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): May 4, 2017
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)
Registrants 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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected no to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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 May 4, 2017, Apache Corporation issued a press release announcing financial and operating results for the fiscal quarter ended March 31, 2017. 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 May 4, 2017. |
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: May 4, 2017 | /s/ Rebecca A. Hoyt | |||||
Rebecca A. Hoyt | ||||||
Senior Vice President, | ||||||
Chief Accounting Officer, and Controller | ||||||
(Principal Accounting Officer) |
INDEX TO EXHIBITS
Exhibit |
Description | |
99.1 | Press Release of Apache Corporation dated May 4, 2017. |
Exhibit 99.1
![]() |
NEWS RELEASE |
APACHE CORPORATION ANNOUNCES FIRST-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS
| Delivered first-quarter production of 481,000 barrels of oil equivalent (Boe) per day and adjusted production of 398,000 Boe per day, which excludes Egypt noncontrolling interest, Egypt tax barrels and 1,100 Boe per day of divested volumes; |
| Returned to profitability with GAAP earnings of $213 million or $0.56 per diluted common share and adjusted earnings of $31 million or $0.08 per share; |
| Delivered capital costs and lease operating expenses (LOE) below plan and lowered LOE per Boe guidance for full-year 2017; |
| Closed on $466 million of noncore asset sales; and |
| Announcing delivery of first gas at Alpine High midstream, two months ahead of schedule. As a result, raising North American production guidance to 256,000 to 264,000 Boe per day for full-year 2017. |
HOUSTON, May 4, 2017 Apache Corporation (NYSE: APA) (Nasdaq: APA) today announced its financial and operational results for the first quarter 2017.
Apache reported earnings of $213 million or $0.56 per diluted common share during the first quarter of 2017. These results include a number of items outside of core earnings that are typically excluded by the investment community in their published earnings estimates. When adjusted for these and certain additional items that impact the comparability of results, Apaches first-quarter earnings totaled $31 million or $0.08 per share.
Net cash provided by operating activities was $455 million, compared to $239 million in the first quarter of 2016, and adjusted earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses (adjusted EBITDAX) was $999 million, compared to $552 million in the first quarter of 2016. Apache ended the quarter with $1.5 billion of cash, up from $1.4 billion at the end of the fourth quarter of 2016.
John J. Christmann IV, Apaches chief executive officer and president said, During the first quarter, we delivered strong results and made notable progress toward our 2017 strategic objectives. Earlier this year, we outlined a plan to deliver returns-focused growth by budgeting conservatively,
APACHE CORPORATION ANNOUNCES FIRST-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS
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investing to sustain free cash flow internationally, and increasing investment in the Midland and Delaware basins. We are maintaining a razor-sharp focus on costs and well optimization and actively managing our portfolio.
During the quarter, we continued ramping up activity in our core Midland Basin acreage and are beginning to see significant cost benefits associated with our development drilling in the area. We are looking forward to the growing contribution these assets will have in the quarters to come.
At Alpine High, testing and delineation have continued with strong results that reinforce our confidence in this world-class resource play. In todays financial and operational supplement, we included three new test wells, two of which delivered our highest 24-hour oil rates and highest oil cuts to date in the Woodford and the Barnett formations.
We also made excellent progress on our midstream buildout and initiated production from the play two months ahead of schedule. This has enabled us to raise our North American production guidance to 256,000 to 264,000 Boe per day for the full-year, and, more importantly, gives us the facilities to transition to a more optimized program.
Optimization activities in the Woodford, Barnett and Pennsylvanian source interval include well spacing and pattern tests, targeted wellbore placement, enhanced completion designs and, in some cases, longer laterals. Our enhanced completions will feature larger fracs with more stages, more fluid and higher sand concentrations. Following extensive, integrated analysis, we are also conducting an appraisal program in the Wolfcamp and Bone Spring parasequences. Information collected from this program, coupled with the extensive knowledge we have gained from our thorough evaluation of the source interval, will inform the buildout of a comprehensive, long-term, full-field development plan, said Christmann.
APACHE CORPORATION ANNOUNCES FIRST-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS
PAGE 3 of 8
Financial position and liquidity
Oil and gas capital investment was $646 million during the quarter, with 68 percent focused on the Permian Basin.
