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 26, 2020

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)	(IRS 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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.625 par value	APA	New York Stock Exchange, Chicago Stock Exchange and NASDAQ Global Select Market
7.75% Notes Due 2029	APA/29	New York Stock Exchange

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 February 26, 2020, Apache Corporation issued a press release announcing financial and operating results for the fiscal quarter and year ended December 31, 2019. 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 26, 2020.
	104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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 27, 2020	By:	/s/ Rebecca A. Hoyt
		Rebecca A. Hoyt
		Senior Vice President, Chief Accounting Officer, and Controller
		(Principal Accounting Officer)

EX-99.1

Exhibit 99.1

NEWS RELEASE

Apache Corporation Announces Fourth-Quarter and Full-Year 2019

Financial and Operational Results

Highlights

• Delivered fourth-quarter reported production of 487,000 barrels of oil equivalent (BOE) per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 430,000 BOE per day, exceeding the high end of guidance by 5,000 BOE per day;

• Achieved the highest quarterly Permian oil production rate in Apache history, averaging 103,000 barrels per day during the fourth quarter;

• Reduced capital investment in 2019 by 23% over 2018, while increasing total company adjusted production by nearly 5%, U.S. production by more than 7%, and Permian oil production by 6% year over year;

• Reported full-year net cash from operating activities of $2.9 billion and adjusted EBITDAX of $4.0 billion;

• Generated full-year cash return on invested capital on-target with the corporate incentive compensation goal of 19%;

• Signed a 50-50 joint venture agreement with Total S.A. for Block 58 offshore Suriname that significantly reduces Apache’s potential large-scale appraisal and development capital requirements;

• Drilled the Maka Central-1 well in Block 58 Suriname and announced a significant oil discovery in January 2020; currently drilling an exploration well at Sapakara West;

• Launched a comprehensive corporate redesign to further align the organization, work processes and cost structure with long-term planned activity levels, targeting a minimum annual savings of $150 million;

• Advanced sustainability efforts by initiating alignment with SASB and TCFD reporting standards, beginning to link ESG performance to short-term incentive compensation, and earmarking capital specifically for sustainability projects; and

• Establishing 2020 upstream capital investment budget of $1.6 billion to $1.9 billion, a 26% year-over-year decrease at the midpoint; projecting flat to low single digit corporate oil growth on an adjusted basis.

HOUSTON, Feb. 26, 2020 – Apache Corporation (NYSE, Nasdaq: APA) today announced its financial and operational results for the fourth-quarter and full-year 2019.

Apache reported a loss of $3.0 billion or $7.89 per diluted common share during the fourth-quarter 2019. When adjusted for certain items that impact the comparability of results, including primarily the impact of asset impairments in both the upstream assets in Alpine High and gathering, processing, and transmission assets from the consolidated results of Altus Midstream, Apache’s fourth-quarter income totaled $31 million, or $0.08 per share. Net cash provided by operating activities in the fourth quarter was $778 million, and adjusted EBITDAX was $1.1 billion.

APACHE CORPORATION ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2019

FINANCIAL AND OPERATIONAL RESULTS

— PAGE 2 of 8

For the full-year 2019, Apache reported a loss of $3.6 billion, or $9.43 per diluted common share. On an adjusted basis, Apache’s 2019 earnings totaled $2 million. Net cash provided by operating activities was $2.9 billion, and adjusted EBITDAX was $4.0 billion.

“Apache finished 2019 on a strong note. For the year, we achieved our corporate returns objective and came in below our upstream capital investment target of $2.4 billion. During the fourth quarter, our Permian region delivered the highest oil production in company history at 103,000 barrels per day and exceeded guidance. In December, we signed a joint venture agreement with Total in Block 58 offshore Suriname, which brings in a world-class offshore operator and enables Apache to retain a 50% working interest in the block while significantly reducing our potential exposure to large-scale appraisal and development costs. Our subsequent announcement of a significant oil discovery with the Maka Central-1 well in January 2020 underscores the transformational potential of Suriname Block 58. We are currently drilling the second well on Block 58, Sapakara West-1, and are encouraged by what we’ve seen so far. We will provide more information after reaching total depth and completing our analysis,” said John J. Christmann IV, Apache’s chief executive officer and president.

Christmann continued, “Despite steady progress on many fronts in 2019, we also encountered some significant challenges, most notably around deteriorating natural gas and NGL prices and the performance of our multi-well development pad tests at Alpine High. To further align our investment program with these dynamics, we plan to significantly reduce our spending in 2020, predominantly in Alpine High.

