10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 10-Q 

(Mark One)  

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 1-4300

APACHE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	41-0747868
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Post Oak Central, 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400

(Address of principal executive offices) (Zip Code)

(713) 296-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Note: The registrant is a voluntary filer of reports required to be filed by certain companies under Sections 13 or 15(d) of the Securities Exchange Act of 1934.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of registrant’s common stock outstanding as of July 31, 2023 (100% owned by APA Corporation) 1,000 

OMISSION OF CERTAIN INFORMATION

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Quarterly Report on Form 10-Q with the reduced disclosure format.

TABLE OF CONTENTS

Item		Page
	PART I - FINANCIAL INFORMATION
1.	FINANCIAL STATEMENTS	1
	STATEMENT OF CONSOLIDATED OPERATIONS	1
	STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)	2
	STATEMENT OF CONSOLIDATED CASH FLOWS	3
	CONSOLIDATED BALANCE SHEET	4
	STATEMENT OF CONSOLIDATED CHANGES IN EQUITY (DEFICIT) AND NONCONTROLLING INTERESTS	5
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	7
2.	MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS	27
3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36
4.	CONTROLS AND PROCEDURES	36
	PART II - OTHER INFORMATION
1.	LEGAL PROCEEDINGS	37
1A.	RISK FACTORS	37
6.	EXHIBITS	38

FORWARD-LOOKING STATEMENTS AND RISKS

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding the Company’s future financial position, business strategy, budgets, projected revenues, projected costs, and plans and objectives of management for future operations, are forward-looking statements. Such forward-looking statements are based on the Company’s examination of historical operating trends, the information that was used to prepare its estimate of proved reserves as of December 31, 2022, and other data in the Company’s possession or available from third parties. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “could,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “continue,” “seek,” “guidance,” “goal,” “might,” “outlook,” “possibly,” “potential,” “prospect,” “should,” “would,” or similar terminology, but the absence of these words does not mean that a statement is not forward looking. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable under the circumstances, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, its assumptions about:

•changes in local, regional, national, and international economic conditions, including as a result of any epidemics or pandemics, such as the coronavirus disease (COVID-19) pandemic and any related variants;

•the market prices of oil, natural gas, natural gas liquids (NGLs), and other products or services, including the prices received for natural gas purchased from third parties to sell and deliver to a U.S. LNG export facility;

•the Company’s commodity hedging arrangements;

•the supply and demand for oil, natural gas, NGLs, and other products or services;

•production and reserve levels;

•drilling risks;

•economic and competitive conditions, including market and macro-economic disruptions resulting from the Russian war in Ukraine and from actions taken by foreign oil and gas producing nations, including the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members that participate in OPEC initiatives (OPEC+);

•the availability of capital resources;

•capital expenditures and other contractual obligations;

•currency exchange rates;

•weather conditions;

•inflation rates;

•the impact of changes in tax legislation;

•the availability of goods and services;

•the impact of political pressure and the influence of environmental groups and other stakeholders on decisions and policies related to the industries in which the Company and its affiliates operate;

•legislative, regulatory, or policy changes, including initiatives addressing the impact of global climate change or further regulating hydraulic fracturing, methane emissions, flaring, or water disposal;

•the Company’s performance on environmental, social, and governance measures;

•terrorism or cyberattacks;

•the occurrence of property acquisitions or divestitures;

•the integration of acquisitions;

•the Company’s ability to access the capital markets;

•market-related risks, such as general credit, liquidity, and interest-rate risks;

•the benefits derived from the operating structure implemented pursuant to the Holding Company Reorganization (as defined in the Notes to the Company’s Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022);

•other factors disclosed under Items 1 and 2—Business and Properties—Estimated Proved Reserves and Future Net Cash Flows, Item 1A—Risk Factors, Item 7—Management’s Narrative Analysis of Results of Operations, Item 7A—Quantitative and Qualitative Disclosures About Market Risk and elsewhere in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022;

•other risks and uncertainties disclosed in APA Corporation’s second-quarter 2023 earnings release;

•other factors disclosed under Part II, Item 1A—Risk Factors of this Quarterly Report on Form 10-Q; and

•other factors disclosed in the other filings that the Company makes with the Securities and Exchange Commission.

Other factors or events that could cause the Company’s actual results to differ materially from the Company’s expectations may emerge from time to time, and it is not possible for the Company to predict all such factors or events. All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements. All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, the Company disclaims any obligation to update or revise these statements, whether based on changes in internal estimates or expectations, new information, future developments, or otherwise.

DEFINITIONS

All defined terms under Rule 4-10(a) of Regulation S-X shall have their statutorily prescribed meanings when used in this Quarterly Report on Form 10-Q. As used herein:

“3-D” means three-dimensional.

“4-D” means four-dimensional.

“b/d” means barrels of oil or NGLs per day.

“bbl” or “bbls” means barrel or barrels of oil or NGLs.

“bcf” means billion cubic feet of natural gas.

“bcf/d” means one bcf per day.

“boe” means barrel of oil equivalent, determined by using the ratio of one barrel of oil or NGLs to six Mcf of gas.

“boe/d” means boe per day.

“Btu” means a British thermal unit, a measure of heating value.

“Liquids” means oil and NGLs.

“LNG” means liquefied natural gas.

“Mb/d” means Mbbls per day.

“Mbbls” means thousand barrels of oil or NGLs.

“Mboe” means thousand boe.

“Mboe/d” means Mboe per day.

“Mcf” means thousand cubic feet of natural gas.

“Mcf/d” means Mcf per day.

“MMbbls” means million barrels of oil or NGLs.

“MMboe” means million boe.

“MMBtu” means million Btu.

“MMBtu/d” means MMBtu per day.

“MMcf” means million cubic feet of natural gas.

“MMcf/d” means MMcf per day.

“NGL” or “NGLs” means natural gas liquids, which are expressed in barrels.

“NYMEX” means New York Mercantile Exchange.

“oil” includes crude oil and condensate.

“PUD” means proved undeveloped.

“SEC” means the United States Securities and Exchange Commission.

“Tcf” means trillion cubic feet of natural gas.

“U.K.” means United Kingdom.

“U.S.” means United States.

With respect to information relating to the Company’s working interest in wells or acreage, “net” oil and gas wells or acreage is determined by multiplying gross wells or acreage by the Company’s working interest therein. Unless otherwise specified, all references to wells and acres are gross.

References to “Apache,” the “Company,” “we,” “us,” and “our” refer to Apache Corporation and its consolidated subsidiaries, unless otherwise specifically stated. References to “APA” refer to APA Corporation, the Company’s parent holding company, and its consolidated subsidiaries, including the Company, unless otherwise specifically stated.

PART I – FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED OPERATIONS

(Unaudited)

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
REVENUES AND OTHER:
Oil, natural gas, and natural gas liquids production revenues(1)	$	1,600	$	2,525	$	3,306	$	4,845
Purchased oil and gas sales(1)	144		522		383		871
Total revenues	1,744		3,047		3,689		5,716
Derivative instrument losses, net	—		(32)		—		(94)
Gain (loss) on divestitures, net	5		(27)		6		1,149
Other, net	109		64		77		109
	1,858		3,052		3,772		6,880
OPERATING EXPENSES:
Lease operating expenses	352		359		666		703
Gathering, processing, and transmission(1)	75		94		148		175
Purchased oil and gas costs(1)	131		528		347		879
Taxes other than income	47		78		97		148
Exploration	37		15		81		40
General and administrative	66		83		124		234
Transaction, reorganization, and separation	2		3		6		17
Depreciation, depletion, and amortization	339		278		647		569
Asset retirement obligation accretion	29		29		57		58
Impairments	46		—		46		—
Financing costs, net	42		62		91		202
	1,166		1,529		2,310		3,025
NET INCOME BEFORE INCOME TAXES	692		1,523		1,462		3,855
Current income tax provision	254		415		600		807
Deferred income tax provision (benefit)	(14)		(21)		105		(62)
NET INCOME INCLUDING NONCONTROLLING INTERESTS	452		1,129		757		3,110
Net income attributable to noncontrolling interest – Sinopec	81		141		165		260
Net income attributable to noncontrolling interest – Altus	—		—		—		14
Net income attributable to noncontrolling interest – APA Corporation	81		85		165		156
Net loss attributable to Altus Preferred Unit limited partners	—		—		—		(70)
NET INCOME ATTRIBUTABLE TO APACHE CORPORATION	$	290	$	903	$	427	$	2,750

(1)    For transactions associated with Kinetik, refer to Note 7—Equity Method Interests for further detail.

The accompanying notes to consolidated financial statements are an integral part of this statement.

1

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
NET INCOME INCLUDING NONCONTROLLING INTERESTS	$	452	$	1,129	$	757	$	3,110
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Pension and postretirement benefit plan	—		—		3		(1)
COMPREHENSIVE INCOME INCLUDING NONCONTROLLING INTERESTS	452		1,129		760		3,109
Comprehensive income attributable to noncontrolling interest – Sinopec	81		141		165		260
Comprehensive income attributable to noncontrolling interest – Altus	—		—		—		14
Comprehensive income attributable to noncontrolling interest – APA Corporation	81		85		165		156
Comprehensive loss attributable to Altus Preferred Unit limited partners	—		—		—		(70)
COMPREHENSIVE INCOME ATTRIBUTABLE TO APACHE CORPORATION	$	290	$	903	$	430	$	2,749

The accompanying notes to consolidated financial statements are an integral part of this statement.

2

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED CASH FLOWS

(Unaudited)

	For the Six Months Ended June 30,
	2023		2022
	(In millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income including noncontrolling interests	$	757	$	3,110
Adjustments to reconcile net income to net cash provided by operating activities:
Unrealized derivative instrument losses, net	—		83
Gain on divestitures, net	(6)		(1,149)
Exploratory dry hole expense and unproved leasehold impairments	61		15
Depreciation, depletion, and amortization	647		569
Asset retirement obligation accretion	57		58
Impairments	46		—
Provision for (benefit from) deferred income taxes	105		(62)
(Gain) loss on extinguishment of debt	(9)		67
Other, net	(113)		(119)
Changes in operating assets and liabilities:
Receivables	92		(501)
Inventories	(45)		(18)
Drilling advances and other current assets	(106)		28
Deferred charges and other long-term assets	159		(11)
Accounts payable	(84)		185
Accounts receivable from/payable to APA Corporation	126		(54)
Accrued expenses	(161)		201
Deferred credits and noncurrent liabilities	(221)		(2)
NET CASH PROVIDED BY OPERATING ACTIVITIES	1,305		2,400
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to upstream oil and gas property	(962)		(635)
Leasehold and property acquisitions	(10)		(26)
Notes receivable from APA Corporation	(144)		—
Proceeds from sale of oil and gas properties	28		751
Proceeds from sale of Kinetik shares	—		224
Deconsolidation of Altus cash and cash equivalents	—		(143)
Other, net	(13)		2
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(1,101)		173
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Apache credit facility, net	—		138
Payments on note payable to APA Corporation, net	—		(486)
Payments on fixed-rate debt	(65)		(1,370)
Distributions to noncontrolling interest – Sinopec	(100)		(159)
Distributions to APA Corporation	(100)		(733)
Other, net	4		(14)
NET CASH USED IN FINANCING ACTIVITIES	(261)		(2,624)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(57)		(51)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	185		279
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	128	$	228
SUPPLEMENTARY CASH FLOW DATA:
Interest paid, net of capitalized interest	$	151	$	176
Income taxes paid, net of refunds	476		637
Non-cash financing adjustment: APA’s assumption of Apache’s borrowings on its syndicated credit facility	—		680

The accompanying notes to consolidated financial statements are an integral part of this statement.

3

APACHE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)

	June 30, 2023		December 31, 2022
	(In millions, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	128	$	185
Receivables, net of allowance of $103 and $117	1,331		1,424
Other current assets (Note 6)	1,161		993
	2,620		2,602
PROPERTY AND EQUIPMENT:
Oil and gas properties	42,117		41,245
Gathering, processing, and transmission facilities	447		449
Other	598		613
Less: Accumulated depreciation, depletion, and amortization	(34,952)		(34,350)
	8,210		7,957
OTHER ASSETS:
Equity method interests (Note 7)	695		624
Decommissioning security for sold Gulf of Mexico properties (Note 12)	57		217
Deferred charges and other	517		571
Noncurrent receivable from APA Corporation (Note 2)	—		869
Notes receivable from APA Corporation (Note 2)	2,473		1,415
	$	14,572	$	14,255
LIABILITIES, NONCONTROLLING INTERESTS, AND EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	562	$	646
Accounts payable to APA Corporation (Note 2)	126		—
Current debt	2		2
Other current liabilities (Note 8)	1,935		2,049
	2,625		2,697
LONG-TERM DEBT (Note 10)	4,812		4,885
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Income taxes	431		314
Asset retirement obligation (Note 9)	1,978		1,936
Decommissioning contingency for sold Gulf of Mexico properties (Note 12)	472		738
Other	440		443
	3,321		3,431
EQUITY (DEFICIT):
Common stock, $0.625 par, 1,000 and 1,000 shares authorized, respectively, 1,000 and 1,000 shares issued, respectively	—		—
Paid-in capital	8,037		8,025
Accumulated deficit	(5,354)		(5,781)
Accumulated other comprehensive income	17		14
EQUITY ATTRIBUTABLE TO APACHE CORPORATION	2,700		2,258
Noncontrolling interest – Sinopec	987		922
Noncontrolling interest – APA Corporation	127		62
TOTAL EQUITY	3,814		3,242
	$	14,572	$	14,255

The accompanying notes to consolidated financial statements are an integral part of this statement.

4

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED CHANGES IN EQUITY (DEFICIT) AND NONCONTROLLING INTERESTS

(Unaudited)

	Redeemable Noncontrolling Interest - Altus Preferred Unit Limited Partners(1)		Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		EQUITY (DEFICIT) ATTRIBUTABLE TO APACHE CORPORATION		Noncontrolling Interests(1)		TOTAL EQUITY
	(In millions)
For the Quarter Ended June 30, 2022
Balance at March 31, 2022	$	—	$	8,381	$	(7,470)	$	21	$	932	$	900	$	1,832
Net income attributable to Apache Corporation	—		—		903		—		903		—		903
Net income attributable to noncontrolling interest – APA	—		—		—		—		—		85		85
Net income attributable to noncontrolling interest – Sinopec	—		—		—		—		—		141		141
Distributions to noncontrolling interest – Sinopec	—		—		—		—		—		(90)		(90)
Distributions to APA Corporation	—		(333)		—		—		(333)		(54)		(387)
Other	—		6		—		—		6		—		6
Balance at June 30, 2022	$	—	$	8,054	$	(6,567)	$	21	$	1,508	$	982	$	2,490
For the Quarter Ended June 30, 2023
Balance at March 31, 2023	$	—	$	8,031	$	(5,644)	$	17	$	2,404	$	1,118	$	3,522
Net income attributable to Apache Corporation	—		—		290		—		290		—		290
Net income attributable to noncontrolling interest – APA	—		—		—		—		—		81		81
Net income attributable to noncontrolling interest – Sinopec	—		—		—		—		—		81		81
Distributions to noncontrolling interest – Sinopec	—		—		—		—		—		(83)		(83)
Distributions to APA Corporation	—		—		—		—		—		(83)		(83)
Other	—		6		—		—		6		—		6
Balance at June 30, 2023	$	—	$	8,037	$	(5,354)	$	17	$	2,700	$	1,114	$	3,814

(1)    As a result of the BCP Business Combination (as defined herein), the Company deconsolidated Altus (as defined herein) on February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

The accompanying notes to consolidated financial statements are an integral part of this statement.

