		14			—			—			—			14
Financing costs, net		41			10			(16	)		—			35
		697			10			1,794			4			2,505
NET INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		495			27			983			(526	)		979
Provision (benefit) for income taxes		(10	)		(8	)		384			—			366
NET INCOME FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		505			35			599			(526	)		613
Net loss from discontinued operations, net of tax		—			—			—			—			—
NET INCOME INCLUDING NONCONTROLLING INTEREST		505			35			599			(526	)		613
Net income attributable to noncontrolling interest		—			—			108			—			108
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	505		$	35		$	491		$	(526	)	$	505
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCK (1)	$	505		$	35		$	491		$	(526	)	$	505

⁽¹⁾  Comprehensive income (loss) activity is recorded on the Apache Corporation entity and consists of derivative instrument reclassifications and changes in fair value as reflected on our Statement of Consolidated Comprehensive Income.

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Quarter Ended June 30, 2013

						All Other
			Apache			Subsidiaries
	Apache		Finance			of Apache			Reclassifications
	Corporation		Canada			Corporation			& Eliminations			Consolidated
	(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	1,255	$	—		$	2,746		$	—		$	4,001
Equity in net income (loss) of affiliates		718		(6	)		2			(714	)		—
Derivative instrument gains (losses), net		247		—			—			—			247
Other		3		15			3			(1	)		20
		2,223		9			2,751			(715	)		4,268
OPERATING EXPENSES:
Depreciation, depletion and amortization		470		—			880			—			1,350
Asset retirement obligation accretion		20		—			44			—			64
Lease operating expenses		267		—			514			—			781
Gathering and transportation		17		—			60			—			77
Taxes other than income		57		—			113			—			170
General and administrative		102		—			25			(1	)		126
Financing costs, net		34		14			4			—			52
		967		14			1,640			(1	)		2,620
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		1,256		(5	)		1,111			(714	)		1,648
Provision (benefit) for income taxes		221		(1	)		391			—			611
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		1,035		(4	)		720			(714	)		1,037
Net loss from discontinued operations, net of tax		—		—			(2	)		—			(2	)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		1,035		(4	)		718			(714	)		1,035
Preferred stock dividends		19		—			—			—			19
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	1,016	$	(4	)	$	718		$	(714	)	$	1,016
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK (1)	$	1,031	$	(4	)	$	718		$	(714	)	$	1,031

⁽¹⁾  Comprehensive income (loss) activity is recorded on the Apache Corporation entity and consists of derivative instrument reclassifications and changes in fair value as reflected on our Statement of Consolidated Comprehensive Income.

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2014

						All Other
				Apache		Subsidiaries
	Apache			Finance		of Apache			Reclassifications
	Corporation			Canada		Corporation			& Eliminations			Consolidated
	(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	1,787		$	—	$	5,568		$	—		$	7,355
Equity in net income (loss) of affiliates		743			53		5			(801	)		—
Derivative instrument gains (losses), net		(145	)		—		(49	)		—			(194	)
Other		(72	)		27		40			3			(2	)
		2,313			80		5,564			(798	)		7,159
OPERATING EXPENSES:
Depreciation, depletion and amortization		684			—		1,979			—			2,663
Asset retirement obligation accretion		15			—		74			—			89
Lease operating expenses		249			—		961			—			1,210
Gathering and transportation		28			—		108			—			136
Taxes other than income		126			—		236			—			362
General and administrative		189			—		7			3			199
Acquisition, divestiture, and separation costs		30			—		—			—			30
Financing costs, net		73			20		(31	)		—			62
		1,394			20		3,334			3			4,751
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		919			60		2,230			(801	)		2,408
Provision for income taxes		52			2		890			—			944
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		867			58		1,340			(801	)		1,464
Net loss from discontinued operations, net of tax		(127	)		—		(390	)		—			(517	)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		740			58		950			(801	)		947
Net income attributable to noncontrolling interest		—			—		206			—			206
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	740		$	58	$	744		$	(801	)	$	741
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK(1)	$	739		$	58	$	744		$	(801	)	$	740

⁽¹⁾  Comprehensive income (loss) activity is recorded on the Apache Corporation entity and consists of derivative instrument reclassifications and changes in fair value as reflected on our Statement of Consolidated Comprehensive Income.

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2013

						All Other
			Apache			Subsidiaries
	Apache		Finance			of Apache			Reclassifications
	Corporation		Canada			Corporation			& Eliminations			Consolidated
	(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	2,401	$	—		$	5,621		$	—		$	8,022
Equity in net income (loss) of affiliates		1,328		(17	)		5			(1,316	)		—
Derivative instrument gains (losses), net		147		—			—			—			147
Other		1		30			17			(3	)		45
		3,877		13			5,643			(1,319	)		8,214
OPERATING EXPENSES:
Depreciation, depletion and amortization		871		—			1,791			—			2,662
Asset retirement obligation accretion		40		—			87			—			127
Lease operating expenses		548		—			955			—			1,503
Gathering and transportation		31		—			119			—			150
Taxes other than income		101		—			298			—			399
General and administrative		202		—			39			(3	)		238
Financing costs, net		68		28			11			—			107
		1,861		28			3,300			(3	)		5,186
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		2,016		(15	)		2,343			(1,316	)		3,028
Provision (benefit) for income taxes		264		(3	)		952			—			1,213
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		1,752		(12	)		1,391			(1,316	)		1,815
Net loss from discontinued operations, net of tax		—		—			(63	)		—			(63	)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		1,752		(12	)		1,328			(1,316	)		1,752
Preferred stock dividends		38		—			—			—			38
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	1,714	$	(12	)	$	1,328		$	(1,316	)	$	1,714
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK (1)	$	1,727	$	(12	)	$	1,328		$	(1,316	)	$	1,727

⁽¹⁾  Comprehensive income (loss) activity is recorded on the Apache Corporation entity and consists of derivative instrument reclassifications and changes in fair value as reflected on our Statement of Consolidated Comprehensive Income.

