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): August 3, 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)

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))

Indicate by check mark whether the registrant is an emerging growth company 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 not 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 August 3, 2017, Apache Corporation issued a press release announcing financial and operating results for the fiscal quarter ended June 30, 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 August 3, 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: August 3, 2017		/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 August 3, 2017.

EX-99.1

Exhibit 99.1

NEWS RELEASE

APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2017

FINANCIAL AND OPERATIONAL RESULTS

• Delivered second-quarter production of 460,000 barrels of oil equivalent (Boe) per day and adjusted production of 388,000 Boe per day, which excludes Egypt noncontrolling interest and tax barrels;

• Announced the strategic exit from Canada, which streamlines the portfolio, increases leverage to the Permian and positively impacts financial metrics; revised 2017 guidance accordingly;

• Completed first appraisal wells in the oil window of the Wolfcamp formation at Alpine High, providing further confirmation of an oil play and supporting hundreds of additional drilling locations; and

• Demonstrated strong cost discipline despite inflationary pressures; capital and lease operating expenses (LOE) tracking at or below guidance for the full year.

HOUSTON, Aug. 3, 2017 – Apache Corporation (NYSE: APA) (Nasdaq: APA) today announced its financial and operational results for the second quarter of 2017.

Apache reported earnings of $572 million or $1.50 per diluted common share for the second 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, Apache’s second-quarter results were a loss of $79 million or $0.21 per share. Adjusted earnings include the effect of dry-hole costs of $0.08 per share, after tax.

Net cash provided by operating activities was $751 million, compared to $455 million in the first quarter of 2017, and adjusted earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses (adjusted EBITDAX) was $850 million, compared to $999 million in the first quarter of 2017.

APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS

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John J. Christmann IV, Apache’s chief executive officer and president said, “Our second-quarter results and operational achievements continue to demonstrate the effectiveness of our underlying strategy. As anticipated, our total daily production bottomed out in the second quarter, and we have shifted to a growth trajectory. We expect continued production volume increases at Alpine High and in the Midland Basin, as well as from our international regions during the second half of 2017. We are successfully managing service cost pressure, LOE and general and administrative (G&A) costs across the company.

“Today, through the combination of expected cash flow from operations and proceeds from recent asset sales, we have the ability to fund our 2017 capital expenditures and dividend program without utilizing our balance sheet. Our $3.1 billion capital program remains unchanged, and relative to year-end 2016, we expect to end 2017 with more cash, less debt and significantly higher production levels in the Permian Basin,” said Christmann.

Portfolio update

Apache expects to complete its previously announced exit from Canada in August. In addition to the total $713 million sales price, the Canadian exit will result in several important financial benefits including a reduction of approximately $800 million in asset retirement obligations from the balance sheet and positive implications for G&A, average cash margins per Boe, earnings per share, free cash flow and corporate-level returns on capital employed.

APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS

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Financial position and liquidity

Oil and gas capital investment was $738 million during the quarter, with two-thirds focused on the Permian Basin. The company ended the quarter with $1.7 billion of cash, up from $1.5 billion at the end of the first quarter of 2017. Apache’s net debt position was $6.8 billion, a decrease of $144 million from the previous quarter.

Second-quarter operational summary

During the second quarter, Apache operated an average of 35 rigs and drilled and completed 66 gross-operated wells worldwide. Highlights from Apache’s three principal areas include:

• North America – During the quarter, North American production was 244,000 Boe per day, and Apache averaged 18 rigs and drilled and completed 36 gross-operated wells.

• Permian Basin – Production averaged 146,000 Boe per day, and Apache operated an average of 17 rigs during the quarter.

• Delaware Basin:

• At Alpine High, the company averaged six rigs and announced two new parasequence well results in the oil window of the Wolfcamp, the first of which had a 4,500 foot lateral and recorded a 30-day average rate in excess of 1,000 Boe per day. Early results from mapping and testing these zones give the company confidence, at a minimum, in hundreds of additional drilling locations, with a considerable amount of acreage and numerous landing zones still to be tested.

APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS

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• The company connected to market the first segment of its natural gas trunk line and achieved first production in early May, exceeding its June 30 target of 50 million cubic feet (MMcf) per day of processed gas. Currently, net sales gas exceeds 60 MMcf per day, which is expected to increase to more than 100 MMcf per day by the end of September.