5

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED CHANGES IN EQUITY (DEFICIT) AND NONCONTROLLING INTERESTS - Continued

(Unaudited)

	Redeemable Noncontrolling Interest - Altus Preferred Unit Limited Partners(1)		Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		EQUITY (DEFICIT) ATTRIBUTABLE TO APACHE CORPORATION		Noncontrolling Interests(1)		TOTAL EQUITY
	(In millions)
For the Six Months Ended June 30, 2022
Balance at December 31, 2021	$	712	$	8,677	$	(9,317)	$	22	$	(618)	$	878	$	260
Net income attributable to APA Corporation	—				2,750		—		2,750		—		2,750
Net income attributable to noncontrolling interest – APA	—		—		—		—		—		156		156
Net income attributable to noncontrolling interest – Sinopec	—		—		—		—		—		260		260
Net income attributable to noncontrolling interest – Altus	—		—		—		—		—		14		14
Net loss attributable to Altus Preferred Unit limited partners	(70)		—		—		—		—		—		—
Distributions to noncontrolling interest – Sinopec	—		—		—		—		—		(159)		(159)
Distributions to APA Corporation	—		(638)		—		—		(638)		(95)		(733)
Deconsolidation of Altus	(642)		—		—		—		—		(72)		(72)
Other	—		15		—		(1)		14		—		14
Balance at June 30, 2022	$	—	$	8,054	$	(6,567)	$	21	$	1,508	$	982	$	2,490
For the Six Months Ended June 30, 2023
Balance at December 31, 2022	$	—	$	8,025	$	(5,781)	$	14	$	2,258	$	984	$	3,242
Net income attributable to APA Corporation	—		—		427		—		427		—		427
Net income attributable to noncontrolling interest – APA	—		—		—		—		—		165		165
Net income attributable to noncontrolling interest – Sinopec	—		—		—		—		—		165		165
Distributions to noncontrolling interest – Sinopec	—		—		—		—		—		(100)		(100)
Distributions to APA Corporation	—		—		—		—		—		(100)		(100)
Other	—		12		—		3		15		—		15
Balance at June 30, 2023	$	—	$	8,037	$	(5,354)	$	17	$	2,700	$	1,114	$	3,814

(1)    As a result of the BCP Business Combination (as defined herein), the Company deconsolidated Altus (as defined herein) on February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

The accompanying notes to consolidated financial statements are an integral part of this statement.

6

APACHE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

These consolidated financial statements have been prepared by Apache Corporation (Apache or the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The Company files these consolidated financial statements with the SEC as a voluntary filer to comply with the terms of certain of the Company’s outstanding debt instruments. They reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods, on a basis consistent with the annual audited financial statements, with the exception of any recently adopted accounting pronouncements. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10-Q should be read along with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which contains a summary of the Company’s significant accounting policies and other disclosures.

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

As of June 30, 2023, the Company's significant accounting policies are consistent with those discussed in Note 1—Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The Company’s financial statements for prior periods may include reclassifications that were made to conform to the current-year presentation.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Apache and its subsidiaries after elimination of intercompany balances and transactions.

The Company’s undivided interests in oil and gas exploration and production ventures and partnerships are proportionately consolidated. The Company consolidates all other investments in which, either through direct or indirect ownership, it has more than a 50 percent voting interest or controls the financial and operating decisions. Noncontrolling interests represent third-party ownership in the net assets of a consolidated subsidiary of Apache and are reflected separately in the Company’s financial statements.

Apache has determined that one of its limited partnership subsidiaries, which has control over Apache’s Egyptian operations, qualified as a variable interest entity (VIE) under GAAP. Apache continues to consolidate this limited partnership subsidiary because the Company has concluded that it has a controlling financial interest in the Egyptian operations and was determined to be the primary beneficiary of the VIE. Sinopec International Petroleum Exploration and Production Corporation (Sinopec) owns a one-third minority participation in the Company’s consolidated Egypt oil and gas business as a noncontrolling interest. APA Corporation (APA) also owns a noncontrolling interest in Apache’s consolidated Egypt oil and gas business. Refer to Note 2—Transactions with Parent Affiliate for detail regarding APA’s noncontrolling interest. All noncontrolling interests are reflected as a separate component of equity in the Company’s consolidated balance sheet.

Additionally, prior to the BCP Business Combination defined below, third-party investors owned a minority interest of approximately 21 percent of Altus Midstream Company (ALTM or Altus), which was reflected as a separate noncontrolling interest component of equity in the Company’s consolidated balance sheet. ALTM qualified as a VIE under GAAP, which Apache consolidated because a wholly owned subsidiary of Apache had a controlling financial interest and was determined to be the primary beneficiary.

On February 22, 2022, ALTM closed a previously announced transaction to combine with privately owned BCP Raptor Holdco LP (BCP and, together with BCP Raptor Holdco GP, LLC, the Contributed Entities) in an all-stock transaction, pursuant to the Contribution Agreement entered into by and among ALTM, Altus Midstream LP, New BCP Raptor Holdco, LLC (the Contributor), and BCP (the BCP Contribution Agreement). Pursuant to the BCP Contribution Agreement, the Contributor contributed all of the equity interests of the Contributed Entities (the Contributed Interests) to Altus Midstream LP, with each Contributed Entity becoming a wholly owned subsidiary of Altus Midstream LP (the BCP Business Combination). Upon closing the transaction, the combined entity was renamed Kinetik Holdings Inc. (Kinetik), and the Company determined that it was no longer the primary beneficiary of Kinetik. The Company further determined that Kinetik no longer qualified as a VIE under GAAP. As a result, the Company deconsolidated ALTM on February 22, 2022. Refer to Note 3—Acquisitions and Divestitures for further detail.

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The stockholders agreement entered into by and among the Company, ALTM, BCP, and other related and affiliated entities provides that the Company, through one of its wholly owned subsidiaries, retains the ability to designate a director to the board of directors of Kinetik for so long as the Company and its affiliates beneficially own 10 percent or more of Kinetik’s outstanding common stock. Based on this board representation, combined with the Company’s stock ownership, management determined it has significant influence over Kinetik, which is considered a related party of the Company. Investments in which the Company has significant influence, but not control, are accounted for under the equity method of accounting. These investments are recorded separately as “Equity method interests” in the Company’s consolidated balance sheet. The Company elected the fair value option to account for its equity method interest in Kinetik. Refer to Note 7—Equity Method Interests for further detail.

Use of Estimates

Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of the Company’s financial statements, and changes in these estimates are recorded when known.

Significant estimates with regard to these financial statements include the estimates of fair value for long-lived assets (refer to “Fair Value Measurements” and “Property and Equipment” sections in this Note 1 below), the fair value determination of acquired assets and liabilities (refer to Note 3—Acquisitions and Divestitures), the fair value of equity method interests (refer to “Equity Method Interests” within this Note 1 below and Note 7—Equity Method Interests), the assessment of asset retirement obligations (refer to Note 9—Asset Retirement Obligation), the estimate of income taxes (refer to Note 11—Income Taxes), the estimation of the contingent liability representing Apache’s potential decommissioning obligations on sold properties in the Gulf of Mexico (refer to Note 12—Commitments and Contingencies), and the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom.

Fair Value Measurements

Certain assets and liabilities are reported at fair value on a recurring basis in the Company’s consolidated balance sheet. Accounting Standards Codification (ASC) 820-10-35, “Fair Value Measurement” (ASC 820), provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority.

The valuation techniques that may be used to measure fair value include a market approach, an income approach, and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models, and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).

Refer to Note 5—Derivative Instruments and Hedging Activities, Note 7—Equity Method Interests, and Note 10—Debt and Financing Costs for further detail regarding the Company’s fair value measurements recorded on a recurring basis.

During the three and six months ended June 30, 2023 and 2022, the Company recorded no asset impairments in connection with fair value assessments.

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Accounts Receivable from / Accounts Payable to APA

Accounts receivable from or payable to APA represents the net result of Apache’s administrative and support services provided to APA and other miscellaneous cash management transactions to be settled between the two affiliated entities. Generally, cash in this amount will be transferred to Apache or paid to APA in subsequent periods, after current period transactions are processed and net results of operations are determined. However, from time to time, Apache may estimate and transfer the cash settlement amount in the month the transactions are processed in order to minimize affiliate working capital balances or retain affiliate balances for cash management purposes. Refer to Note 2—Transactions with Parent Affiliate for more detail.

Revenue Recognition

There have been no significant changes to the Company’s contracts with customers during the six months ended June 30, 2023 and 2022.

Payments under all contracts with customers are typically due and received within a short-term period of one year or less after physical delivery of the product or service has been rendered. Receivables from contracts with customers, including receivables for purchased oil and gas sales, in each case, net of allowance for credit losses, were $1.2 billion and $1.3 billion as of June 30, 2023 and December 31, 2022, respectively.

Oil and gas production revenues from non-customers represent income taxes paid to the Arab Republic of Egypt by Egyptian General Petroleum Corporation on behalf of the Company. Revenue and associated expenses related to such tax volumes are recorded as “Oil, natural gas, and natural gas liquids production revenues” and “Current income tax provision,” respectively, in the Company’s statement of consolidated operations.

Refer to Note 13—Business Segment Information for a disaggregation of oil, gas, and natural gas production revenue by product and reporting segment.

In accordance with the provisions of ASC 606, “Revenue from Contracts with Customers,” variable market prices for each short-term commodity sale are allocated entirely to each performance obligation as the terms of payment relate specifically to the Company’s efforts to satisfy its obligations. As such, the Company has elected the practical expedients available under the standard to not disclose the aggregate transaction price allocated to unsatisfied, or partially unsatisfied, performance obligations as of the end of the reporting period.

Inventories

Inventories consist principally of tubular goods and equipment and are stated at the lower of weighted-average cost or net realizable value. Oil produced but not sold, primarily in the North Sea, is also recorded to inventory and is stated at the lower of the cost to produce or net realizable value.

During the three and six months ended June 30, 2023, the Company recorded $46 million of impairments in connection with valuations of drilling and operations equipment inventory upon the Company’s decision to suspend drilling operations in the North Sea.

Property and Equipment

The carrying value of the Company’s property and equipment represents the cost incurred to acquire the property and equipment, including capitalized interest, net of any impairments. For business combinations and acquisitions, property and equipment cost is based on the fair values at the acquisition date.

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Oil and Gas Property

The Company follows the successful efforts method of accounting for its oil and gas property. Under this method of accounting, exploration costs, such as exploratory geological and geophysical costs, delay rentals, and exploration overhead, are expensed as incurred. All costs related to production, general corporate overhead, and similar activities are expensed as incurred. If an exploratory well provides evidence to justify potential development of reserves, drilling costs associated with the well are initially capitalized, or suspended, pending a determination as to whether a commercially sufficient quantity of proved reserves can be attributed to the area as a result of drilling. This determination may take longer than one year in certain areas depending on, among other things, the amount of hydrocarbons discovered, the outcome of planned geological and engineering studies, the need for additional appraisal drilling activities to determine whether the discovery is sufficient to support an economic development plan, and government sanctioning of development activities in certain international locations. At the end of each quarter, management reviews the status of all suspended exploratory well costs in light of ongoing exploration activities; in particular, whether the Company is making sufficient progress in its ongoing exploration and appraisal efforts or, in the case of discoveries requiring government sanctioning, whether development negotiations are underway and proceeding as planned. If management determines that future appraisal drilling or development activities are unlikely to occur, associated suspended exploratory well costs are expensed.

Acquisition costs of unproved properties are assessed for impairment at least annually and are transferred to proved oil and gas properties to the extent the costs are associated with successful exploration activities. Significant undeveloped leases are assessed individually for impairment based on the Company’s current exploration plans. Unproved oil and gas properties with individually insignificant lease acquisition costs are amortized on a group basis over the average lease term at rates that provide for full amortization of unsuccessful leases upon lease expiration or abandonment. Costs of expired or abandoned leases are charged to exploration expense, while costs of productive leases are transferred to proved oil and gas properties. Costs of maintaining and retaining unproved properties, as well as amortization of individually insignificant leases and impairment of unsuccessful leases, are included in exploration costs in the statement of consolidated operations.

Costs to develop proved reserves, including the costs of all development wells and related equipment used in the production of crude oil and natural gas, are capitalized. Depreciation of the cost of proved oil and gas properties is calculated using the unit-of-production (UOP) method. The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the carrying value of associated proved oil and gas properties. The reserve base used to calculate depreciation for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. The reserve base used to calculate the depreciation for capitalized well costs is the sum of proved developed reserves only. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are included in the depreciable cost.

Oil and gas properties are grouped for depreciation in accordance with ASC 932, “Extractive Activities—Oil and Gas.” The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field.

When circumstances indicate that the carrying value of proved oil and gas properties may not be recoverable, the Company compares unamortized capitalized costs to the expected undiscounted pre-tax future cash flows for the associated assets grouped at the lowest level for which identifiable cash flows are independent of cash flows of other assets. If the expected undiscounted pre-tax future cash flows, based on the Company’s estimate of future crude oil and natural gas prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally estimated using the income approach described in ASC 820. The expected future cash flows used for impairment reviews and related fair value calculations are typically based on judgmental assessments, a Level 3 fair value measurement.

Unproved leasehold impairments are typically recorded as a component of “Exploration” expense in the Company’s statement of consolidated operations. Gains and losses on divestitures of the Company’s oil and gas properties are recognized in the statement of consolidated operations upon closing of the transaction. Refer to Note 3—Acquisitions and Divestitures for more detail.

Gathering, Processing, and Transmission (GPT) Facilities

GPT facilities are depreciated on a straight-line basis over the estimated useful lives of the assets. The estimation of useful life takes into consideration anticipated production lives from the fields serviced by the GPT assets, whether Apache-operated or third party-operated, as well as potential development plans by the Company for undeveloped acreage within, or close to, those fields.

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The Company assesses the carrying amount of its GPT facilities whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of these facilities is more than the sum of the undiscounted cash flows, an impairment loss is recognized for the excess of the carrying value over its fair value.

2.    TRANSACTIONS WITH PARENT AFFILIATE

Apache is a direct, wholly owned subsidiary of APA. Apache holds assets in the U.S., Egypt, and the U.K. and provides administrative and support operations for certain APA subsidiaries with interests in the U.S., Suriname, and the Dominican Republic.

Notes Receivable from APA Corporation

On March 1, 2021, Apache sold to APA all of the equity in the three Apache subsidiaries through which Apache’s interests in Suriname and the Dominican Republic were held. The purchase price is payable pursuant to a senior promissory note made by APA payable to Apache, dated March 1, 2021. The note has a seven-year term, maturing on February 29, 2028, and bears interest at a rate of 4.5 percent per annum, payable semi-annually, subject to APA’s option to allow accrued interest to convert to principal (PIK) during the first 5.5 years of the note’s term (to August 31, 2026). The note is guaranteed by each of the three subsidiaries sold by Apache to APA. APA allowed interest accrued from March 1, 2021 through February 28, 2023, totaling $125 million, to PIK pursuant to the note. As of June 30, 2023 and December 31, 2022, there was $1.4 billion in principal outstanding under this note.