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2014

							All Other
				Apache			Subsidiaries
	Apache			Finance			of Apache			Reclassifications
	Corporation			Canada			Corporation			& Eliminations			Consolidated
	(In millions)
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	$	70		$	(33	)	$	4,513		$	—		$	4,550
CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			82			—			82
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		70			(33	)		4,595			—			4,632
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(1,703	)		—			(3,168	)		—			(4,871	)
Additions to gas gathering, transmission and processing facilities		(2	)		—			(719	)		—			(721	)
Proceeds from sale of Deepwater Gulf of Mexico assets		1,367			—			—			—			1,367
Restricted cash related to divestitures		(1,367	)		—			—			—			(1,367	)
Proceeds from sale of other oil and gas properties		69			—			312			—			381
Acquisitions		(5	)		—			—			—			(5	)
Investment in subsidiaries, net		2,899			—			—			(2,899	)		—
Other		(35	)		—			12			—			(23	)
NET CASH PROVIDED BY (USED IN) CONTINUING INVESTING ACTIVITIES		1,223			—			(3,563	)		(2,899	)		(5,239	)
NET CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			748			—			748
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		1,223			—			(2,815	)		(2,899	)		(4,491	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net		—			—			(1	)		—			(1	)
Intercompany borrowings		—			11			(2,909	)		2,898			—
Distributions to noncontrolling interest		—			—			(66	)		—			(66	)
Dividends paid		(176	)		—			—			—			(176	)
Treasury stock activity, net		(1,263	)		—			—			—			(1,263	)
Other		—			19			5			1			25
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES		(1,439	)		30			(2,971	)		2,899			(1,481	)
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(42	)		—			(42	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(1,439	)		30			(3,013	)		2,899			(1,523	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(146	)		(3	)		(1,233	)		—			(1,382	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		155			3			1,748			—			1,906
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	9		$	—		$	515		$	—		$	524

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2013

							All Other
				Apache			Subsidiaries
	Apache			Finance			of Apache			Reclassifications
	Corporation			Canada			Corporation			& Eliminations			Consolidated
	(In millions)
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	$	688		$	(76	)	$	4,664		$	—		$	5,276
CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			104			—			104
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		688			(76	)		4,768			—			5,380
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(1,854	)		—			(3,196	)		—			(5,050	)
Additions to gas gathering, transmission and processing facilities		(54	)		—			(437	)		—			(491	)
Proceeds from Kitimat LNG transaction, net		—			—			405			—			405
Acquisitions		—			—			(148	)		—			(148	)
Investment in subsidiaries, net		1,258			—			—			(1,258	)		—
Other		(58	)		—			72			—			14
NET CASH USED IN CONTINUING INVESTING ACTIVITIES		(708	)		—			(3,304	)		(1,258	)		(5,270	)
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(94	)		—			(94	)
NET CASH USED IN INVESTING ACTIVITIES		(708	)		—			(3,398	)		(1,258	)		(5,364	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net		945			—			—			—			945
Intercompany borrowings		—			1			(1,253	)		1,252			—
Payments on fixed rate debt		(500	)		—			—			—			(500	)
Dividends paid		(183	)		—			—			—			(183	)
Treasury stock activity, net		(249	)		—			—			—			(249	)
Other		7			75			(85	)		6			3
NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES		20			76			(1,338	)		1,258			16
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(8	)		—			(8	)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		20			76			(1,346	)		1,258			8
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		—			—			24			—			24
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		—			—			160			—			160
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	—		$	—		$	184		$	—		$	184

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2014

					All Other
			Apache		Subsidiaries
	Apache		Finance		of Apache		Reclassifications
	Corporation		Canada		Corporation		& Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	9	$	—	$	515	$	—		$	524
Short-term restricted cash		—		—		778		—			778
Receivables, net of allowance		873		—		1,534		—			2,407
Inventories		24		—		770		—			794
Drilling advances		29		2		300		—			331
Prepaid assets and other		90		—		202		—			292
Intercompany receivable		6,065		—		—		(6,065	)		—
		7,090		2		4,099		(6,065	)		5,126
PROPERTY AND EQUIPMENT, NET		17,436		—		35,034		—			52,470
OTHER ASSETS:
Intercompany receivable		—		—		1,327		(1,327	)		—
Equity in affiliates		25,486		1,203		445		(27,134	)		—
Long-term restricted cash		—		—		589		—			589
Goodwill, net		173		—		1,196		—			1,369
Deferred charges and other		191		1,005		1,421		(1,000	)		1,617
	$	50,376	$	2,210	$	44,111	$	(35,526	)	$	61,171
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	831	$	13	$	647	$	—		$	1,491
Current debt		—		—		1		—			1
Asset retirement obligation		115		—		63		—			178
Derivative instruments		272		—		—		—			272
Other current liabilities		1,128		1		1,499		—			2,628
Intercompany payable		—		—		6,065		(6,065	)		—
		2,346		14		8,275		(6,065	)		4,570
LONG-TERM DEBT		9,375		298		1		—			9,674
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable		1,327		—		—		(1,327	)		—
Income taxes		3,641		—		4,925		—			8,566
Asset retirement obligation		455		—		2,595		—			3,050
Other		477		250		692		(1,000	)		419
		5,900		250		8,212		(2,327	)		12,035
COMMITMENTS AND CONTINGENCIES APACHE SHAREHOLDERS’ EQUITY		32,755		1,648		25,486		(27,134	)		32,755
Noncontrolling interest		—		—		2,137		—			2,137
TOTAL EQUITY		32,755		1,648		27,623		(27,134	)		34,892
	$	50,376	$	2,210	$	44,111	$	(35,526	)	$	61,171

APACHE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2013

					All Other
			Apache		Subsidiaries
	Apache		Finance		of Apache		Reclassifications
	Corporation		Canada		Corporation		& Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	155	$	3	$	1,748	$	—		$	1,906
Receivables, net of allowance		1,043		—		1,909		—			2,952
Inventories		48		—		843		—			891
Drilling advances		49		—		322		—			371
Derivative instruments		1		—		—		—			1
Prepaid assets and other		99		—		146		—			245
Intercompany receivable		5,357		—		—		(5,357	)		—
		6,752		3		4,968		(5,357	)		6,366
PROPERTY AND EQUIPMENT, NET		16,092		—		36,329		—			52,421
OTHER ASSETS:
Intercompany receivable		1,572		—		—		(1,572	)		—
Equity in affiliates		24,743		1,155		449		(26,347	)		—
Goodwill, net		173		—		1,196		—			1,369
Deferred charges and other		166		1,006		1,309		(1,000	)		1,481
	$	49,498	$	2,164	$	44,251	$	(34,276	)	$	61,637
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	956	$	2	$	658	$	—		$	1,616
Current debt		—		—		53		—			53
Asset retirement obligation		115		—		6		—			121
Derivative instruments		299		—		—		—			299
Other current liabilities		896		10		1,705		—			2,611
Intercompany payable		—		—		5,357		(5,357	)		—
		2,266		12		7,779		(5,357	)		4,700
LONG-TERM DEBT		9,374		298		—		—			9,672
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable		—		—		1,572		(1,572	)		—
Income taxes		3,586		—		4,778		—			8,364
Asset retirement obligation		430		—		2,671		—			3,101
Other		446		250		711		(1,000	)		407
		4,462		250		9,732		(2,572	)		11,872
COMMITMENTS AND CONTINGENCIES APACHE SHAREHOLDERS’ EQUITY		33,396		1,604		24,743		(26,347	)		33,396
Noncontrolling interest		—		—		1,997		—			1,997
TOTAL EQUITY		33,396		1,604		26,740		(26,347	)		35,393
	$	49,498	$	2,164	$	44,251	$	(34,276	)	$	61,637

XML

INCOME TAXES

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

INCOME TAXES

7. INCOME TAXES

The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. Accordingly, the Company recorded the income tax impact of a $203 million non-cash write-down of its North Sea proved oil and gas properties as a discrete item in the second quarter of 2014.

