SUPPLEMENTAL OIL AND GAS DISCLOSURES (Unaudited)

12 Months Ended

Dec. 31, 2017

Supplemental Oil and Gas Disclosures (Unaudited)

SUPPLEMENTAL OIL AND GAS DISCLOSURES (Unaudited)

Oil and Gas Operations

The following table sets forth revenue and direct cost information relating to the Company’s oil and gas exploration and production activities. Apache has no long-term agreements to purchase oil or gas production from foreign governments or authorities. In the second quarter of 2015, Apache completed the sale of its Australian LNG business and oil and gas assets, and as such the results of Australia oil and gas assets have been classified as discontinued operations.



	United States			Canada⁽³⁾			Egypt⁽⁴⁾		North Sea			Other International			Total⁽⁴⁾⁽⁵⁾
	(In millions, except per boe)
2017
Oil and gas production revenues	$	2,271		$	231		$	2,307	$	1,078		$	—		$	5,887
Operating cost:
Depreciation, depletion, and amortization⁽¹⁾	924			72			707		433			—			2,136
Asset retirement obligation accretion	31			27			—		72			—			130
Lease operating expenses	600			103			362		335			—			1,400
Gathering and transportation	71			34			44		30			—			179
Exploration expenses	363			11			62		86			27			549
Production taxes⁽²⁾	153			11			—		(14		)	—			150
Income tax	45			(7		)	509		54			—			601
	2,187			251			1,684		996			27			5,145
Results of operation	$	84		$	(20	)	$	623	$	82		$	(27	)	$	742
2016
Oil and gas production revenues	$	1,997		$	343		$	2,057	$	970		$	—		$	5,367
Operating cost:
Depreciation, depletion, and amortization⁽¹⁾	1,055			174			733		498			—			2,460
Asset retirement obligation accretion	34			47			—		75			—			156
Lease operating expenses	553			181			446		314			—			1,494
Gathering and transportation	80			68			44		8			—			200
Exploration expenses	285			88			48		37			15			473
Impairments related to oil and gas properties	61			366			—		—			—			427
Production taxes⁽²⁾	135			18			—		(33		)	—			120
Income tax	(72		)	(162		)	354		28			—			148
	2,131			780			1,625		927			15			5,478
Results of operation	$	(134	)	$	(437	)	$	432	$	43		$	(15	)	$	(111	)
2015
Oil and gas production revenues	$	2,637		$	498		$	2,095	$	1,280		$	—		$	6,510
Operating cost:
Depreciation, depletion, and amortization⁽¹⁾	1,455			251			780		490			—			2,976
Asset retirement obligation accretion	28			43			—		74			—			145
Lease operating expenses	739			244			522		349			—			1,854
Gathering and transportation	68			89			45		9			—			211
Exploration expenses	2,145			231			154		237			4			2,771
Impairments related to oil and gas properties	6,154			1,031			193		11			—			7,389
Production taxes⁽²⁾	178			23			—		58			—			259
Income tax	(2,886		)	(369		)	180		26			—			(3,049		)
	7,881			1,543			1,874		1,254			4			12,556
Results of operation	$	(5,244	)	$	(1,045	)	$	221	$	26		$	(4	)	$	(6,046	)


(1)	This amount only reflects DD&A of capitalized costs of oil and gas properties and, therefore, does not agree with DD&A reflected on Note 14—Business Segment Information.


(2)	Only reflects amounts directly related to oil and gas producing properties and, therefore, does not agree with taxes other than income reflected on Note 14—Business Segment Information.


(3)	During the third quarter of 2017, Apache completed the sale of its Canadian operations. For more information regarding this divestiture, please refer to Note 2—Acquisitions and Divestitures


(4)	Includes noncontrolling interest in Egypt.


(5)	Prior year amounts have been recast to exclude discontinued operations.