• Midland Basin:

• Apache averaged six rigs and focused primarily on multi-well pad drilling in the Wolfcamp and Spraberry formations. During the quarter, the company brought online the nine-well Schrock 34 pad in Glasscock County with very strong results.

• North Sea – Apache reported average production of 55,000 Boe per day and averaged four rigs during the quarter. At Callater, the company completed its facility tieback ahead of schedule and is currently flowing back the 18x discovery well and a subsequent well at a combined, facilities-constrained rate of 19,000 Boe per day, of which approximately 70 percent is oil and natural gas liquids.

• Egypt – On a net basis, excluding minority interest and tax barrels, Egypt production was 89,000 Boe per day. Apache averaged 13 rigs and drilled and completed 25 gross-operated wells during the quarter including two high-rate exploration wells in the Matruh Basin, which de-risked additional exploration prospects in the area. Apache expects to sign agreements soon for two new concessions, which will increase the company’s footprint in the Western Desert by 40 percent.

APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS

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2017 outlook and plan update

To reflect the impact of the company’s exit from Canada, Apache has updated its 2017 production guidance to account for divested volumes. Guidance for certain expenses, including gathering and transportation costs and G&A expenses, has also been reduced. With regards to capital, Apache’s $3.1 billion 2017 budget is not impacted by the Canada exit since most of the capital allocated to Canada this year will have been spent by the time all transactions have closed. Further details on financial and operational guidance can be found in the Second-Quarter 2017 Financial and Operational Supplement.

“As we look to 2018, we are well prepared to manage a capital program commensurate with the prevailing price environment without stressing the balance sheet or diluting our shareholders. We are keenly focused on returns and have great confidence in the economics of our long-term investments and opportunity set. We have structured our business to adapt and thrive in a lower-for-longer price environment. Our focus on costs, maintaining a strong balance sheet and streamlining our business have positioned us to deliver returns-focused organic growth for many years to come,” said Christmann.

Conference call

Apache will host a conference call to discuss its second-quarter 2017 results at 1 p.m. Central time, Thursday, Aug. 3. The conference call will be webcast from Apache’s website at

APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS

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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 48382280. Sign up for email alerts to be reminded of the webcast at 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. 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 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’s Play store.

NonGAAP financial measures

Apache’s financial information includes information prepared in conformity with generally accepted accounting principles (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

APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS

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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 Apache’s 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 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

APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS

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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 SEC’s 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 Apache’s 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 SEC’s website at www.sec.gov.

APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS

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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						For the Six Months
	Ended June 30,						Ended June 30,
	2017			2016			2017			2016
REVENUES AND OTHER:
Oil and gas production revenues
Oil revenues	$	1,050		$	1,118		$	2,222		$	1,940
Gas revenues		233			209			488			432
Natural gas liquids revenues		63			59			148			101
		1,346			1,386			2,858			2,473
Other		59			(21	)		84			(24	)
Gain (loss) on divestiture		(21	)		17			320			16
		1,384			1,382			3,262			2,465
OPERATING EXPENSES:
Lease operating expenses		372			359			708			737
Gathering and transportation		48			52			105			104
Taxes other than income		29			65			71			76
Exploration		108			91			200			186
General and administrative		106			103			209			196
Transaction, reorganization and separation		4			9			(6	)		24
Depreciation, depletion and amortization:
Oil and gas property and equipment		536			629			1,074			1,265
Other assets		36			40			74			82
Asset retirement obligation accretion		37			38			73			76
Impairments		—			173			8			173
Financing costs, net		99			104			199			209
		1,375			1,663			2,715			3,128
NET INCOME (LOSS) BEFORE INCOME TAXES		9			(281	)		547			(663	)
Current income tax provision (benefit)		126			144			314			134
Deferred income tax provision (benefit)		(730	)		(225	)		(647	)		(226	)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		613			(200	)		880			(571	)
Net income attributable to noncontrolling interest		41			44			95			45
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	572		$	(244	)	$	785		$	(616	)
NET INCOME (LOSS) PER COMMON SHARE:
Basic	$	1.50		$	(0.65	)	$	2.06		$	(1.63	)
Diluted	$	1.50		$	(0.65	)	$	2.05		$	(1.63	)
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic		381			379			380			379
Diluted		383			379			383			379
DIVIDENDS DECLARED PER COMMON SHARE	$	0.25		$	0.25		$	0.50		$	0.50