During the quarter, the company closed two noncore Permian acreage transactions for cash proceeds of $440 million. In addition, the company closed $26 million in further noncore divestments. Apache continues to evaluate its portfolio and assess opportunities to further streamline its asset base and redeploy capital into its primary growth areas in North America. At the end of the first quarter, Apaches net debt position was just under $7 billion, a decrease of $200 million from the previous quarter.
First-quarter operational summary
During the first quarter, Apache operated an average of 30 rigs and drilled and completed 46 gross-operated wells worldwide. Highlights from Apaches three principal areas include:
| North America Apache drilled and completed 25 gross-operated wells in North America during the first quarter and reported production of 252,000 Boe per day. |
In the Permian Basin, Apache operated an average of 13 rigs and drilled and completed 22 gross-operated wells during the quarter, up from 17 wells drilled and completed in the fourth quarter. Production averaged 148,000 Boe per day.
| Delaware Basin: |
| At Alpine High, the company averaged four rigs and announced three new test well results, two of which were shallow source rock tests and the other a successful azimuth test in the Woodford formation at the King Hidalgo pad in the Southern portion of the play. |
| The company also continued pad drilling in Pecos Bend with an average of two rigs. |
APACHE CORPORATION ANNOUNCES FIRST-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS
PAGE 4 of 8
| Midland Basin: |
| The company averaged six rigs during the quarter and drilled and completed nine gross-operated wells. |
| Activity targeted the Wolfcamp and Spraberry shale formations in the Wildfire, Azalea and Powell fields. |
| North Sea Production in the North Sea averaged 58,000 Boe per day. Apache operated two platform rigs during the quarter, with one each at the Forties and Beryl fields. In addition, the company has two semi-submersible drilling rigs under rig sharing agreements and operated one during the quarter. The subsea tieback development at Callater progressed with drilling underway on the first production well and facilities installation. Callater remains on schedule to deliver first production in the third quarter of 2017. |
| Egypt On a net basis and excluding minority interest and tax barrels, Egypt production was 88,000 Boe per day. Apache averaged 11 rigs and drilled and completed 18 wells during the quarter. |
Further operational detail can be found in the First-Quarter 2017 Financial and Operational Supplement.
2017 outlook and plan update
Apaches 2017 capital expenditures are tracking in line with its guidance of $3.1 billion. LOE is tracking below plan, and the company is reducing full-year 2017 LOE guidance range to $8.25 to $8.75 per Boe. Following strong production and drilling results year-to-date and the early startup of gas flows
APACHE CORPORATION ANNOUNCES FIRST-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS
PAGE 5 of 8
at Alpine High, the company updated its 2017 North American production guidance to 256,000 to 264,000 Boe per day. Further details can be found in the First-Quarter 2017 Financial and Operational Supplement.
We have responded well to the challenges facing the industry over the last two years, successfully realigning our cost structure to ensure profitability at $50 oil, streamlining our asset base and significantly improving our capital efficiency, well performance and organic growth prospects. We are now well positioned to deliver returns-focused growth, with our first quarter results indicating solid progress toward our objectives, concluded Christmann.
Conference call
Apache will host a conference call to discuss its first-quarter 2017 results at 1 p.m. Central time, Thursday, May 4. The conference call will be webcast from Apaches website at www.apachecorp.com and investor.apachecorp.com, and the webcast replay will be archived there as well. A replay of the conference call will be available for seven days following the call. The number for the replay is 855-859-2056 or 404-537-3406 for international calls. The conference access code is 48380128. Sign up for email alerts to be reminded of the webcast at http://investor.apachecorp.com/alerts.cfm.
Additional Information
Additional information follows, including reconciliations of adjusted earnings, adjusted EBITDAX and net debt (non-GAAP financial measures) to GAAP measures and information regarding adjusted production. Apaches quarterly supplement is available at www.apachecorp.com/financialdata.
