BUSINESS SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2019

As of June 30, 2019, Apache is engaged in exploration and production (Upstream) activities across three operating segments: Egypt, the North Sea, and the U.S. Apache also has exploration interests in Suriname that may, over time, result in a reportable discovery and development opportunity. Apache’s Upstream business explores for, develops, and produces natural gas, crude oil and natural gas liquids. During the fourth quarter of 2018, Apache established a new reporting segment for its U.S. midstream business separate from its upstream oil and gas development activities. The midstream business is operated by Altus, which owns, develops, and operates a midstream energy asset network in the Permian Basin of West Texas, anchored by midstream service contracts to Apache’s production from its Alpine High resource play. Altus primarily generates revenue by providing fee-based natural gas gathering, compression, processing, and transportation services. Financial information for each segment is presented below:



	Egypt⁽¹⁾		North Sea		U.S.			Altus			Intersegment Eliminations & Other			Total⁽²⁾
	Upstream							Midstream
	(In millions)
For the Quarter Ended June 30, 2019
Oil revenues	$	523	$	337	$	537		$	—		$	—		$	1,397
Natural gas revenues	70		18		30			—			—			118
Natural gas liquids revenues	3		5		75			—			—			83
Oil and gas production revenues	596		360		642			—			—			1,598
Midstream service affiliate revenues	—		—		—			24			(24		)	—

Operating Expenses:
Lease operating expenses	132		92		166			—			(1		)	389
Gathering, processing, and transmission	10		11		64			14			(23		)	76
Taxes other than income	—		—		42			4			—			46
Exploration	30		1		59			—			5			95
Depreciation, depletion, and amortization	174		99		320			9			—			602
Asset retirement obligation accretion	—		18		8			—			—			26
Impairments	—		—		240			—			—			240
	346		221		899			27			(19		)	1,474
Operating Income (Loss)⁽³⁾	$	250	$	139	$	(257	)	$	(3	)	$	(5	)	124
Other Income (Expense):
Gain on divestitures														17
Derivative instrument losses, net														(8		)
Other⁽⁴⁾														(4		)
General and administrative														(102		)
Transaction, reorganization, and separation														(6		)
Financing costs, net														(173		)
Loss Before Income Taxes														$	(152	)



	Egypt⁽¹⁾		North Sea		U.S.			Altus			Intersegment Eliminations & Other			Total⁽²⁾
	Upstream							Midstream
	(In millions)
For the Six Months Ended June 30, 2019
Oil revenues	$	1,037	$	637	$	1,033		$	—		$	—		$	2,707
Natural gas revenues	151		50		153			—			—			354
Natural gas liquids revenues	7		11		173			—			—			191
Oil and gas production revenues	1,195		698		1,359			—			—			3,252
Midstream service affiliate revenues	—		—		—			58			(58		)	—

Operating Expenses:
Lease operating expenses	250		164		342			—			(2		)	754
Gathering, processing, and transmission	22		23		145			30			(56		)	164
Taxes other than income	—		—		91			6			—			97
Exploration	62		2		92			—			8			164
Depreciation, depletion, and amortization	361		198		673			16			—			1,248
Asset retirement obligation accretion	—		37		15			1			—			53
Impairments	—		—		240			—			—			240
	695		424		1,598			53			(50		)	2,720
Operating Income (Loss)⁽³⁾	$	500	$	274	$	(239	)	$	5		$	(8	)	532
Other Income (Expense):
Gain on divestitures														20
Derivative instrument losses, net														(38		)
Other⁽⁴⁾														4
General and administrative														(225		)
Transaction, reorganization, and separation														(10		)
Financing costs, net														(270		)
Income Before Income Taxes														$	13

Total Assets⁽⁵⁾	$	4,035	$	2,568	$	12,710		$	2,434		$	59		$	21,806

For the Quarter Ended June 30, 2018
Oil revenues	$	649	$	320	$	607		$	—		$	—		$	1,576
Natural gas revenues	89		27		96			—			—			212
Natural gas liquids revenues	4		5		139			—			—			148
Oil and gas production revenues	742		352		842			—			—			1,936
Midstream service affiliate revenues	—		—		—			12			(12		)	—

Operating Expenses:
Lease operating expenses	106		78		172			—			—			356
Gathering, processing, and transmission	11		10		62			11			(12		)	82
Taxes other than income	—		—		47			2			—			49
Exploration	32		3		40			—			1			76
Depreciation, depletion, and amortization	192		96		315			5			—			608
Asset retirement obligation accretion	—		19		8			—			—			27
Impairments	—		—		—			—			—			—
	341		206		644			18			(11		)	1,198
Operating Income (Loss)⁽³⁾	$	401	$	146	$	198		$	(6	)	$	(1	)	738
Other Income (Expense):
Gain on divestitures														2
Derivative instrument losses, net														(25		)
Other⁽⁴⁾														16
General and administrative														(117		)
Transaction, reorganization, and separation														(12		)
Financing costs, net														(94		)
Income Before Income Taxes														$	508



	Egypt⁽¹⁾		North Sea		U.S.		Altus			Intersegment Eliminations & Other			Total⁽²⁾
	Upstream						Midstream
	(In millions)
For the Six Months Ended June 30, 2018
Oil revenues	$	1,218	$	591	$	1,160	$	—		$	—		$	2,969
Natural gas revenues	177		51		206		—			—			434
Natural gas liquids revenues	7		9		250		—			—			266
Oil and gas production revenues	1,402		651		1,616		—			—			3,669
Midstream service affiliate revenues	—		—		—		24			(24		)	—

Operating Expenses:
Lease operating expenses	204		172		329		—			—			705
Gathering, processing, and transmission	23		20		127		22			(24		)	168
Taxes other than income	—		—		99		5			—			104
Exploration	60		17		73		—			2			152
Depreciation, depletion, and amortization	378		191		584		8			—			1,161
Asset retirement obligation accretion	—		37		16		1			—			54
Impairments	—		—		—		—			—			—
	665		437		1,228		36			(22		)	2,344
Operating Income (Loss)⁽³⁾	$	737	$	214	$	388	$	(12	)	$	(2	)	1,325
Other Income (Expense):
Gain on divestitures													9
Derivative instrument losses, net													(23		)
Other⁽⁴⁾													21
General and administrative													(231		)
Transaction, reorganization, and separation													(12		)
Financing costs, net													(193		)
Income Before Income Taxes													$	896

Total Assets⁽⁵⁾	$	4,471	$	3,148	$	13,311	$	939		$	41		$	21,910


(1)	Includes revenue from non-customers for the second quarters and six-month periods of 2019 and 2018 of:



	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2019		2018		2019		2018
	(In millions)
Oil	$	111	$	165	$	218	$	304
Natural gas	9		15		21		30
Natural gas liquids	—		1		1		2


(2)	Includes a noncontrolling interest in Egypt for the 2019 and 2018 periods, and Altus for the 2019 period.

(3)

The operating income of U.S. and Egypt includes leasehold and other asset impairments totaling $277 million and $2 million, respectively, for the second quarter of 2019. The operating income of U.S. and Egypt includes leasehold and other asset impairments totaling $298 million and $4 million, respectively, for the first six months of 2019. The operating income of U.S. includes leasehold impairments totaling $21 million and $37 million for the second quarter and first six months of 2018, respectively.


(4)	Included in Other are sales proceeds related to U.S. third-party purchased oil and gas which are determined to be revenue from customers. Proceeds for these volumes totaled $18 million and $98 million for the second quarters of 2019 and 2018, respectively, and $42 million and $202 million for the first six months of 2019 and 2018, respectively.

(5)

Intercompany balances are excluded from total assets.