Page 1

APACHE CORPORATION

PRODUCTION INFORMATION

	For the Quarter Ended						% Change						For the Six Months Ended
	June 30, 2017		March 31, 2017		June 30, 2016		2Q17 to 1Q17			2Q17 to 2Q16			June 30, 2017		June 30, 2016
OIL VOLUME - Barrels per day
Permian		71,891		75,210		86,430		-4	%		-17	%		73,541		89,854
MidContinent/Gulf Coast Region		10,197		11,142		15,959		-8	%		-36	%		10,667		17,187
Gulf of Mexico		3,983		4,376		4,352		-9	%		-8	%		4,178		4,259
Canada		11,638		11,655		12,917		0	%		-10	%		11,647		13,690
North America		97,709		102,383		119,658		-5	%		-18	%		100,033		124,990
Egypt (1, 2)		96,961		101,718		106,223		-5	%		-9	%		99,327		102,241
North Sea		48,091		49,784		59,124		-3	%		-19	%		48,933		58,043
International (1)		145,052		151,502		165,347		-4	%		-12	%		148,260		160,284
Total (1)		242,761		253,885		285,005		-4	%		-15	%		248,293		285,274
NATURAL GAS VOLUME - Mcf per day
Permian		237,455		227,654		242,019		4	%		-2	%		232,582		241,740
MidContinent/Gulf Coast Region		114,534		123,501		148,841		-7	%		-23	%		118,993		151,906
Gulf of Mexico		12,063		15,769		17,266		-24	%		-30	%		13,906		15,297
Canada		205,408		215,617		246,830		-5	%		-17	%		210,484		256,635
North America		569,460		582,541		654,956		-2	%		-13	%		575,965		665,578
Egypt (1, 2)		383,296		407,194		408,013		-6	%		-6	%		395,179		402,806
North Sea		34,348		43,928		60,318		-22	%		-43	%		39,111		65,556
International (1)		417,644		451,122		468,331		-7	%		-11	%		434,290		468,362
Total (1)		987,104		1,033,663		1,123,287		-5	%		-12	%		1,010,255		1,133,940
NGL VOLUME - Barrels per day
Permian		34,067		34,382		38,688		-1	%		-12	%		34,223		38,104
MidContinent/Gulf Coast Region		12,636		13,185		16,619		-4	%		-24	%		12,909		17,214
Gulf of Mexico		326		432		325		-25	%		0	%		379		348
Canada		4,365		4,821		5,092		-9	%		-14	%		4,592		5,797
North America		51,394		52,820		60,724		-3	%		-15	%		52,103		61,463
Egypt (1, 2)		880		955		950		-8	%		-7	%		917		1,119
North Sea		741		1,172		1,563		-37	%		-53	%		955		1,486
International (1)		1,621		2,127		2,513		-24	%		-35	%		1,872		2,605
Total		53,015		54,947		63,237		-4	%		-16	%		53,975		64,068
BOE per day
Permian		145,533		147,534		165,455		-1	%		-12	%		146,528		168,248
MidContinent/Gulf Coast Region		41,923		44,910		57,384		-7	%		-27	%		43,408		59,719
Gulf of Mexico		6,319		7,437		7,554		-15	%		-16	%		6,875		7,156
Canada		50,238		52,412		59,148		-4	%		-15	%		51,319		62,260
North America		244,013		252,293		289,541		-3	%		-16	%		248,130		297,383
Egypt (1, 2)		161,724		170,539		175,175		-5	%		-8	%		166,107		170,494
North Sea		54,556		58,278		70,740		-6	%		-23	%		56,407		70,455
International (1)		216,280		228,817		245,915		-5	%		-12	%		222,514		240,949
Total (1)		460,293		481,110		535,456		-4	%		-14	%		470,644		538,332
Total excluding noncontrolling interests		405,989		424,259		477,110		-4	%		-15	%		415,073		481,564
(1)       Includes net production volumes attributed to our noncontrolling partner in Egypt below:
Oil (b/d)		32,562		33,910		35,357								33,232		34,017
Gas (Mcf/d)		128,696		135,736		136,029								132,197		134,266
NGL (b/d)		293		318		317								306		373
(2)       Egypt Gross Production - BOE per day		334,496		328,141		349,689		2	%		-4	%		331,336		351,344

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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 company’s operational trends and performance and believes it is useful to investors and other third parties.