Costs Incurred in Oil and Gas Property Acquisitions, Exploration, and Development Activities



	United States			Canada			Egypt⁽²⁾		Australia		North Sea			Other International		Total⁽²⁾
	(In millions)
2017
Acquisitions:
Proved	$	3		$	—		$	4	$	—	$	—		$	—	$	7
Unproved	136			5			40		—		—			—		181
Exploration	602			11			122		—		131			25		891
Development	1,118			52			387		—		250			—		1,807
Costs incurred⁽¹⁾	$	1,859		$	68		$	553	$	—	$	381		$	25	$	2,886
⁽¹⁾ Includes capitalized interest and asset retirement costs as follows:
Capitalized interest	$	23		$	2		$	—	$	—	$	17		$	2	$	44
Asset retirement costs	15			—			—		—		55			—		70
2016
Acquisitions:
Proved	$	—		$	1		$	6	$	—	$	38		$	—	$	45
Unproved	110			7			49		—		4			—		170
Exploration	278			23			67		—		84			18		470
Development	420			27			353		—		150			—		950
Costs incurred⁽¹⁾	$	808		$	58		$	475	$	—	$	276		$	18	$	1,635
⁽¹⁾Includes capitalized interest and asset retirement costs as follows:
Capitalized interest	$	21		$	6		$	—	$	—	$	21		$	—	$	48
Asset retirement costs	(51		)	(13		)	—		—		(128		)	—		(192		)
2015
Acquisitions:
Proved	$	1		$	8		$	29	$	—	$	—		$	—	$	38
Unproved	313			23			—		—		—			—		336
Exploration	194			51			125		32		246			29		677
Development	1,729			151			741		98		479			—		3,198
Costs incurred⁽¹⁾	$	2,237		$	233		$	895	$	130	$	725		$	29	$	4,249
⁽¹⁾ Includes capitalized interest and asset retirement costs as follows:
Capitalized interest	$	—		$	—		$	8	$	6	$	7		$	—	$	21
Asset retirement costs	123			8			—		—		(66		)	—		65
⁽²⁾ Includes a noncontrolling interest in Egypt.

Capitalized Costs

The following table sets forth the capitalized costs and associated accumulated depreciation, depletion, and amortization relating to the Company’s oil and gas acquisition, exploration, and development activities:



	United States			Canada			Egypt⁽¹⁾			North Sea			Other International		Total⁽¹⁾
	(In millions)
2017
Proved properties	$	20,408		$	—		$	10,590		$	8,199		$	—	$	39,197
Unproved properties	1,312			—			137			297			37		1,783
	21,720			—			10,727			8,496			37		40,980
Accumulated DD&A	(10,766		)	—			(7,985		)	(5,960		)	—		(24,711		)
	$	10,954		$	—		$	2,742		$	2,536		$	37	$	16,269
2016
Proved properties	$	19,170		$	5,434		$	10,169		$	7,920		$	—	$	42,693
Unproved properties	1,465			109			76			280			39		1,969
	20,635			5,543			10,245			8,200			39		44,662
Accumulated DD&A	(10,034		)	(4,120		)	(7,287		)	(5,531		)	—		(26,972		)
	$	10,601		$	1,423		$	2,958		$	2,669		$	39	$	17,690
⁽¹⁾ Includes a noncontrolling interest in Egypt.

Oil and Gas Reserve Information

Proved oil and gas reserves are the estimated quantities of natural gas, crude oil, condensate, and natural gas liquids (NGLs) that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing conditions, operating conditions, and government regulations. Estimated proved developed oil and gas reserves can be expected to be recovered through existing wells with existing equipment and operating methods. The Company reports all estimated proved reserves held under production-sharing arrangements utilizing the “economic interest” method, which excludes the host country’s share of reserves.

Estimated reserves that can be produced economically through application of improved recovery techniques are included in the “proved” classification when successful testing by a pilot project or the operation of an active, improved recovery program using reliable technology establishes the reasonable certainty for the engineering analysis on which the project or program is based. Economically producible means a resource which generates revenue that exceeds, or is reasonably expected to exceed, the costs of the operation. Reasonable certainty means a high degree of confidence that the quantities will be recovered. Reliable technology is a grouping of one or more technologies (including computational methods) that has been field-tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation. In estimating its proved reserves, Apache uses several different traditional methods that can be classified in three general categories: 1) performance-based methods; 2) volumetric-based methods; and 3) analogy with similar properties. Apache will, at times, utilize additional technical analysis such as computer reservoir models, petrophysical techniques, and proprietary 3-D seismic interpretation methods to provide additional support for more complex reservoirs. Information from this additional analysis is combined with traditional methods outlined above to enhance the certainty of Apache’s reserve estimates.