“Apache is well-prepared to navigate this challenging and volatile commodity price environment. We are continuing to streamline our portfolio, completing our comprehensive corporate redesign to centralize and align the organization and costs with projected long-term activity levels, investing to improve long-term returns and free cash flow, strengthening our balance sheet, and sustaining our dividend.

APACHE CORPORATION ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2019

FINANCIAL AND OPERATIONAL RESULTS

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“While these steps are important to generate long-term returns, we must continue to deliver energy in a responsible manner and are taking a number of steps to prioritize ESG initiatives.”

Specifically, over the last year, the company started to link ESG performance to short-term incentive compensation, earmarked 2020 capital specifically for sustainability projects, and began to align its 2019 sustainability report with the Task Force on Climate-related Financial Disclosures’ (TCFD) recommendations and the Sustainability Accounting Standards Board’s (SASB) Oil and Gas Exploration and Production Sustainability Accounting Standard.

2020 capital budget and outlook

In 2020, the company plans to invest $1.6 billion to $1.9 billion in upstream oil and gas capital, which, at the midpoint, represents a 26% reduction from 2019. If oil prices deteriorate from current levels, Apache is prepared to further reduce activity and capital investment. At higher oil prices, the priority will be to retain cash for debt reduction. The company does not anticipate increasing capital investment above $1.9 billion. This 2020 capital budget is projected to deliver flat to low single-digit total company oil production growth on an adjusted basis.

“Apache’s portfolio is differentiated through both geographic diversification and an attractive balance of conventional and unconventional development opportunities. We have optionality to fund high-quality, shorter-cycle growth projects in the Permian Basin, Egypt and the North Sea, as well as longer-cycle organic exploration plays. We are choosing to allocate capital to Suriname over the next several years that could otherwise be directed toward near-term growth opportunities elsewhere in the portfolio. This is consistent with our strategy of investing for long-term returns with growth as an outcome,” Christmann concluded.

APACHE CORPORATION ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2019

FINANCIAL AND OPERATIONAL RESULTS

— PAGE 4 of 8

Fourth-quarter operational summary

During the fourth quarter, Apache operated an average of 21 rigs and drilled and completed 74 gross-operated wells worldwide. Highlights from Apache’s principal areas include:

• United States – Operated an average of eight rigs, drilled and completed 56 gross-operated wells, all of which were in the Permian, and reported production of 299,000 BOE per day, an increase of 5% over fourth-quarter 2018.

Permian Basin production averaged 288,000 BOE per day, including oil production of 103,000 barrels of oil per day.

• Midland Basin – Averaged four rigs and placed 19 wells on production, all on multi-well pads. The 16-well Lynch-Tippett pad at Wildfire delivered strong initial production rates with an 83% oil cut on 1.5-mile laterals.

• Delaware Basin – Averaged four rigs and placed 36 wells on production, including the 6-well Ghost Rider pad in Lea County, which produced impressive initial flow rates. At year-end, there were no rigs drilling at Alpine High.

• International – Operated an average of 13 rigs, drilled and completed 18 gross-operated wells and reported production of 189,000 BOE per day.

• Egypt – Averaged nine rigs, drilled and completed 16 gross-operated wells and reported production of 126,000 BOE per day, or 69,000 BOE per day on an adjusted basis. The company drilled several high-rate oil wells in the Faghur and Shushan basins and had an 81% success rate during the quarter.

• North Sea – Averaged three rigs and drilled and completed two gross operated wells during the quarter with a 100% success rate. Production was 63,000 BOE per day with the startup of the Storr development in late November and return from scheduled turnaround activity in the third quarter.

• Suriname – Drilled the first well in Block 58, the Maka Central-1, during the back half of 2019, and subsequently announced a significant oil discovery in January. The company is now working with its partner Total on an appraisal plan, which will be submitted to the state-owned oil company, Staatsolie, in the coming months.

APACHE CORPORATION ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2019

FINANCIAL AND OPERATIONAL RESULTS

— PAGE 5 of 8

Drilling commenced in January and is ongoing on the Sapakara West-1 exploration well in Suriname Block 58, approximately 12 miles southeast of the Maka Central-1 discovery. The company has drilled through the shallower Campanian interval and drilling continues toward the deeper Santonian objectives. Once the well reaches total depth, the company will run open-hole logs, pressure tests, fluid and core samples, and associated laboratory analyses. Following Sapakara, the rig will drill a third, and likely a fourth exploration test in Block 58.