Apache and its subsidiaries are subject to U.S. federal income tax as well as income or capital taxes in various state and foreign jurisdictions. The Company’s tax reserves are related to tax years that may be subject to examination by the relevant taxing authority. The Company is under audit with the Internal Revenue Service for the 2011 and 2012 tax years. The Company is also under audit in various states and in most of the Company’s foreign jurisdictions as part of its normal course of business.

XML

ASSET RETIREMENT OBLIGATION

6 Months Ended

Jun. 30, 2014

Asset Retirement Obligation Disclosure [Abstract]

ASSET RETIREMENT OBLIGATION

5. ASSET RETIREMENT OBLIGATION

The following table describes changes to the Company’s asset retirement obligation (ARO) liability for the six-month period ended June 30, 2014:

	(In millions)
Asset retirement obligation at December 31, 2013	$	3,222
Liabilities incurred		63
Liabilities divested		(91	)
Liabilities settled		(55	)
Accretion expense		89
Asset retirement obligation at June 30, 2014		3,228
Less current portion		(178	)
Asset retirement obligation, long-term	$	3,050

XML

DEBT AND FINANCING COSTS

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

DEBT AND FINANCING COSTS

6. DEBT AND FINANCING COSTS

The following table presents the carrying amounts and estimated fair values of the Company’s outstanding debt:

	June 30, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Uncommitted credit lines	$	1	$	1	$	53	$	53
Notes and debentures		9,674		10,828		9,672		10,247
Total Debt	$	9,675	$	10,829	$	9,725	$	10,300

The Company’s debt is recorded at the carrying amount, net of unamortized discount, on its consolidated balance sheet. The carrying amount of the Company’s commercial paper and uncommitted credit facilities and overdraft lines approximates fair value because the interest rates are variable and reflective of market rates. Apache uses a market approach to determine the fair value of its notes and debentures using estimates provided by an independent investment financial data services firm (a Level 2 fair value measurement).

As of June 30, 2014, the Company had unsecured committed revolving credit facilities totaling $3.3 billion, of which $1.0 billion matures in August 2016 and $2.3 billion matures in June 2018 pursuant to a one-year extension approved in May 2014 under the terms of the $2.3 billion facilities. The facilities consist of a $1.7 billion facility and $1.0 billion facility for the U.S., a $300 million facility for Australia, and a $300 million facility for Canada. As of June 30, 2014, available borrowing capacity under the Company’s credit facilities was $3.3 billion. The Company’s committed credit facilities are used to support Apache’s commercial paper program.

The Company has available a $3.0 billion commercial paper program, which generally enables Apache to borrow funds for up to 270 days at competitive interest rates. The commercial paper program is fully supported by available borrowing capacity under our committed credit facilities. At June 30, 2014 and December 31, 2013, the Company had no outstanding commercial paper.

As of June 30, 2014, the Company had approximately $1 million of current debt outstanding borrowed on uncommitted credit facilities and overdraft lines, compared with $53 million as of December 31, 2013.

Financing Costs, Net

The following table presents the components of Apache’s financing costs, net:

	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(In millions)
Interest expense	$	124		$	141		$	248		$	287
Amortization of deferred loan costs		1			2			3			4
Capitalized interest		(90	)		(88	)		(185	)		(178	)
Interest income		—			(3	)		(4	)		(6	)
Financing costs, net	$	35		$	52		$	62		$	107

XML

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2014

Commitments And Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

8. COMMITMENTS AND CONTINGENCIES

Legal Matters

Apache is party to various legal actions arising in the ordinary course of business, including litigation and governmental and regulatory controls. As of June 30, 2014, the Company has an accrued liability of approximately $21 million for all legal contingencies that are deemed to be probable of occurring and can be reasonably estimated. Apache’s estimates are based on information known about the matters and its experience in contesting, litigating, and settling similar matters. Although actual amounts could differ from management’s estimate, none of the actions are believed by management to involve future amounts that would be material to Apache’s financial position, results of operations, or liquidity after consideration of recorded accruals. For material matters that Apache believes an unfavorable outcome is reasonably possible, the Company has disclosed the nature of the matter and a range of potential exposure, unless an estimate cannot be made at this time. It is management’s opinion that the loss for any other litigation matters and claims that are reasonably possible to occur will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity.

For additional information on each of the Legal Matters described below, please see Note 8—Commitments and Contingencies to the consolidated financial statements contained in Apache’s Current Report on Form 8-K dated July 17, 2014 for the fiscal year ended December 31, 2013.

Argentine Environmental Claims and Argentina Tariff

In 2003, the Asociación de Superficiarios de la Patagonia (ASSUPA) filed lawsuits against Company subsidiaries in Argentina courts relating to various environmental and remediation claims concerning certain geographic areas of Argentina, including the Neuquén and Austral basins. In addition, effective December 1, 2011, Enargas, an autonomous entity that functions under the Argentine Ministry of Economy, created a tariff charge on all fuel gas used by oil and gas producers in field operations, which is likewise the subject of legal proceedings in Argentina.

On March 12, 2014, the Company and its subsidiaries completed the sale of all of the Company’s subsidiaries’ operations and properties in Argentina to YPF Sociedad Anonima (YPF). As part of that sale, YPF assumed responsibility for all of the past, present, and future litigation in Argentina involving Company subsidiaries, including the ASSUPA and Enargas matters, except that Company subsidiaries have agreed to indemnify YPF for certain environmental, tax, and royalty obligations capped at an aggregate of $100 million. The indemnity is subject to specific agreed conditions precedent, thresholds, contingencies, limitations, claim deadlines, loss sharing, and other terms and conditions. On April 11, 2014, YPF provided its first notice of claims pursuant to the indemnity. Company subsidiaries have not paid any amounts under the indemnity, but will continue to review and consider claims presented by YPF. Further, Company subsidiaries retain the right to enforce certain Argentina-related indemnification obligations against Pioneer Natural Resources Company (Pioneer) up to $67.5 million pursuant to the terms and conditions of stock purchase agreements entered in 2006 between Company subsidiaries and Pioneer subsidiaries. No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Louisiana Restoration 

Numerous surface owners have filed claims or sent demand letters to various oil and gas companies, including Apache, claiming that, under either expressed or implied lease terms or Louisiana law, they are liable for damage measured by the cost of restoration of leased premises to their original condition as well as damages for contamination and cleanup.