APACHE CORPORATION ANNOUNCES FIRST-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS
PAGE 6 of 8
About Apache
Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt and the United Kingdom. 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
Apaches financial information includes information prepared in conformity with generally accepted accounting principles (GAAP) as well as non-GAAP information. It is managements intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted earnings, adjusted EBITDAX and net debt 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, guidance, outlook, and similar references to future periods. These statements include, but are not limited to, statements about future plans, expectations and objectives for Apaches operations, including statements about our capital plans, drilling plans, production expectations, asset sales, and monetizations. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the
APACHE CORPORATION ANNOUNCES FIRST-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS
PAGE 7 of 8
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 2016 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.
Cautionary note to investors
The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SECs definitions for such terms. Apache may use certain terms in this earnings release, such as resources, potential resources, resource potential, estimated net reserves, recoverable reserves, and other similar terms that the SEC guidelines strictly prohibit Apache from including in filings with the SEC. Such terms do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality and other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in Apaches Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2016, available from Apache at www.apachecorp.com or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, TX 77056 (Attn: Corporate Secretary). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SECs website at www.sec.gov.
APACHE CORPORATION ANNOUNCES FIRST-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS
PAGE 8 of 8
Contacts
Investor: | (281) 302-2286 | Gary Clark | ||
Media: | (713) 296-7276 | Castlen Kennedy | ||
Website: | www.apachecorp.com |
-end-
APACHE CORPORATION
STATEMENT OF CONSOLIDATED OPERATIONS
(Unaudited)
(In millions, except per share data)
For the Quarter Ended March 31, |
||||||||
2017 | 2016 | |||||||
REVENUES AND OTHER: |
||||||||
Oil revenues |
$ | 1,172 | $ | 822 | ||||
Gas revenues |
255 | 223 | ||||||
NGL revenues |
85 | 42 | ||||||
|
|
|
|
|||||
Oil and gas production revenues |
1,512 | 1,087 | ||||||
Other |
25 | (3 | ) | |||||
Gain (loss) on divestiture |
341 | (1 | ) | |||||
|
|
|
|
|||||
1,878 | 1,083 | |||||||
|
|
|
|
|||||
OPERATING EXPENSES: |
||||||||
Lease operating expenses |
336 | 378 | ||||||
Gathering and transportation |
57 | 52 | ||||||
Taxes other than income |
42 | 11 | ||||||
Exploration expense |
92 | 95 | ||||||
General and administrative |
103 | 93 | ||||||
Transaction, reorganization and separation |
(10 | ) | 15 | |||||
Depreciation, depletion and amortization: |
||||||||
Oil and gas property and equipment |
538 | 636 | ||||||
Other assets |
38 | 42 | ||||||
Asset retirement obligation accretion |
36 | 38 | ||||||
Impairments |
8 | | ||||||
Financing costs, net |
100 | 105 | ||||||
|
|
|
|
|||||
1,340 | 1,465 | |||||||
|
|
|
|
|||||
INCOME (LOSS) BEFORE INCOME TAXES |
538 | (382 | ) | |||||
Current income tax provision (benefit) |
188 | (10 | ) | |||||
Deferred income tax provision (benefit) |
83 | (1 | ) | |||||
|
|
|
|
|||||
INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST |
267 | (371 | ) | |||||
Net income attributable to noncontrolling interest |
54 | 1 | ||||||
|
|
|
|
|||||
INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK |
$ | 213 | $ | (372 | ) | |||
|
|
|
|
|||||
NET INCOME (LOSS) PER COMMON SHARE: |
||||||||
Basic |
$ | 0.56 | $ | (0.98 | ) | |||
Diluted |
$ | 0.56 | $ | (0.98 | ) | |||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: |
||||||||
Basic |
380 | 378 | ||||||
Diluted |
383 | 378 | ||||||
DIVIDENDS DECLARED PER COMMON SHARE |
$ | 0.25 | $ | 0.25 |
Page 1
APACHE CORPORATION
PRODUCTION INFORMATION
For the Quarter Ended | % Change | |||||||||||||||||||
March 31, | December 31, | March 31, | 1Q17 to | 1Q17 to | ||||||||||||||||
2017 | 2016 | 2016 | 4Q16 | 1Q16 | ||||||||||||||||
OIL VOLUME - Barrels per day |
||||||||||||||||||||
Permian |
75,210 | 77,566 | 93,278 | -3 | % | -19 | % | |||||||||||||