There are numerous uncertainties inherent in estimating quantities of proved reserves and projecting future rates of production and timing of development expenditures. The reserve data in the following tables only represent estimates and should not be construed as being exact.



	Crude Oil and Condensate
	(Thousands of barrels)
	United States		Canada		Egypt⁽¹⁾		Australia		North Sea		Total⁽¹⁾
Proved developed reserves:
December 31, 2014	444,440		75,876		128,712		29,996		105,746		784,770
December 31, 2015	348,797		67,847		144,164		—		104,255		665,063
December 31, 2016	300,900		51,508		138,771		—		91,138		582,317
December 31, 2017	304,279		—		124,568		—		92,598		521,445
Proved undeveloped reserves:
December 31, 2014	170,125		59,923		14,617		25,775		19,059		289,499
December 31, 2015	60,505		38,326		17,856		—		11,309		127,996
December 31, 2016	21,088		7,906		20,187		—		10,784		59,965
December 31, 2017	31,904		—		16,198		—		14,013		62,115
Total proved reserves:
Balance December 31, 2014	614,565		135,799		143,329		55,771		124,805		1,074,269
Extensions, discoveries and other additions	13,903		4,550		24,524		—		16,579		59,556
Purchases of minerals in-place	—		1,763		—		—		—		1,763
Revisions of previous estimates	(173,907	)	(27,966	)	27,330		11,189		(2,255	)	(165,609	)
Production	(45,138	)	(5,755	)	(33,163	)	(2,778	)	(21,657	)	(108,491	)
Sales of minerals in-place	(121	)	(2,218	)	—		(64,182	)	(1,908	)	(68,429	)
Balance December 31, 2015	409,302		106,173		162,020		—		115,564		793,059
Extensions, discoveries and other additions	9,614		3,372		17,599		—		9,766		40,351
Purchases of minerals in-place	21		—		—		—		438		459
Revisions of previous estimates	(58,882	)	(43,282	)	17,301		—		(3,851	)	(88,714	)
Production	(38,000	)	(4,787	)	(37,962	)	—		(19,995	)	(100,744	)
Sales of minerals in-place	(67	)	(2,062	)	—		—		—		(2,129	)
Balance December 31, 2016	321,988		59,414		158,958		—		101,922		642,282
Extensions, discoveries and other additions	48,391		14,025		27,140		—		16,023		105,579
Purchases of minerals in-place	46		375		—		—		—		421
Revisions of previous estimates	825		1,829		(9,839	)	—		6,510		(675	)
Production	(33,394	)	(2,425	)	(35,493	)	—		(17,844	)	(89,156	)
Sales of minerals in-place	(1,673	)	(73,218	)	—		—		—		(74,891	)
Balance December 31, 2017	336,183		—		140,766		—		106,611		583,560


(1)	2017, 2016, 2015, and 2014 includes proved reserves of 47 MMbbls, 53 MMbbls, 54 MMbbls, and 48 MMbbls, respectively, attributable to a noncontrolling interest in Egypt.