	For the Quarter Ended						% Change						For the Six Months Ended
	June 30, 2017		March 31, 2017		June 30, 2016		2Q17 to 1Q17			2Q17 to 2Q16			June 30, 2017		June 30, 2016
OIL VOLUME - Barrels per day
Permian		71,891		74,766		85,989		-4	%		-16	%		73,320		89,215
MidContinent/Gulf Coast Region		10,197		11,142		15,959		-8	%		-36	%		10,667		17,187
Gulf of Mexico		3,983		4,376		4,352		-9	%		-8	%		4,178		4,259
Canada		11,638		11,637		12,864		0	%		-10	%		11,638		13,581
North America		97,709		101,921		119,164		-4	%		-18	%		99,803		124,242
Egypt		51,776		51,651		57,955		0	%		-11	%		51,714		58,925
North Sea		48,091		49,784		59,124		-3	%		-19	%		48,933		58,043
International		99,867		101,435		117,079		-2	%		-15	%		100,647		116,968
Total		197,576		203,356		236,243		-3	%		-16	%		200,450		241,210
NATURAL GAS VOLUME - Mcf per day
Permian		237,455		225,663		240,000		5	%		-1	%		231,592		238,971
MidContinent/Gulf Coast Region		114,534		123,501		148,841		-7	%		-23	%		118,993		151,906
Gulf of Mexico		12,063		15,769		17,266		-24	%		-30	%		13,906		15,297
Canada		205,408		215,553		242,666		-5	%		-15	%		210,452		252,991
North America		569,460		580,486		648,773		-2	%		-12	%		574,943		659,165
Egypt		220,061		217,133		251,983		1	%		-13	%		218,605		253,834
North Sea		34,348		43,928		60,318		-22	%		-43	%		39,111		65,556
International		254,409		261,061		312,301		-3	%		-19	%		257,716		319,390
Total		823,869		841,547		961,074		-2	%		-14	%		832,659		978,555
NGL VOLUME - Barrels per day
Permian		34,067		34,073		38,265		0	%		-11	%		34,069		37,518
MidContinent/Gulf Coast Region		12,636		13,185		16,619		-4	%		-24	%		12,909		17,214
Gulf of Mexico		326		432		325		-25	%		0	%		379		348
Canada		4,365		4,805		4,980		-9	%		-12	%		4,584		5,650
North America		51,394		52,495		60,189		-2	%		-15	%		51,941		60,730
Egypt		540		511		610		6	%		-11	%		526		734
North Sea		741		1,172		1,563		-37	%		-53	%		955		1,486
International		1,281		1,683		2,173		-24	%		-41	%		1,481		2,220
Total		52,675		54,178		62,362		-3	%		-16	%		53,422		62,950
BOE per day
Permian		145,533		146,448		164,254		-1	%		-11	%		145,988		166,561
MidContinent/Gulf Coast Region		41,923		44,910		57,384		-7	%		-27	%		43,408		59,719
Gulf of Mexico		6,319		7,437		7,554		-15	%		-16	%		6,875		7,156
Canada		50,238		52,368		58,288		-4	%		-14	%		51,297		61,396
North America		244,013		251,163		287,480		-3	%		-15	%		247,568		294,832
Egypt		88,993		88,351		100,562		1	%		-12	%		88,674		101,965
North Sea		54,556		58,278		70,740		-6	%		-23	%		56,407		70,455
International		143,549		146,629		171,302		-2	%		-16	%		145,081		172,420
Total		387,562		397,792		458,782		-3	%		-16	%		392,649		467,252

