SUPPLEMENTAL OIL AND GAS DISCLOSURES (Unaudited)

12 Months Ended

Dec. 31, 2018

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.



	United States			Canada⁽³⁾			Egypt⁽⁴⁾		North Sea			Other International			Total⁽⁴⁾
	(In millions, except per boe)
2018
Oil and gas production revenues	$	3,279		$	—		$	2,748	$	1,321		$	—		$	7,348
Operating cost:
Depreciation, depletion, and amortization⁽¹⁾	1,206			—			688		371			—			2,265
Asset retirement obligation accretion	32			—			—		75			—			107
Lease operating expenses	670			—			428		341			—			1,439
Gathering, transmission, and processing	282			—			47		42			—			371
Exploration expenses	219			—			88		192			4			503
Impairments related to oil and gas properties	265			—			63		10			—			338
Production taxes⁽²⁾	203			—			—		—			—			203
Income tax	87			—			645		116			—			848
	2,964			—			1,959		1,147			4			6,074
Results of operation	$	315		$	—		$	789	$	174		$	(4	)	$	1,274
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	584			103			362		335			—			1,384
Gathering, transmission, and processing	86			34			44		30			—			194
Exploration expenses	363			11			62		86			27			549
Production taxes⁽²⁾	153			11			—		(14		)	—			150
Income tax	45			(7		)	509		54			—			601
	2,186			251			1,684		996			27			5,144
Results of operation	$	85		$	(20	)	$	623	$	82		$	(27	)	$	743
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, transmission, and processing	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	)


(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.

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



	United States			Canada			Egypt⁽²⁾		North Sea			Other International		Total⁽²⁾
	(In millions)
2018
Acquisitions:
Proved	$	—		$	—		$	6	$	—		$	—	$	6
Unproved	111			—			16		—			—		127
Exploration	640			—			175		113			12		940
Development	1,791			—			457		133			—		2,381
Costs incurred⁽¹⁾	$	2,542		$	—		$	654	$	246		$	12	$	3,454
⁽¹⁾ Includes capitalized interest and asset retirement costs as follows:
Capitalized interest	$	23		$	—		$	—	$	11		$	2	$	36
Asset retirement costs	93			—			—		(62		)	—		31
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		)
⁽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			Egypt⁽¹⁾			North Sea			Other International		Total⁽¹⁾
	(In millions)
2018
Proved properties	$	22,699		$	11,184		$	8,462		$	—	$	42,345
Unproved properties	1,275			110			5			45		1,435
	23,974			11,294			8,467			45		43,780
Accumulated DD&A	(12,217		)	(8,736		)	(6,332		)	—		(27,285		)
	$	11,757		$	2,558		$	2,135		$	45	$	16,495
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
⁽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⁾		North Sea		Total⁽¹⁾
Proved developed reserves:
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
December 31, 2018	300,484		—		110,014		104,491		514,989
Proved undeveloped reserves:
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
December 31, 2018	45,182		—		9,484		11,278		65,944
Total proved reserves:
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
Extensions, discoveries and other additions	61,976		—		22,473		15,682		100,131
Purchases of minerals in-place	140		—		—		—		140
Revisions of previous estimates	(14,334	)	—		(9,556	)	10,613		(13,277	)
Production	(38,252	)	—		(34,185	)	(17,137	)	(89,574	)
Sales of minerals in-place	(47	)	—		—		—		(47	)
Balance December 31, 2018	345,666		—		119,498		115,769		580,933


(1)	2018, 2017, 2016, and 2015 includes proved reserves of 40 MMbbls, 47 MMbbls, 53 MMbbls, and 54 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, 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
December 31, 2018	197,574		—		502		1,938		200,014
Proved undeveloped reserves:
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
December 31, 2018	33,796		—		60		631		34,487
Total proved reserves:
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
Extensions, discoveries and other additions	60,990		—		144		1,444		62,578
Purchases of minerals in-place	40		—		—		—		40
Revisions of previous estimates	(9,250	)	—		31		(819	)	(10,038	)
Production	(20,969	)	—		(337	)	(434	)	(21,740	)
Sales of minerals in-place	(5	)	—		—		—		(5	)
Balance December 31, 2018	231,370		—		562		2,569		234,501

(1) 2018, 2017, 2016, and 2015 includes proved reserves of 187 Mbbls, 241 Mbbls, 466 Mbbls, and 523 Mbbls, respectively, attributable to a noncontrolling interest in Egypt.