APA also made a senior promissory note payable to Apache, dated March 31, 2023, pursuant to which Apache may loan and APA may borrow, repay, and reborrow up to $1.5 billion in aggregate principal amount outstanding at any time. The note has a five-year term, maturing March 31, 2028. The note bears interest at a rate per annum of 6.0 percent, payable semi-annually; however, APA may allow accrued interest to convert to principal, subject to the aggregate maximum principal amount of the note. APA allowed interest accrued from March 31, 2023 through May 15, 2023, totaling approximately $6 million, to PIK pursuant to the note. As of June 30, 2023, there were $994 million in borrowings outstanding under this note. The note is intended to facilitate cash management of APA and Apache.

These notes are both reflected in “Notes receivable from APA Corporation” on the Company’s consolidated balance sheet. The Company recognized interest income on these notes totaling $29 million and $16 million during the second quarters of 2023 and 2022, respectively, and $45 million and $31 million during the first six months of 2023 and 2022, respectively. The interest income related to these notes is reflected in “Financing costs, net” on the Company’s statement of consolidated operations.

Noncontrolling Interest – APA Corporation

In the fourth quarter of 2021, in conjunction with the ratification of a new merged concession agreement (MCA) with the Egyptian General Petroleum Corporation, Apache entered into an agreement with APA under which the historical value of existing concessions prior to ratifying the MCA was retained by Apache, with any excess value from the MCA terms being allocated to APA. Sinopec owns a one-third minority participation in the Company’s consolidated Egypt oil and gas business, and approximately 50 percent of the remaining net income and distributable cash flow for the Company’s Egyptian operations is being allocated to APA in 2023. Apache consolidates its Egyptian operations, with APA’s noncontrolling interest reflected as a separate component in the Company’s consolidated balance sheet. The Company recorded net income attributable to APA’s noncontrolling interest of $81 million and $85 million in the second quarters of 2023 and 2022, respectively, and $165 million and $156 million in the first six months of 2023 and 2022, respectively. The Company also distributed $100 million and $95 million in the first six months of 2023 and 2022, respectively, of cash to APA in association with its noncontrolling interest.

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Accounts Receivable from / Accounts Payable to APA

In connection with the Company’s role as service provider, Apache is reimbursed by APA for employee costs, certain internal costs, and third-party costs paid by the Company on behalf of APA. All reimbursements are based on actual costs incurred, and no market premium is applied by the Company to APA. The Company incurred $6 million and $5 million in the second quarters of 2023 and 2022, respectively, and $11 million and $9 million in the first six months of 2023 and 2022, respectively, in reimbursable corporate overhead charges. The Company also collects third-party receivables on behalf of APA. As of June 30, 2023, the Company had accounts payable to APA in connection with these services totaling $126 million, which is reflected in “Accounts payable to APA Corporation” on the Company’s consolidated balance sheet. As of December 31, 2022, the Company had a receivable from APA totaling $869 million, which is reflected in “Noncurrent receivable from APA Corporation.” This balance was incorporated into the senior promissory note dated March 31, 2023, discussed above during the first six months of 2023.

Other Transactions with APA Corporation

From time to time, the Company may, at its discretion, make distributions of capital to APA. No capital distributions were made during the first six months of 2023. During the first six months of 2022, the Company made capital distributions totaling $638 million primarily in support of dividend payments and capital transactions completed by APA during the period.

3.    ACQUISITIONS AND DIVESTITURES

2023 Activity

During the second quarter and first six months of 2023, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of approximately $5 million and $10 million, respectively.

During the second quarter and first six months of 2023, the Company completed the sale of non-core assets and leasehold in multiple transactions for total cash proceeds of $7 million and $28 million, respectively, recognizing a gain of approximately $5 million and $6 million, respectively, upon closing of these transactions.

2022 Activity

During the second quarter and first six months of 2022, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $26 million.

During the second quarter and first six months of 2022, the Company completed the sale of non-core assets and leasehold in multiple transactions for total cash proceeds of $7 million and $15 million, respectively, recognizing a gain of approximately $1 million and $2 million, respectively, upon closing of these transactions.

During the first six months of 2022, the Company completed a transaction to sell certain non-core mineral rights in the Delaware Basin. The Company received total cash proceeds of approximately $726 million after certain post-closing adjustments and recognized an associated gain of approximately $560 million.

The BCP Business Combination was completed on February 22, 2022. As consideration for the contribution of the Contributed Interests, ALTM issued 50 million shares of Class C Common Stock (and Altus Midstream LP issued a corresponding number of common units) to BCP’s unitholders, which are principally funds affiliated with Blackstone and I Squared Capital. ALTM’s stockholders continued to hold their existing shares of common stock. As a result of the transaction, the Contributor, or its designees, collectively owned approximately 75 percent of the issued and outstanding shares of ALTM common stock. Apache Midstream LLC, a wholly owned subsidiary of APA, which owned approximately 79 percent of the issued and outstanding shares of ALTM common stock prior to the BCP Business Combination, owned approximately 20 percent of the issued and outstanding shares of Kinetik common stock after the transaction closed.

As a result of the BCP Business Combination, the Company deconsolidated ALTM on February 22, 2022 and recognized a gain of approximately $609 million that reflects the difference between the Company’s share of ALTM’s deconsolidated balance sheet of $193 million and the fair value of $802 million of its approximate 20 percent retained ownership in the combined entity.

During the first quarter of 2022, the Company sold four million of its shares of Kinetik Class A Common Stock for cash proceeds of $224 million and recognized a loss of $25 million, including transaction fees. Refer to Note 7—Equity Method Interests for further detail.

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4.    CAPITALIZED EXPLORATORY WELL COSTS

The Company’s capitalized exploratory well costs were $71 million and $50 million as of June 30, 2023 and December 31, 2022, respectively. The increase is primarily attributable to additional drilling activity in Egypt, partially offset by successful transfer of well costs during the quarter.

Projects with suspended exploratory well costs capitalized for a period greater than one year since the completion of drilling are those identified by management as exhibiting sufficient quantities of hydrocarbons to justify potential development. Management is actively pursuing efforts to assess whether proved reserves can be attributed to these projects.

5.    DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Objectives and Strategies

The Company is exposed to fluctuations in crude oil and natural gas prices on the majority of its worldwide production, as well as fluctuations in exchange rates in connection with transactions denominated in foreign currencies. The Company manages the variability in its cash flows by occasionally entering into derivative transactions on a portion of its crude oil and natural gas production and foreign currency transactions. The Company may utilize various types of derivative financial instruments, including forward contracts, futures contracts, swaps, and options, to manage fluctuations in cash flows resulting from changes in commodity prices or foreign currency values.

In December 2022, counterparty agreements for Apache’s commodity derivative instruments were transferred from Apache to APA Corporation. Apache had no outstanding derivative positions as of June 30, 2023 or December 31, 2022.

Derivative Activity Recorded in the Statement of Consolidated Operations

The following table summarizes the effect of derivative instruments on the Company’s statement of consolidated operations:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Realized:
Commodity derivative instruments	$	—	$	(4)	$	—	$	(9)
Foreign currency derivative instruments	—		(2)		—		(2)
Realized losses, net	—		(6)		—		(11)
Unrealized:
Commodity derivative instruments	—		(20)		—		(44)
Foreign currency derivative instruments	—		(6)		—		(8)
Preferred Units embedded derivative	—		—		—		(31)
Unrealized losses, net	—		(26)		—		(83)
Derivative instrument losses, net	$	—	$	(32)	$	—	$	(94)

Derivative instrument gains and losses were recorded in “Derivative instrument losses, net” under “Revenues and Other” in the Company’s statement of consolidated operations. Unrealized losses for derivative activity recorded in the statement of consolidated operations are reflected in the statement of consolidated cash flows separately as “Unrealized derivative instrument losses, net” under “Adjustments to reconcile net income to net cash provided by operating activities.”

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6.    OTHER CURRENT ASSETS

The following table provides detail of the Company’s other current assets:

	June 30, 2023		December 31, 2022
	(In millions)
Inventories	$	487	$	425
Drilling advances	66		64
Prepaid assets and other	158		54
Current decommissioning security for sold Gulf of Mexico assets	450		450
Total Other current assets	$	1,161	$	993

7.    EQUITY METHOD INTERESTS

The Kinetik Class A Common Stock held by the Company is treated as an interest in equity securities measured at fair value. The Company elected the fair value option for measuring its equity method interest in Kinetik based on practical expedience, variances in reporting timelines, and cost-benefit considerations. The fair value of the Company’s interest in Kinetik is determined using observable share prices on a major exchange, a Level 1 fair value measurement. Fair value adjustments are recorded as a component of “Other, net” under “Revenues and other” in the Company’s statement of consolidated operations.

The Company’s initial interest in Kinetik was measured at fair value based on the Company’s ownership of approximately 12.9 million shares of Kinetik Class A Common stock as of February 22, 2022. In March 2022, the Company sold four million of its shares of Kinetik Class A Common Stock for a loss, including underwriters fees, of $25 million, which was recorded as a component of “Gain on divestitures, net” under “Revenues and other” in the Company’s statement of consolidated operations. Refer to Note 3—Acquisitions and Divestitures for further detail. During the second quarter of 2022, Kinetik issued a two-for-one split of its common stock, resulting in the Company owning approximately 17.7 million shares.

The Company has received approximately 2.1 million shares of Kinetik’s Class A Common Stock as paid-in-kind dividends through June 30, 2023. As of June 30, 2023, the Company’s ownership of 19.8 million shares represented approximately 13 percent of Kinetik’s outstanding Class A Common Stock.

The Company recorded changes in the fair value of its equity method interest in Kinetik totaling gains of $90 million and $42 million in the second quarters of 2023 and 2022, respectively, and gains of $71 million and $66 million in the first six months of 2023 and 2022, respectively. These gains were recorded as a component of “Revenues and other” in the Company’s statement of consolidated operations.

The following table represents sales and costs associated with Kinetik:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Natural gas and NGLs sales	$	22	$	—	$	29	$	—
Purchased oil and gas sales	7		—		7		—
	$	29	$	—	$	36	$	—
Gathering, processing, and transmission costs	$	26	$	26	$	50	$	36
Purchased oil and gas costs	26		—		28		—
	$	52	$	26	$	78	$	36

As of June 30, 2023, the Company has recorded accrued costs payable to Kinetik of approximately $37 million and receivables from Kinetik of approximately $19 million.

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8.    OTHER CURRENT LIABILITIES

The following table provides detail of the Company’s other current liabilities:

	June 30, 2023		December 31, 2022
	(In millions)
Accrued operating expenses	$	172	$	139
Accrued exploration and development	352		300
Accrued compensation and benefits	247		514
Accrued interest	93		96
Accrued income taxes	193		90
Current asset retirement obligation	55		55
Current operating lease liability	102		167
Current decommissioning contingency for sold Gulf of Mexico properties	450		450
Other	271		238
Total Other current liabilities	$	1,935	$	2,049

9.    ASSET RETIREMENT OBLIGATION

The following table describes changes to the Company’s asset retirement obligation (ARO) liability:

	June 30, 2023
	(In millions)
Asset retirement obligation, December 31, 2022	$	1,991
Liabilities incurred	6
Liabilities settled	(21)
Accretion expense	57
Asset retirement obligation, June 30, 2023	2,033
Less current portion	(55)
Asset retirement obligation, long-term	$	1,978

10.    DEBT AND FINANCING COSTS

The following table presents the carrying values of the Company’s debt:

	June 30, 2023		December 31, 2022
	(In millions)
Notes and debentures before unamortized discount and debt issuance costs(1)	$	4,835	$	4,908
Finance lease obligations	33		34
Unamortized discount	(27)		(27)
Debt issuance costs	(27)		(28)
Total debt	4,814		4,887
Current maturities	(2)		(2)
Long-term debt	$	4,812	$	4,885

(1)    The fair values of the Company’s notes and debentures were $4.1 billion and $4.2 billion as of June 30, 2023 and December 31, 2022, respectively.

Apache uses a market approach to determine the fair values of its notes and debentures using estimates provided by an independent investment financial data services firm (a Level 2 fair value measurement).

At each of June 30, 2023 and December 31, 2022, current debt included $2 million of finance lease obligations.

During the six months ended June 30, 2023, Apache purchased in the open market and canceled senior notes issued under its indentures in an aggregate principal amount of $74 million for an aggregate purchase price of $65 million in cash, including accrued interest and broker fees, reflecting a discount to par of an aggregate $10 million. The Company recognized a $9 million gain on these repurchases. The repurchases were partially financed by Apache’s borrowing under the US dollar-denominated revolving credit facility of APA Corporation described below.

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During the six months ended June 30, 2022, Apache closed cash tender offers for certain outstanding notes issued under its indentures, accepting for purchase $1.1 billion aggregate principal amount of notes. Apache paid holders an aggregate $1.2 billion in cash, reflecting principal, premium to par, and accrued and unpaid interest. The Company recognized a $66 million loss on extinguishment of debt, including $11 million of unamortized debt discount and issuance costs in connection with the note purchases. The repurchases were partially financed by borrowing under Apache’s former revolving credit facility.

During the six months ended June 30, 2022, Apache purchased in the open market and canceled senior notes issued under its indentures in an aggregate principal amount of $15 million for an aggregate purchase price of $16 million in cash, including accrued interest and broker fees, reflecting a premium to par of $1 million. The Company recognized a $1 million loss on these repurchases. The repurchases were partially financed by borrowing under Apache’s former revolving credit facility.

On January 18, 2022, Apache redeemed the outstanding $213 million principal amount of 3.25% senior notes due April 15, 2022, at a redemption price equal to 100 percent of their principal amount, plus accrued and unpaid interest to the redemption date. The redemption was financed by borrowing under Apache’s former revolving credit facility.

Apache intends to reduce debt outstanding under its indentures from time to time.

On April 29, 2022, Apache entered into two unsecured guaranties of obligations under two unsecured syndicated credit agreements then entered into by APA, of which Apache is a wholly owned subsidiary. APA’s new credit agreements are for general corporate purposes and replaced and refinanced Apache’s 2018 unsecured syndicated credit agreement (the Former Facility).

•One credit agreement is denominated in US dollars (the USD Agreement) and provides for an unsecured five-year revolving credit facility, with aggregate commitments of US$1.8 billion (including a letter of credit subfacility of up to US$750 million, of which US$150 million currently is committed). APA may increase commitments up to an aggregate US$2.3 billion by adding new lenders or obtaining the consent of any increasing existing lenders. This facility matures in April 2027, subject to APA’s two, one-year extension options.

•The second credit agreement is denominated in pounds sterling (the GBP Agreement) and provides for an unsecured five-year revolving credit facility, with aggregate commitments of £1.5 billion for loans and letters of credit. This facility matures in April 2027, subject to APA’s two, one-year extension options.

In connection with APA’s entry into the USD Agreement and the GBP Agreement (each, a New Agreement), Apache terminated US$4.0 billion of commitments under the Former Facility, borrowings then outstanding under the Former Facility were deemed outstanding under APA’s USD Agreement, and letters of credit then outstanding under the Former Facility were deemed outstanding under a New Agreement, depending upon whether denominated in US dollars or pounds sterling. Apache has guaranteed obligations under each New Agreement effective until the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures is less than US$1.0 billion.

Apache may borrow under APA’s USD Agreement up to an aggregate principal amount of US$300 million outstanding at any given time. As of June 30, 2023 and December 31, 2022, there were no borrowings by Apache outstanding under the USD Agreement.

Apache, from time to time, has and uses uncommitted credit and letter of credit facilities for working capital and credit support purposes. As of June 30, 2023 and December 31, 2022, there were no outstanding borrowings under these facilities. As of June 30, 2023, there were £185 million and $3 million in letters of credit outstanding under these facilities. As of December 31, 2022, there were £199 million and $17 million in letters of credit outstanding under these facilities.