Year-end 2019 proved reserves

Worldwide estimated proved reserves totaled 1.01 billion BOE at year-end 2019. During the year, Apache added approximately 176.4 million BOE in field extensions and discoveries, more than offsetting production of approximately 172.9 million BOE. Divestitures reduced proved reserves by 107.6 million BOE. Negative price revisions, partially offset by positive performance revisions, further reduced proved reserves by 119.5 million BOE. More than 88% of Apache’s estimated proved reserves at year-end 2019 were classified as proved developed.

Conference call

Apache will host a conference call to discuss its fourth-quarter and full-year 2019 results at 10 a.m. Central time, Thursday, Feb. 27. The conference call will be webcast from Apache’s website at www.apachecorp.com and investor.apachecorp.com, and the webcast replay will be archived there as well. The conference call will also be available for playback by telephone for one week beginning at approximately 4 p.m. Central time Feb. 28. The number for the replay is 855-859-2056 or 404-537-3406 for international calls. The conference access code is 7162078. Sign up for email alerts to be reminded of the webcast at http://investor.apachecorp.com/alerts/email-alerts-subscription.

APACHE CORPORATION ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2019

FINANCIAL AND OPERATIONAL RESULTS

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About Apache

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Egypt and the United Kingdom and exploration activities offshore Suriname. Apache posts announcements, operational updates, investor information and all press releases on its website, www.apachecorp.com.

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.

Non-GAAP financial measures

Apache’s financial information includes information prepared in conformity with generally accepted accounting principles (GAAP) as well as non-GAAP financial 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, 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,” “continues,” “could,” “estimates,”

APACHE CORPORATION ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2019

FINANCIAL AND OPERATIONAL RESULTS

— PAGE 7 of 8

“expects,” “guidance,” “may,” “might,” “outlook,” “possibly,” “potential,” “projects,” “should,” “will,” “would,” and similar references to future periods, but the absence of these words does not mean that a statement is not forward-looking. 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 2018 Form 10-K and in our quarterly reports on Form 10-Q filed, and 2019 Form 10-K when filed, with the Securities and Exchange Commission (“SEC”) for a discussion of risk factors that affect our business. Any forward-looking statement made by Apache 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. Apache undertakes 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 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 news 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, 2018 (and Apache’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2019, when filed) 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 FOURTH-QUARTER AND FULL-YEAR 2019

FINANCIAL AND OPERATIONAL RESULTS

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Contacts

Investor: (281) 302-2286 Gary Clark

Media: (713) 296-7276 Phil West

Website: www.apachecorp.com

APA-F

-end-

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,
	2019			2018			2019			2018
REVENUES AND OTHER:
Oil and gas production revenues
Oil revenues	$	1,316		$	1,322		$	5,230		$	5,846
Natural gas revenues		188			244			678			919
Natural gas liquids revenues		121			137			407			583
		1,625			1,703			6,315			7,348
Gain on divestitures		23			13			43			23
Other		48			49			53			53
		1,696			1,765			6,411			7,424
OPERATING EXPENSES:
Lease operating expenses		343			352			1,447			1,439
Gathering, processing and transmission		76			88			306			348
Taxes other than income		66			53			207			215
Exploration		585			252			805			503
General and administrative		83			101			406			431
Transaction, reorganization and separation		33			8			50			28
Depreciation, depletion and amortization:
Oil and gas property and equipment		676			599			2,512			2,265
Other assets		45			35			168			140
Asset retirement obligation accretion		27			27			107			108
Impairments		2,700			501			2,949			511
Financing costs, net		97			93			462			478
		4,731			2,109			9,419			6,466
NET INCOME BEFORE INCOME TAXES		(3,035	)		(344	)		(3,008	)		958
Current income tax provision		146			185			660			894
Deferred income tax provision (benefit)		66			(179	)		14			(222	)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		(3,247	)		(350	)		(3,682	)		286
Net income attributable to noncontrolling interest - Egypt		42			30			167			245
Net loss attributable to noncontrolling interest - Altus		(329	)		1			(334	)		1
Net income attributable to Altus Preferred Unit limited partners		16			—			38			—
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	(2,976	)	$	(381	)	$	(3,553	)	$	40
NET INCOME (LOSS) PER COMMON SHARE:
Basic	$	(7.89	)	$	(1.00	)	$	(9.43	)	$	0.11
Diluted	$	(7.89	)	$	(1.00	)	$	(9.43	)	$	0.11
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic		377			379			377			382
Diluted		377			379			377			384
DIVIDENDS DECLARED PER COMMON SHARE	$	0.25		$	0.25		$	1.00		$	1.00

