8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 12, 2015

APACHE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-4300	41-0747868
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

2000 Post Oak Boulevard

Suite 100

Houston, Texas 77056-4400

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (713) 296-6000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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

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

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

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

The information in this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of Section 18, and shall not be incorporated by reference in any filing under the Securities Act or the Exchange Act, except as set forth by specific reference in such filing.

Item 2.02. Results of Operations and Financial Condition.

On February 12, 2015, Apache Corporation issued a press release announcing financial and operating results for the fiscal quarter and year ended December 31, 2014. The full text of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release of Apache Corporation dated February 12, 2015.

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
Date: February 12, 2015		/s/ Rebecca A. Hoyt
		Rebecca A. Hoyt
		Senior Vice President, Chief Accounting Officer and Controller
		(Principal Accounting Officer)

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press Release of Apache Corporation dated February 12, 2015.

EX-99.1

Exhibit 99.1

NEWS RELEASE

Apache Corporation announces fourth-quarter and full-year 2014 financial and operational results

Ø 2014 onshore pro forma North American liquids production grew 18.6 percent year over year; pro forma worldwide production grew 6.4 percent

Ø Fourth-quarter 2014 worldwide production averaged 673,300 barrels of oil equivalent (boe) per day; onshore North American production averaged 367,800 boe per day

Ø Fourth-quarter net loss of $4.8 billion or $12.78 per share; adjusted earnings of $404 million or $1.07 per share

Ø Fourth-quarter operating activities provided net cash of $1.9 billion; cash flow from operations before changes in operating assets and liabilities of approximately $2.1 billion

Ø Expecting approximately $3.7 billion in cash upon closing from previously announced sale of Kitimat and Wheatstone LNG facilities

Ø 2015 onshore North American production, adjusted for asset sales, is projected to be relatively flat year over year on a capital budget of $2.1 to $2.3 billion, with North American onshore oil production estimated to increase 1 to 3 percent

Ø 2015 pro forma international and offshore production projected to increase slightly year over year on a capital budget of $1.5 to $1.7 billion

HOUSTON, Feb. 12, 2015 – Apache Corporation (NYSE, Nasdaq: APA) today announced a fourth-quarter 2014 net loss of $4.8 billion or $12.78 per diluted common share, primarily as a result of after-tax, non-cash charges totaling $5.2 billion. Adjusted earnings, which exclude certain items that impact the comparability of results, totaled $404 million or $1.07 per share. Net cash provided by operating activities was approximately $1.9 billion in the fourth quarter of 2014, with cash from operations, before changes in operating assets and liabilities, totaling $2.1 billion.

“Onshore North American liquids production growth exceeded our guidance for 2014, and we exited the year with strong operational momentum,” said John J. Christmann IV, Apache’s chief executive officer and president. “Since our Nov. 20th North American Update, oil and gas prices have decreased substantially, prompting us to act quickly and decisively to reduce activity levels and reset our well cost structure. We have reduced our rig count from an average of 91 rigs in the third quarter of

2014 to an estimated 27 rigs by the end of this month. We have also reduced our frac crews by approximately 50 percent during the same time period and are delaying some well completions until service costs decrease materially. In 2015, Apache will run a streamlined capital program that focuses on efficiency improvements, downspacing and other strategic tests to further delineate our extensive inventory of locations within the Permian, Eagle Ford, Canyon Lime, Duvernay and Montney. While we are fortunate to have a substantial inventory of projects that can make economics at these oil prices, we believe it more prudent to curtail our activity until costs are lower and prices recover. This strategy will enable us to further strengthen our balance sheet and preserve the financial flexibility to capitalize on industry opportunities during the downturn.”

Fourth-quarter acquisition and divestiture activity

During the quarter, Apache significantly expanded and enhanced its core operating areas through $800 million of leasehold acquisitions in onshore North America.

In December, Apache entered into an agreement to sell its interests in the Wheatstone and Kitimat LNG projects along with certain other upstream assets in Australia. The company anticipates closing the transaction during the first quarter of 2015. Upon closing, Apache will receive cash proceeds of approximately $2.75 billion plus recovery of an estimated $1 billion in net expenditures between June 30, 2014, and closing. On Dec. 31, 2014, Apache completed the previously announced sale of non-core properties in the Anadarko Basin and southern Louisiana and received net proceeds of $1.3 billion.

Christmann noted, “2014 was a year of transition marked by the completion of many of our key strategic portfolio repositioning initiatives. We completed or announced the sale of approximately $7 billion of assets worldwide and enhanced our North American portfolio through the purchase of approximately $1.2 billion of strategic acreage. 2015 will be a year of tangible operational results that demonstrate the progress Apache has made with the application of leading-edge geoscience and process improvements across our nine primary plays in North America. This will put us in an excellent position to efficiently ramp-up the capital program and take advantage of market opportunities as commodity prices recover.”

Fourth-quarter 2014 production and operating highlights

• The Permian Region achieved record production of approximately 168,700 boe per day, up 26 percent from the prior-year period. The region averaged 42 operated rigs during the quarter and drilled 148 gross operated wells. Apache plans to operate approximately 10 to 12 rigs in the Permian Basin during 2015.