In a case captioned Heloise, LLC, et al. v. BP America Production Company, et al., Case No. 120113 in the District Court for the Parish of Lafourche, plaintiff landowners allege that defendants’ oil and gas operations contaminated their property primarily with chlorides. Apache, a defendant in the case, acquired its interest in the oil and gas operations on plaintiffs’ property from the former operator, Amoco Production Company, when the Company purchased the stock of Amoco’s subsidiary, MW Petroleum Corporation, in 1991. BP America Production Company, as Amoco’s successor in interest, and Apache dispute whether and to what extent they might owe each other indemnity in the case. Plaintiffs’ expert has recently opined that the cost of remediating plaintiffs’ 825 acres exceeds $200 million. Trial is set for December 2014. While an adverse judgment against the Company might be possible, Apache intends to vigorously defend the case.

With respect to Board of Commissioners of the Southeast Louisiana Flood Protection Authority – East v. Tennessee Gas Pipeline Company et al., Civil Action no. 13-5410, in the United States District Court for the Eastern District of Louisiana, the federal court has retained jurisdiction over the matter after denying plaintiff’s motion to remand on June 27, 2014. Further, the Louisiana state government has passed a new law (SB 469) clarifying that only entities authorized under the Coastal Zone Management Act may bring litigation to assert claims arising out of the permitted activities. Plaintiff is not one of those authorized entities. The Company and other defendants will seek dismissal of the case, including pursuant to SB 469.

No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Australia Gas Pipeline Force Majeure 

In 2008, Company subsidiaries reported a pipeline explosion that interrupted deliveries of natural gas in Australia to customers under various long-term contracts.

In the case captioned Alcoa of Australia Limited v. Apache Energy Limited, Apache Northwest Pty Ltd, Tap (Harriet) Pty Ltd, and Kufpec Australia Pty Ltd, Civ. 1481 of 2011, in the Supreme Court of Western Australia, on June 20, 2012, the Supreme Court struck out Alcoa’s claim that the liquidated damages provisions under two long-term contracts are unenforceable as a penalty and also struck out Alcoa’s claim for damages for breach of statutory duty. On September 17, 2013, the Western Australia Court of Appeal dismissed the Company subsidiaries’ appeal concerning Alcoa’s remaining tort claim for economic loss. On October 15, 2013, the Company subsidiaries applied to the High Court of Australia for special leave to appeal. On April 11, 2014, the High Court refused special leave to appeal. All of the Company subsidiaries’ defenses remain intact for further proceedings at the trial court level, including the defenses that were the subject of the special leave application. Further, in January 2014, an Alcoa affiliate pleaded guilty in United States of America v. Alcoa World Alumina LLC, Criminal No. 14-7, in the United States District Court for the Western District of Pennsylvania, to a charge under the Foreign Corrupt Practices Act (FCPA) anti-bribery provisions, 15 U.S.C. Section 78dd-2 and 18 U.S.C. Section 2. This matter overlaps with Alcoa’s claims against Company subsidiaries in that both cases concern alumina produced from Alcoa’s alumina refineries in Western Australia during the period of the gas supply disruption in 2008-2009. In the circumstances of the admitted, agreed, and stipulated facts set forth in the Alcoa affiliate’s Plea Agreement, which is a public document, Company subsidiaries will defend against Alcoa’s claims on the basis that Alcoa is barred by law from recovering economic losses.

In the week prior to expiration of the applicable six-year limitations period on June 3, 2014, the following civil lawsuits were filed in connection with the Varanus Island pipeline explosion (the Incident):

• As previously reported, a lawsuit filed by Burrup Fertilisers Pty Ltd (Burrup Fertilisers) in Texas in December 2009 was dismissed in March 2013 on the ground of forum non conveniens. On May 29, 2014, Burrup Fertilisers (now known as Yara Pilbara Fertilisers Pty Ltd, YPFPL) re-filed the lawsuit in Western Australia, captioned Yara Pilbara Fertilisers Pty Ltd vs. Apache Energy Limited et al., Civ. 1742 of 2014, in the Supreme Court of Western Australia. In the lawsuit, which is being pressed by YPFPL’s insurers, YPFPL alleges that a joint venture whose members include an Apache subsidiary supplied YPFPL with natural gas and that, as a consequence of a disruption in gas supply following the Incident, plaintiff incurred damages in the amount of nearly $166 million USD for economic losses and, alternatively, contractual liquidated damages and “abnormal costs” in the amount of approximately $13 million USD. In addition to all of their other defenses, the Company and its subsidiaries will defend against YPFPL’s claims on the basis that during the gas supply disruption there was no enforceable gas supply contract between YPFPL and Company subsidiaries.

• In Wesfarmers LPG Pty Ltd et al. vs. Apache Energy Limited et al., Civ. 1740 of 2014, in the Supreme Court of Western Australia, plaintiffs allege that Alinta Sales Pty Ltd (Alinta) supplied them (and associated entities) with natural gas and that, as a consequence of a disruption in gas supply following the Incident, plaintiffs incurred an unspecified amount of damages for alleged lost profits, alternative gas, and associated expenses. Plaintiffs’ Indorsement of Claim (a short form of pleading) has been filed with the court but not yet served on the Apache defendants.

• In Iluka Resources Limited vs. Apache Energy Limited et al., Civ. 1748 of 2014, in the Supreme Court of Western Australia, plaintiff alleges that Alinta supplied it with natural gas and power and that, as a consequence of a disruption in gas supply following the Incident, plaintiff incurred damages of approximately $23 million (no currency is specified) for alleged lost profits, alternative energy, and associated expenses. Plaintiff’s Indorsement of Claim has been filed with the court but not yet served on the Apache defendants.

• In Harvey Industries Group Pty Ltd vs. Apache Energy Limited et al., Civ. 1749 of 2014, in the Supreme Court of Western Australia, plaintiff alleges that Alinta supplied it with natural gas and power and that, as a consequence of a disruption in gas supply following the Incident, plaintiff incurred an unspecified amount of damages for alleged lost profits, the cost of alternative gas and power, and associated expenses. Plaintiff’s Indorsement of Claim has been filed with the court but not yet served on the Apache defendants.