Page 1

APACHE CORPORATION

PRODUCTION INFORMATION

	For the Quarter Ended						% Change						For the Year Ended
	December 31, 2019		September 30, 2019		December 31, 2018		4Q19 to 3Q19			4Q19 to 4Q18			December 31, 2019		December 31, 2018
OIL VOLUME - Barrels per day
Permian		103,275		94,873		98,560		9	%		5	%		96,997		91,132
MidContinent/Gulf Coast		2,500		2,635		9,697		-5	%		-74	%		5,328		10,434
Gulf of Mexico		2,655		2,537		2,391		5	%		11	%		2,726		3,234
United States		108,430		100,045		110,648		8	%		-2	%		105,051		104,800
Egypt (1, 2)		79,119		84,114		86,103		-6	%		-8	%		84,617		93,656
North Sea		50,226		44,281		52,519		13	%		-4	%		49,746		46,953
International (1)		129,345		128,395		138,622		1	%		-7	%		134,363		140,609
Total (1)		237,775		228,440		249,270		4	%		-5	%		239,414		245,409
NATURAL GAS VOLUME - Mcf per day
Permian		635,159		539,132		553,945		18	%		15	%		571,141		458,564
MidContinent/Gulf Coast		12,001		14,779		120,720		-19	%		-90	%		57,996		125,488
Gulf of Mexico		11,235		9,251		7,477		21	%		50	%		10,443		9,202
United States		658,395		563,162		682,142		17	%		-3	%		639,580		593,254
Egypt (1, 2)		275,811		275,569		291,196		0	%		-5	%		285,972		326,811
North Sea		63,681		47,875		55,955		33	%		14	%		54,642		45,466
International (1)		339,492		323,444		347,151		5	%		-2	%		340,614		372,277
Total (1)		997,887		886,606		1,029,293		13	%		-3	%		980,194		965,531
NGL VOLUME - Barrels per day
Permian		78,908		69,703		45,053		13	%		75	%		62,106		43,368
MidContinent/Gulf Coast		1,211		1,959		13,676		-38	%		-91	%		6,017		13,780
Gulf of Mexico		286		343		397		-17	%		-28	%		258		303
United States		80,405		72,005		59,126		12	%		36	%		68,381		57,451
Egypt (1, 2)		788		891		877		-12	%		-10	%		931		923
North Sea		1,920		1,540		1,476		25	%		30	%		1,739		1,189
International (1)		2,708		2,431		2,353		11	%		15	%		2,670		2,112
Total		83,113		74,436		61,479		12	%		35	%		71,051		59,563
BOE per day
Permian		288,043		254,432		235,936		13	%		22	%		254,293		210,926
MidContinent/Gulf Coast		5,711		7,057		43,493		-19	%		-87	%		21,011		45,129
Gulf of Mexico		4,813		4,421		4,035		9	%		19	%		4,725		5,071
United States		298,567		265,910		283,464		12	%		5	%		280,029		261,126
Egypt (1, 2)		125,875		130,934		135,513		-4	%		-7	%		133,209		149,048
North Sea		62,760		53,800		63,321		17	%		-1	%		60,592		55,719
International (1)		188,635		184,734		198,834		2	%		-5	%		193,801		204,767
Total (1)		487,202		450,644		482,298		8	%		1	%		473,830		465,893
Total excluding noncontrolling interests		445,209		406,926		437,030		9	%		2	%		429,377		416,150
(1)  Includes net production volumes attributed to our noncontrolling partner in Egypt below:
Oil (b/d)		26,384		28,052		28,756								28,220		31,240
Gas (Mcf/d)		92,075		92,212		97,317								95,539		109,169
NGL (b/d)		263		297		292								310		308
(2)  Egypt Gross Production - BOE per day		300,136		301,296		334,992		0	%		-10	%		313,722		336,125