• The Central Region produced approximately 93,900 boe per day, up 1 percent from the prior-year period and up 3 percent sequentially from the third quarter of 2014. The region averaged 20 operated rigs during the quarter and drilled 72 gross operated wells. In the Canyon Lime play, the company is in the early stages of flow back and testing on its first four-well pad and has drilled two step-out delineation wells that indicate excellent fluid properties and higher-than-expected oil content. Apache plans to operate two to three rigs in the Central Region during 2015, one to two of which will be in the Canyon Lime.

• Gulf Coast production averaged 32,800 boe per day in the fourth quarter, up 8 percent from the prior-year period and up 13 percent sequentially from the third quarter of 2014. Following the sale of its south Louisiana properties on Dec. 31, 2014, Apache’s Gulf Coast regional production is almost entirely attributable to the Eagle Ford play. The company is in the early stages of flowing back wells from several new pads in the Eagle Ford. On the Grant pad in Brazos County, Texas, four wells have been producing for more than 50 days. These wells have produced substantially higher oil volumes than indicated by the “Area B” type curve presented in Apache’s North American Update on Nov. 20, 2014. Apache plans to operate one to two rigs in the Eagle Ford during 2015.

• Egypt’s gross production of 344,100 boe per day was down 4 percent from the prior-year period, primarily due to lower gas volumes at the Shell Egypt NV-operated Obaiyed Gas Plant. The lower gas volumes resulted from unplanned mechanical-related downtime and the operator exercising its right to utilize a greater portion of the plant capacity.

• North Sea production averaged 80,800 boe per day, up 7 percent compared to the prior-year period and the highest quarterly production rate in the history of Apache’s operations in the region.

“Apache had an excellent fourth quarter in both Egypt, where we made two significant new oil discoveries, and in the North Sea, where we achieved record quarterly operating efficiency and production volumes. Both of these regions provide relatively stable cash flow and complement Apache’s growth potential in North America, particularly during the current period of depressed oil and gas prices,” said Christmann.

Year-end 2014 proved reserves

Worldwide estimated proved reserves totaled 2.40 billion boe at year-end 2014, down from 2.65 billion boe at year end 2013. The decrease in reserves was the result of sales of approximately 358 million boe of proved reserves during the year. These sales were partially offset by 313 million boe of proved reserves added through extensions and discoveries during the same period. During the year, Apache replaced 158 percent of 2014 North American production through extensions and discoveries.

Oil and gas prices

Apache’s production during the fourth quarter 2014 consisted of approximately 62 percent liquids and 38 percent natural gas. Liquids contributed 81 percent of the company’s revenue during the period. In North America onshore, Apache received an average oil price of $68.21 per barrel during the fourth quarter, compared with $91.64 per barrel in the prior-year period. North American onshore natural gas prices averaged $3.79 per thousand cubic feet (Mcf), compared with $3.55 per Mcf in the prior-year period. Globally, Apache received an average oil price of $70.89 per barrel during the fourth quarter, compared with $101.12 per barrel in the prior-year period. Global natural gas prices averaged $3.89 per Mcf of natural gas, compared with $3.78 per Mcf in the prior-year period.

Fourth-quarter 2014 charges to income

During the fourth quarter, Apache recorded after-tax, non-cash charges of $5.2 billion, the majority of which was attributable to the following items:

• $2 billion reduction in the carrying value of oil and gas properties pursuant to quarterly ceiling test requirements for full cost accounting companies;

• $1.3 billion impairment of goodwill associated with prior year acquisitions;

• $1 billion deferred tax adjustment related to undistributed and distributed foreign earnings; and

• $750 million fair value impairment of downstream LNG assets held for sale.

2015 capital budget and production outlook

Apache anticipates capital spending of $2.1 to $2.3 billion in onshore North America and plans to run an average of 17 rigs in 2015. Onshore North American production in 2015 is projected to be relatively flat from 2014 average production of approximately 302,000 boe per day, as adjusted for 2014 asset sales. The company’s year-end 2015 onshore North American production exit rate is also projected to be relatively flat compared to the average production rate for 2015.

Internationally and offshore, the company is planning a capital budget of $1.5 to $1.7 billion and estimates that 2015 pro forma production will be up slightly from 2014 average production of 207,000 boe per day, as adjusted for 2014 and announced 2015 asset sales. The company’s year-end 2015 international and offshore exit rate is projected to be relatively flat compared to its average production rate for the year.

Christmann commented, “We have planned our budget and operations in such a way that we can dynamically manage our activity levels and capital spending to respond quickly to material changes in commodity prices. Should we see a meaningful rebound in oil prices from current strip levels or a notable shift in our cost structure, we have the organizational capability to add rigs and production quickly and efficiently from our ready inventory of highly economic projects in North America.”

Conference call

Apache will conduct a conference call to discuss its fourth-quarter and full-year 2014 results at 1 p.m. Central time Thursday Feb. 12. The conference call will be webcast from Apache’s website, www.apachecorp.com. The webcast replay will be archived on Apache’s website. The conference call will be available for delayed playback by telephone for one week beginning at approximately 4 p.m. Central time Feb. 12. To access the telephone playback, dial 855-859-2056 or 404-537-3406 for international calls. The conference access code is 31399418.