• In EDL LNG (WA) Pty Ltd et al. vs. Apache Energy Limited et al., Civ. 1751 of 2014, in the Supreme Court of Western Australia, plaintiffs allege that an Apache subsidiary and Santos (BOL) Pty Ltd supplied one such plaintiff with natural gas and that, as a consequence of a disruption in gas supply following the Incident, plaintiffs incurred damages of approximately $17.5 million (no currency is specified) for alleged alternative gas and diesel, and, alternatively, plaintiffs seek an unspecified amount of liquidated damages from their gas sellers.

• In Newmont Mining Services Pty Ltd et al. vs. Apache Energy Limited et al., Civ. 1727 of 2014, in the Supreme Court of Western Australia, plaintiffs allege that Santos (BOL) Pty Ltd supplied one such plaintiff with natural gas and that, as a consequence of a disruption in gas supply following the Incident, plaintiffs incurred an unspecified amount of damages for alleged alternative energy and associated expenses, except that as an alternative measure of damage plaintiffs seek to recover $6.4 million (no currency is specified) in liquidated damages from Santos (BOL) Pty Ltd. Plaintiffs’ Indorsement of Claim has been filed with the court but not yet served on the Apache defendants.

With respect to the claims in which the plaintiffs have not specified an amount of alleged damages, the exposure related to such claims is not currently determinable but, in each case, the alleged damages are not expected to be material. Insurance statistics maintained by the Insurance Council of Australia show that the total insured loss resulting from the gas supply disruption was $230 million AUD.

The applicable six-year limitations period has expired. In six years none of the above-referenced plaintiffs presented a claim to Apache or its subsidiaries prior to filing suit and instead allowed the same plaintiff law firm to file suit in Western Australia at the latest possible moment. The Apache defendants do not believe that any of the claims have merit and will vigorously pursue their defenses against such claims. The plaintiffs seek relief primarily in tort, in circumvention of their own positive arrangements regarding risk allocation. In respect of the pending claims filed prior to expiration of the limitations period, contractual liquidated damages under the long-term contracts with such provisions, and under which an Apache subsidiary is a gas supplier, would not be expected to exceed $20 million AUD exclusive of interest. This is a reduction from previous estimates.

No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Breton Lawsuit

On October 29, 2012, plaintiffs filed an amended complaint in Breton Energy, L.L.C. et al. v. Mariner Energy Resources, Inc., et al., Case 4:11-cv-03561, in the United States District Court for the Southern District of Texas, Houston Division, seeking compensation from defendants for allegedly depriving plaintiffs of rights to hydrocarbons in a reservoir described by plaintiffs as a common reservoir in West Cameron Blocks 171 and 172 offshore Louisiana in the Gulf of Mexico. On May 28, 2013, the United States District Court for the Southern District of Texas dismissed the plaintiffs’ claims and entered judgment in favor of the defendants. On June 3, 2013, the plaintiffs filed a notice of appeal in the United States Court of Appeals for the Fifth Circuit. The appeal is pending. No material change in the status of this matter has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Escheat Audits

The State of Delaware, Department of Finance, Division of Revenue (Unclaimed Property), has notified numerous companies, including Apache Corporation, that the State intends to examine its books and records and those of its subsidiaries and related entities to determine compliance with the Delaware Escheat Laws. The review is ongoing, and no material change in the status of this matter has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Burrup-Related Gas Supply Lawsuits

On October 11, 2013, a lawsuit captioned Pankaj Oswal v. Apache Corporation, No. WAD 389/2013, in the Federal Court of Australia, District of Western Australia, General Division, was filed in which plaintiff asserts claims against the Company under the Australian Trade Practices Act. The Company does not believe the lawsuit has merit and will vigorously defend against it. No other material change in the status of this matter has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

In the case captioned Radhika Oswal v. Australia and New Zealand Banking Group Limited (ANZ) et al., No. SCI 2011 4653, in the Supreme Court of Victoria, plaintiff filed an application seeking to amend her statement of claim in order to add parties as defendants to the proceedings, including the Company and certain of its subsidiaries. Similarly, in a companion case captioned Pankaj Oswal v. Australia and New Zealand Banking Group Limited (ANZ) et al., No. SCI 2012 01995, in the Supreme Court of Victoria, plaintiff also filed an application seeking to amend his statement of claim in order to add parties as defendants to the proceedings, including the Company and certain of its subsidiaries. This is the second attempt by the plaintiffs to amend their pleadings, with their first attempt having been unsuccessful. While reserving all rights, including all defenses to the plaintiffs’ proposed amended pleadings, the Company and its subsidiaries did not object to the plaintiffs’ revised applications to amend their pleadings, which is a procedural matter. The court granted plaintiffs’ applications and entered a scheduling order with respect to the filing of all amended pleadings. On July 23, 2014, the Apache defendants filed their responsive pleadings, which include substantial counterclaims against the Oswals by a Company subsidiary. No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Concerning the action filed by Tap (Harriet) Pty Ltd (Tap) against Burrup Fertilisers Pty Ltd et al., Civ. 2329 of 2009, in the Supreme Court of Western Australia, no material change in the status of this matter has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Environmental Matters

As of June 30, 2014, the Company had an undiscounted reserve for environmental remediation of approximately $89 million. The Company is not aware of any environmental claims existing as of June 30, 2014, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity. There can be no assurance, however, that current regulatory requirements will not change or past non-compliance with environmental laws will not be discovered on the Company’s properties.

XML

Derivative Instruments and Hedging Activities - Commodity Derivative Instruments (Detail) (Fixed-Price Swaps [Member], 2014 [Member], Derivatives Not Designated as Cash Flow Hedging Instruments [Member])	Jun. 30, 2014 MMBTU
Open Natural Gas Derivative Positions [Member] | NYMEX Henry Hub and Various Inside FERC Indices [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Open positions	32,470
Open positions	32,470
Weighted Average Fixed Price	4.37
Open Crude Oil Derivative Positions [Member] | NYMEX WTI [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Open positions	11,500
Open positions	11,500
Weighted Average Fixed Price	90.83
Open Crude Oil Derivative Positions [Member] | Dated Brent [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Open positions	11,500
Open positions	11,500
Weighted Average Fixed Price	100.05

XML

Supplemental Guarantor Information - Additional Information (Detail) (Notes Due 2029 [Member], USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Notes Due 2029 [Member]
Condensed Financial Statements, Captions [Line Items]
Publicly traded notes	$ 300
Publicly-traded notes maturity date	2029

XML

ACQUISITIONS AND DIVESTITURES (Tables)

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Summary of Carrying Amount of Major Assets and Liabilities Associated with Disposition

The carrying amounts of the major classes of assets and liabilities associated with the disposition were as follows:

	December 31,
	2013
	(In millions)
ASSETS
Current assets	$	150
Net property and equipment		1,416
Other assets		12
Total assets	$	1,578
LIABILITIES
Current debt	$	51
Other current liabilities		95
Asset retirement obligations		91
Other long-term liabilities		21
Total liabilities	$	258

Summary of Sales and Other Operating Revenue and Loss from Discontinued Operation Related to Disposition

Sales and other operating revenues and loss from discontinued operations related to the Argentina disposition were as follows:

	For the Quarter Ended					For the Six Months Ended
	June 30,					June 30,
	2014		2013			2014			2013
	(In millions)
Revenues and other from discontinued operations	$	—	$	115		$	87		$	246
Loss from Argentina divestiture		—		—			(539	)		—
Loss from operations in Argentina		—		(2	)		(1	)		(63	)
Income tax benefit		—		—			23			—
Loss from discontinued operations, net of tax	$	—	$	(2	)	$	(517	)	$	(63	)

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CAPITAL STOCK (Tables)

6 Months Ended

Jun. 30, 2014

Equity [Abstract]

Net Income Per Common Share

A reconciliation of the components of basic and diluted net income per common share for the quarters and six-month periods ended June 30, 2014 and 2013 is presented in the table below.

	For the Quarter Ended June 30,
	2014								2013
	Income			Shares		Per Share			Income			Shares		Per Share
	(In millions, except per share amounts)
Basic:
Income from continuing operations	$	505			385	$	1.31		$	1,018			392	$	2.60
Loss from discontinued operations		—			385		—			(2	)		392		(0.01	)
Income attributable to common stock	$	505			385	$	1.31		$	1,016			392	$	2.59
Effect of Dilutive Securities:
Mandatory Convertible Preferred Stock	$	—			—				$	19			14
Stock options and other		—			2					—			2
Diluted:
Income from continuing operations	$	505			387	$	1.31		$	1,037			408	$	2.54
Loss from discontinued operations		—			387		—			(2	)		408		—
Income attributable to common stock	$	505			387	$	1.31		$	1,035			408	$	2.54
	For the Six Months Ended June 30,
	2014								2013
	Income			Shares		Per Share			Income			Shares		Per Share
	(In millions, except per share amounts)
Basic:
Income from continuing operations	$	1,258			390	$	3.23		$	1,777			392	$	4.53
Loss from discontinued operations		(517	)		390		(1.33	)		(63	)		392		(0.16	)
Income attributable to common stock	$	741			390	$	1.90		$	1,714			392	$	4.37
Effect of Dilutive Securities:
Mandatory Convertible Preferred Stock		—			—					38			14
Stock options and other		—			2					—			2
Diluted:
Income from continuing operations	$	1,258			392	$	3.21		$	1,815			408	$	4.45
Loss from discontinued operations		(517	)		392		(1.32	)		(63	)		408		(0.15	)
Income attributable to common stock	$	741			392	$	1.89		$	1,752			408	$	4.30

XML

Business Segment Information - Financial Segment Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Oil and gas production revenues	$ 3,708,000,000	$ 4,001,000,000	$ 7,355,000,000	$ 8,022,000,000
Operating Income (Loss)	1,346,000,000	1,559,000,000	2,895,000,000	3,181,000,000
Other Income (Expense):
Derivative instrument gains (losses), net	(174,000,000)	247,000,000	(194,000,000)	147,000,000
Other	(50,000,000)	20,000,000	(2,000,000)	45,000,000
General and administrative	(94,000,000)	(126,000,000)	(199,000,000)	(238,000,000)
Acquisition, divestiture, and separation costs	(14,000,000)		(30,000,000)
Financing costs, net	(35,000,000)	(52,000,000)	(62,000,000)	(107,000,000)
NET INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	979,000,000	1,648,000,000	2,408,000,000	3,028,000,000
Total Assets	61,171,000,000	61,622,000,000	61,171,000,000	61,622,000,000	61,637,000,000
United States [Member]
Segment Reporting Information [Line Items]
Oil and gas production revenues	1,529,000,000	1,836,000,000	3,034,000,000	3,513,000,000
Operating Income (Loss)	679,000,000	712,000,000	1,342,000,000	1,298,000,000
Other Income (Expense):
Total Assets	31,547,000,000	33,376,000,000	31,547,000,000	33,376,000,000
Canada [Member]
Segment Reporting Information [Line Items]
Oil and gas production revenues	293,000,000	329,000,000	611,000,000	627,000,000
Operating Income (Loss)	47,000,000	14,000,000	119,000,000	11,000,000
Other Income (Expense):
Total Assets	6,842,000,000	6,927,000,000	6,842,000,000	6,927,000,000
Egypt [Member]
Segment Reporting Information [Line Items]
Oil and gas production revenues	989,000,000	893,000,000	1,939,000,000	1,902,000,000
Operating Income (Loss)	585,000,000	512,000,000	1,121,000,000	1,170,000,000
Other Income (Expense):
Total Assets	7,264,000,000	6,951,000,000	7,264,000,000	6,951,000,000
Australia [Member]
Segment Reporting Information [Line Items]
Oil and gas production revenues	237,000,000	291,000,000	493,000,000	588,000,000
Operating Income (Loss)	74,000,000	119,000,000	169,000,000	254,000,000
Other Income (Expense):
Total Assets	8,763,000,000	7,124,000,000	8,763,000,000	7,124,000,000
North Sea [Member]
Segment Reporting Information [Line Items]
Oil and gas production revenues	660,000,000	652,000,000	1,278,000,000	1,392,000,000
Operating Income (Loss)	(39,000,000)	202,000,000	144,000,000	448,000,000
Other Income (Expense):
Total Assets	6,713,000,000	7,114,000,000	6,713,000,000	7,114,000,000
Other International [Member]
Segment Reporting Information [Line Items]
Oil and gas production revenues	0		0
Operating Income (Loss)	0		0
Other Income (Expense):
Total Assets	$ 42,000,000	$ 130,000,000	$ 42,000,000	$ 130,000,000

XML

Debt and Financing Cost - Non-Recurring Fair Value Measurement (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Total Debt, Carrying Amount	$ 9,675	$ 9,725
Total Debt, Fair Value	10,829	10,300
Uncommitted Credit Lines [Member]
Debt Instrument [Line Items]
Uncommitted credit lines, Carrying Amount	1	53
Total Debt, Fair Value	1	53
Notes and Debentures [Member]
Debt Instrument [Line Items]
Notes and debentures, Carrying Amount	9,674	9,672
Total Debt, Fair Value	$ 10,828	$ 10,247