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Financing Costs, Net

The following table presents the components of the Company’s financing costs, net:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Interest expense	$	74	$	75	$	149	$	165
Amortization of debt issuance costs	—		4		1		6
Capitalized interest	—		(1)		—		(1)
(Gain) loss on extinguishment of debt	—		—		(9)		67
Interest income	(3)		(1)		(5)		(5)
Interest income from APA Corporation, net (Note 2)	(29)		(15)		(45)		(30)
Financing costs, net	$	42	$	62	$	91	$	202

11.    INCOME TAXES

The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Non-cash impairments on the carrying value of the Company’s oil and gas properties, gains and losses on the sale of assets, statutory tax rate changes, and other significant or unusual items are recognized as discrete items in the quarter in which they occur.

During the second quarter of 2023, the Company’s effective income tax rate was primarily impacted by a decrease in the amount of valuation allowance against its U.S. deferred tax assets. The Company’s 2023 year-to-date effective income tax rate was primarily impacted by a deferred tax expense related to the remeasurement of taxes in the U.K. as a result of the enactment of Finance Act 2023 on January 10, 2023, and a decrease in the amount of valuation allowance against its U.S. deferred tax assets. During the second quarter of 2022, the Company’s effective income tax rate was primarily impacted by a decrease in the amount of valuation allowance against its U.S. deferred tax assets. The Company’s 2022 year-to-date effective income tax rate was primarily impacted by the gain associated with deconsolidation of Altus, the gain on sale of certain non-core mineral rights in the Delaware Basin, and a decrease in the amount of valuation allowance against its U.S. deferred tax assets.

On January 10, 2023, Finance Act 2023 was enacted, receiving Royal Assent, and included amendments to the Energy (Oil and Gas) Profits Levy Act of 2022, increasing the levy from a 25 percent rate to a 35 percent rate, effective for the period of January 1, 2023 through March 31, 2028. Under U.S. GAAP, the financial statement impact of new legislation is recorded in the period of enactment. Therefore, in the first quarter of 2023, the Company recorded a deferred tax expense of $174 million related to the remeasurement of the December 31, 2022 U.K. deferred tax liability.

On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022 (IRA). The IRA includes a new 15 percent corporate alternative minimum tax (Corporate AMT) on applicable corporations with an average annual financial statement income that exceeds $1 billion for any three consecutive years preceding the tax year at issue. The Corporate AMT is effective for tax years beginning after December 31, 2022. The Company is continuing to evaluate the provisions of the IRA and awaits further guidance from the U.S. Treasury Department to properly assess the impact of these provisions on the Company. Under the existing guidance, the Company does not believe the IRA will have a material impact for 2023.

The Company has a full valuation allowance against its U.S. net deferred tax assets. The Company will continue to maintain a full valuation allowance on its U.S. net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of this allowance. However, given the Company’s current and anticipated future domestic earnings, the Company believes that there is a reasonable possibility that within the next 12 months sufficient positive evidence may become available to allow the Company to reach a conclusion that a significant portion of the U.S. valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense, which could be material, for the period the release is recorded.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income or capital taxes in various states and foreign jurisdictions. The Company’s tax reserves are related to tax years that may be subject to examination by the relevant taxing authority.

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12.    COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is party to various legal actions arising in the ordinary course of business, including litigation and governmental and regulatory controls, which also may include controls related to the potential impacts of climate change. As of June 30, 2023, the Company has an accrued liability of approximately $52 million for all legal contingencies that are deemed to be probable of occurring and can be reasonably estimated. The Company’s estimates are based on information known about the matters and its experience in contesting, litigating, and settling similar matters. Although actual amounts could differ from management’s estimate, none of the actions are believed by management to involve future amounts that would be material to the Company’s financial position, results of operations, or liquidity after consideration of recorded accruals. With respect to material matters for which the Company believes an unfavorable outcome is reasonably possible, the Company has disclosed the nature of the matter and a range of potential exposure, unless an estimate cannot be made at this time. It is management’s opinion that the loss for any other litigation matters and claims that are reasonably possible to occur will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity.

For additional information on Legal Matters described below, refer to Note 11—Commitments and Contingencies to the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Argentine Environmental Claims

On March 12, 2014, the Company and its subsidiaries completed the sale of all of the Company’s subsidiaries’ operations and properties in Argentina to YPF Sociedad Anonima (YPF). As part of that sale, YPF assumed responsibility for all of the past, present, and future litigation in Argentina involving Company subsidiaries, except that Company subsidiaries have agreed to indemnify YPF for certain environmental, tax, and royalty obligations capped at an aggregate of $100 million. The indemnity is subject to specific agreed conditions precedent, thresholds, contingencies, limitations, claim deadlines, loss sharing, and other terms and conditions. On April 11, 2014, YPF provided its first notice of claims pursuant to the indemnity. Company subsidiaries have not paid any amounts under the indemnity but will continue to review and consider claims presented by YPF. Further, Company subsidiaries retain the right to enforce certain Argentina-related indemnification obligations against Pioneer Natural Resources Company (Pioneer) in an amount up to $45 million pursuant to the terms and conditions of stock purchase agreements entered in 2006 between Company subsidiaries and subsidiaries of Pioneer.

Louisiana Restoration 

As more fully described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, Louisiana surface owners often file lawsuits or assert claims against oil and gas companies, including the Company, claiming that operators and working interest owners in the chain of title are liable for environmental damages on the leased premises, including damages measured by the cost of restoration of the leased premises to its original condition, regardless of the value of the underlying property. From time to time, restoration lawsuits and claims are resolved by the Company for amounts that are not material to the Company, while new lawsuits and claims are asserted against the Company. With respect to each of the pending lawsuits and claims, the amount claimed is not currently determinable or is not material. Further, the overall exposure related to these lawsuits and claims is not currently determinable. While adverse judgments against the Company are possible, the Company intends to actively defend these lawsuits and claims.

Starting in November of 2013 and continuing into 2023, several parishes in Louisiana have pending lawsuits against many oil and gas producers, including the Company. In these cases, the Parishes, as plaintiffs, allege that defendants’ oil and gas exploration, production, and transportation operations in specified fields were conducted in violation of the State and Local Coastal Resources Management Act of 1978, as amended, and applicable regulations, rules, orders, and ordinances promulgated or adopted thereunder by the Parish or the State of Louisiana. Plaintiffs allege that defendants caused substantial damage to land and water bodies located in the coastal zone of Louisiana. Plaintiffs seek, among other things, unspecified damages for alleged violations of applicable law within the coastal zone, the payment of costs necessary to clear, re-vegetate, detoxify, and otherwise restore the subject coastal zone as near as practicable to its original condition, and actual restoration of the coastal zone to its original condition. While adverse judgments against the Company might be possible, the Company intends to vigorously oppose these claims.

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Apollo Exploration Lawsuit

In a case captioned Apollo Exploration, LLC, Cogent Exploration, Ltd. Co. & SellmoCo, LLC v. Apache Corporation, Cause No. CV50538 in the 385th Judicial District Court, Midland County, Texas, plaintiffs alleged damages in excess of $200 million (having previously claimed in excess of $1.1 billion) relating to purchase and sale agreements, mineral leases, and area of mutual interest agreements concerning properties located in Hartley, Moore, Potter, and Oldham Counties, Texas. The trial court entered final judgment in favor of the Company, ruling that the plaintiffs take nothing by their claims and awarding the Company its attorneys’ fees and costs incurred in defending the lawsuit. The court of appeals affirmed in part and reversed in part the trial court’s judgment thereby reinstating some of plaintiffs’ claims. The Texas Supreme Court granted the Company’s petition for review and heard oral argument in October 2022. On April 28, 2023, the Texas Supreme Court reversed the court of appeals’ decision and remanded the case back to the court of appeals for further proceedings. After plaintiffs’ request for rehearing, on July 21, 2023, the Texas Supreme Court reaffirmed its reversal of the court of appeals’ decision and remand of the case back to the court of appeals for further proceedings.

Australian Operations Divestiture Dispute

Pursuant to a Sale and Purchase Agreement dated April 9, 2015 (Quadrant SPA), the Company and its subsidiaries divested Australian operations to Quadrant Energy Pty Ltd (Quadrant). Closing occurred on June 5, 2015. In April 2017, the Company filed suit against Quadrant for breach of the Quadrant SPA. In its suit, the Company seeks approximately AUD $80 million. In December 2017, Quadrant filed a defense of equitable set-off to the Company’s claim and a counterclaim seeking approximately AUD $200 million in the aggregate. The Company believes that Quadrant’s claims lack merit and will not have a material adverse effect on the Company’s financial position, results of operation, or liquidity.

Canadian Operations Divestiture Dispute

Pursuant to a Sale and Purchase Agreement dated July 6, 2017 (Paramount SPA), the Company and its subsidiaries divested their remaining Canadian operations to Paramount Resources LTD (Paramount). Closing occurred on August 16, 2017. On September 11, 2019, four ex-employees of Apache Canada LTD on behalf of themselves and individuals employed by Apache Canada LTD on July 6, 2017, filed an Amended Statement of Claim in a matter styled Stephen Flesch et. al. v Apache Corporation et. al., No. 1901-09160 Court of Queen’s Bench of Alberta against the Company and others seeking class certification and a finding that the Paramount SPA amounted to a Change of Control of the Company, entitling them to accelerated vesting under the Company’s equity plans. In the suit, the class seeks approximately $60 million USD and punitive damages. Without acknowledging or admitting any liability and solely to avoid the expense and uncertainty of future litigation, Apache has agreed to a settlement in the Flesch class action matter under which Apache will pay $7 million USD to resolve all claims against the Company asserted by the class. The settlement is subject to court approval and is expected to be finalized by the end of 2023.

California and Delaware Litigation

On July 17, 2017, in three separate actions, San Mateo and Marin Counties, and the City of Imperial Beach, California, all filed suit individually and on behalf of the people of the state of California against over 30 oil and gas companies alleging damages as a result of global warming. Plaintiffs seek unspecified damages and abatement under various tort theories. On December 20, 2017, in two separate actions, the City of Santa Cruz and Santa Cruz County filed similar lawsuits against many of the same defendants. On January 22, 2018, the City of Richmond filed a similar lawsuit. On November 14, 2018, the Pacific Coast Federation of Fishermen’s Associations, Inc. also filed a similar lawsuit against many of the same defendants.

On September 10, 2020, the State of Delaware filed suit, individually and on behalf of the people of the State of Delaware, against over 25 oil and gas companies alleging damages as a result of global warming. Plaintiffs seek unspecified damages and abatement under various tort theories.

The Company believes that it is not subject to jurisdiction of the California courts and that claims made against it in the California and Delaware litigation are baseless. The Company intends to challenge jurisdiction in California and to vigorously defend the Delaware lawsuit.

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Castex Lawsuit

In a case styled Apache Corporation v. Castex Offshore, Inc., et. al., Cause No. 2015-48580, in the 113th Judicial District Court of Harris County, Texas, Castex filed claims for alleged damages of approximately $200 million, relating to overspend on the Belle Isle Gas Facility upgrade, and the drilling of five sidetracks on the Potomac #3 well. After a jury trial, a verdict of approximately $60 million, plus fees, costs, and interest was entered against the Company. The Fourteenth Court of Appeals of Texas reversed the judgment, in part, reducing the judgment to approximately $13.5 million, plus fees, costs, and interest against the Company.

Kulp Minerals Lawsuit

On or about April 7, 2023, Apache was sued in a purported class action in New Mexico styled Kulp Minerals LLC v. Apache Corporation, Case No. D-506-CV-2023-00352 in the Fifth Judicial District. The Kulp Minerals case has not been certified and seeks to represent a group of owners allegedly owed statutory interest under New Mexico law as a result of purported late oil and gas payments. The amount of this claim is not yet reasonably determinable. The Company intends to vigorously defend against the claims asserted in this lawsuit.

Shareholder and Derivative Lawsuits

On February 23, 2021, a case captioned Plymouth County Retirement System v. Apache Corporation, et al. was filed in the United States District Court for the Southern District of Texas (Houston Division) against the Company and certain current and former officers. The complaint, which is a shareholder lawsuit styled as a class action, alleges that (1) the Company intentionally used unrealistic assumptions regarding the amount and composition of available oil and gas in Alpine High; (2) the Company did not have the proper infrastructure in place to safely and/or economically drill and/or transport those resources even if they existed in the amounts purported; (3) certain statements and omissions artificially inflated the value of the Company’s operations in the Permian Basin; and (4) as a result, the Company’s public statements were materially false and misleading. The Company believes that plaintiffs’ claims lack merit and intends to vigorously defend this lawsuit.

On January 18, 2023, a case captioned Jerry Hight, Derivatively and on behalf of APA Corporation v. John J. Christmann IV et al. was filed in the 61st District Court of Harris County, Texas. Then, on February 21, 2023, a case captioned Steve Silverman, Derivatively and on behalf of Nominal Defendant APA Corp. v. John J. Christmann IV, et al. was filed in federal district court for the Southern District of Texas. Then, on April 20, 2023, a case captioned William Wessels, Derivatively and on behalf of APA Corporation v. John J. Christmann IV et al. was filed in the 151st District Court of Harris County, Texas. Then, on July 21, 2023, a case captioned Yang-Li-Yu, Derivatively and on behalf of Nominal Defendant APA Corp. v. John J. Christmann IV, et al. was filed in federal district court for the Southern District of Texas. These cases purport to be derivative actions brought against senior management and Company directors over many of the same allegations included in the Plymouth County Retirement System matter and asserts claims of (1) breach of fiduciary duty; (2) waste of corporate assets; and (3) unjust enrichment. The defendants believe that plaintiffs’ claims lack merit and intend to vigorously defend these lawsuits.

Environmental Matters

As of June 30, 2023, the Company had an undiscounted reserve for environmental remediation of approximately $1 million.

On September 11, 2020, the Company received a Notice of Violation and Finding of Violation, and accompanying Clean Air Act Information Request, from the U.S. Environmental Protection Agency (EPA) following site inspections in April 2019 at several of the Company’s oil and natural gas production facilities in Lea and Eddy Counties, New Mexico. The notice and information request involve alleged emissions control and reporting violations. The Company is cooperating with the EPA and has responded to the information request. The EPA has referred the notice for civil enforcement proceedings; however, at this time the Company is unable to reasonably estimate whether such proceedings will result in monetary sanctions and, if so, whether they would be more or less than $100,000, exclusive of interest and costs.

On December 29, 2020, the Company received a Notice of Violation and Opportunity to Confer, and accompanying Clean Air Act Information Request, from the EPA following helicopter flyovers in September 2019 of several of the Company’s oil and natural gas production facilities in Reeves County, Texas. The notice and information request involve alleged emissions control and reporting violations. The Company is cooperating with the EPA and has responded to the information request. The EPA has referred the notice for civil enforcement proceedings; however, at this time the Company is unable to reasonably estimate whether such proceedings will result in monetary sanctions and, if so, whether they would be more or less than $100,000, exclusive of interest and costs.

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The Company was recently served with two lawsuits filed in Lea County, New Mexico: William O. Stephens v. Apache Corporation; No. D-506-CV-2023-00632, in the Fifth Judicial District and Merchant Livestock Company v. Apache Corporation, Exxon Corporation, et al.; No. D-506-CV-2023-00664, in the Fifth Judicial District. Each lawsuit alleges property damage and environmental impacts from previous oil and gas operations that require remediation. The Company disputes that it is responsible for the damages claimed and/or relief sought and intends to vigorously defend each lawsuit. At this time, the Company is unable to reasonably estimate whether either lawsuit, individually, will result in damages that are more or less than $100,000, exclusive of interest and costs.