Additional Information

Additional information follows, including reconciliations of adjusted earnings and cash from operations before changes in operating assets and liabilities (non-GAAP financial measures) to GAAP measures and information regarding pro forma production. Apache’s quarterly supplement is available at www.apachecorp.com/financialdata.

About Apache

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

Non-GAAP financial measures

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

Forward-looking statements

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

Contacts

Investor:  (281) 302-2286        Gary Clark

Media:  (713) 296-2286            Castlen Kennedy

Website:  www.apachecorp.com

APACHE CORPORATION

STATEMENT OF CONSOLIDATED OPERATIONS

(Unaudited)

(In millions, except per share data)

	For the Quarter Ended December 31,						For the Year Ended December 31,
	2014			2013			2014			2013
REVENUES AND OTHER:
Oil revenues	$	2,234		$	2,842		$	10,752		$	12,632
Gas revenues		556			579			2,329			2,627
NGL revenues		136			179			668			652
Oil and gas production revenues		2,926			3,600			13,749			15,911
Derivative instrument gains (losses), net		205			(124	)		284			(399	)
Other		(179	)		(30	)		(182	)		48
		2,952			3,446			13,851			15,560
COSTS AND EXPENSES:
Depreciation, depletion and amortization
Oil and gas property and equipment
Recurring		1,310			1,154			4,747			4,894
Additional		3,236			368			5,001			995
Other assets		114			110			410			400
Asset retirement obligation accretion		46			46			181			238
Lease operating expenses		617			589			2,479			2,864
Gathering and transportation		70			57			273			288
Taxes other than income		146			211			678			785
Impairments		2,357			—			2,357			—
General and administrative		125			123			434			482
Acquisition, divestiture & separation costs		1			33			67			33
Financing costs, net		27			20			130			177
		8,049			2,711			16,757			11,156
INCOME (LOSS) BEFORE INCOME TAXES		(5,097	)		735			(2,906	)		4,404
Current income tax provision		104			473			1,142			1,663
Deferred income tax provision (benefit)		(435	)		33			495			261
INCOME (LOSS) FROM CONTINUING OPS INCLUDING NONCONTROLLING INTEREST		(4,766	)		229			(4,543	)		2,480
Income (Loss) from discontinued operations, net of tax		—			1			(517	)		(192	)
INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		(4,766	)		230			(5,060	)		2,288
Net income attributable to noncontrolling interest		48			56			343			56
Preferred stock dividends		—			—			—			44
INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	(4,814	)	$	174		$	(5,403	)	$	2,188
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS
Net income (loss) from continuing operations attributable to common shareholders	$	(4,814	)	$	173		$	(4,886	)	$	2,380
Net income (loss) from discontinued operations		—			1			(517	)		(192	)
Net income (loss) attributable to common shareholders	$	(4,814	)	$	174		$	(5,403	)	$	2,188
BASIC NET INCOME (LOSS) PER COMMON SHARE:
Basic net income (loss) from continuing operations per share	$	(12.78	)	$	0.43		$	(12.72	)	$	6.02
Basic net income (loss) from discontinued operations per share		—			0.01			(1.34	)		(0.49	)
Basic net income (loss) per share	$	(12.78	)	$	0.44		$	(14.06	)	$	5.53
DILUTED NET INCOME (LOSS) PER COMMON SHARE:
Diluted net income (loss) from continuing operations per share	$	(12.78	)	$	0.43		$	(12.72	)	$	5.97
Diluted net income (loss) from discontinued operations per share		—			—			(1.34	)		(0.47	)
Diluted net income (loss) per share	$	(12.78	)	$	0.43		$	(14.06	)	$	5.50
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic		377			399			384			395
Diluted		377			401			384			406
DIVIDENDS DECLARED PER COMMON SHARE	$	0.25		$	0.20		$	1.00		$	0.80