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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) noncontrolling interest in Egypt and 2) 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 Year Ended
	December 31, 2019		September 30, 2019		December 31, 2018		4Q19 to 3Q19			4Q19 to 4Q18			December 31, 2019		December 31, 2018
OIL VOLUME - Barrels per day
Permian		103,275		94,873		98,560		9	%		5	%		96,997		91,132
MidContinent/Gulf Coast		2,500		2,635		9,697		-5	%		-74	%		5,328		10,434
Gulf of Mexico		2,655		2,537		2,391		5	%		11	%		2,726		3,234
United States		108,430		100,045		110,648		8	%		-2	%		105,051		104,800
Egypt		42,120		44,461		46,077		-5	%		-9	%		44,773		47,286
North Sea		50,226		44,281		52,519		13	%		-4	%		49,746		46,953
International		92,346		88,742		98,596		4	%		-6	%		94,519		94,239
Total		200,776		188,787		209,244		6	%		-4	%		199,570		199,039
NATURAL GAS VOLUME - Mcf per day
Permian		635,159		539,132		553,945		18	%		15	%		571,141		458,564
MidContinent/Gulf Coast		12,001		14,779		120,720		-19	%		-90	%		57,996		125,488
Gulf of Mexico		11,235		9,251		7,477		21	%		50	%		10,443		9,202
United States		658,395		563,162		682,142		17	%		-3	%		639,580		593,254
Egypt		159,242		160,263		166,109		-1	%		-4	%		165,159		180,841
North Sea		63,681		47,875		55,955		33	%		14	%		54,642		45,466
International		222,923		208,138		222,064		7	%		0	%		219,801		226,307
Total		881,318		771,300		904,206		14	%		-3	%		859,381		819,561
NGL VOLUME - Barrels per day
Permian		78,908		69,703		45,053		13	%		75	%		62,106		43,368
MidContinent/Gulf Coast		1,211		1,959		13,676		-38	%		-91	%		6,017		13,780
Gulf of Mexico		286		343		397		-17	%		-28	%		258		303
United States		80,405		72,005		59,126		12	%		36	%		68,381		57,451
Egypt		474		518		527		-8	%		-10	%		550		505
North Sea		1,920		1,540		1,476		25	%		30	%		1,739		1,189
International		2,394		2,058		2,003		16	%		20	%		2,289		1,694
Total		82,799		74,063		61,129		12	%		35	%		70,670		59,145
BOE per day
Permian		288,043		254,432		235,936		13	%		22	%		254,293		210,926
MidContinent/Gulf Coast		5,711		7,057		43,493		-19	%		-87	%		21,011		45,129
Gulf of Mexico		4,813		4,421		4,035		9	%		19	%		4,725		5,071
United States		298,567		265,910		283,464		12	%		5	%		280,029		261,126
Egypt		69,134		71,690		74,289		-4	%		-7	%		72,850		77,932
North Sea		62,760		53,800		63,321		17	%		-1	%		60,592		55,719
International		131,894		125,490		137,610		5	%		-4	%		133,442		133,651
Total		430,461		391,400		421,074		10	%		2	%		413,471		394,777

Page 3

APACHE CORPORATION

PRICE INFORMATION

	For the Quarter Ended						For the Year Ended
	December 31, 2019		September 30, 2019		December 31, 2018		December 31, 2019		December 31, 2018
AVERAGE OIL PRICE PER BARREL
Permian	$	56.25	$	54.51	$	50.98	$	54.47	$	58.57
MidContinent/Gulf Coast		56.97		58.38		58.73		56.77		64.17
Gulf of Mexico		56.47		58.38		61.48		59.44		67.75
United States		56.26		54.70		51.85		54.71		59.36
Egypt		63.11		61.10		64.27		63.76		70.09
North Sea		64.07		63.12		62.68		65.10		69.02
International		63.48		61.75		63.69		64.25		69.73
Total		60.19		58.60		58.37		60.05		65.30
AVERAGE NATURAL GAS PRICE PER MCF
Permian	$	1.47	$	.91	$	1.71	$	1.11	$	1.95
MidContinent/Gulf Coast		2.30		2.03		3.32		2.47		2.65
Gulf of Mexico		2.43		2.39		3.70		2.76		3.27
United States		1.50		0.97		2.03		1.26		2.12
Egypt		2.86		2.81		2.83		2.83		2.84
North Sea		4.30		3.20		7.91		4.48		7.33
International		3.13		2.87		3.65		3.09		3.39
Total		2.05		1.66		2.57		1.90		2.61
AVERAGE NGL PRICE PER BARREL
Permian	$	14.93	$	13.24	$	24.29	$	14.82	$	27.20
MidContinent/Gulf Coast		16.60		14.35		22.17		16.05		23.32
Gulf of Mexico		21.39		16.11		24.47		19.16		29.82
United States		15.00		13.26		23.81		14.95		26.28
Egypt		36.47		27.76		34.43		33.87		39.17
North Sea		44.22		26.63		42.94		36.83		45.84
International		41.97		27.05		39.77		35.80		42.93
Total		15.88		13.71		24.42		15.74		26.87