	Natural Gas Liquids
	(Thousands of barrels)
	United States		Canada		Egypt⁽¹⁾		North Sea		Total⁽¹⁾
Proved developed reserves:
December 31, 2014	183,565		17,947		1,346		1,770		204,628
December 31, 2015	150,265		15,246		1,491		1,784		168,786
December 31, 2016	155,124		13,866		1,266		1,627		171,883
December 31, 2017	171,005		—		685		2,025		173,715
Proved undeveloped reserves:
December 31, 2014	69,828		7,168		212		371		77,579
December 31, 2015	24,939		4,839		78		295		30,151
December 31, 2016	17,311		2,473		131		646		20,561
December 31, 2017	29,559		—		39		353		29,951
Total proved reserves:
Balance December 31, 2014	253,393		25,115		1,558		2,141		282,207
Extensions, discoveries and other additions	5,768		1,473		144		689		8,074
Purchases of minerals in-place	—		976		—		—		976
Revisions of previous estimates	(64,226	)	(4,886	)	255		(321	)	(69,178	)
Production	(19,684	)	(2,236	)	(388	)	(413	)	(22,721	)
Sales of minerals in-place	(47	)	(357	)	—		(17	)	(421	)
Balance December 31, 2015	175,204		20,085		1,569		2,079		198,937
Extensions, discoveries and other additions	10,238		755		208		671		11,872
Purchases of minerals in-place	2		—		—		5		7
Revisions of previous estimates	6,824		(1,355	)	17		141		5,627
Production	(19,824	)	(2,098	)	(397	)	(623	)	(22,942	)
Sales of minerals in-place	(9	)	(1,048	)	—		—		(1,057	)
Balance December 31, 2016	172,435		16,339		1,397		2,273		192,444
Extensions, discoveries and other additions	33,806		1,794		50		845		36,495
Purchases of minerals in-place	206		199		—		—		405
Revisions of previous estimates	12,982		(1,060	)	(425	)	(321	)	11,176
Production	(17,766	)	(1,032	)	(298	)	(419	)	(19,515	)
Sales of minerals in-place	(1,099	)	(16,240	)	—		—		(17,339	)
Balance December 31, 2017	200,564		—		724		2,378		203,666

(1) 2017, 2016, 2015, and 2014 includes proved reserves of 241 Mbbls, 466 Mbbls, 523 Mbbls, and 519 Mbbls, respectively, attributable to a noncontrolling interest in Egypt.



	Natural Gas
	(Millions of cubic feet)
	United States		Canada		Egypt⁽¹⁾		Australia		North Sea		Total⁽¹⁾
Proved developed reserves:
December 31, 2014	1,616,504		990,145		637,187		640,265		87,259		3,971,360
December 31, 2015	1,364,174		759,321		776,263		—		85,532		2,985,290
December 31, 2016	1,200,379		553,724		675,559		—		86,948		2,516,610
December 31, 2017	1,347,009		—		540,667		—		83,342		1,971,018
Proved undeveloped reserves:
December 31, 2014	580,299		527,623		171,696		964,554		23,228		2,267,400
December 31, 2015	208,594		162,809		53,969		—		19,760		445,132
December 31, 2016	231,304		45,312		42,109		—		23,813		342,538
December 31, 2017	297,226		—		47,255		—		11,063		355,544
Total proved reserves:
Balance December 31, 2014	2,196,803		1,517,768		808,883		1,604,819		110,487		6,238,760
Extensions, discoveries and other additions	40,901		121,216		94,777		—		41,755		298,649
Purchases of minerals in-place	—		24,727		—		—		—		24,727
Revisions of previous estimates	(503,939	)	(325,375	)	61,442		8,162		(22,373	)	(782,083	)
Production	(160,614	)	(100,289	)	(134,870	)	(34,352	)	(23,647	)	(453,772	)
Sales of minerals in-place	(383	)	(315,917	)	—		(1,578,629	)	(930	)	(1,895,859	)
Balance December 31, 2015	1,572,768		922,130		830,232		—		105,292		3,430,422
Extensions, discoveries and other additions	219,633		30,234		35,202		—		20,814		305,883
Purchases of minerals in-place	7		—		—		—		6,677		6,684
Revisions of previous estimates	(215,378	)	(242,080	)	(4,305	)	—		4,239		(457,524	)
Production	(145,019	)	(88,792	)	(143,461	)	—		(26,261	)	(403,533	)
Sales of minerals in-place	(328	)	(22,456	)	—		—		—		(22,784	)
Balance December 31, 2016	1,431,683		599,036		717,668		—		110,761		2,859,148
Extensions, discoveries and other additions	378,747		49,780		81,245		—		17,646		527,418
Purchases of minerals in-place	4,434		4,319		—		—		—		8,753
Revisions of previous estimates	(5,431	)	92,207		(70,030	)	—		(17,387	)	(641	)
Production	(143,943	)	(47,990	)	(140,961	)	—		(16,615	)	(349,509	)
Sales of minerals in-place	(21,255	)	(697,352	)	—		—		—		(718,607	)
Balance December 31, 2017	1,644,235		—		587,922		—		94,405		2,326,562

(1) 2017, 2016, 2015, and 2014 include proved reserves of 196 Bcf, 239 Bcf, 277 Bcf, and 270 Bcf, respectively, attributable to a noncontrolling interest in Egypt.