The Company is not aware of any environmental claims existing as of June 30, 2023 that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity. There can be no assurance, however, that current regulatory requirements will not change or past non-compliance with environmental laws will not be discovered on the Company’s properties.

Potential Decommissioning Obligations on Sold Properties

In 2013, Apache sold its Gulf of Mexico (GOM) Shelf operations and properties and its GOM operating subsidiary, GOM Shelf LLC (GOM Shelf) to Fieldwood Energy LLC (Fieldwood). Under the terms of the purchase agreement, Apache received cash consideration of $3.75 billion and Fieldwood assumed the obligation to decommission the properties held by GOM Shelf and the properties acquired from Apache and its other subsidiaries (collectively, the Legacy GOM Assets). In respect of such abandonment obligations, Fieldwood posted letters of credit in favor of Apache (Letters of Credit) and established trust accounts (Trust A and Trust B) of which Apache was a beneficiary and which were funded by two net profits interests (NPIs) depending on future oil prices. On February 14, 2018, Fieldwood filed for protection under Chapter 11 of the U.S. Bankruptcy Code. In connection with the 2018 bankruptcy, Fieldwood confirmed a plan under which Apache agreed, inter alia, to (i) accept bonds in exchange for certain of the Letters of Credit and (ii) amend the Trust A trust agreement and one of the NPIs to consolidate the trusts into a single Trust (Trust A) funded by both remaining NPIs. Currently, Apache holds two bonds (Bonds) and five Letters of Credit to secure Fieldwood’s asset retirement obligations on the Legacy GOM Assets as and when Apache is required to perform or pay for decommissioning any Legacy GOM Asset over the remaining life of the Legacy GOM Assets.

On August 3, 2020, Fieldwood again filed for protection under Chapter 11 of the U.S. Bankruptcy Code. On June 25, 2021, the United States Bankruptcy Court for the Southern District of Texas (Houston Division) entered an order confirming Fieldwood’s bankruptcy plan. On August 27, 2021, Fieldwood’s bankruptcy plan became effective. Pursuant to the plan, the Legacy GOM Assets were separated into a standalone company, which was subsequently merged into GOM Shelf. Under GOM Shelf’s limited liability company agreement, the proceeds of production of the Legacy GOM Assets will be used to fund decommissioning of Legacy GOM Assets.

By letter dated April 5, 2022, replacing two prior letters dated September 8, 2021 and February 22, 2022, and by subsequent letter dated March 1, 2023, GOM Shelf notified the Bureau of Safety and Environmental Enforcement (BSEE) that it was unable to fund the decommissioning obligations that it is currently obligated to perform on certain of the Legacy GOM Assets. As a result, Apache and other current and former owners in these assets have received orders from BSEE to decommission certain of the Legacy GOM Assets included in GOM Shelf’s notifications to BSEE. Apache expects to receive similar orders on the other Legacy GOM Assets included in GOM Shelf’s notification letters. Apache has also received orders to decommission other Legacy GOM Assets that were not included in GOM Shelf’s notification letters. Further, Apache anticipates that GOM Shelf may send additional such notices to BSEE in the future and that it may receive additional orders from BSEE requiring it to decommission other Legacy GOM Assets.

As of June 30, 2023, Apache has incurred $464 million in decommissioning costs related to several Legacy GOM Assets. GOM Shelf did not, and has confirmed that it will not, reimburse Apache for these decommissioning costs. As a result, Apache has sought and will continue to seek reimbursement from its security for these costs, of which $276 million had been reimbursed from Trust A as of June 30, 2023. If GOM Shelf does not reimburse Apache for further decommissioning costs incurred with respect to Legacy GOM Assets, then Apache will continue to seek reimbursement from Trust A, to the extent of available funds, and thereafter, will seek reimbursement from the Bonds and the Letters of Credit until all such funds and securities are fully utilized. In addition, after such sources have been exhausted, Apache has agreed to provide a standby loan to GOM Shelf of up to $400 million to perform decommissioning (Standby Loan Agreement), with such standby loan secured by a first and prior lien on the Legacy GOM Assets.

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If the combination of GOM Shelf’s net cash flow from its producing properties, the Trust A funds, the Bonds, and the remaining Letters of Credit are insufficient to fully fund decommissioning of any Legacy GOM Assets that Apache may be required to perform or fund, or if GOM Shelf’s net cash flow from its remaining producing properties after the Trust A funds, Bonds, and Letters of Credit are exhausted is insufficient to repay any loans made by Apache under the Standby Loan Agreement, then Apache may be forced to effectively use its available cash to fund the deficit.

As of June 30, 2023, Apache estimates that its potential liability to fund the remaining decommissioning of Legacy GOM Assets it may be ordered to perform or fund ranges from $922 million to $1.1 billion on an undiscounted basis. Management does not believe any specific estimate within this range is a better estimate than any other. Accordingly, the Company has recorded a contingent liability of $922 million as of June 30, 2023, representing the estimated costs of decommissioning it may be required to perform or fund on Legacy GOM Assets. Of the total liability recorded, $472 million is reflected under the caption “Decommissioning contingency for sold Gulf of Mexico properties,” and $450 million is reflected under “Other current liabilities” in the Company’s consolidated balance sheet. Changes in significant assumptions impacting Apache’s estimated liability, including expected decommissioning rig spread rates, lift boat rates, and planned abandonment logistics could result in a liability in excess of the amount accrued.

As of June 30, 2023, the Company has also recorded a $507 million asset, which represents the amount the Company expects to be reimbursed from the Trust A funds, the Bonds, and the Letters of Credit for decommissioning it may be required to perform on Legacy GOM Assets. Of the total asset recorded, $57 million is reflected under the caption “Decommissioning security for sold Gulf of Mexico properties,” and $450 million is reflected under “Other current assets.”

On June 21, 2023, the two sureties that issued bonds directly to Apache and two sureties that issued bonds to the issuing bank on the Letters of Credit filed suit against Apache in a case styled Zurich American Insurance Company, HCC International Insurance Company PLC, Philadelphia Indemnity Insurance Company and Everest Reinsurance Company (Insurers) v. Apache Corporation, Cause No. 2023-38238 in the 281st Judicial District Court, Harris County Texas. Insurers are seeking to prevent Apache from drawing on the Bonds and Letters of Credit and further allege that they are discharged from their reimbursement obligations related to decommissioning costs and are entitled to other relief. On July 20, 2023, the 281st Judicial District Court denied the Insurers’ request for a temporary injunction. Apache believes that Insurers’ claims lack merit, intends to vigorously defend these claims, and will vigorously pursue counterclaims.

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13.    BUSINESS SEGMENT INFORMATION

As of June 30, 2023, the Company is engaged in exploration and production (Upstream) activities across three operating segments: Egypt, North Sea, and the U.S. The Company’s Upstream business explores for, develops, and produces crude oil, natural gas, and natural gas liquids. Prior to the deconsolidation of Altus on February 22, 2022, the Company’s Midstream business was operated by ALTM, which owned, developed, and operated a midstream energy asset network in the Permian Basin of West Texas. Financial information for each segment is presented below:

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Quarter Ended June 30, 2023	(In millions)
Revenues:
Oil revenues	$	618	$	235	$	473	$	—	$	—	$	1,326
Natural gas revenues	90		39		46		—		—		175
Natural gas liquids revenues	—		4		95		—		—		99
Oil, natural gas, and natural gas liquids production revenues	708		278		614		—		—		1,600
Purchased oil and gas sales	—		—		144		—		—		144
	708		278		758		—		—		1,744
Operating Expenses:
Lease operating expenses	121		99		132		—		—		352
Gathering, processing, and transmission	6		12		57		—		—		75
Purchased oil and gas costs	—		—		131		—		—		131
Taxes other than income	—		—		47		—		—		47
Exploration	30		4		3		—		—		37
Depreciation, depletion, and amortization	126		61		152		—		—		339
Asset retirement obligation accretion	—		19		10		—		—		29
Impairments	—		46		—		—		—		46
	283		241		532		—		—		1,056
Operating Income(2)	$	425	$	37	$	226	$	—	$	—	688
Other Income (Expense):
Gain on divestitures, net											5
Other, net											109
General and administrative											(66)
Transaction, reorganization, and separation											(2)
Financing costs, net											(42)
Income Before Income Taxes											$	692

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	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Six Months Ended June 30, 2023	(In millions)
Revenues:
Oil revenues	$	1,247	$	517	$	912	$	—	$	—	$	2,676
Natural gas revenues	183		99		131		—		—		413
Natural gas liquids revenues	—		14		203		—		—		217
Oil, natural gas, and natural gas liquids production revenues	1,430		630		1,246		—		—		3,306
Purchased oil and gas sales	—		—		383		—		—		383
	1,430		630		1,629		—		—		3,689
Operating Expenses:
Lease operating expenses	218		176		272		—		—		666
Gathering, processing, and transmission	13		23		112		—		—		148
Purchased oil and gas costs	—		—		347		—		—		347
Taxes other than income	—		—		97		—		—		97
Exploration	66		9		6		—		—		81
Depreciation, depletion, and amortization	249		119		279		—		—		647
Asset retirement obligation accretion	—		37		20		—		—		57
Impairments	—		46		—		—		—		46
	546		410		1,133		—		—		2,089
Operating Income(2)	$	884	$	220	$	496	$	—	$	—	1,600
Other Income (Expense):
Gain on divestitures, net											6
Other, net											77
General and administrative											(124)
Transaction, reorganization, and separation											(6)
Financing costs, net											(91)
Income Before Income Taxes											$	1,462
Total Assets(3)	$	3,365	$	1,719	$	9,489	$	—	$	(1)	$	14,572

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	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Quarter Ended June 30, 2022	(In millions)
Revenues:
Oil revenues	$	902	$	307	$	654	$	—	$	—	$	1,863
Natural gas revenues	88		64		281		—		—		433
Natural gas liquids revenues	3		12		214		—		—		229
Oil, natural gas, and natural gas liquids production revenues	993		383		1,149		—		—		2,525
Purchased oil and gas sales	—		—		522		—		—		522
	993		383		1,671		—		—		3,047
Operating Expenses:
Lease operating expenses	131		118		110		—		—		359
Gathering, processing, and transmission	5		12		77		—		—		94
Purchased oil and gas costs	—		—		528		—		—		528
Taxes other than income	—		—		78		—		—		78
Exploration	12		2		1		—		—		15
Depreciation, depletion, and amortization	91		54		133		—		—		278
Asset retirement obligation accretion	—		20		9		—		—		29
	239		206		936		—		—		1,381
Operating Income(2)	$	754	$	177	$	735	$	—	$	—	1,666
Other Income (Expense):
Derivative instrument losses, net											(32)
Loss on divestitures, net											(27)
Other, net											64
General and administrative											(83)
Transaction, reorganization, and separation											(3)
Financing costs, net											(62)
Income Before Income Taxes											$	1,523

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	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Six Months Ended June 30, 2022	(In millions)
Revenues:
Oil revenues	$	1,692	$	635	$	1,253	$	—	$	—	$	3,580
Natural gas revenues	186		163		464		—		—		813
Natural gas liquids revenues	6		28		421		—		(3)		452
Oil, natural gas, and natural gas liquids production revenues	1,884		826		2,138		—		(3)		4,845
Purchased oil and gas sales	—		—		866		5		—		871
Midstream service affiliate revenues	—		—		—		16		(16)		—
	1,884		826		3,004		21		(19)		5,716
Operating Expenses:
Lease operating expenses	262		214		228		—		(1)		703
Gathering, processing, and transmission	10		24		154		5		(18)		175
Purchased oil and gas costs	—		—		879		—		—		879
Taxes other than income	—		—		145		3		—		148
Exploration	27		7		5		—		1		40
Depreciation, depletion, and amortization	188		116		263		2		—		569
Asset retirement obligation accretion	—		40		17		1		—		58
	487		401		1,691		11		(18)		2,572
Operating Income (Loss)(2)	$	1,397	$	425	$	1,313	$	10	$	(1)	3,144
Other Income (Expense):
Derivative instrument losses, net											(94)
Gain on divestitures, net											1,149
Other, net											109
General and administrative											(234)
Transaction, reorganization, and separation											(17)
Financing costs, net											(202)
Income Before Income Taxes											$	3,855
Total Assets(3)	$	3,107	$	2,103	$	8,629	$	—	$	—	$	13,839

(1)    Includes revenue from non-customers for the quarters and six months ended June 30, 2023 and 2022 of:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Oil	$	165	$	302	$	337	$	552
Natural gas	24		30		50		61
Natural gas liquids	—		1		—		2

(2)Operating income of U.S. and North Sea includes leasehold impairments of $3 million and $3 million, respectively, for the second quarter of 2023.
Operating income of U.S. and Egypt includes leasehold impairments of $1 million and $1 million, respectively, for the second quarter of 2022. Operating income of U.S. and North Sea includes leasehold impairments of $5 million and $6 million, respectively, for the first six months of 2023. Operating income of U.S. and Egypt includes leasehold impairments of $4 million and $2 million, respectively, for the first six months of 2022.

(3)Intercompany balances are excluded from total assets.

(4)Includes noncontrolling interests of Sinopec, Altus prior to deconsolidation, and APA.

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ITEM 2.    MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS

The following discussion relates to Apache Corporation (Apache or the Company) and its consolidated subsidiaries and should be read together with the Company’s Consolidated Financial Statements and accompanying notes included in Part I, Item 1—Financial Statements of this Quarterly Report on Form 10-Q, as well as related information set forth in the Company’s Consolidated Financial Statements, accompanying Notes to Consolidated Financial Statements, and Management’s Narrative Analysis of Results of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Overview

Apache, a direct, wholly owned subsidiary of APA Corporation (APA), is an independent energy company that explores for, develops, and produces natural gas, crude oil, and natural gas liquids (NGLs). The Company’s upstream business currently has exploration and production operations in three geographic areas: the U.S., Egypt, and offshore the U.K. in the North Sea (North Sea). Prior to the BCP Business Combination (as defined in the Notes to the Company’s Consolidated Financial Statements set forth in Part I, Item 1—Financial Statements of this Quarterly Report on Form 10-Q), the Company’s midstream business was operated by Altus Midstream Company (ALTM) through its subsidiary Altus Midstream LP (collectively, Altus).

The Company’s mission is to grow in an innovative, safe, environmentally responsible, and profitable manner for the long-term benefit of its stakeholders. The Company is focused on rigorous portfolio management, disciplined financial structure, and optimization of returns.

The global economy and the energy industry continue to be impacted by the effects of the conflict in Ukraine and the coronavirus disease 2019 (COVID-19) pandemic. Uncertainties in the global supply chain and financial markets, including the impact of inflation and rising interest rates, and actions taken by foreign oil and gas producing nations, including OPEC+, continue to impact oil supply and demand and contribute to commodity price volatility. Despite these uncertainties, the Company remains committed to its longer-term objectives: (1) to maintain a balanced asset portfolio; (2) to invest for long-term returns over production growth; and (3) to budget conservatively to generate cash flow in excess of its upstream exploration, appraisal, and development capital program that can be directed to debt reduction, share repurchases, and other return of capital to its shareholders. The Company continues to aggressively manage its cost structure regardless of the oil price environment and closely monitors hydrocarbon pricing fundamentals to reallocate capital as part of its ongoing planning process.