Page 4

APACHE CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

(Unaudited)

(In millions)

SUMMARY EXPLORATION EXPENSE INFORMATION

	For the Quarter Ended				For the Year Ended
	December 31,				December 31,
	2019		2018		2019		2018
Unproved leasehold impairments	$	545	$	138	$	619	$	214
Dry hole expense		24		80		57		137
Geological and geophysical expense		5		14		59		55
Exploration overhead and other		11		20		70		97
	$	585	$	252	$	805	$	503

SUMMARY CASH FLOW INFORMATION

	For the Quarter Ended						For the Year Ended
	December 31,						December 31,
	2019			2018			2019			2018
Net cash provided by operating activities	$	778		$	1,043		$	2,867		$	3,777
Additions to upstream oil and gas property		(580	)		(899	)		(2,634	)		(3,323	)
Additions to Altus gathering, processing, and transmission facilities		(33	)		(169	)		(327	)		(581	)
Altus equity method interests		(164	)		(91	)		(1,172	)		(91	)
Proceeds from sale of oil and gas properties		128			87			718			138
Other, net		(14	)		(32	)		(31	)		(87	)
Net cash used in investing activities	$	(663	)	$	(1,104	)	$	(3,446	)	$	(3,944	)
Debt borrowings and payments, net		161			—			235			(378	)
Proceeds from Altus transaction		—			628			—			628
Distributions to noncontrolling interest - Egypt		(70	)		(89	)		(305	)		(345	)
Redeemable noncontrolling interest - Altus Preferred Unit limited partners		—			—			611			—
Dividends paid		(94	)		(95	)		(376	)		(382	)
Other		(28	)		(262	)		(53	)		(310	)
Net cash used in financing activities	$	(31	)	$	182		$	112		$	(787	)

SUMMARY BALANCE SHEET INFORMATION

	December 31, 2019		December 31, 2018
Cash and cash equivalents	$	247	$	714
Other current assets		1,714		1,973
Property and equipment, net		14,158		18,421
Other assets		1,988		474
Total assets	$	18,107	$	21,582
Current debt - Apache *	$	1	$	151
Current debt - Altus		10		—
Current liabilities		1,844		2,050
Long-term debt - Apache *		8,159		8,093
Long-term debt - Altus		396		—
Deferred credits and other noncurrent liabilities		2,677		2,476
Redeemable noncontrolling interest - Altus Preferred Unit limited partners		555		—
Apache shareholders’ equity		3,255		7,130
Noncontrolling interest - Egypt		1,137		1,275
Noncontrolling interest - Altus		73		407
Total Liabilities, redeemable noncontrolling interest, and equity	$	18,107	$	21,582
Common shares outstanding at end of period		377		375

* Excludes Altus

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 Year Ended
	December 31,			September 30,			December 31,			December 31,
	2019			2019			2018			2019			2018
Net cash provided by operating activities	$	778		$	635		$	1,043		$	2,867		$	3,777
Adjustments:
Exploration seismic and administration costs		16			39			34			129			152
Current income tax provision		146			141			185			660			894
Other adjustments to reconcile net income to net cash provided by operating activities		(19	)		(13	)		(29	)		(50	)		(125	)
Changes in operating assets and liabilities		42			1			(191	)		3			(245	)
Financing costs, net (excluding loss on early extinguishment of debt)		97			95			93			387			384
Transaction, reorganization & separation costs		33			7			8			50			28
Adjusted EBITDAX (Non-GAAP)	$	1,093		$	905		$	1,143		$	4,046		$	4,865