APACHE CORPORATION

PRODUCTION INFORMATION

								% Change
	4Q14		3Q14		4Q13			4Q14 to 3Q14			4Q14 to 4Q13			FY 2014		FY 2013
OIL VOLUME - Barrels per day
Permian		98,017		91,844		77,703			7	%		26	%		92,207		72,113
Central		23,832		22,866		22,939			4	%		4	%		22,599		22,783
Gulf Coast		14,380		12,923		10,397			11	%		38	%		12,324		10,526
Canada		17,133		17,672		16,570			-3	%		3	%		17,593		17,724
N.A. Onshore		153,362		145,305		127,609			6	%		20	%		144,723		123,146
Gulf of Mexico		6,319		5,980		6,530			6	%		-3	%		6,369		7,386
GOM Shelf		—		—		(27	)		NM			NM			168		34,099
North America		159,681		151,285		134,112			6	%		19	%		151,260		164,631
Egypt (1)		87,445		87,499		89,654			0	%		-2	%		87,917		89,561
Australia		28,577		22,014		16,760			30	%		71	%		20,529		19,329
North Sea		66,822		55,247		64,996			21	%		3	%		60,699		63,721
International (1)		182,844		164,760		171,410			11	%		7	%		169,145		172,611
Total (1)		342,525		316,045		305,522			8	%		12	%		320,405		337,242
TOTAL LIQUIDS - Barrels per day
Permian		131,429		125,674		101,818			5	%		29	%		122,658		95,492
Central		49,246		47,353		49,022			4	%		0	%		47,125		45,817
Gulf Coast		18,555		15,322		13,037			21	%		42	%		15,213		12,944
Canada		22,812		23,053		22,965			-1	%		-1	%		23,773		24,413
N.A. Onshore		222,042		211,402		186,842			5	%		19	%		208,769		178,666
Gulf of Mexico		7,004		6,905		7,270			1	%		-4	%		7,270		8,224
GOM Shelf		—		71		797			NM			NM			208		39,010
North America		229,046		218,378		194,909			5	%		18	%		216,247		225,900
Egypt (1)		88,278		88,225		89,654			0	%		-2	%		88,588		89,561
Australia		28,577		22,014		16,760			30	%		71	%		20,529		19,329
North Sea		68,632		56,541		66,297			21	%		4	%		62,091		64,993
International (1)		185,487		166,780		172,711			11	%		7	%		171,208		173,883
Total		414,533		385,158		367,620			8	%		13	%		387,455		399,783
NATURAL GAS VOLUME - Mcf per day
Permian		223,787		216,804		191,371			3	%		17	%		217,431		189,450
Central		268,130		260,443		264,786			3	%		1	%		263,468		272,814
Gulf Coast		85,625		82,710		104,300			4	%		-18	%		90,776		107,014
Canada		297,004		300,803		421,409			-1	%		-30	%		322,783		497,515
N.A. Onshore		874,546		860,760		981,866			2	%		-11	%		894,458		1,066,793
Gulf of Mexico		18,955		19,109		11,378			-1	%		67	%		19,272		19,743
GOM Shelf		—		122		11,167			NM			NM			365		192,314
North America		893,501		879,991		1,004,411			2	%		-11	%		914,095		1,278,850
Egypt (1)		358,031		377,838		352,616			-5	%		2	%		370,262		356,454
Australia		228,284		201,386		254,853			13	%		-10	%		213,983		223,433
North Sea		73,042		50,647		53,491			44	%		37	%		55,964		50,961
International (1)		659,357		629,871		660,960			5	%		0	%		640,209		630,848
Total (1)		1,552,858		1,509,862		1,665,371			3	%		-7	%		1,554,304		1,909,698
BOE per day
Permian		168,728		161,808		133,713			4	%		26	%		158,897		127,066
Central		93,933		90,760		93,153			3	%		1	%		91,036		91,286
Gulf Coast		32,826		29,107		30,421			13	%		8	%		30,343		30,780
Canada		72,312		73,187		93,199			-1	%		-22	%		77,569		107,332
N.A. Onshore		367,799		354,862		350,486			4	%		5	%		357,845		356,464
Gulf of Mexico		10,163		10,090		9,167			1	%		11	%		10,482		11,515
GOM Shelf		—		92		2,658			NM			NM			269		71,062
North America		377,962		365,044		362,311			4	%		4	%		368,596		439,041
Egypt (1, 2)		147,950		151,198		148,423			-2	%		0	%		150,298		148,970
Australia		66,625		55,578		59,236			20	%		12	%		56,193		56,568
North Sea		80,806		64,982		75,212			24	%		7	%		71,419		73,487
International (1)		295,381		271,758		282,871			9	%		4	%		277,910		279,025
Total (1)		673,343		636,802		645,182			6	%		4	%		646,506		718,066
Total excluding noncontrolling interests		623,743		586,189		618,735			6	%		1	%		596,405		711,478
(1) Includes production volumes attributable to our noncontrolling partner in Egypt below:
Oil (b/d)		29,391		29,201		15,375									29,292		3,875
Gas (Mcf/d)		119,578		127,020		66,432									123,511		16,278
NGL (b/d)		279		242		—									224		—
(2) BOE per day Egypt Gross Production		344,122		345,708		357,098			0	%		-4	%		348,401		349,702
Discontinued Operations - Argentina:
Oil (b/d)		—		—		9,276									1,698		9,375
Gas (Mcf/d)		—		—		190,799									34,854		187,390
NGL (b/d)		—		—		1,653									317		2,102
BOE/d		—		—		42,729									7,824		42,709