In the second quarter of 2023, the Company reported net income of $290 million compared to net income of $903 million in the second quarter of 2022. Net income for the second quarter of 2023 was impacted by lower revenues attributable to significantly lower realized commodity prices when compared to the prior-year period.

The Company generated $1.3 billion of cash from operating activities during the first six months of 2023, 46 percent lower than the first six months of 2022. The Company’s lower operating cash flows for the first six months of 2023 were driven by lower commodity prices and associated revenues and the timing of working capital items.

Operational Highlights

Key operational highlights for the quarter include:

United States

•Daily boe production from the Company’s U.S. assets accounted for 51 percent of its total production during the second quarter of 2023. The Company averaged four drilling rigs in the U.S. during the quarter, including two rigs in the Southern Midland Basin and two rigs in the Delaware Basin, and drilled and brought online 10 operated wells in the quarter. Two-thirds of those wells came online in June, so the full impact will be realized in the third quarter. The Company’s core Midland Basin development program continues to represent a key growth area for the U.S. assets.

International

•In Egypt, the Company averaged 17 drilling rigs and drilled 19 new productive wells during the second quarter of 2023. Second quarter 2023 gross equivalent production in the Company’s Egypt assets decreased 3 percent from the second quarter of 2022, and net production remained relatively flat. The Company has increased drilling and workover activity with a heavier focus on oil prospects and anticipates increases in gross oil production volumes throughout the remainder of the year as it maintains a steady operational cadence.

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•The Company suspended all new drilling activity in the North Sea during the second quarter of 2023. The Company will manage its base production and maximize economic recovery of its oil and gas wells through well intervention activities.

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Results of Operations

Oil, Natural Gas, and Natural Gas Liquids Production Revenues

Revenue

The Company’s production revenues and respective contribution to total revenues by country were as follows:

	For the Quarter Ended June 30,								For the Six Months Ended June 30,
	2023				2022				2023				2022
	$ Value		% Contribution		$ Value		% Contribution		$ Value		% Contribution		$ Value		% Contribution
	($ in millions)
Oil Revenues:
United States	$	473	36	%	$	654	35	%	$	912	34	%	$	1,253	35	%
Egypt(1)	618		47	%	902		48	%	1,247		47	%	1,692		47	%
North Sea	235		17	%	307		17	%	517		19	%	635		18	%
Total(1)	$	1,326	100	%	$	1,863	100	%	$	2,676	100	%	$	3,580	100	%
Natural Gas Revenues:
United States	$	46	26	%	$	281	65	%	$	131	32	%	$	464	57	%
Egypt(1)	90		52	%	88		20	%	183		44	%	186		23	%
North Sea	39		22	%	64		15	%	99		24	%	163		20	%
Total(1)	$	175	100	%	$	433	100	%	$	413	100	%	$	813	100	%
NGL Revenues:
United States	$	95	96	%	$	214	93	%	$	203	94	%	$	418	92	%
Egypt(1)	—		0	%	3		1	%	—		0	%	6		2	%
North Sea	4		4	%	12		6	%	14		6	%	28		6	%
Total(1)	$	99	100	%	$	229	100	%	$	217	100	%	$	452	100	%
Oil and Gas Revenues:
United States	$	614	38	%	$	1,149	46	%	$	1,246	38	%	$	2,135	44	%
Egypt(1)	708		44	%	993		39	%	1,430		43	%	1,884		39	%
North Sea	278		18	%	383		15	%	630		19	%	826		17	%
Total(1)	$	1,600	100	%	$	2,525	100	%	$	3,306	100	%	$	4,845	100	%

(1)    Includes revenues attributable to a noncontrolling interest in Egypt.

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Production

The Company’s production volumes by country were as follows:

	For the Quarter Ended June 30,			For the Six Months Ended June 30,
	2023	Increase (Decrease)	2022	2023	Increase (Decrease)	2022
Oil Volume (b/d)
United States	70,087	8%	64,759	67,515	0%	67,184
Egypt(1)(2)	87,790	3%	85,502	87,792	3%	85,261
North Sea	35,048	8%	32,493	36,268	7%	33,860
Total	192,925	6%	182,754	191,575	3%	186,305
Natural Gas Volume (Mcf/d)
United States	422,325	(8)%	457,459	417,213	(11)%	467,493
Egypt(1)(2)	337,413	(3)%	346,424	346,829	(5)%	366,390
North Sea	37,194	(13)%	42,802	38,769	(5)%	40,645
Total	796,932	(6)%	846,685	802,811	(8)%	874,528
NGL Volume (b/d)
United States	56,973	(4)%	59,267	54,122	(11)%	60,482
Egypt(1)(2)	—	NM	297	—	NM	394
North Sea	872	(27)%	1,195	1,062	(21)%	1,345
Total	57,845	(5)%	60,759	55,184	(11)%	62,221
BOE per day(3)
United States	197,448	(1)%	200,269	191,172	(7)%	205,582
Egypt(1)(2)	144,026	0%	143,536	145,597	(1)%	146,720
North Sea(4)	42,118	3%	40,822	43,792	4%	41,979
Total	383,592	NM	384,627	380,561	(3)%	394,281

(1)    Gross oil, natural gas, and NGL production in Egypt were as follows:

	For the Quarter Ended June 30,		For the Six Months Ended June 30,
	2023	2022	2023	2022
Oil (b/d)	140,652	141,432	140,708	137,934
Natural Gas (Mcf/d)	517,291	555,694	531,093	576,637
NGL (b/d)	—	464	—	599

(2)    Includes net production volumes per day attributable to noncontrolling interests in Egypt of:

	For the Quarter Ended June 30,		For the Six Months Ended June 30,
	2023	2022	2023	2022
Oil (b/d)	58,561	45,616	58,560	45,475
Natural Gas (Mcf/d)	225,080	184,819	231,348	195,390
NGL (b/d)	—	158	—	210

(3)    The table shows production on a boe basis in which natural gas is converted to an equivalent barrel of oil based on a 6:1 energy equivalent ratio. This ratio is not reflective of the price ratio between the two products.

(4)    Average sales volumes from the North Sea for the second quarters of 2023 and 2022 were 40,099 boe/d and 38,029 boe/d, respectively, and 43,347 boe/d and 40,833 boe/d for the first six months of 2023 and 2022, respectively. Sales volumes may vary from production volumes as a result of the timing of liftings.

NM — Not Meaningful

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Pricing

The Company’s average selling prices by country were as follows:

	For the Quarter Ended June 30,					For the Six Months Ended June 30,
	2023		Increase (Decrease)	2022		2023		Increase (Decrease)	2022
Average Oil Price – Per barrel
United States	$	74.04	(33)%	$	110.98	$	74.57	(28)%	$	103.05
Egypt	77.39		(33)%	115.97		78.48		(28)%	109.65
North Sea	79.27		(30)%	113.77		80.51		(25)%	107.47
Total	76.48		(33)%	113.79		77.47		(28)%	106.87
Average Natural Gas Price – Per Mcf
United States	$	1.21	(82)%	$	6.75	$	1.74	(68)%	$	5.48
Egypt	2.95		6%	2.78		2.92		4%	2.80
North Sea	11.29		(38)%	18.15		14.47		(41)%	24.72
Total	2.42		(57)%	5.65		2.85		(45)%	5.16
Average NGL Price – Per barrel
United States	$	18.13	(54)%	$	39.79	$	20.71	(46)%	$	38.20
Egypt	—		NM	75.14		—		NM	76.80
North Sea	39.24		(45)%	71.71		49.52		(32)%	73.29
Total	18.61		(55)%	40.97		21.52		(46)%	39.63

NM — Not Meaningful

Second-Quarter 2023 compared to Second-Quarter 2022

Crude Oil Crude oil revenues for the second quarter of 2023 totaled $1.3 billion, a $537 million decrease from the comparative 2022 quarter. A 33 percent decrease in average realized prices decreased second-quarter 2023 oil revenues by $611 million compared to the prior-year quarter, while 6 percent higher average daily production increased revenues by $74 million. Crude oil revenues accounted for 83 percent of total oil and gas production revenues and 50 percent of worldwide production in the second quarter of 2023. Crude oil prices realized in the second quarter of 2023 averaged $76.48 per barrel, compared with $113.79 per barrel in the comparative prior-year quarter.

The Company’s worldwide oil production increased 10.2 Mb/d to 192.9 Mb/d during the second quarter of 2023 from the comparative prior-year period, primarily a result of increased drilling activity and recompletions, partially offset by natural production decline across all assets.

Natural Gas Gas revenues for the second quarter of 2023 totaled $175 million, a $258 million decrease from the comparative 2022 quarter. A 57 percent decrease in average realized prices decreased second-quarter 2023 natural gas revenues by $248 million compared to the prior-year quarter, while 6 percent lower average daily production decreased revenues by $10 million. Natural gas revenues accounted for 11 percent of total oil and gas production revenues and 35 percent of worldwide production during the second quarter of 2023. The Company’s worldwide natural gas production decreased 49.8 MMcf/d to 796.9 MMcf/d during the second quarter of 2023 from the comparative prior-year period, primarily a result of natural production decline across all assets and sale of non-core assets in the U.S., partially offset by increased drilling activity and recompletions.

NGL NGL revenues for the second quarter of 2023 totaled $99 million, a $130 million decrease from the comparative 2022 quarter. A 55 percent decrease in average realized prices decreased second-quarter 2023 NGL revenues by $125 million compared to the prior-year quarter, while 5 percent lower average daily production decreased revenues by $5 million. NGL revenues accounted for 6 percent of total oil and gas production revenues and 15 percent of worldwide production during the second quarter of 2023. The Company’s worldwide NGL production decreased 2.9 Mb/d to 57.8 Mb/d during the second quarter of 2023 from the comparative prior-year period, primarily a result of natural production decline, partially offset by increased drilling activity and recompletions.

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Year-to-Date 2023 compared to Year-to-Date 2022

Crude Oil Crude oil revenues for the first six months of 2023 totaled $2.7 billion, a $904 million decrease from the comparative 2022 period. A 28 percent decrease in average realized prices decreased oil revenues for the 2023 period by $984 million compared to the prior-year period, while 3 percent higher average daily production increased revenues by $80 million. Crude oil revenues accounted for 81 percent of total oil and gas production revenues and 50 percent of worldwide production for the first six months of 2023. Crude oil prices realized during the first six months of 2023 averaged $77.37 per barrel, compared to $106.87 per barrel in the comparative prior-year period.

The Company’s worldwide oil production increased 5.3 Mb/d to 191.6 Mb/d in the first six months of 2023 compared to the prior-year period, primarily a result of increased drilling activity and recompletions, partially offset by natural production decline across all assets.

Natural Gas Gas revenues for the first six months of 2023 totaled $413 million, a $400 million decrease from the comparative 2022 period. A 45 percent decrease in average realized prices decreased natural gas revenues for the 2023 period by $364 million compared to the prior-year period, while 8 percent lower average daily production decreased revenues by $36 million compared to the prior-year period. Natural gas revenues accounted for 12 percent of total oil and gas production revenues and 35 percent of worldwide production for the first six months of 2023. The Company’s worldwide natural gas production decreased 72 MMcf/d to 802.8 MMcf/d in the first six months of 2023 compared to the prior-year period, primarily a result of natural production decline across all assets and sale of non-core assets in the U.S., partially offset by increased drilling activity and recompletions.

NGL NGL revenues for the first six months of 2023 totaled $217 million, a $235 million decrease from the comparative 2022 period. A 46 percent decrease in average realized prices decreased NGL revenues for the 2023 period by $206 million compared to the prior-year period, while 11 percent lower average daily production decreased revenues by $29 million compared to the prior-year period. NGL revenues accounted for 7 percent of total oil and gas production revenues and 15 percent of worldwide production for the first six months of 2023. The Company’s worldwide NGL production decreased 7.0 Mb/d to 55.2 Mb/d in the first six months of 2023 compared to the prior-year period, primarily a result of natural production decline, partially offset by increased drilling activity and recompletions.

Purchased Oil and Gas Sales

Purchased oil and gas sales represent volumes primarily attributable to transport, fuel, and physical in-basin gas purchases that were sold by the Company to fulfill natural gas takeaway obligations. Sales related to these purchased volumes totaled $144 million and $522 million during the second quarters of 2023 and 2022, respectively, and $383 million and $871 million during the first six months of 2023 and 2022, respectively. Purchased oil and gas sales were offset by associated purchase costs of $131 million and $528 million during the second quarters of 2023 and 2022, respectively, and $347 million and $879 million during the first six months of 2023 and 2022, respectively. Gross purchased oil and gas sales values were lower in the second quarter and the first six months of 2023, primarily due to lower average natural gas prices during the 2023 periods.

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Operating Expenses

The Company’s operating expenses were as follows:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Lease operating expenses	$	352	$	359	$	666	$	703
Gathering, processing, and transmission	75		94		148		175
Purchased oil and gas costs	131		528		347		879
Taxes other than income	47		78		97		148
Exploration	37		15		81		40
General and administrative	66		83		124		234
Transaction, reorganization, and separation	2		3		6		17
Depreciation, depletion, and amortization:
Oil and gas property and equipment	326		269		627		547
Gathering, processing, and transmission assets	1		1		3		6
Other assets	12		8		17		16
Asset retirement obligation accretion	29		29		57		58
Impairments	46		—		46		—
Financing costs, net	42		62		91		202
Total Operating Expenses	$	1,166	$	1,529	$	2,310	$	3,025

Lease Operating Expenses (LOE)

LOE remained essentially flat in the second quarter of 2023 when compared to the second quarter of 2022 and decreased $37 million in the first six months of 2023 when compared to the first six months of 2022. On a per-unit basis, LOE decreased 5 percent and 6 percent in the second quarter and the first six months of 2023, respectively, from the comparative prior-year period. The decrease was primarily driven by the impact from changes in foreign currency exchange rates against the US dollar, decreased workover activity, primarily in the North Sea, and mark-to-market adjustments for cash-based stock compensation expense resulting from changes in APA’s stock price. These decreases were offset by overall higher labor costs and chemical and other operating costs trending with global inflation.

Gathering, Processing, and Transmission (GPT)

The Company’s GPT expenses were as follows:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Third-party processing and transmission costs	$	49	$	68	$	98	$	134
Midstream service costs – ALTM	—		—		—		18
Midstream service costs – Kinetik	26		26		50		36
Upstream processing and transmission costs	75		94		148		188
Midstream operating expenses	—		—		—		5
Intersegment eliminations	—		—		—		(18)
Total Gathering, processing, and transmission	$	75	$	94	$	148	$	175

GPT costs decreased $19 million and $27 million in the second quarter and the first six months of 2023, respectively, from the comparative prior-year period, primarily the result of lower upstream processing and transmission costs, partially offset by impacts of the BCP Business Combination. Upstream processing and transmission costs decreased $19 million and $40 million in the second quarter and the first six months of 2023, respectively, from the comparative prior-year period, primarily driven by a decrease in natural gas production volumes when compared to the prior-year period. Costs for services provided by ALTM in the first six months of 2022, prior to the BCP Business Combination, totaling $18 million were eliminated in the Company’s consolidated financial statements and reflected as “Intersegment eliminations” in the table above. Subsequent to the BCP Business Combination and the Company’s deconsolidation of Altus on February 22, 2022, these midstream services continue to be provided by Kinetik Holdings Inc. (Kinetik) but are no longer eliminated.