	Total Equivalent Reserves
	(Thousands barrels of oil equivalent)
	United States		Canada		Egypt⁽¹⁾		Australia		North Sea		Total⁽¹⁾
Proved developed reserves:
December 31, 2014	897,422		258,848		236,256		136,707		122,058		1,651,291
December 31, 2015	726,424		209,647		275,033		—		120,293		1,331,397
December 31, 2016	656,087		157,662		252,630		—		107,256		1,173,635
December 31, 2017	699,786		—		215,364		—		108,513		1,023,663
Proved undeveloped reserves:
December 31, 2014	336,670		155,028		43,446		186,534		23,301		744,979
December 31, 2015	120,210		70,300		26,929		—		14,897		232,336
December 31, 2016	76,950		17,931		27,336		—		15,399		137,616
December 31, 2017	111,001		—		24,112		—		16,210		151,323
Total proved reserves:
Balance December 31, 2014	1,234,092		413,876		279,702		323,241		145,359		2,396,270
Extensions, discoveries and other additions	26,488		26,226		40,464		—		24,227		117,405
Purchases of minerals in-place	—		6,860		—		—		—		6,860
Revisions of previous estimates	(322,123	)	(87,081	)	37,825		12,549		(6,305	)	(365,135	)
Production	(91,591	)	(24,706	)	(56,029	)	(8,503	)	(26,011	)	(206,840	)
Sales of minerals in-place	(232	)	(55,228	)	—		(327,287	)	(2,080	)	(384,827	)
Balance December 31, 2015	846,634		279,947		301,962		—		135,190		1,563,733
Extensions, discoveries and other additions	56,458		9,166		23,674		—		13,906		103,204
Purchases of minerals in-place	24		—		—		—		1,556		1,580
Revisions of previous estimates	(87,954	)	(84,984	)	16,599		—		(3,002	)	(159,341	)
Production	(81,994	)	(21,684	)	(62,269	)	—		(24,995	)	(190,942	)
Sales of minerals in-place	(131	)	(6,852	)	—		—		—		(6,983	)
Balance December 31, 2016	733,037		175,593		279,966		—		122,655		1,311,251
Extensions, discoveries and other additions	145,322		24,115		40,731		—		19,809		229,977
Purchases of minerals in-place	991		1,294		—		—		—		2,285
Revisions of previous estimates	12,903		16,136		(21,936	)	—		3,291		10,394
Production	(75,151	)	(11,455	)	(59,285	)	—		(21,032	)	(166,923	)
Sales of minerals in-place	(6,315	)	(205,683	)	—		—		—		(211,998	)
Balance December 31, 2017	810,787		—		239,476		—		124,723		1,174,986

(1) 2017, 2016, 2015, and 2014 include total proved reserves of 80 MMboe, 93 MMboe, 101MMboe, and 93 MMboe, respectively, attributable to a noncontrolling interest in Egypt.

During 2017, Apache sold a combined 212 MMboe primarily through divestiture transactions in Canada. The Company added 2 MMboe of estimated proved reserves through purchases of minerals in-place and 230 MMboe from extensions, discoveries, and other additions. The Company recorded 169 MMboe of exploration and development adds in North America, primarily associated with Woodford, Bone Springs, Yeso, Barnett, and Wolfcamp drilling programs in the Permian Basin (128 MMboe), Montney and Duverney drilling in Canada (24 MMboe), and Woodford and Austin Chalk drilling activity in the MidContinent region (17 MMboe).

The international regions contributed 61 MMboe of exploration and development adds during 2017 with Egypt contributing 41 MMboe from onshore exploration and appraisal activity in the Khalda Extension 2, Khalda, Khalda Extension 3, Matruh, and West Kalabsha concessions. The North Sea offshore region contributed 20 MMboe from drilling success in the Beryl and Forties fields.