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APACHE CORPORATION

PRICE INFORMATION

	For the Quarter Ended						For the Six Months Ended
	June 30,		March 31,		June 30,		June 30,		June 30,
	2017		2017		2016		2017		2016
AVERAGE OIL PRICE PER BARREL
Permian	$	45.09	$	49.16	$	41.82	$	47.16	$	35.74
MidContinent/Gulf Coast Region		46.19		49.25		42.17		47.78		34.93
Gulf of Mexico		45.85		49.14		41.14		47.56		35.54
Canada		44.52		46.89		39.39		45.70		34.11
North America		45.10		48.51		41.45		46.84		35.34
Egypt		47.98		53.06		45.42		50.57		34.97
North Sea		48.21		52.89		45.56		50.51		39.64
International		48.06		53.00		45.47		50.55		39.53
Total		46.89		51.20		43.14		49.06		37.37
AVERAGE NATURAL GAS PRICE PER MCF
Permian	$	2.50	$	2.56	$	1.72	$	2.53	$	1.74
MidContinent/Gulf Coast Region		2.88		3.13		1.71		3.01		1.70
Gulf of Mexico		3.03		3.11		2.04		3.07		2.06
Canada		2.14		2.33		1.01		2.24		1.36
North America		2.39		2.48		1.44		2.44		1.55
Egypt		2.73		2.78		2.72		2.75		2.65
North Sea		4.54		5.85		3.95		5.27		4.11
International		2.88		3.07		2.88		2.98		2.86
Total		2.60		2.74		2.04		2.67		2.09
AVERAGE NGL PRICE PER BARREL
Permian	$	13.08	$	16.53	$	10.00	$	14.81	$	8.37
MidContinent/Gulf Coast Region		10.03		14.94		9.32		12.52		7.80
Gulf of Mexico		13.10		21.78		NM		18.02		4.69
Canada		15.99		17.03		8.54		16.53		6.88
North America		12.58		16.22		9.64		14.42		8.05
Egypt		31.11		40.05		27.68		35.74		27.24
North Sea		22.92		39.19		22.25		32.85		20.29
International		27.37		39.58		24.30		34.26		23.28
Total		13.03		17.13		10.22		15.10		8.67

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APACHE CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

SUMMARY EXPLORATION EXPENSE INFORMATION

(Unaudited)

(In millions)

	For the Quarter Ended June 30,				For the Six Months Ended Ended June 30,
	2017		2016		2017		2016
Unproved leasehold impairments	$	39	$	66	$	54	$	108
Dry hole expense		46		2		98		31
Geological and geophysical expense		6		4		12		9
Exploration overhead and other		17		19		36		38
	$	108	$	91	$	200	$	186

SUMMARY CASH FLOW INFORMATION

(Unaudited)

(In millions)

	For the Quarter Ended June 30,						For the Six Months Ended Ended June 30,
	2017			2016			2017			2016
Net cash provided by operating activities	$	751		$	744		$	1,206		$	983
Net cash used in investing activities		(436	)		(411	)		(529	)		(966	)
Net cash used in financing activities		(169	)		(136	)		(387	)		(283	)

SUMMARY BALANCE SHEET INFORMATION

(Unaudited)

(In millions)

	June 30,		December 31,
	2017		2016
Cash and cash equivalents	$	1,667	$	1,377
Assets held for sale		1,231		—
Other current assets		1,749		1,864
Property and equipment, net		17,551		18,867
Other assets		404		411
Total assets	$	22,602	$	22,519
Current liabilities	$	1,934	$	1,843
Liabilities held for sale		939		—
Long-term debt		8,329		8,544
Deferred credits and other noncurrent liabilities		3,135		4,453
Apache shareholders’ equity		6,899		6,238
Noncontrolling interest		1,366		1,441
Total Liabilities and shareholders’ equity	$	22,602	$	22,519
Common shares outstanding at end of period		381		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 company’s 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 Company’s 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									For the Six Months Ended
	June 30, 2017			March 31, 2017			June 30, 2016			June 30,
										2017			2016
Net cash provided by operating activities	$	751		$	455		$	744		$	1,206		$	983
Adjustments:
Exploration expense other than dry hole expense and unproved leasehold impairments		23			25			23			48			47
Current income tax provision (benefit)		126			188			144			314			134
Other adjustments to reconcile net loss to net cash provided by operating activities		(5	)		(34	)		(36	)		(39	)		(91	)
Changes in operating assets and liabilities		(148	)		275			(202	)		127			30
Financing costs, net		99			100			104			199			209
Transaction, reorganization & separation costs		4			(10	)		9			(6	)		24
Contract termination charges		—			—			1			—			3
Adjusted EBITDAX (Non-GAAP)	$	850		$	999		$	787		$	1,849		$	1,339