MidContinent/Gulf Coast Region |
11,142 | 11,697 | 18,415 | -5 | % | -39 | % | |||||||||||||
Gulf of Mexico |
4,376 | 5,337 | 4,166 | -18 | % | 5 | % | |||||||||||||
Canada |
11,655 | 12,338 | 14,463 | -6 | % | -19 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
North America |
102,383 | 106,938 | 130,322 | -4 | % | -21 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Egypt (1, 2) |
101,718 | 99,557 | 98,259 | 2 | % | 4 | % | |||||||||||||
North Sea |
49,784 | 53,316 | 56,962 | -7 | % | -13 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
International (1) |
151,502 | 152,873 | 155,221 | -1 | % | -2 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total (1) |
253,885 | 259,811 | 285,543 | -2 | % | -11 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
NATURAL GAS VOLUME - Mcf per day |
||||||||||||||||||||
Permian |
227,654 | 225,676 | 241,461 | 1 | % | -6 | % | |||||||||||||
MidContinent/Gulf Coast Region |
123,501 | 132,141 | 154,972 | -7 | % | -20 | % | |||||||||||||
Gulf of Mexico |
15,769 | 14,415 | 13,328 | 9 | % | 18 | % | |||||||||||||
Canada |
215,617 | 223,810 | 266,438 | -4 | % | -19 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
North America |
582,541 | 596,042 | 676,199 | -2 | % | -14 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Egypt (1, 2) |
407,194 | 356,637 | 397,598 | 14 | % | 2 | % | |||||||||||||
North Sea |
43,928 | 86,248 | 70,795 | -49 | % | -38 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
International (1) |
451,122 | 442,885 | 468,393 | 2 | % | -4 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total (1) |
1,033,663 | 1,038,927 | 1,144,592 | -1 | % | -10 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
NGL VOLUME - Barrels per day |
||||||||||||||||||||
Permian |
34,382 | 34,123 | 37,519 | 1 | % | -8 | % | |||||||||||||
MidContinent/Gulf Coast Region |
13,185 | 14,373 | 17,810 | -8 | % | -26 | % | |||||||||||||
Gulf of Mexico |
432 | 509 | 371 | -15 | % | 16 | % | |||||||||||||
Canada |
4,821 | 5,292 | 6,503 | -9 | % | -26 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
North America |
52,820 | 54,297 | 62,203 | -3 | % | -15 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Egypt (1, 2) |
955 | 974 | 1,288 | -2 | % | -26 | % | |||||||||||||
North Sea |
1,172 | 2,139 | 1,409 | -45 | % | -17 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
International (1) |
2,127 | 3,113 | 2,697 | -32 | % | -21 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total |
54,947 | 57,410 | 64,900 | -4 | % | -15 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
BOE per day |
||||||||||||||||||||
Permian |
147,534 | 149,302 | 171,041 | -1 | % | -14 | % | |||||||||||||
MidContinent/Gulf Coast Region |
44,910 | 48,093 | 62,053 | -7 | % | -28 | % | |||||||||||||
Gulf of Mexico |
7,437 | 8,249 | 6,759 | -10 | % | 10 | % | |||||||||||||
Canada |
52,412 | 54,931 | 65,372 | -5 | % | -20 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
North America |
252,293 | 260,575 | 305,225 | -3 | % | -17 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Egypt (1, 2) |
170,539 | 159,971 | 165,813 | 7 | % | 3 | % | |||||||||||||
North Sea |
58,278 | 69,830 | 70,170 | -17 | % | -17 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
International (1) |
228,817 | 229,801 | 235,983 | 0 | % | -3 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total (1) |
481,110 | 490,376 | 541,208 | -2 | % | -11 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total excluding noncontrolling interests |
424,259 | 436,857 | 486,019 | -3 | % | -13 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
(1) Includes net production volumes attributed to our noncontrolling partner in Egypt below: |
|
|||||||||||||||||||
Oil (b/d) |
33,910 | 33,238 | 32,676 | |||||||||||||||||
Gas (Mcf/d) |
135,736 | 119,734 | 132,503 | |||||||||||||||||
NGL (b/d) |
318 | 325 | 429 | |||||||||||||||||
(2) Egypt Gross Production - BOE per day |
328,141 | 344,540 | 353,000 | -5 | % | -7 | % |
Page 2
APACHE CORPORATION
ADJUSTED PRODUCTION INFORMATION
Adjusted production excludes certain items that management believes affect the comparability of operating results for the periods presented. Adjusted production excludes production attributable to 1) divested assets, 2) noncontrolling interest in Egypt, and 3) Egypt tax barrels. Management uses adjusted production to evaluate the companys operational trends and performance and believes it is useful to investors and other third parties.