33

Taxes Other Than Income

Taxes other than income decreased $31 million and $51 million from the second quarter and the first six months of 2022, respectively, primarily from lower severance taxes driven by lower commodity prices as compared to the prior-year periods.

Exploration Expenses

The Company’s exploration expenses were as follows:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Unproved leasehold impairments	$	6	$	2	$	11	$	6
Dry hole expense	22		4		50		9
Geological and geophysical expense	—		1		1		2
Exploration overhead and other	9		8		19		23
Total Exploration	$	37	$	15	$	81	$	40

Exploration expenses increased $22 million and $41 million from the second quarter and the first six months of 2022, respectively, primarily the result of higher dry hole expense from increased Egypt exploration activity during 2023.

General and Administrative (G&A) Expenses

G&A expenses decreased $17 million and $110 million compared to the second quarter and the first six months of 2022, respectively. The decrease in expenses for the second quarter of 2023 and the first six months of 2023 compared to the prior-year period was primarily driven by lower cash-based stock compensation expense resulting from changes in APA’s stock price.

Transaction, Reorganization, and Separation (TRS) Costs

TRS costs remained essentially flat compared to the second quarter of 2022 and decreased $11 million compared to the first six months of 2022. The decrease in costs during the first six months of 2023 compared to the prior-year period was primarily a result of transaction costs from the BCP Business Combination in the first quarter of 2022.

Depreciation, Depletion, and Amortization (DD&A)

DD&A expenses on the Company’s oil and gas properties increased $57 million and $80 million from the second quarter and the first six months of 2022, respectively. The Company’s DD&A rate on its oil and gas properties increased $1.29 per boe and $1.06 per boe from the second quarter and the first six months of 2022, respectively, driven by general cost inflation. The increase on an absolute basis was also impacted by an increase in capital investment activity in Egypt and acquisitions in the U.S. over the past year.

Impairments

During the three and six months ended June 30, 2023, the Company recorded $46 million of impairments in connection with valuations of drilling and operations equipment inventory upon the Company’s decision to suspend drilling operations in the North Sea.

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Financing Costs, Net

The Company’s Financing costs were as follows:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Interest expense	$	74	$	75	$	149	$	165
Amortization of debt issuance costs	—		4		1		6
Capitalized interest	—		(1)		—		(1)
(Gain) loss on extinguishment of debt	—		—		(9)		67
Interest income	(3)		(1)		(5)		(5)
Interest income from APA Corporation, net	(29)		(15)		(45)		(30)
Total Financing costs, net	$	42	$	62	$	91	$	202

Net financing costs decreased $20 million and $111 million from the second quarter and the first six months of 2022, respectively. The lower overall interest expense was a result of the reduction of fixed-rate debt during 2023 coupled with losses incurred on the extinguishment of debt during the first six months of 2022 and gains on extinguishment of debt in the first six months of 2023.

Provision for Income Taxes

The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Non-cash impairments on the carrying value of the Company’s oil and gas properties, gains and losses on the sale of assets, statutory tax rate changes, and other significant or unusual items are recognized as discrete items in the quarter in which they occur.

During the second quarter of 2023, the Company’s effective income tax rate was primarily impacted by a decrease in the amount of valuation allowance against its U.S. deferred tax assets. The Company’s 2023 year-to-date effective income tax rate was primarily impacted by a deferred tax expense related to the remeasurement of taxes in the U.K. as a result of the enactment of Finance Act 2023 on January 10, 2023, and a decrease in the amount of valuation allowance against its U.S. deferred tax assets. During the second quarter of 2022, the Company’s effective income tax rate was primarily impacted by a decrease in the amount of valuation allowance against its U.S. deferred tax assets. The Company’s 2022 year-to-date effective income tax rate was primarily impacted by the gain associated with deconsolidation of Altus, the gain on sale of certain non-core mineral rights in the Delaware Basin, and a decrease in the amount of valuation allowance against its U.S. deferred tax assets.

On January 10, 2023, Finance Act 2023 was enacted, receiving Royal Assent, and included amendments to the Energy (Oil and Gas) Profits Levy Act of 2022, increasing the levy from a 25 percent rate to a 35 percent rate, effective for the period of January 1, 2023 through March 31, 2028. Under U.S. GAAP, the financial statement impact of new legislation is recorded in the period of enactment. Therefore, in the first quarter of 2023, the Company recorded a deferred tax expense of $174 million related to the remeasurement of the December 31, 2022 U.K. deferred tax liability.

On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022 (IRA). The IRA includes a new 15 percent corporate alternative minimum tax (Corporate AMT) on applicable corporations with an average annual financial statement income that exceeds $1 billion for any three consecutive years preceding the tax year at issue. The Corporate AMT is effective for tax years beginning after December 31, 2022. The Company is continuing to evaluate the provisions of the IRA and awaits further guidance from the U.S. Treasury Department to properly assess the impact of these provisions on the Company. Under the existing guidance, the Company does not believe the IRA will have a material impact for 2023.

The Company has a full valuation allowance against its U.S. net deferred tax assets. The Company will continue to maintain a full valuation allowance on its U.S. net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of this allowance. However, given the Company’s current and anticipated future domestic earnings, the Company believes that there is a reasonable possibility that within the next 12 months sufficient positive evidence may become available to allow the Company to reach a conclusion that a significant portion of the U.S. valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense, which could be material, for the period the release is recorded.

35

The Company and its subsidiaries are subject to U.S. federal income tax as well as income or capital taxes in various states and foreign jurisdictions. The Company’s tax reserves are related to tax years that may be subject to examination by the relevant taxing authority.

Critical Accounting Estimates

The Company prepares its financial statements and accompanying notes in conformity with accounting principles generally accepted in the U.S., which require management to make estimates and assumptions about future events that affect reported amounts in the financial statements and the accompanying notes. The Company identifies certain accounting policies involving estimation as critical accounting estimates based on, among other things, their impact on the portrayal of the Company’s financial condition, results of operations, or liquidity, as well as the degree of difficulty, subjectivity, and complexity in their deployment. Critical accounting estimates address accounting matters that are inherently uncertain due to unknown future resolution of such matters. Management routinely discusses the development, selection, and disclosure of each critical accounting estimate. For a discussion of the Company’s most critical accounting estimates, please see the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Some of the more significant estimates include reserve estimates, oil and gas exploration costs, offshore decommissioning contingency, long-lived asset impairments, asset retirement obligations, and income taxes.

New Accounting Pronouncements

There were no material changes in recently issued or adopted accounting standards from those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Omitted.

ITEM 4.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

John J. Christmann IV, the Company’s Chief Executive Officer and President, in his capacity as principal executive officer, and Stephen J. Riney, the Company’s Executive Vice President and Chief Financial Officer, in his capacity as principal financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2023, the end of the period covered by this report. Based on that evaluation and as of the date of that evaluation, these officers concluded that the Company’s disclosure controls and procedures were effective, providing effective means to ensure that the information the Company is required to disclose under applicable laws and regulations is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

The Company periodically reviews the design and effectiveness of its disclosure controls, including compliance with various laws and regulations that apply to its operations, both inside and outside the United States. The Company makes modifications to improve the design and effectiveness of our disclosure controls, and may take other corrective action, if the Company’s reviews identify deficiencies or weaknesses in its controls.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting that occurred during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

36

PART II - OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

Refer to Part I, Item 3—Legal Proceedings of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and Note 12—Commitments and Contingencies in the Notes to the Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q (which is hereby incorporated by reference herein), for a description of material legal proceedings.

ITEM 1A.    RISK FACTORS

There have been no material changes to the risk factors disclosed in Part I, Item 1A—Risk Factors of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Given the nature of its business, APA Corporation may be subject to different or additional risks than those applicable to the Company. For a description of these risks, refer to the disclosures in APA Corporation’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2023 and June 30, 2023 and APA Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

37

ITEM 6.    EXHIBITS

3.1	–	Amended and Restated Certificate of Incorporation of Registrant, dated March 1, 2021, as attached as Annex A to the Certificate of Merger of APA Merger Sub, Inc. with and into Registrant, filed with the Secretary of State of the State of Delaware on March 1, 2021 (incorporated by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed March 1, 2021, SEC File No. 001-4300).
3.2	–	Certificate of Amendment of Amended and Restated Certificate of Incorporation of Registrant, dated June 7, 2021, filed with the Secretary of State of the State of Delaware on June 10, 2021 (incorporated by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed June 14, 2021, SEC File No. 001-4300).
3.3	–	Amended and Restated Bylaws of Registrant, dated March 1, 2021 (incorporated by reference to Exhibit 3.2 to Registrant’s Current Report on Form 8-K filed March 1, 2021, SEC File No. 001-4300).
*31.1	–	Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act) by Principal Executive Officer.
*31.2	–	Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act) by Principal Financial Officer.
**32.1	–	Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Executive Officer and Principal Financial Officer.
*101	–	The following financial statements from the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in Inline XBRL: (i) Statement of Consolidated Operations, (ii) Statement of Consolidated Comprehensive Income (Loss), (iii) Statement of Consolidated Cash Flows, (iv) Consolidated Balance Sheet, (v) Statement of Consolidated Changes in Equity (Deficit) and Noncontrolling Interests and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
*101.SCH	–	Inline XBRL Taxonomy Schema Document.
*101.CAL	–	Inline XBRL Calculation Linkbase Document.
*101.DEF	–	Inline XBRL Definition Linkbase Document.
*101.LAB	–	Inline XBRL Label Linkbase Document.
*101.PRE	–	Inline XBRL Presentation Linkbase Document.
*104	–	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*    Filed herewith

**    Furnished herewith

38

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
Dated:	August 3, 2023	/s/ STEPHEN J. RINEY
		Stephen J. Riney
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)
Dated:	August 3, 2023	/s/ REBECCA A. HOYT
		Rebecca A. Hoyt
		Senior Vice President, Chief Accounting Officer, and Controller
		(Principal Accounting Officer)

39

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, John J. Christmann IV, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Apache Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2023

/s/ John J. Christmann IV

John J. Christmann IV

Chief Executive Officer and President

(principal executive officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Stephen J. Riney, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Apache Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2023

/s/ Stephen J. Riney

Stephen J. Riney

Executive Vice President and Chief Financial Officer

(principal financial officer)

EX-32.1

EXHIBIT 32.1

APACHE CORPORATION

Certification of Principal Executive Officer

and Principal Financial Officer

I, John J. Christmann IV, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the quarterly report on Form 10-Q of Apache Corporation for the quarterly period ending June 30, 2023, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §78m or §78o (d)) and that information contained in such report fairly represents, in all material respects, the financial condition and results of operations of Apache Corporation.

Date: August 3, 2023

/s/ John J. Christmann IV
By:	John J. Christmann IV
Title:	Chief Executive Officer and President
	(principal executive officer)

I, Stephen J. Riney, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the quarterly report on Form 10-Q of Apache Corporation for the quarterly period ending June 30, 2023, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §78m or §78o (d)) and that information contained in such report fairly represents, in all material respects, the financial condition and results of operations of Apache Corporation.

Date: August 3, 2023

/s/ Stephen J. Riney
By:	Stephen J. Riney
Title:	Executive Vice President and Chief Financial Officer
	(principal financial officer)

XML

Cover - shares	6 Months Ended
	Jun. 30, 2023	Jul. 31, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	1-4300
Entity Registrant Name	APACHE CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	41-0747868
Entity Address, Address Line One	One Post Oak Central, 2000 Post Oak Boulevard, 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
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		1,000
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000006769
Current Fiscal Year End Date	--12-31

XML

STATEMENT OF CONSOLIDATED OPERATIONS (Unaudited) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
REVENUES AND OTHER:
Derivative instrument losses, net		$ 0	$ (32)	$ 0	$ (94)
Gain (loss) on divestitures, net		5	(27)	6	1,149
Other, net		109	64	77	109
Total revenues and other		1,858	3,052	3,772	6,880
OPERATING EXPENSES:
Lease operating expenses		352	359	666	703
Taxes other than income		47	78	97	148
Exploration		37	15	81	40
General and administrative		66	83	124	234
Transaction, reorganization, and separation		2	3	6	17
Depreciation, depletion, and amortization		339	278	647	569
Asset retirement obligation accretion		29	29	57	58
Impairments		46	0	46	0
Financing costs, net		42	62	91	202
Total operating expenses		1,166	1,529	2,310	3,025
NET INCOME BEFORE INCOME TAXES		692	1,523	1,462	3,855
Current income tax provision		254	415	600	807
Deferred income tax provision (benefit)		(14)	(21)	105	(62)
NET INCOME INCLUDING NONCONTROLLING INTERESTS		452	1,129	757	3,110
Net loss attributable to Altus Preferred Unit limited partners		0	0	0	(70)
NET INCOME ATTRIBUTABLE TO APACHE CORPORATION		290	903	427	2,750
Noncontrolling interest – Sinopec
OPERATING EXPENSES:
Net income attributable to noncontrolling interest		81	141	165	260
Noncontrolling interest - Altus
OPERATING EXPENSES:
Net income attributable to noncontrolling interest		0	0	0	14
Noncontrolling interest – APA Corporation
OPERATING EXPENSES:
Net income attributable to noncontrolling interest		81	85	165	156
Oil and gas
REVENUES AND OTHER:
Total revenues		1,744	3,047	3,689	5,716
Gathering, processing, and transmission costs
REVENUES AND OTHER:
Oil, natural gas, and natural gas liquids production revenues	[1]	1,600	2,525	3,306	4,845
OPERATING EXPENSES:
Gathering, processing, and transmission/Purchased oil and gas costs	[1]	75	94	148	175
Purchased oil and gas sales
REVENUES AND OTHER:
Purchased oil and gas sales	[1]	144	522	383	871
OPERATING EXPENSES:
Gathering, processing, and transmission/Purchased oil and gas costs	[1]	$ 131	$ 528	$ 347	$ 879

[1] For transactions associated with Kinetik, refer to Note 7—Equity Method Interests for further detail.