APACHE CORPORATION

PRO FORMA PRODUCTION INFORMATION

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

							% Change
	4Q14		3Q14		4Q13		4Q14 to 3Q14			4Q14 to 4Q13			FY 2014		FY 2013
OIL VOLUME - Barrels per day
Permian		98,017		91,844		77,703		7	%		26	%		92,207		72,113
Central		23,832		22,866		22,939		4	%		4	%		22,599		22,783
Gulf Coast		14,385		12,902		10,075		11	%		43	%		12,165		10,132
Canada		17,118		17,649		16,348		-3	%		5	%		17,498		16,788
N.A. Onshore		153,352		145,261		127,065		6	%		21	%		144,469		121,816
Gulf of Mexico		6,319		5,980		6,530		6	%		-3	%		6,369		7,386
GOM Shelf		—		—		—		—			—			—		—
North America		159,671		151,241		133,595		6	%		20	%		150,838		129,202
Egypt		49,361		44,372		43,872		11	%		13	%		45,203		42,853
Australia		28,577		22,014		16,760		30	%		71	%		20,529		19,329
North Sea		66,822		55,247		64,996		21	%		3	%		60,699		63,721
International		144,760		121,633		125,628		19	%		15	%		126,431		125,903
Total		304,431		272,874		259,223		12	%		17	%		277,269		255,105
TOTAL LIQUIDS - Barrels per day
Permian		131,429		125,674		101,818		5	%		29	%		122,658		95,492
Central		49,246		47,353		49,022		4	%		0	%		47,125		45,817
Gulf Coast		18,544		15,238		12,078		22	%		54	%		14,778		11,743
Canada		22,797		23,025		21,596		-1	%		6	%		23,210		22,109
N.A. Onshore		222,016		211,290		184,514		5	%		20	%		207,771		175,161
Gulf of Mexico		7,004		6,905		7,270		1	%		-4	%		7,270		8,224
GOM Shelf		—		—		—		—			—			—		—
North America		229,020		218,195		191,784		5	%		19	%		215,041		183,385
Egypt		49,834		44,749		43,872		11	%		14	%		45,562		42,853
Australia		28,577		22,014		16,760		30	%		71	%		20,529		19,329
North Sea		68,632		56,541		66,297		21	%		4	%		62,091		64,993
International		147,043		123,304		126,929		19	%		16	%		128,182		127,175
Total		376,063		341,499		318,713		10	%		18	%		343,223		310,560
NATURAL GAS VOLUME - Mcf per day
Permian		223,787		216,804		191,371		3	%		17	%		217,431		189,450
Central		268,130		260,443		264,786		3	%		1	%		263,468		272,814
Gulf Coast		85,209		82,032		86,502		4	%		-1	%		82,698		85,689
Canada		296,872		300,624		316,799		-1	%		-6	%		295,039		314,836
N.A. Onshore		873,998		859,903		859,458		2	%		2	%		858,636		862,789
Gulf of Mexico		18,955		19,109		11,378		-1	%		67	%		19,272		19,743
GOM Shelf		—		—		—		—			—			—		—
North America		892,953		879,012		870,836		2	%		3	%		877,908		882,532
Egypt		201,475		192,484		180,328		5	%		12	%		192,184		175,080
Australia		228,284		201,386		254,853		13	%		-10	%		213,983		223,433
North Sea		73,042		50,647		53,491		44	%		37	%		55,964		50,961
International		502,801		444,517		488,672		13	%		3	%		462,131		449,474
Total		1,395,754		1,323,529		1,359,508		5	%		3	%		1,340,039		1,332,006
BOE per day
Permian		168,728		161,808		133,713		4	%		26	%		158,897		127,066
Central		93,933		90,760		93,153		3	%		1	%		91,036		91,286
Gulf Coast		32,746		28,910		26,496		13	%		24	%		28,562		26,025
Canada		72,275		73,129		74,395		-1	%		-3	%		72,381		74,582
N.A. Onshore		367,682		354,607		327,757		4	%		12	%		350,876		318,959
Gulf of Mexico		10,163		10,090		9,167		1	%		11	%		10,482		11,515
GOM Shelf		—		—		—		—			—			—		—
North America		377,845		364,697		336,924		4	%		12	%		361,358		330,474
Egypt		83,413		76,830		73,927		9	%		13	%		77,593		72,033
Australia		66,625		55,578		59,236		20	%		12	%		56,193		56,568
North Sea		80,806		64,982		75,212		24	%		7	%		71,419		73,487
International		230,844		197,390		208,375		17	%		11	%		205,205		202,088
Total		608,689		562,087		545,299		8	%		12	%		566,563		532,562