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 Company’s 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 Company’s on-going business operations. As a performance measure, adjusted earnings may be useful to investors in facilitating comparisons to others in the Company’s 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 June 30, 2017												For the Quarter Ended June 30, 2016
	Before			Tax			After			Diluted			Before			Tax			After			Diluted
	Tax			Impact			Tax			EPS			Tax			Impact			Tax			EPS
Income (loss) attributable to common stock (GAAP)	$	(32	)	$	604		$	572			1.50		$	(325	)	$	81		$	(244	)		(0.65	)
Adjustments: *
Valuation allowance and other tax adjustments		—			(670	)		(670	)		(1.77	)		—			13			13			0.04
(Gain) / loss on divestitures		21			(3	)		18			0.05			(17	)		4			(13	)		(0.03	)
Commodity derivative mark-to-market		(41	)		15			(26	)		(0.07	)		—			—			—			—
Transaction, reorganization & separation costs		4			(2	)		2			0.01			9			(4	)		5			0.01
Asset impairments		39			(14	)		25			0.07			239			(100	)		139			0.37
Contract termination charges		—			—			—			—			1			—			1			—
Adjusted earnings (Non-GAAP)	$	(9	)	$	(70	)	$	(79	)		(0.21	)	$	(93	)	$	(6	)	$	(99	)		(0.26	)
	For the Six Monhts Ended												For the Six Monhts Ended
	June 30, 2017												June 30, 2016
	Before			Tax			After			Diluted			Before			Tax			After			Diluted
	Tax			Impact			Tax			EPS			Tax			Impact			Tax			EPS
Income (Loss) Attributable to Common Stock (GAAP)	$	452		$	333		$	785			2.05		$	(708	)	$	92		$	(616	)		(1.63	)
Adjustments: *
Valuation allowance and other tax adjustments		—			(639	)		(639	)		(1.68	)		—			30			30			0.08
(Gain) / loss on divestitures		(320	)		116			(204	)		(0.53	)		(16	)		4			(12	)		(0.03	)
Commodity derivative mark-to-market		(41	)		15			(26	)		(0.07	)		—			—			—			—
Transaction, reorganization & separation costs		(6	)		1			(5	)		(0.01	)		24			(9	)		15			0.04
Asset impairments		62			(22	)		40			0.11			281			(113	)		168			0.44
Contract termination charges		—			—			—			—			3			(1	)		2			0.01
Loss on extinguishment of debt		1			—			1			—			—			—			—			—
Adjusted Earnings (Non-GAAP)	$	148		$	(196	)	$	(48	)		(0.13	)	$	(416	)	$	3		$	(413	)		(1.09	)

* 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 Company’s outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand.

	June 30,		March 31,		December 31,		September 30,
	2017		2017		2016		2016
Current debt	$	150	$	150	$	—	$	1
Long-term debt		8,329		8,327		8,544		8,721
Total debt		8,479		8,477		8,544		8,722
Cash and cash equivalents		1,667		1,521		1,377		1,230
Net debt	$	6,812	$	6,956	$	7,167	$	7,492

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 Apache’s 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 Apache’s cash expenditures related to oil and gas capital activity and is consistent with how we plan our capital budget.

	For the Quarter Ended June 30,						For the Six Months Ended Ended June 30,
	2017			2016			2017			2016
Costs incurred in oil and gas property:
Acquisitions
Proved	$	3		$	41		$	3		$	41
Unproved		15			90			64			108
Exploration and development		733			423			1,246			900
		751			554			1,313			1,049
GTP capital investments:
GTP facilities		146			—			288			—
Total Costs incurred and GTP capital investments	$	897		$	554		$	1,601		$	1,049
Reconciliation of Costs incurred and GTP to Oil and gas capital investment
Asset retirement obligations incurred and revisions	$	(104	)	$	(98	)	$	(119	)		(99	)
Asset retirement obligations settled		9			16			22			31
Exploration expense other than dry hole expense and unproved leasehold impairments		(23	)		(24	)		(48	)		(51	)
Less noncontrolling interest		(41	)		(48	)		(72	)		(104	)
Total Oil and gas capital investment	$	738		$	400		$	1,384		$	826

Page 7