	Natural Gas
	(Millions of cubic feet)
	United States		Canada		Egypt⁽¹⁾		North Sea		Total⁽¹⁾
Proved developed reserves:
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
December 31, 2018	1,626,403		—		476,132		95,347		2,197,882
Proved undeveloped reserves:
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
December 31, 2018	267,090		—		33,006		15,804		315,900
Total proved reserves:
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
Extensions, discoveries and other additions	704,135		—		79,394		55,274		838,803
Purchases of minerals in-place	906		—		—		—		906
Revisions of previous estimates	(239,204	)	—		(38,892	)	(21,933	)	(300,029	)
Production	(216,538	)	—		(119,286	)	(16,595	)	(352,419	)
Sales of minerals in-place	(41	)	—		—		—		(41	)
Balance December 31, 2018	1,893,493		—		509,138		111,151		2,513,782

(1) 2018, 2017, 2016, and 2015 include proved reserves of 170 Bcf, 196 Bcf, 239 Bcf, and 277 Bcf, respectively, attributable to a noncontrolling interest in Egypt.



	Total Equivalent Reserves
	(Thousands barrels of oil equivalent)
	United States		Canada		Egypt⁽¹⁾		North Sea		Total⁽¹⁾
Proved developed reserves:
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
December 31, 2018	769,125		—		189,871		122,320		1,081,316
Proved undeveloped reserves:
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
December 31, 2018	123,493		—		15,045		14,543		153,081
Total proved reserves:
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
Extensions, discoveries and other additions	240,322		—		35,849		26,338		302,509
Purchases of minerals in-place	331		—		—		—		331
Revisions of previous estimates	(63,451	)	—		(16,007	)	6,139		(73,319	)
Production	(95,312	)	—		(54,402	)	(20,337	)	(170,051	)
Sales of minerals in-place	(59	)	—		—		—		(59	)
Balance December 31, 2018	892,618		—		204,916		136,863		1,234,397

(1) 2018, 2017, 2016, and 2015 include total proved reserves of 68 MMboe, 80 MMboe, 93MMboe, and 101 MMboe, respectively, attributable to a noncontrolling interest in Egypt.

During 2018, Apache added approximately 303 MMboe from extensions, discoveries, and other additions. The Company recorded 240 MMboe of exploration and development adds in the United States, primarily associated with Woodford, Bone Springs, Yeso, Barnett, and Wolfcamp drilling programs in the Permian Basin (217 MMboe), and Woodford and Austin Chalk drilling activity in the Midcontinent region (20 MMboe).

The international regions contributed 62 MMboe of exploration and development adds during 2018, with Egypt contributing 36 MMboe from onshore exploration and appraisal activity in the Khalda Extension 2, Khalda, Khalda Extension 3, Matruh, and West Kalabsha concessions. The North Sea contributed 26 MMboe from drilling success in the Beryl and Forties fields.

During 2018, Apache also had combined downward revisions of previously estimated reserves of 73 MMboe. Downward revisions related to changes in product prices accounted for 24 MMboe, interest revisions accounted for 5 MMboe, and engineering and performance downward revisions accounted for 44 MMboe.

Approximately 8 percent of Apache’s year-end 2018 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, 2018 and 2017 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			Egypt⁽²⁾			North Sea			Total⁽²⁾
	(In millions)
2018
Cash inflows	$	29,906		$	9,866		$	9,206		$	48,978
Production costs	(13,699		)	(1,799		)	(2,588		)	(18,086		)
Development costs	(2,150		)	(792		)	(2,714		)	(5,656		)
Income tax expense	(19		)	(2,455		)	(1,352		)	(3,826		)
Net cash flows	14,038			4,820			2,552			21,410
10 percent discount rate	(6,516		)	(1,066		)	(107		)	(7,689		)
Discounted future net cash flows⁽¹⁾	$	7,522		$	3,754		$	2,445		$	13,721
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


(1)	Estimated future net cash flows before income tax expense, discounted at 10 percent per annum, totaled approximately $16.9 billion and $12.2 billion as of December 31, 2018 and 2017, respectively.


(2)	Includes discounted future net cash flows of approximately $1.3 billion and $1.1 billion in 2018 and 2017, 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,
	2018			2017			2016
	(In millions)
Sales, net of production costs	$	(5,335	)	$	(4,158	)	$	(3,479	)
Net change in prices and production costs	3,902			3,651			(3,835		)
Discoveries and improved recovery, net of related costs	3,889			2,273			1,153
Change in future development costs	47			(279		)	309
Previously estimated development costs incurred during the period	910			719			986
Revision of quantities	(648		)	(344		)	(574		)
Purchases of minerals in-place	6			9			8
Accretion of discount	1,216			952			1,313
Change in income taxes	(1,125		)	(617		)	1,070
Sales of minerals in-place	(1		)	(809		)	(52		)
Change in production rates and other	777			626			567
	$	3,638		$	2,023		$	(2,534	)