For the Quarter Ended | % Change | |||||||||||||||||||
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
1Q17 to 4Q16 |
1Q17 to 1Q16 |
||||||||||||||||
OIL VOLUME - Barrels per day |
||||||||||||||||||||
Permian |
74,766 | 77,018 | 92,441 | -3 | % | -19 | % | |||||||||||||
MidContinent/Gulf Coast Region |
11,142 | 11,697 | 18,415 | -5 | % | -39 | % | |||||||||||||
Gulf of Mexico |
4,376 | 5,337 | 4,166 | -18 | % | 5 | % | |||||||||||||
Canada |
11,637 | 12,237 | 14,298 | -5 | % | -19 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
North America |
101,921 | 106,289 | 129,320 | -4 | % | -21 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Egypt |
51,651 | 53,799 | 59,896 | -4 | % | -14 | % | |||||||||||||
North Sea |
49,784 | 53,316 | 56,962 | -7 | % | -13 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
International |
101,435 | 107,115 | 116,858 | -5 | % | -13 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total |
203,356 | 213,404 | 246,178 | -5 | % | -17 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
NATURAL GAS VOLUME - Mcf per day |
||||||||||||||||||||
Permian |
225,663 | 221,604 | 237,941 | 2 | % | -5 | % | |||||||||||||
MidContinent/Gulf Coast Region |
123,501 | 132,141 | 154,972 | -7 | % | -20 | % | |||||||||||||
Gulf of Mexico |
15,769 | 14,415 | 13,328 | 9 | % | 18 | % | |||||||||||||
Canada |
215,553 | 221,772 | 263,317 | -3 | % | -18 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
North America |
580,486 | 589,932 | 669,558 | -2 | % | -13 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Egypt |
217,133 | 216,344 | 255,684 | 0 | % | -15 | % | |||||||||||||
North Sea |
43,928 | 86,248 | 70,795 | -49 | % | -38 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
International |
261,061 | 302,592 | 326,479 | -14 | % | -20 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total |
841,547 | 892,524 | 996,037 | -6 | % | -16 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
NGL VOLUME - Barrels per day |
||||||||||||||||||||
Permian |
34,073 | 33,088 | 36,770 | 3 | % | -7 | % | |||||||||||||
MidContinent/Gulf Coast Region |
13,185 | 14,373 | 17,810 | -8 | % | -26 | % | |||||||||||||
Gulf of Mexico |
432 | 509 | 371 | -15 | % | 16 | % | |||||||||||||
Canada |
4,805 | 5,083 | 6,320 | -5 | % | -24 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
North America |
52,495 | 53,053 | 61,271 | -1 | % | -14 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Egypt |
511 | 588 | 859 | -13 | % | -41 | % | |||||||||||||
North Sea |
1,172 | 2,139 | 1,409 | -45 | % | -17 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
International |
1,683 | 2,727 | 2,268 | -38 | % | -26 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total |
54,178 | 55,780 | 63,539 | -3 | % | -15 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
BOE per day |
||||||||||||||||||||
Permian |
146,448 | 147,040 | 168,868 | 0 | % | -13 | % | |||||||||||||
MidContinent/Gulf Coast Region |
44,910 | 48,093 | 62,053 | -7 | % | -28 | % | |||||||||||||
Gulf of Mexico |
7,437 | 8,249 | 6,759 | -10 | % | 10 | % | |||||||||||||
Canada |
52,368 | 54,282 | 64,504 | -4 | % | -19 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
North America |
251,163 | 257,664 | 302,184 | -3 | % | -17 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Egypt |
88,351 | 90,445 | 103,369 | -2 | % | -15 | % | |||||||||||||
North Sea |
58,278 | 69,830 | 70,170 | -17 | % | -17 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
International |