Reconciliation of Income 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												For the Quarter Ended
	December 31, 2019												December 31, 2018
	Before			Tax			After			Diluted			Before			Tax			After			Diluted
	Tax			Impact			Tax			EPS			Tax			Impact			Tax			EPS
Income including noncontrolling interest (GAAP)	$	(3,035	)	$	(212	)	$	(3,247	)	$	(8.61	)	$	(344	)	$	(6	)	$	(350	)	$	(0.92	)
Income attributable to noncontrolling interest		(191	)		(96	)		(287	)		(0.77	)		71			(40	)		31			0.08
Loss attributable to Altus preferred unit limited partner		16			—			16			0.05			—			—			—			—
Net income attributable to common stock		(2,860	)		(116	)		(2,976	)		(7.89	)		(415	)		34			(381	)		(1.00	)
Adjustments:*
Asset impairments		3,245			(682	)		2,563			6.78			639			(143	)		496			1.31
Noncontrolling interest impact on Altus impairments		(269	)		57			(212	)		(0.56	)		—			—			—			—
Noncontrolling interest & tax barrel impact on Egypt adj		—			—			—			—			13			(34	)		(21	)		(0.06	)
Valuation allowance and other tax adjustments		—			655			655			1.74			—			42			42			0.10
Loss on extinguishment of debt		—			—			—			—			—			—			—			—
Unrealized derivative instrument (gain)/loss		(8	)		1			(7	)		(0.02	)		(15	)		2			(13	)		(0.03	)
Transaction, reorganization & separation costs		33			(7	)		26			0.07			8			(3	)		5			0.01
Modification of stock comp plans		—			—			—			—			—			—			—			—
(Gain)/loss on divestitures		(23	)		5			(18	)		(0.04	)		(13	)		4			(9	)		(0.02	)
Adjusted earnings (Non-GAAP)	$	118		$	(87	)	$	31		$	0.08		$	217		$	(98	)	$	119		$	0.31
	For the Year Ended												For the Year Ended
	December 31, 2019												December 31, 2018
	Before			Tax			After			Diluted			Before			Tax			After			Diluted
	Tax			Impact			Tax			EPS			Tax			Impact			Tax			EPS
Income including noncontrolling interest (GAAP)	$	(3,008	)	$	(674	)	$	(3,682	)	$	(9.77	)	$	958		$	(672	)	$	286		$	0.75
Income attributable to noncontrolling interest		44			(211	)		(167	)		(0.44	)		464			(218	)		246			0.64
Loss attributable to Altus preferred unit limited partner		38			—			38			0.10			—			—			—			—
Net income attributable to common stock		(3,090	)		(463	)		(3,553	)		(9.43	)		494			(454	)		40			0.11
Adjustments:*
Asset impairments		3,568			(750	)		2,818			7.45			725			(163	)		562			1.47
Noncontrolling interest impact on Altus impairments		(271	)		57			(214	)		(0.56	)		—			—			—			—
Noncontrolling interest & tax barrel impact on Egypt adj		—			—			—			—			13			(34	)		(21	)		(0.05	)
Valuation allowance and other tax adjustments		—			854			854			2.27			—			72			72			0.18
Loss on extinguishment of debt		75			(16	)		59			0.16			94			(19	)		75			0.19
Unrealized derivative instrument (gain)/loss		44			(11	)		33			0.09			(103	)		21			(82	)		(0.21	)
Transaction, reorganization & separation costs		50			(11	)		39			0.11			28			(7	)		21			0.06
Modification of stock comp plans		—			—			—			—			39			(9	)		30			0.07
(Gain)/loss on divestitures		(43	)		9			(34	)		(0.09	)		(23	)		5			(18	)		(0.05	)
Adjusted Earnings (Non-GAAP)	$	333		$	(331	)	$	2		$	0.00		$	1,267		$	(588	)	$	679		$	1.77

* 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 Costs incurred to Upstream capital investment

Management believes the presentation of upstream capital investments is useful for investors to assess Apache’s expenditures related to our upstream capital activity. We define capital investments as costs incurred for oil and gas activities, adjusted to exclude asset retirement obligation revisions and liabilities incurred, capitalized interest, and certain exploration expenses, while including amounts paid during the period for abandonment and decommissioning expenditures. Upstream 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 upstream capital activity and is consistent with how we plan our capital budget.

	For the Quarter Ended						For the Year Ended
	December 31,						December 31,
	2019			2018			2019			2018
Costs incurred in oil and gas property:
Acquisitions
Proved	$	1		$	1		$	8		$	6
Unproved		14			46			57			127
Exploration and development		533			860			2,464			3,321
Total Costs incurred in oil and gas property	$	548		$	907		$	2,529		$	3,454
Reconciliation of Costs incurred to Upstream capital investment:
Total Costs incurred in oil and gas property	$	548		$	907		$	2,529		$	3,454
Asset retirement obligations settled vs. incurred - oil and gas property		110			(1	)		153			20
Capitalized interest		(8	)		(8	)		(32	)		(36	)
Exploration seismic and administration costs		(16	)		(34	)		(129	)		(152	)
Less noncontrolling interest - Egypt		(44	)		(49	)		(155	)		(200	)
Total Upstream capital investment	$	590		$	815		$	2,366		$	3,086

Reconciliation of Net cash provided by operating activities to Cash flows from operations before changes in operating assets and liabilities

Cash flows 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 flows 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.