XML

CONSOLIDATED BALANCE SHEET (Unaudited) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
CURRENT ASSETS:
Cash and cash equivalents	$ 524	$ 1,906
Short-term restricted cash	778
Receivables, net of allowance	2,407	2,952
Inventories	794	891
Drilling advances	331	371
Prepaid assets and other	292	246
Total current assets	5,126	6,366
Oil and gas, on the basis of full-cost accounting:
Proved properties	84,033	83,390
Unproved properties and properties under development, not being amortized	7,789	8,363
Gathering, transmission and processing facilities	7,587	6,995
Other	1,103	1,071
Property and equipment, gross	100,512	99,819
Less: Accumulated depreciation, depletion and amortization	(48,042)	(47,398)
Property and equipment, net	52,470	52,421
Long-term restricted cash	589
Goodwill	1,369	1,369
Deferred charges and other	1,617	1,481
Total assets	61,171	61,637
CURRENT LIABILITIES:
Accounts payable	1,491	1,616
Current debt	1	53
Current asset retirement obligation	178	121
Derivative instruments	272	299
Other current liabilities	2,628	2,611
Total current liabilities	4,570	4,700
LONG-TERM DEBT	9,674	9,672
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Income taxes	8,566	8,364
Asset retirement obligation	3,050	3,101
Other	419	407
Total deferred credits and other noncurrent liabilities	12,035	11,872
COMMITMENTS AND CONTINGENCIES (Note 8)
EQUITY:
Common stock, $0.625 par, 860,000,000 shares authorized, 409,441,006 and 408,041,088 shares issued, respectively	256	255
Paid-in capital	12,324	12,251
Retained earnings	22,581	22,032
Treasury stock, at cost, 27,110,079 and 12,268,180 shares, respectively	(2,290)	(1,027)
Accumulated other comprehensive loss	(116)	(115)
APACHE SHAREHOLDERS' EQUITY	32,755	33,396
Noncontrolling interest	2,137	1,997
TOTAL EQUITY	34,892	35,393
Total liabilities and shareholders' equity	$ 61,171	$ 61,637

XML

ACQUISITIONS AND DIVESTITURES

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

ACQUISITIONS AND DIVESTITURES

2. ACQUISITIONS AND DIVESTITURES

2014 Activity

Gulf of Mexico Deepwater Divestiture

On June 30, 2014, Apache completed the sale of non-operated interests in the Lucius and Heidelberg development projects and 11 primary term deepwater exploration blocks in the Gulf of Mexico for $1.4 billion. The effective date of the transaction was May 1, 2014. Apache’s net book value of oil and gas properties was reduced by approximately $850 million of proved property costs and $518 million of unproved property costs as a result of the transaction.

Canada Divestiture

On April 30, 2014, Apache completed the sale of primarily dry gas producing hydrocarbon assets in the Deep Basin area of western Alberta and British Columbia, Canada, for $374 million. The assets comprise 328,400 net acres in the Ojay, Noel, and Wapiti areas. Apache retained 100 percent of its working interest in horizons below the Cretaceous in the Wapiti area, including rights to the liquids-rich Montney and other deeper horizons. The effective date of the transaction was January 1, 2014.

Argentina Divestiture

On March 12, 2014, Apache’s subsidiaries completed the sale of all of the Company’s operations in Argentina to YPF Sociedad Anónima for cash consideration of $800 million (subject to customary closing adjustments) plus the assumption of $52 million of bank debt as of June 30, 2013. The results of operations related to Argentina have been classified as discontinued operations in all periods presented in this Quarterly Report on Form 10-Q. The carrying amounts of the major classes of assets and liabilities associated with the disposition were as follows:

	December 31,
	2013
	(In millions)
ASSETS
Current assets	$	150
Net property and equipment		1,416
Other assets		12
Total assets	$	1,578
LIABILITIES
Current debt	$	51
Other current liabilities		95
Asset retirement obligations		91
Other long-term liabilities		21
Total liabilities	$	258

Sales and other operating revenues and loss from discontinued operations related to the Argentina disposition were as follows:

	For the Quarter Ended					For the Six Months Ended
	June 30,					June 30,
	2014		2013			2014			2013
	(In millions)
Revenues and other from discontinued operations	$	—	$	115		$	87		$	246
Loss from Argentina divestiture		—		—			(539	)		—
Loss from operations in Argentina		—		(2	)		(1	)		(63	)
Income tax benefit		—		—			23			—
Loss from discontinued operations, net of tax	$	—	$	(2	)	$	(517	)	$	(63	)

2013 Activity

Egypt Partnership

On November 14, 2013, Apache completed the sale of a one-third minority participation in its Egypt oil and gas business to a subsidiary of Sinopec International Petroleum Exploration and Production Corporation (Sinopec). Apache received cash consideration of $2.95 billion after customary closing adjustments. Apache continues to operate its Egypt upstream oil and gas business. Apache recorded $1.9 billion of the proceeds as a noncontrolling interest, which is reflected as a separate component of equity in the Company’s consolidated balance sheet. This represents one-third of Apache’s net book value of its Egypt holdings at the time of the transaction. The remaining proceeds were recorded as additional paid-in capital. Included in “Net income including noncontrolling interest” for the quarter ended June 30, 2014, is net income attributable to Sinopec’s interest totaling $108 million. For the first half of 2014, net income attributable to Sinopec’s interest totaled $206 million, of which the Company has distributed $66 million to Sinopec.

Gulf of Mexico Shelf Divestiture

On September 30, 2013, Apache completed the sale of its Gulf of Mexico Shelf operations and properties to Fieldwood Energy LLC (Fieldwood), an affiliate of Riverstone Holdings. Under the terms of the agreement, Apache received cash consideration of $3.7 billion, and Fieldwood assumed $1.5 billion of discounted asset abandonment liabilities. Additionally, Apache retained 50 percent of its ownership interest in all exploration blocks and in horizons below production in developed blocks.

Canada LNG Project

In February 2013, Apache completed a transaction with Chevron Canada Limited (Chevron Canada) under which each company became a 50-percent owner of the Kitimat LNG plant, the Pacific Trail Pipelines Limited Partnership (PTP), and 644,000 gross undeveloped acres in the Horn River and Liard basins. Chevron Canada will operate the LNG plant and pipeline while Apache Canada will continue to operate the upstream assets. Apache’s net proceeds from the transaction were $396 million after post-closing adjustments, and no gain or loss was recorded.