During 2017, Apache also had combined upward revisions of previously estimated reserves of 10 MMboe. Changes in product prices accounted for 32 MMboe, offset by engineering and performance downward revisions totaling 22 MMboe.

Approximately 9 percent of Apache’s year-end 2017 estimated proved developed reserves are classified as proved not producing. These reserves relate to zones that are either behind pipe, or that have been completed but not yet produced, or zones that have been produced in the past, but are not now producing because of mechanical reasons. These reserves are considered to be a lower tier of reserves than producing reserves because they are frequently based on volumetric calculations rather than performance data. Future production associated with behind pipe reserves is scheduled to follow depletion of the currently producing zones in the same wellbores. Additional capital may have to be spent to access these reserves. The capital and economic impact of production timing are reflected in this Note 15, under “Future Net Cash Flows.”

Future Net Cash Flows

Future cash inflows as of December 31, 2017 and 2016 were calculated using an unweighted arithmetic average of oil and gas prices in effect on the first day of each month in the respective year, except where prices are defined by contractual arrangements. Operating costs, production and ad valorem taxes and future development costs are based on current costs with no escalation.

The following table sets forth unaudited information concerning future net cash flows for proved oil and gas reserves, net of income tax expense. Income tax expense has been computed using expected future tax rates and giving effect to tax deductions and credits available, under current laws, and which relate to oil and gas producing activities. This information does not purport to present the fair market value of the Company’s oil and gas assets, but does present a standardized disclosure concerning possible future net cash flows that would result under the assumptions used.



	United States			Canada			Egypt⁽²⁾			North Sea			Total⁽²⁾
	(In millions)
2017
Cash inflows	$	24,271		$	—		$	9,254		$	6,230		$	39,755
Production costs	(10,618		)	—			(1,749		)	(2,459		)	(14,826		)
Development costs	(1,659		)	—			(1,052		)	(2,795		)	(5,506		)
Income tax expense	(42		)	—			(2,078		)	(353		)	(2,473		)
Net cash flows	11,952			—			4,375			623			16,950
10 percent discount rate	(6,080		)	—			(1,034		)	247			(6,867		)
Discounted future net cash flows⁽¹⁾	$	5,872		$	—		$	3,341		$	870		$	10,083
2016
Cash inflows	$	20,067		$	3,625		$	8,778		$	4,734		$	37,204
Production costs	(8,858		)	(2,582		)	(1,967		)	(2,255		)	(15,662		)
Development costs	(1,653		)	(1,565		)	(1,111		)	(2,410		)	(6,739		)
Income tax expense	(32		)	—			(1,775		)	(8		)	(1,815		)
Net cash flows	9,524			(522		)	3,925			61			12,988
10 percent discount rate	(5,319		)	549			(956		)	798			(4,928		)
Discounted future net cash flows⁽¹⁾	$	4,205		$	27		$	2,969		$	859		$	8,060


(1)	Estimated future net cash flows before income tax expense, discounted at 10 percent per annum, totaled approximately $12.2 billion and $9.5 billion as of December 31, 2017 and 2016, respectively.


(2)	Includes discounted future net cash flows of approximately $1.1 billion and $1.0 billion in 2017 and 2016, respectively, attributable to a noncontrolling interest in Egypt.

The following table sets forth the principal sources of change in the discounted future net cash flows:



	For the Year Ended December 31,
	2017			2016			2015
	(In millions)
Sales, net of production costs	$	(4,158	)	$	(3,479	)	$	(4,056	)
Net change in prices and production costs	3,651			(3,835		)	(21,710		)
Discoveries and improved recovery, net of related costs	2,273			1,153			1,953
Change in future development costs	(279		)	309			705
Previously estimated development costs incurred during the period	719			986			1,991
Revision of quantities	(344		)	(574		)	(2,292		)
Purchases of minerals in-place	9			8			22
Accretion of discount	952			1,313			3,642
Change in income taxes	(617		)	1,070			7,264
Sales of minerals in-place	(809		)	(52		)	(5,240		)
Change in production rates and other	626			567			(3,343		)
	$	2,023		$	(2,534	)	$	(21,064	)