146,629 | 160,275 | 173,539 | -9 | % | -16 | % | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total |
397,792 | 417,939 | 475,723 | -5 | % | -16 | % | |||||||||||||
|
|
|
|
|
|
Page 3
APACHE CORPORATION
PRICE INFORMATION
For the Quarter Ended | ||||||||||||
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
||||||||||
AVERAGE OIL PRICE PER BARREL |
||||||||||||
Permian |
$ | 49.16 | $ | 45.80 | $ | 30.10 | ||||||
MidContinent/Gulf Coast Region |
49.25 | 46.36 | 28.65 | |||||||||
Gulf of Mexico |
49.14 | 46.29 | 29.70 | |||||||||
Canada |
46.89 | 42.70 | 29.40 | |||||||||
North America |
48.51 | 45.48 | 29.73 | |||||||||
Egypt |
53.06 | 48.96 | 33.04 | |||||||||
North Sea |
52.89 | 48.36 | 33.50 | |||||||||
International |
53.00 | 48.76 | 33.21 | |||||||||
Total |
51.20 | 47.39 | 31.62 | |||||||||
AVERAGE NATURAL GAS PRICE PER MCF |
||||||||||||
Permian |
$ | 2.56 | $ | 2.70 | $ | 1.77 | ||||||
MidContinent/Gulf Coast Region |
3.13 | 2.88 | 1.69 | |||||||||
Gulf of Mexico |
3.11 | 2.97 | 2.09 | |||||||||
Canada |
2.33 | 2.22 | 1.69 | |||||||||
North America |
2.48 | 2.52 | 1.67 | |||||||||
Egypt |
2.78 | 2.78 | 2.58 | |||||||||
North Sea |
5.85 | 5.42 | 4.24 | |||||||||
International |
3.07 | 3.29 | 2.83 | |||||||||
Total |
2.74 | 2.85 | 2.14 | |||||||||
AVERAGE NGL PRICE PER BARREL |
||||||||||||
Permian |
$ | 16.53 | $ | 12.33 | $ | 6.70 | ||||||
MidContinent/Gulf Coast Region |
14.94 | 9.14 | 6.37 | |||||||||
Gulf of Mexico |
21.78 | 15.51 | 8.88 | |||||||||
Canada |
17.03 | 13.24 | 5.58 | |||||||||
North America |
16.22 | 11.60 | 6.50 | |||||||||
Egypt |
40.05 | 32.61 | 26.92 | |||||||||
North Sea |
39.19 | 29.38 | 18.13 | |||||||||
International |
39.58 | 30.39 | 22.33 | |||||||||
Total |
17.13 | 12.62 | 7.16 |
Page 4
APACHE CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
SUMMARY EXPLORATION EXPENSE INFORMATION
(Unaudited)
(In millions)
For the Quarter Ended March 31, |
||||||||
2017 | 2016 | |||||||
Unproved leasehold impairments |
$ | 15 | $ | 42 | ||||
Dry hole expense |
52 | 29 | ||||||
Geological and geophysical expense |
6 | 5 | ||||||
Exploration overhead and other |
19 | 19 | ||||||
|
|
|
|
|||||
$ | 92 | $ | 95 | |||||
|
|
|
|
SUMMARY CASH FLOW INFORMATION
(Unaudited)
(In millions)
For the Quarter Ended March 31, |
||||||||
2017 | 2016 | |||||||
Net cash provided by operating activities |
$ | 455 | $ | 239 | ||||
Net cash used in investing activities |
(93 | ) | (555 | ) | ||||
Net cash used in financing activities |
(218 | ) | (147 | ) |
SUMMARY BALANCE SHEET INFORMATION
(Unaudited)
(In millions)
March 31, 2017 |
December 31, 2016 |
|||||||
Cash and cash equivalents |
$ | 1,521 | $ | 1,377 | ||||
Other current assets |
1,905 | 1,864 | ||||||
Property and equipment, net |
18,780 | 18,867 | ||||||
Other assets |
404 | 411 | ||||||
|
|
|
|
|||||
Total assets |
$ | 22,610 | $ | 22,519 | ||||
|
|
|
|
|||||
Current liabilities |
$ | 1,898 | $ | 1,843 | ||||
Long-term debt |
8,327 | 8,544 | ||||||
Deferred credits and other noncurrent liabilities |
4,562 | 4,453 | ||||||
Apache shareholders equity |
6,385 | 6,238 | ||||||
Noncontrolling interest |
1,438 | 1,441 | ||||||
|
|
|
|
|||||
Total Liabilities and shareholders equity |
$ | 22,610 | $ | 22,519 | ||||
|
|
|
|
|||||
Common shares outstanding at end of period |
380 | 379 |
Page 5
APACHE CORPORATION
NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
Reconciliation of net cash provided by operating activities to adjusted EBITDAX