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BUSINESS SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Financial Segment Information

Financial information for each country is presented below:

	United States		Canada		Egypt(2)		Australia		North Sea			Other International		Total
	(In millions)
For the Quarter Ended
June 30, 2014
Oil and Gas Production Revenues	$	1,529	$	293	$	989	$	237	$	660		$	—	$	3,708
Operating Income (Loss) (1)	$	679	$	47	$	585	$	74	$	(39	)	$	—	$	1,346
Other Income (Expense):
Derivative instrument gains (losses), net															(174	)
Other															(50	)
General and administrative															(94	)
Acquisition, divestiture, and separation costs															(14	)
Financing costs, net															(35	)
Income Before Income Taxes														$	979
For the Six Months Ended
June 30, 2014
Oil and Gas Production Revenues	$	3,034	$	611	$	1,939	$	493	$	1,278		$	—	$	7,355
Operating Income (Loss) (1)	$	1,342	$	119	$	1,121	$	169	$	144		$	—	$	2,895
Other Income (Expense):
Derivative instrument gains (losses), net															(194	)
Other															(2	)
General and administrative															(199	)
Acquisition, divestiture, and separation costs															(30	)
Financing costs, net															(62	)
Income Before Income Taxes														$	2,408
Total Assets	$	31,547	$	6,842	$	7,264	$	8,763	$	6,713		$	42	$	61,171
For the Quarter Ended
June 30, 2013
Oil and Gas Production Revenues(3)	$	1,836	$	329	$	893	$	291	$	652		$	—	$	4,001
Operating Income (Loss)(1)(3)	$	712	$	14	$	512	$	119	$	202		$	—	$	1,559
Other Income (Expense):
Derivative instrument gains (losses), net															247
Other															20
General and administrative															(126	)
Financing costs, net															(52	)
Income Before Income Taxes(3)														$	1,648
For the Six Months Ended
June 30, 2013
Oil and Gas Production Revenues(3)	$	3,513	$	627	$	1,902	$	588	$	1,392		$	—	$	8,022
Operating Income (Loss) (1)(3)	$	1,298	$	11	$	1,170	$	254	$	448		$	—	$	3,181
Other Income (Expense):
Derivative instrument gains (losses), net															147
Other															45
General and administrative															(238	)
Financing costs, net															(107	)
Income Before Income Taxes(3)														$	3,028
Total Assets(3)	$	33,376	$	6,927	$	6,951	$	7,124	$	7,114		$	130	$	61,622

⁽¹⁾  Operating Income (Loss) consists of oil and gas production revenues less depreciation, depletion and amortization, asset retirement obligation accretion, lease operating expenses, gathering and transportation costs, and taxes other than income. North Sea’s operating income (loss) for the second quarter and first six months of 2014 includes a $203 million non-cash write-down of the carrying value of oil and gas properties.

⁽²⁾  Includes a noncontrolling interest in Egypt for the quarter and six months ended June 30, 2014.

⁽³⁾  Amounts for 2013 have been recast to exclude discontinued operations.

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Derivative Instruments and Hedging Activities - Commodity Derivative Activity in Accumulated Other Comprehensive Loss (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Unrealized gain (loss) on derivatives at beginning of period, Before tax			$ 1	$ (10)
Realized amounts reclassified into earnings, Before tax			0	20
Net change in derivative fair value, Before tax			(1)	0
Unrealized gain on derivatives at end of period, Before tax	0	10	0	10
Unrealized gain (loss) on derivatives at beginning of period, After tax			1	(6)
Realized amounts reclassified into earnings, After tax			0	14
Net change in derivative fair value, After tax	0	7	(1)	(1)
Unrealized gain on derivatives at end of period, After tax	$ 0	$ 7	$ 0	$ 7

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates with regard to these financial statements include the fair value determination of acquired assets and liabilities, the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom, assessing asset retirement obligations, and the estimate of income taxes. Actual results could differ from those estimates.

Restricted Cash

Restricted Cash

The Company classifies cash balances as restricted cash when cash is restricted as to withdrawal or usage. As of June 30, 2014, the Company had approximately $1.4 billion of proceeds from the sale of our deepwater Gulf of Mexico properties held by a qualified intermediary and available for use in a like-kind exchange under Section 1031 of the U.S. Internal Revenue Code. The Company has the option to use these funds for the acquisition of properties or receive the funds in cash after a short-term contractual period. As of the date of this filing, the Company expects to close on the acquisition of like-kind properties for $589 million, and as such, the balance is classified as long-term restricted cash on Apache’s consolidated balance sheet as of June 30, 2014. The remaining proceeds of approximately $778 million are classified as short-term restricted cash as of June 30, 2014. Should the Company elect to use additional funds for a like-kind exchange, the balance will be reclassified to long-term restricted cash until the funds are expended. For more information regarding the sale of the deepwater Gulf of Mexico properties, please refer to Note 2—Acquisitions and Divestitures.

Oil and Gas Property

Oil and Gas Property

The Company follows the full-cost method of accounting for its oil and gas property. Under this method of accounting, all costs incurred for both successful and unsuccessful exploration and development activities, including salaries, benefits and other internal costs directly identified with these activities, and oil and gas property acquisitions are capitalized. The net book value of oil and gas properties, less related deferred income taxes, may not exceed a calculated “ceiling.” The ceiling limitation is the estimated after-tax future net cash flows from proved oil and gas reserves, discounted at 10 percent per annum and adjusted for designated cash flow hedges. Estimated future net cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months, held flat for the life of the production, except where prices are defined by contractual arrangements.

Any excess of the net book value of proved oil and gas properties, less related deferred income taxes, over the ceiling is charged to expense and reflected as “Additional depreciation, depletion and amortization” (DD&A) in the accompanying statement of consolidated operations. Such limitations are imposed separately on a country-by-country basis and are tested quarterly. For a discussion of the calculation of estimated future net cash flows, please refer to Note 14—Supplemental Oil and Gas Disclosures to the consolidated financial statements contained in Apache’s Current Report on Form 8-K dated July 17, 2014 for the fiscal year ended December 31, 2013.

In the second quarter of 2014, the Company recorded a $203 million ($77 million net of tax) non-cash write-down of the carrying value of the Company’s North Sea proved oil and gas properties.

New Pronouncements Issued But Not Yet Adopted

New Pronouncements Issued But Not Yet Adopted

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-08—Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 modifies the criteria for disposals to qualify as discontinued operations and expands related disclosures. The guidance is effective for annual and interim reporting periods beginning after December 15, 2014. Adoption of this amendment will not have a material effect on our financial position or results of operations.

In May 2014, the FASB and the International Accounting Standards Board (IASB) issued a joint revenue recognition standard, ASU 2014-09. The new standard removes inconsistencies in existing standards, changes the way companies recognize revenue from contracts with customers, and increases disclosure requirements. The guidance requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2016. The standard is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to retained earnings on the opening balance sheet. The Company is currently evaluating the level of effort needed to implement the standard, the impact of adopting this standard on its consolidated financial statements, and whether to use the full retrospective approach or the modified retrospective approach.