	For the Quarter Ended							For the Year Ended
	December 31,		September 30,		December 31,			December 31,
	2019		2019		2018			2019		2018
Net cash provided by operating activities	$	778	$	635	$	1,043		$	2,867	$	3,777
Changes in operating assets and liabilities		42		1		(191	)		3		(245	)
Cash flows from operations before changes in operating assets and liabilities	$	820	$	636	$	852		$	2,870	$	3,532

Page 7

APACHE CORPORATION

OIL & GAS RESERVES INFORMATION

For the Year Ended December 31, 2019

OIL (Mbbl)
	U.S.			Egypt1			North Sea			Total1
Balance - Dec 31, 2018		345,666			119,498			115,769			580,933
Extensions and Discoveries		52,297			21,039			9,017			82,353
Purchases		—			—			—			—
Revisions		(16,446	)		4,752			5,132			(6,562	)
Production		(38,344	)		(30,885	)		(18,157	)		(87,386	)
Sales		(18,312	)		—			—			(18,312	)
Balance - Dec 31, 2019		324,861			114,404			111,761			551,026
NGL’s (Mbbl)
	U.S.			Egypt1			North Sea			Total1
Balance - Dec 31, 2018		231,370			562			2,569			234,501
Extensions and Discoveries		41,343			27			697			42,067
Purchases		—			—			—			—
Revisions		(32,569	)		508			345			(31,716	)
Production		(24,959	)		(340	)		(634	)		(25,933	)
Sales		(32,822	)		—			—			(32,822	)
Balance - Dec 31, 2019		182,363			757			2,977			186,097
GAS (MMcf)
	U.S.			Egypt1			North Sea			Total1
Balance - Dec 31, 2018		1,893,493			509,138			111,151			2,513,782
Extensions and Discoveries		249,205			34,758			27,711			311,674
Purchases		—			—			—			—
Revisions		(509,753	)		18,570			4,015			(487,168	)
Production		(233,447	)		(104,380	)		(19,944	)		(357,771	)
Sales		(338,520	)		—			—			(338,520	)
Balance - Dec 31, 2019		1,060,978			458,086			122,933			1,641,997
TOTAL BOE (Mboe)
	U.S.			Egypt1			North Sea			Total1
Balance - Dec 31, 2018		892,618			204,916			136,863			1,234,397
Extensions and Discoveries		135,174			26,859			14,333			176,366
Purchases		—			—			—			—
Revisions		(133,974	)		8,355			6,146			(119,473	)
Production		(102,211	)		(48,622	)		(22,115	)		(172,948	)
Sales		(107,554	)		—			—			(107,554	)
Balance - Dec 31, 2019		684,053			191,508			135,227			1,010,788
Proved developed reserves:
Oil (Mbbls)		278,145			103,573			101,712			483,430
NGL’s (Mbbls)		158,794			667			2,317			161,778
Gas (Mboe)		157,656			72,230			17,722			247,608
Balance - Dec 31, 2019 (Mboe)		594,595			176,470			121,751			892,816

⁽¹⁾  Includes reserves attributable to noncontrolling interest in Egypt.    

Page 8

XML

Document and Entity Information	Feb. 26, 2020
Document And Entity Information [Line Items]
Amendment Flag	false
Entity Central Index Key	0000006769
Document Type	8-K
Document Period End Date	Feb. 26, 2020
Entity Registrant Name	APACHE CORPORATION
Entity Incorporation, State or Country Code	DE
Entity File Number	1-4300
Entity Tax Identification Number	41-0747868
Entity Address, Address Line One	2000 Post Oak Boulevard
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77056-4400
City Area Code	713
Local Phone Number	296-6000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
7.75% Notes Due 2029
Document And Entity Information [Line Items]
Title of 12(b) Security	7.75% Notes Due 2029
Trading Symbol	APA/29
Security Exchange Name	NYSE
New York Stock Exchange | Common Stock
Document And Entity Information [Line Items]
Title of 12(b) Security	Common Stock, $0.625 par value
Trading Symbol	APA
Security Exchange Name	NYSE
Chicago Stock Exchange | Common Stock
Document And Entity Information [Line Items]
Title of 12(b) Security	Common Stock, $0.625 par value
Trading Symbol	APA
Security Exchange Name	CHX
NASDAQ Global Select Market | Common Stock
Document And Entity Information [Line Items]
Title of 12(b) Security	Common Stock, $0.625 par value
Trading Symbol	APA
Security Exchange Name	NASDAQ