APACHE CORPORATION

PRICE INFORMATION

	4Q14		3Q14		4Q13		FY 2014		FY 2013
AVERAGE OIL PRICE PER BARREL
Permian	$	67.59	$	88.71	$	93.44	$	85.62	$	93.50
Central		69.83		95.17		92.67		89.36		93.45
Gulf Coast		73.13		99.41		97.06		93.20		106.09
Canada		65.52		85.43		79.44		83.57		87.00
N.A. Onshore		68.21		90.30		91.64		86.61		93.58
Gulf of Mexico		73.94		97.86		95.04		94.03		105.04
GOM Shelf		NM		NM		NM		NM		109.57
North America		68.44		90.58		91.64		86.89		96.94
Egypt		73.34		100.06		108.56		97.44		107.94
Australia		71.83		98.82		114.06		94.99		110.42
North Sea		73.16		95.80		107.08		95.53		107.48
International		73.04		98.47		108.54		96.46		108.04
Total		70.89		94.69		101.12		91.94		102.62
AVERAGE NATURAL GAS PRICE PER MCF
Permian	$	3.71	$	3.79	$	3.80	$	4.18	$	3.77
Central		4.03		4.00		3.62		4.42		3.72
Gulf Coast		4.06		4.19		3.69		4.50		3.80
Canada		3.56		4.04		3.34		4.07		3.23
N.A. Onshore		3.79		3.97		3.55		4.26		3.51
GOM Deepwater		3.88		3.50		3.61		4.20		3.34
GOM Shelf		NM		NM		NM		NM		3.82
North America		3.79		3.97		3.59		4.24		3.61
Egypt		2.94		2.91		3.00		2.96		2.99
Australia		4.24		4.70		4.15		4.43		4.43
North Sea		8.77		6.10		10.58		8.29		10.43
International		4.03		3.74		4.06		3.92		4.10
Total		3.89		3.88		3.78		4.11		3.77
AVERAGE NGL PRICE PER BARREL
Permian	$	20.53	$	27.29	$	29.90	$	26.55	$	27.94
Central		17.17		24.94		28.34		24.27		25.61
Gulf Coast		20.34		24.85		36.75		26.15		32.44
Canada		24.38		33.50		36.82		33.61		30.50
N.A. Onshore		19.59		26.83		30.26		26.34		27.48
GOM Deepwater		21.46		34.44		35.80		30.52		33.23
GOM Shelf		NM		NM		NM		NM		28.52
North America		19.61		26.96		30.27		26.33		27.64
Egypt		41.35		52.80		—		51.80		—
North Sea		45.55		59.47		80.43		59.42		73.06
International		44.22		57.07		80.43		56.94		73.06
Total		20.52		27.84		31.32		27.28		28.56
Discontinued Operations - Argentina:
Oil price ($/Bbl)			$	—	$	83.22	$	72.70	$	79.05
Gas price ($/Mcf)				—		3.11		3.04		2.96
NGL price ($/Bbl)				—		17.68		24.57		23.64

APACHE CORPORATION

SUMMARY BALANCE SHEET INFORMATION

(Unaudited)

(In millions)

	December 31,			December 31,
	2014			2013
Cash and Cash Equivalents	$	769		$	1,906
Assets Held for Sale		1,628			—
Other Current Assets		4,018			4,460
Property and Equipment, net		48,076			52,421
Goodwill		87			1,369
Other Assets		1,374			1,481
Total Assets	$	55,952		$	61,637
Short-Term Debt	$	—		$	53
Other Current Liabilities		3,664			4,647
Long-Term Debt		11,245			9,672
Deferred Credits and Other Noncurrent Liabilities		12,906			11,872
Apache Shareholders’ Equity		25,937			33,396
Noncontrolling interest		2,200			1,997
Total Liabilities and Shareholders’ Equity	$	55,952		$	61,637
Common shares outstanding at end of period		377			396
% of total debt-to-capitalization		29	%		22	%

APACHE CORPORATION

SUMMARY OF COSTS INCURRED AND GTP CAPITAL INVESTMENTS

(Unaudited)

(In millions)

	For the Quarter Ended December 31,				For the Year Ended December 31,
	2014		2013		2014		2013
Costs Incurred in Oil and Gas Property:
Acquisitions
Proved	$	1	$	47	$	104	$	177
Unproved		836		55		1,388		379
Exploration and Development		2,629		2,528		10,153		10,226
		3,466		2,630		11,645		10,782
GTP Capital Investments:
Acquisitions	$	—	$	5	$	—	$	88
GTP Facilities		317		324		1,339		1,177
		317		329		1,339		1,265
Total Costs Incurred and GTP Capital Investments	$	3,783	$	2,959	$	12,984	$	12,047

APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(In millions, except per share data)

Reconciliation of income attributable to common stock to adjusted earnings

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

	For the Quarter Ended December 31,						For the Year Ended December 31,
	2014			2013			2014			2013
Income (Loss) Attributable to Common Stock (GAAP)	$	(4,814	)	$	174		$	(5,403	)	$	2,188
Adjustments:
Oil & gas property write-downs, net of tax		1,990			139			3,069			541
Deferred tax adjustments (1)		1,046			248			2,096			197
Impairments		2,058			—			2,058			—
Argentina discontinued operations, net of tax		—			(1	)		517			191
Loss on divested assets, net of tax		116			—			116			—
Acquisition, divestiture & separation costs, net of tax		1			21			44			21
Rig stacking costs, net of tax		8			—			35			—
Unrealized foreign currency fluctuation impact on deferred tax expense		(28	)		(25	)		(45	)		(123	)
Unrealized commodity derivative mark-to-market, net of tax		27			54			(193	)		142
Adjusted Earnings (Non-GAAP)	$	404		$	610		$	2,294		$	3,157
Net Income (Loss) per Common Share - Diluted (GAAP)	$	(12.78	)	$	0.43		$	(14.06	)	$	5.50
Adjustments:
Oil & gas property write-downs, net of tax		5.26			0.35			7.95			1.33
Deferred tax adjustments (1)		2.78			0.62			5.44			0.49
Impairments		5.46			—			5.35			—
Argentina discontinued operations, net of tax		—			—			1.34			0.47
Loss on divested assets, net of tax		0.31			—			0.30			—
Acquisition, divestiture & separation costs, net of tax		—			0.05			0.12			0.05
Rig stacking costs, net of tax		0.03			—			0.10			—
Unrealized foreign currency fluctuation impact on deferred tax expense		(0.07	)		(0.06	)		(0.11	)		(0.30	)
Unrealized commodity derivative mark-to-market, net of tax		0.08			0.13			(0.49	)		0.35
Adjusted Earnings Per Share - Diluted (Non-GAAP)	$	1.07		$	1.52		$	5.94		$	7.89
Total income tax provision (GAAP)	$	(331	)	$	506		$	1,637		$	1,924
Adjustments:
Tax impact on oil & gas property write-downs		1,246			229			1,932			454
Tax impact on impairments		299			—			299			—
Tax impact on loss on divested assets		64			—			64			—
Unrealized foreign currency fluctuation impact on deferred tax expense		28			25			45			123
Tax impact on acquisition, divestiture & separation costs		—			12			23			12
Tax impact on rig stacking costs		5			—			19			—
Tax impact on unrealized commodity derivative mark-to-market		15			30			(107	)		79
Deferred tax adjustments (1)		(1,046	)		(248	)		(2,096	)		(196	)
Adjusted total income tax provision	$	280		$	554		$	1,816		$	2,396
Adjusted Effective Tax Rate (Non-GAAP)		38.3	%		45.4	%		40.8	%		42.4	%