Management believes EBITDAX, or earnings before income tax expense, interest expense, depreciation, amortization and exploration expense is a widely accepted financial indicator, and useful for investors, to assess a companys ability to incur and service debt, fund capital expenditures, and make distributions to shareholders. We define adjusted EBITDAX, a non-GAAP financial measure, as EBITDAX adjusted for certain items presented in the accompanying reconciliation. Management uses adjusted EBITDAX to evaluate our ability to fund our capital expenditures, debt services and other operational requirements and to compare our results from period to period by eliminating the impact of certain items that management does not consider to be representative of the Companys on-going operations. Management also believes adjusted EBITDAX facilitates investors and analysts in evaluating and comparing EBITDAX from period to period by eliminating differences caused by the existence and timing of certain operating expenses that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted EBITDAX may not be comparable to similar measures of other companies in our industry.
For the Quarter Ended | ||||||||||||
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
||||||||||
Net cash provided by operating activities |
$ | 455 | $ | 819 | $ | 239 | ||||||
Adjustments: |
||||||||||||
Exploration expense other than dry hole expense and unproved leasehold impairments |
25 | 33 | 24 | |||||||||
Current income tax provision (benefit) |
188 | 107 | (10 | ) | ||||||||
Other adjustments to reconcile net loss to net cash provided by operating activities |
(34 | ) | (38 | ) | (55 | ) | ||||||
Changes in operating assets and liabilities |
275 | (152 | ) | 232 | ||||||||
Financing costs, net |
100 | 106 | 105 | |||||||||
Transaction, reorganization & separation costs |
(10 | ) | 3 | 15 | ||||||||
Contract termination charges |
| | 2 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDAX (Non-GAAP) |
$ | 999 | $ | 878 | $ | 552 | ||||||
|
|
|
|
|
|
Reconciliation of income (loss) attributable to common stock to adjusted earnings
Our presentation of adjusted earnings and adjusted earnings per share are non-GAAP measures because they exclude the effect of certain items included in Income Attributable to Common Stock. Management believes that adjusted earnings and adjusted earnings per share provides relevant and useful information, which is widely used by analysts, investors and competitors in our industry as well as by our management in assessing the Companys operational trends and comparability of results to our peers.
Management uses adjusted earnings and adjusted earnings per share to evaluate our operating and financial performance because it eliminates the impact of certain items that management does not consider to be representative of the Companys on-going business operations. As a performance measure, adjusted earnings may be useful to investors in facilitating comparisons to others in the Companys industry because certain items can vary substantially in the oil and gas industry from company to company depending upon accounting methods, book value of assets, capital structure and asset sales and other divestitures, among other factors. Management believes excluding these items facilitates investors and analysts in evaluating and comparing the underlying operating and financial performance of our business from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted earnings and adjusted earnings per share may not be comparable to similar measures of other companies in our industry.