⁽¹⁾  Deferred tax adjustments for the fourth quarter and third quarter of 2014 include $840 million and $814 million, respectively, related to undistributed foreign earnings $62 million and $249 million, respectively, related to distributed foreign earnings, and other adjustments totaling $144 million and $8 million, respectively.

APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(Unaudited)

(In millions, except per share data)

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

Cash from operations before changes in operating assets and liabilities is a non-GAAP financial measure. Apache uses it internally and provides the information because management believes it is useful for investors and widely accepted by those following the oil and gas industry as a financial indicator of a company’s ability to generate cash to internally fund exploration and development activities, fund dividend programs, and service debt. It is also used by research analysts to value and compare oil and gas exploration and production companies and is frequently included in published research when providing investment recommendations. Cash from operations before changes in operating assets and liabilities, therefore, is an additional measure of liquidity but is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing, or financing activities.

The following table reconciles net cash provided by operating activities to cash from operations before changes in operating assets and liabilities.

	For the Quarter Ended December 31,					For the Year Ended December 31,
	2014		2013			2014			2013
Net cash provided by operating activities (GAAP)	$	1,933	$	2,477		$	8,461		$	9,835
Less: Discontinued operations		—		(74	)		(82	)		(232	)
Net cash provided by operating activities excluding discontinued operations	$	1,933	$	2,403		$	8,379		$	9,603
Changes in operating assets and liabilities		141		(385	)		218			(67	)
Cash from continuing operations before changes in operating assets and liabilities	$	2,074	$	2,018		$	8,597		$	9,536

APACHE CORPORATION

OIL & GAS RESERVES INFORMATION

For the Year Ended December 31, 2014

Oil (Mbbls)	U.S.			Canada			Egypt1			Australia			North Sea			Argentina			Total1
Balance - Dec 31, 2013		653,816			136,892			135,544			59,227			129,580			16,426			1,131,485
Extensions and Discoveries		57,011			9,657			38,074			4,254			17,386			5			126,387
Purchases		15,240			—			—			—			—			—			15,240
Revisions		3,083			(812	)		1,801			(216	)		(7	)		—			3,849
Production		(48,789	)		(6,421	)		(32,090	)		(7,494	)		(22,154	)		(620	)		(117,568	)
Sales		(65,796	)		(3,517	)		—			—			—			(15,811	)		(85,124	)
Balance - Dec 31, 2014		614,565			135,799			143,329			55,771			124,805			—			1,074,269
NGLs (Mbbls)	U.S.			Canada			Egypt1			Australia			North Sea			Argentina			Total1
Balance - Dec 31, 2013		248,023			36,069			—			—			2,650			5,119			291,861
Extensions and Discoveries		47,516			1,163			1,820			—			1			—			50,500
Purchases		2,916			—			—			—			—			—			2,916
Revisions		2,594			116			(17	)		—			(2	)		—			2,691
Production		(21,464	)		(2,256	)		(245	)		—			(508	)		(116	)		(24,589	)
Sales		(26,192	)		(9,977	)		—			—			—			(5,003	)		(41,172	)
Balance - Dec 31, 2014		253,393			25,115			1,558			—			2,141			—			282,207
Oil & NGLs	U.S.			Canada			Egypt1			Australia			North Sea			Argentina			Total1
Balance - Dec 31, 2013		901,839			172,961			135,544			59,227			132,230			21,545			1,423,346
Extensions and Discoveries		104,527			10,820			39,894			4,254			17,387			5			176,887
Purchases		18,156			—			—			—			—			—			18,156
Revisions		5,677			(696	)		1,784			(216	)		(9	)		—			6,540
Production		(70,253	)		(8,677	)		(32,335	)		(7,494	)		(22,662	)		(736	)		(142,157	)
Sales		(91,988	)		(13,494	)		—			—			—			(20,814	)		(126,296	)
Balance - Dec 31, 2014		867,958			160,914			144,887			55,771			126,946			—			1,356,476
GAS (MMcf)	U.S.			Canada			Egypt1			Australia			North Sea			Argentina			Total1
Balance - Dec 31, 2013		2,673,126			1,733,457			812,180			1,601,767			107,165			410,717			7,338,412
Extensions and Discoveries		203,318			383,077			125,899			81,156			23,803			—			817,253
Purchases		21,337			—			—			—			—			—			21,337
Revisions		35,910			(12,626	)		5,949			—			(54	)		—			29,179
Production		(215,829	)		(117,816	)		(135,145	)		(78,104	)		(20,427	)		(12,722	)		(580,043	)
Sales		(521,059	)		(468,324	)		—			—			—			(397,995	)		(1,387,378	)
Balance - Dec 31, 2014		2,196,803			1,517,768			808,883			1,604,819			110,487			—			6,238,760
TOTAL BOE (Mboe)	U.S.			Canada			Egypt1			Australia			North Sea			Argentina			Total1
Balance - Dec 31, 2013		1,347,361			461,871			270,908			326,188			150,090			89,998			2,646,416
Extensions and Discoveries		138,413			74,666			60,877			17,780			21,354			5			313,095
Purchases		21,712			—			—			—			—			—			21,712
Revisions		11,662			(2,800	)		2,776			(216	)		(18	)		—			11,404
Production		(106,225	)		(28,313	)		(54,859	)		(20,511	)		(26,067	)		(2,856	)		(238,831	)
Sales		(178,831	)		(91,548	)		—			—			—			(87,147	)		(357,526	)
Balance - Dec 31, 2014		1,234,092			413,876			279,702			323,241			145,359			—			2,396,270
Proved developed reserves:	U.S.			Canada			Egypt1			Australia			North Sea			Argentina			Total1
Oil + NGL’s (Mbbls)		628,005			93,823			130,058			29,996			107,516			—			989,398
Gas (Mboe)		269,417			165,025			106,198			106,711			14,542			—			661,893
Balance - Dec 31, 2014 (Mboe)		897,422			258,848			236,256			136,707			122,058			—			1,651,291

⁽¹⁾  Includes reserves attributable to our noncontrolling partner in Egypt.

APACHE CORPORATION

OIL & GAS RESERVES AND COSTS

For the Year Ended December 31, 2014

(In millions, except reserve data)

Reserve Additions (Mboe)	U.S.		Canada			Egypt (1)		Australia			North Sea			Argentina		Other		Total (1)
Extensions and Discoveries		138,413		74,666			60,877		17,780			21,354			5		—		313,095
Purchases		21,712		—			—		—			—			—		—		21,712
Additions excluding revisions		160,125		74,666			60,877		17,780			21,354			5		—		334,807
Revisions		11,662		(2,800	)		2,776		(216	)		(18	)		—		—		11,404
Total		171,787		71,866			63,653		17,564			21,336			5		—		346,211
Capital Cost Information (Non-GAAP)	U.S.		Canada			Egypt (1)		Australia			North Sea			Argentina		Other		Total (1)
Exploration & Development, excluding Capitalized Interest and Asset Retirement Cost (ARC)	$	5,516	$	715		$	1,320	$	976		$	996		$	12	$	1	$	9,536
Acquisitions, excluding ARC - Acquired
Proved		102		—			1		1			—			—		—		104
Unproved		1,221		141			10		16			—			—		—		1,388
Total	$	6,839	$	856		$	1,331	$	993		$	996		$	12	$	1	$	11,028

Non-GAAP Reconciliations

Presented below is a reconciliation of exploration and development costs (GAAP) to exploration and development costs, excluding capitalized interest and asset retirement cost (Non-GAAP). Management believes exploration and development costs, excluding capitalized interest and asset retirement cost is a more accurate reflection of the expenditures during the current year.

	U.S.			Canada			Egypt (1)			Australia			North Sea			Argentina			Other		Total (1)
Exploration & Development Costs	$	5,768		$	928		$	1,335		$	1,051		$	1,055		$	15		$	1	$	10,153
Less: Capitalized Interest		(209	)		(38	)		(15	)		(20	)		(25	)		(3	)		—		(310	)
Less: ARC		(43	)		(175	)		—			(55	)		(34	)		—			—		(307	)
Total Adds	$	5,516		$	715		$	1,320		$	976		$	996		$	12		$	1	$	9,536

Presented below is a reconciliation of total acquisition costs (GAAP) to acquisitions, excluding asset retirement cost - acquired (Non-GAAP). Management believes acquisitions, excluding asset retirement cost - acquired is a more accurate reflection of the costs of acquisitions during the current year.

	U.S.		Canada		Egypt (1)		Australia		North Sea		Argentina		Other		Total (1)
Total Acquisition Costs
Proved	$	102	$	—	$	1	$	1	$	—	$	—	$	—	$	104
Unproved		1,221		141		10		16		—		—		—		1,388
Less: ARC - Acquired		—		—		—		—		—		—		—		—
Acquisitions, excluding ARC - Acquired	$	1,323	$	141	$	11	$	17	$	—	$	—	$	—	$	1,492

⁽¹⁾  Includes reserves and costs attributable to our noncontrolling partner in Egypt.