For the Quarter Ended March 31, 2017 |
For the Quarter Ended March 31, 2016 |
|||||||||||||||||||||||||||||||
Before Tax |
Tax Impact |
After Tax |
Diluted EPS |
Before Tax |
Tax Impact |
After Tax |
Diluted EPS |
|||||||||||||||||||||||||
Income (loss) attributable to common stock (GAAP) |
$ | 484 | $ | (271 | ) | $ | 213 | 0.56 | $ | (383 | ) | $ | 11 | $ | (372 | ) | (0.98 | ) | ||||||||||||||
Adjustments: * |
||||||||||||||||||||||||||||||||
Valuation allowance and other tax adjustments |
| 31 | 31 | 0.08 | | 17 | 17 | 0.04 | ||||||||||||||||||||||||
Asset impairments |
23 | (8 | ) | 15 | 0.04 | 42 | (13 | ) | 29 | 0.07 | ||||||||||||||||||||||
Transaction, reorganization & separation costs |
(10 | ) | 3 | (7 | ) | (0.02 | ) | 15 | (5 | ) | 10 | 0.03 | ||||||||||||||||||||
Contract termination charges |
| | | | 2 | (1 | ) | 1 | 0.01 | |||||||||||||||||||||||
Loss on extinguishment of debt |
1 | | 1 | | | | | | ||||||||||||||||||||||||
(Gain) / loss on divestitures |
(341 | ) | 119 | (222 | ) | (0.58 | ) | 1 | | 1 | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Adjusted earnings (Non-GAAP) |
$ | 157 | $ | (126 | ) | $ | 31 | 0.08 | $ | (323 | ) | $ | 9 | $ | (314 | ) | (0.83 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | The income tax effect of the reconciling items are calculated based on the statutory rate of the jurisdiction in which the discrete item resides. |
Page 6
APACHE CORPORATION
NON-GAAP FINANCIAL MEASURES
(In millions)
Reconciliation of Debt to Net debt
Net debt, or outstanding debt obligations less cash and cash equivalents, is a non-GAAP financial measure. Management uses net debt as a measure of the Companys outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand.
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
June 30, 2016 |
|||||||||||||
Current debt |
$ | 150 | $ | | $ | 1 | $ | 1 | ||||||||
Long-term debt |
8,327 | 8,544 | 8,721 | 8,719 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total debt |
8,477 | 8,544 | 8,722 | 8,720 | ||||||||||||
Cash and cash equivalents |
1,521 | 1,377 | 1,230 | 1,201 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net debt |
$ | 6,956 | $ | 7,167 | $ | 7,492 | $ | 7,519 | ||||||||
|
|
|
|
|
|
|
|
Reconciliation of Costs incurred and GTP capital investments to Oil and gas capital investment
Management believes the presentation of oil and gas capital investments is useful for investors to assess Apaches expenditures related to our oil and gas capital activity. We define oil and gas capital investments as costs incurred for oil and gas activities and GTP activities, adjusted to exclude asset retirement obligations revisions and liabilities incurred, while including amounts paid during the period for abandonment and decommissioning expenditures. Capital expenditures attributable to a one-third noncontrolling interest in Egypt are also excluded. Management believes this provides a more accurate reflection of Apaches cash expenditures related to oil and gas capital activity and is consistent with how we plan our capital budget.
For the Quarter Ended March 31, |
||||||||
2017 | 2016 | |||||||
Costs incurred in oil and gas property: |
||||||||
Acquisitions |
||||||||
Unproved |
$ | 49 | $ | 19 | ||||
Exploration and development |
513 | 476 | ||||||
|
|
|
|
|||||
562 | 495 | |||||||
GTP capital investments: |
||||||||
GTP facilities |
142 | | ||||||
|
|
|
|
|||||
Total Costs incurred and GTP capital investments |
$ | 704 | $ | 495 | ||||
|
|
|
|
|||||
Reconciliation of Costs incurred and GTP to Oil and gas capital investment |
||||||||
Asset retirement obligations incurred and revisions |
$ | (15 | ) | $ | (1 | ) | ||
Asset retirement obligations settled |
13 | 15 | ||||||
Exploration expense other than dry hole expense and unproved leasehold impairments |
(25 | ) | (24 | ) | ||||
Less noncontrolling interest |
(31 | ) | (57 | ) | ||||
|
|
|
|
|||||
Total Oil and gas capital investment |
$ | 646 | $ | 428 | ||||
|
|
|
|
Page 7
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