XML

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
NET INCOME INCLUDING NONCONTROLLING INTERESTS	$ 452	$ 1,129	$ 757	$ 3,110
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Pension and postretirement benefit plan	0	0	3	(1)
COMPREHENSIVE INCOME INCLUDING NONCONTROLLING INTERESTS	452	1,129	760	3,109
Comprehensive loss attributable to Altus Preferred Unit limited partners	0	0	0	(70)
COMPREHENSIVE INCOME ATTRIBUTABLE TO APACHE CORPORATION	290	903	430	2,749
Noncontrolling interest – Sinopec
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Comprehensive income attributable to noncontrolling interest	81	141	165	260
Noncontrolling interest - Altus
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Comprehensive income attributable to noncontrolling interest	0	0	0	14
Noncontrolling interest – APA Corporation
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Comprehensive income attributable to noncontrolling interest	$ 81	$ 85	$ 165	$ 156

XML

STATEMENT OF CONSOLIDATED CASH FLOWS (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income including noncontrolling interests	$ 757	$ 3,110
Adjustments to reconcile net income to net cash provided by operating activities:
Unrealized derivative instrument losses, net	0	83
Gain on divestitures, net	(6)	(1,149)
Exploratory dry hole expense and unproved leasehold impairments	61	15
Depreciation, depletion, and amortization	647	569
Asset retirement obligation accretion	57	58
Impairments	46	0
Provision for (benefit from) deferred income taxes	105	(62)
(Gain) loss on extinguishment of debt	(9)	67
Other, net	(113)	(119)
Changes in operating assets and liabilities:
Receivables	92	(501)
Inventories	(45)	(18)
Drilling advances and other current assets	(106)	28
Deferred charges and other long-term assets	159	(11)
Accounts payable	(84)	185
Accounts receivable from/payable to APA Corporation	126	(54)
Accrued expenses	(161)	201
Deferred credits and noncurrent liabilities	(221)	(2)
NET CASH PROVIDED BY OPERATING ACTIVITIES	1,305	2,400
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to upstream oil and gas property	(962)	(635)
Leasehold and property acquisitions	(10)	(26)
Notes receivable from APA Corporation	(144)	0
Proceeds from sale of oil and gas properties	28	751
Proceeds from sale of Kinetik shares	0	224
Deconsolidation of Altus cash and cash equivalents	0	(143)
Other, net	(13)	2
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(1,101)	173
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Apache credit facility, net	0	138
Payments on note payable to APA Corporation, net	0	(486)
Payments on fixed-rate debt	(65)	(1,370)
Distributions to noncontrolling interest – Sinopec	(100)	(159)
Distributions to APA Corporation	(100)	(733)
Other, net	4	(14)
NET CASH USED IN FINANCING ACTIVITIES	(261)	(2,624)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(57)	(51)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	185	279
CASH AND CASH EQUIVALENTS AT END OF PERIOD	128	228
SUPPLEMENTARY CASH FLOW DATA:
Interest paid, net of capitalized interest	151	176
Income taxes paid, net of refunds	476	637
Non-cash financing adjustment: APA’s assumption of Apache’s borrowings on its syndicated credit facility	$ 0	$ 680

XML

CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
CURRENT ASSETS:
Cash and cash equivalents	$ 128	$ 185
Receivables, net of allowance of $103 and $117	1,331	1,424
Other current assets (Note 6)	1,161	993
Total current assets	2,620	2,602
PROPERTY AND EQUIPMENT:
Oil and gas properties	42,117	41,245
Gathering, processing, and transmission facilities	447	449
Other	598	613
Less: Accumulated depreciation, depletion, and amortization	(34,952)	(34,350)
Property and equipment, net	8,210	7,957
OTHER ASSETS:
Equity method interests (Note 7)	695	624
Decommissioning security for sold Gulf of Mexico properties (Note 12)	57	217
Deferred charges and other	517	571
Assets	14,572	14,255
CURRENT LIABILITIES:
Current debt	2	2
Other current liabilities (Note 8)	1,935	2,049
Total current liabilities	2,625	2,697
LONG-TERM DEBT (Note 10)	4,812	4,885
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Income taxes	431	314
Asset retirement obligation (Note 9)	1,978	1,936
Decommissioning contingency for sold Gulf of Mexico properties (Note 12)	472	738
Other	440	443
Total deferred credits and other noncurrent liabilities	3,321	3,431
EQUITY (DEFICIT):
Common stock, $0.625 par, 1,000 and 1,000 shares authorized, respectively, 1,000 and 1,000 shares issued, respectively	0	0
Paid-in capital	8,037	8,025
Accumulated deficit	(5,354)	(5,781)
Accumulated other comprehensive income	17	14
EQUITY ATTRIBUTABLE TO APACHE CORPORATION	2,700	2,258
TOTAL EQUITY	3,814	3,242
Liabilities and Equity, Total	14,572	14,255
Affiliated Entity
OTHER ASSETS:
Noncurrent receivable from APA Corporation (Note 2)	0	869
Notes receivable from APA Corporation (Note 2)	2,473	1,415
CURRENT LIABILITIES:
Accounts payable	126	0
Nonrelated Party
CURRENT LIABILITIES:
Accounts payable	562	646
Noncontrolling interest – Sinopec
EQUITY (DEFICIT):
Noncontrolling interest	987	922
Noncontrolling interest – APA Corporation
EQUITY (DEFICIT):
Noncontrolling interest	$ 127	$ 62

XML

CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Receivables, allowance	$ 103	$ 117
Common stock, par value (in USD per share)	$ 0.625	$ 0.625
Common stock, shares authorized (in shares)	1,000	1,000
Common stock, shares issued (in shares)	1,000	1,000

XML

STATEMENT OF CONSOLIDATED CHANGES IN EQUITY (DEFICIT) AND NONCONTROLLING INTERESTS (Unaudited) - USD ($) $ in Millions		Total	Redeemable Noncontrolling Interest - Altus Preferred Unit Limited Partners	Noncontrolling interest – APA Corporation	Noncontrolling interest – Sinopec	Noncontrolling interest - Altus	EQUITY (DEFICIT) ATTRIBUTABLE TO APACHE CORPORATION	Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Income	Noncontrolling Interests		Noncontrolling Interests Noncontrolling interest – APA Corporation		Noncontrolling Interests Noncontrolling interest – Sinopec		Noncontrolling Interests Noncontrolling interest - Altus	[1]
Beginning balance at Dec. 31, 2021	[1]		$ 712
Increase (Decrease) in Temporary Equity [Roll Forward]
Net loss attributable to Altus Preferred Unit limited partners	[1]		(70)
Deconsolidation of Altus	[1]		(642)
Ending balance at Jun. 30, 2022	[1]		0
Beginning balance at Dec. 31, 2021		$ 260					$ (618)	$ 8,677	$ (9,317)	$ 22	$ 878	[1]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to Apache Corporation		2,750					2,750		2,750
Net income attributable to noncontrolling interest				$ 156	$ 260	$ 14							$ 156	[1]	$ 260	[1]	$ 14
Distributions to noncontrolling interest – Sinopec					(159)										(159)	[1]
Distributions to APA Corporation		(733)					(638)	(638)			(95)	[1]
Deconsolidation of Altus		(72)									(72)	[1]
Other		14					14	15		(1)
Ending balance at Jun. 30, 2022		2,490					1,508	8,054	(6,567)	21	982	[1]
Ending balance at Jun. 30, 2022	[1]		$ 0
Beginning balance at Mar. 31, 2022		1,832					932	8,381	(7,470)	21	900	[2]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to Apache Corporation		903					903		903
Net income attributable to noncontrolling interest				85	141	0							85	[2]	141	[2]
Distributions to noncontrolling interest – Sinopec					(90)										(90)	[2]
Distributions to APA Corporation		(387)					(333)	(333)			(54)	[2]
Other		6					6	6
Ending balance at Jun. 30, 2022		2,490					1,508	8,054	(6,567)	21	982	[1]
Beginning balance at Dec. 31, 2022		3,242					2,258	8,025	(5,781)	14	984	[1]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to Apache Corporation		427					427		427
Net income attributable to noncontrolling interest				165	165	0							165	[1]	165	[1]
Distributions to noncontrolling interest – Sinopec					(100)										(100)	[1]
Distributions to APA Corporation		(100)									(100)	[1]
Other		15					15	12		3
Ending balance at Jun. 30, 2023		3,814					2,700	8,037	(5,354)	17	1,114	[2]
Beginning balance at Mar. 31, 2023		3,522					2,404	8,031	(5,644)	17	1,118	[2]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to Apache Corporation		290					290		290
Net income attributable to noncontrolling interest				$ 81	81	$ 0							$ 81	[2]	81	[2]
Distributions to noncontrolling interest – Sinopec					$ (83)										$ (83)	[2]
Distributions to APA Corporation		(83)									(83)	[2]
Other		6					6	6
Ending balance at Jun. 30, 2023		$ 3,814					$ 2,700	$ 8,037	$ (5,354)	$ 17	$ 1,114	[2]

[1] As a result of the BCP Business Combination (as defined herein), the Company deconsolidated Altus (as defined herein) on February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

[2] As a result of the BCP Business Combination (as defined herein), the Company deconsolidated Altus (as defined herein) on February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

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NATURE OF OPERATIONS	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF OPERATIONS	These consolidated financial statements have been prepared by Apache Corporation (Apache or the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The Company files these consolidated financial statements with the SEC as a voluntary filer to comply with the terms of certain of the Company’s outstanding debt instruments. They reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods, on a basis consistent with the annual audited financial statements, with the exception of any recently adopted accounting pronouncements. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10-Q should be read along with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which contains a summary of the Company’s significant accounting policies and other disclosures.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

As of June 30, 2023, the Company's significant accounting policies are consistent with those discussed in Note 1—Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The Company’s financial statements for prior periods may include reclassifications that were made to conform to the current-year presentation.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Apache and its subsidiaries after elimination of intercompany balances and transactions.

The Company’s undivided interests in oil and gas exploration and production ventures and partnerships are proportionately consolidated. The Company consolidates all other investments in which, either through direct or indirect ownership, it has more than a 50 percent voting interest or controls the financial and operating decisions. Noncontrolling interests represent third-party ownership in the net assets of a consolidated subsidiary of Apache and are reflected separately in the Company’s financial statements.

Apache has determined that one of its limited partnership subsidiaries, which has control over Apache’s Egyptian operations, qualified as a variable interest entity (VIE) under GAAP. Apache continues to consolidate this limited partnership subsidiary because the Company has concluded that it has a controlling financial interest in the Egyptian operations and was determined to be the primary beneficiary of the VIE. Sinopec International Petroleum Exploration and Production Corporation (Sinopec) owns a one-third minority participation in the Company’s consolidated Egypt oil and gas business as a noncontrolling interest. APA Corporation (APA) also owns a noncontrolling interest in Apache’s consolidated Egypt oil and gas business. Refer to Note 2—Transactions with Parent Affiliate for detail regarding APA’s noncontrolling interest. All noncontrolling interests are reflected as a separate component of equity in the Company’s consolidated balance sheet.

Additionally, prior to the BCP Business Combination defined below, third-party investors owned a minority interest of approximately 21 percent of Altus Midstream Company (ALTM or Altus), which was reflected as a separate noncontrolling interest component of equity in the Company’s consolidated balance sheet. ALTM qualified as a VIE under GAAP, which Apache consolidated because a wholly owned subsidiary of Apache had a controlling financial interest and was determined to be the primary beneficiary.

On February 22, 2022, ALTM closed a previously announced transaction to combine with privately owned BCP Raptor Holdco LP (BCP and, together with BCP Raptor Holdco GP, LLC, the Contributed Entities) in an all-stock transaction, pursuant to the Contribution Agreement entered into by and among ALTM, Altus Midstream LP, New BCP Raptor Holdco, LLC (the Contributor), and BCP (the BCP Contribution Agreement). Pursuant to the BCP Contribution Agreement, the Contributor contributed all of the equity interests of the Contributed Entities (the Contributed Interests) to Altus Midstream LP, with each Contributed Entity becoming a wholly owned subsidiary of Altus Midstream LP (the BCP Business Combination). Upon closing the transaction, the combined entity was renamed Kinetik Holdings Inc. (Kinetik), and the Company determined that it was no longer the primary beneficiary of Kinetik. The Company further determined that Kinetik no longer qualified as a VIE under GAAP. As a result, the Company deconsolidated ALTM on February 22, 2022. Refer to Note 3—Acquisitions and Divestitures for further detail.

The stockholders agreement entered into by and among the Company, ALTM, BCP, and other related and affiliated entities provides that the Company, through one of its wholly owned subsidiaries, retains the ability to designate a director to the board of directors of Kinetik for so long as the Company and its affiliates beneficially own 10 percent or more of Kinetik’s outstanding common stock. Based on this board representation, combined with the Company’s stock ownership, management determined it has significant influence over Kinetik, which is considered a related party of the Company. Investments in which the Company has significant influence, but not control, are accounted for under the equity method of accounting. These investments are recorded separately as “Equity method interests” in the Company’s consolidated balance sheet. The Company elected the fair value option to account for its equity method interest in Kinetik. Refer to Note 7—Equity Method Interests for further detail.

Use of Estimates

Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of the Company’s financial statements, and changes in these estimates are recorded when known.

Significant estimates with regard to these financial statements include the estimates of fair value for long-lived assets (refer to “Fair Value Measurements” and “Property and Equipment” sections in this Note 1 below), the fair value determination of acquired assets and liabilities (refer to Note 3—Acquisitions and Divestitures), the fair value of equity method interests (refer to “Equity Method Interests” within this Note 1 below and Note 7—Equity Method Interests), the assessment of asset retirement obligations (refer to Note 9—Asset Retirement Obligation), the estimate of income taxes (refer to Note 11—Income Taxes), the estimation of the contingent liability representing Apache’s potential decommissioning obligations on sold properties in the Gulf of Mexico (refer to Note 12—Commitments and Contingencies), and the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom.

Fair Value Measurements

Certain assets and liabilities are reported at fair value on a recurring basis in the Company’s consolidated balance sheet. Accounting Standards Codification (ASC) 820-10-35, “Fair Value Measurement” (ASC 820), provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority.

The valuation techniques that may be used to measure fair value include a market approach, an income approach, and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models, and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).

Refer to Note 5—Derivative Instruments and Hedging Activities, Note 7—Equity Method Interests, and Note 10—Debt and Financing Costs for further detail regarding the Company’s fair value measurements recorded on a recurring basis.

During the three and six months ended June 30, 2023 and 2022, the Company recorded no asset impairments in connection with fair value assessments.

Accounts Receivable from / Accounts Payable to APA

Accounts receivable from or payable to APA represents the net result of Apache’s administrative and support services provided to APA and other miscellaneous cash management transactions to be settled between the two affiliated entities. Generally, cash in this amount will be transferred to Apache or paid to APA in subsequent periods, after current period transactions are processed and net results of operations are determined. However, from time to time, Apache may estimate and transfer the cash settlement amount in the month the transactions are processed in order to minimize affiliate working capital balances or retain affiliate balances for cash management purposes. Refer to Note 2—Transactions with Parent Affiliate for more detail.

Revenue Recognition

There have been no significant changes to the Company’s contracts with customers during the six months ended June 30, 2023 and 2022.

Payments under all contracts with customers are typically due and received within a short-term period of one year or less after physical delivery of the product or service has been rendered. Receivables from contracts with customers, including receivables for purchased oil and gas sales, in each case, net of allowance for credit losses, were $1.2 billion and $1.3 billion as of June 30, 2023 and December 31, 2022, respectively.

Oil and gas production revenues from non-customers represent income taxes paid to the Arab Republic of Egypt by Egyptian General Petroleum Corporation on behalf of the Company. Revenue and associated expenses related to such tax volumes are recorded as “Oil, natural gas, and natural gas liquids production revenues” and “Current income tax provision,” respectively, in the Company’s statement of consolidated operations.

Refer to Note 13—Business Segment Information for a disaggregation of oil, gas, and natural gas production revenue by product and reporting segment.

In accordance with the provisions of ASC 606, “Revenue from Contracts with Customers,” variable market prices for each short-term commodity sale are allocated entirely to each performance obligation as the terms of payment relate specifically to the Company’s efforts to satisfy its obligations. As such, the Company has elected the practical expedients available under the standard to not disclose the aggregate transaction price allocated to unsatisfied, or partially unsatisfied, performance obligations as of the end of the reporting period.

Inventories

Inventories consist principally of tubular goods and equipment and are stated at the lower of weighted-average cost or net realizable value. Oil produced but not sold, primarily in the North Sea, is also recorded to inventory and is stated at the lower of the cost to produce or net realizable value.

During the three and six months ended June 30, 2023, the Company recorded $46 million of impairments in connection with valuations of drilling and operations equipment inventory upon the Company’s decision to suspend drilling operations in the North Sea.

Property and Equipment

The carrying value of the Company’s property and equipment represents the cost incurred to acquire the property and equipment, including capitalized interest, net of any impairments. For business combinations and acquisitions, property and equipment cost is based on the fair values at the acquisition date.

Oil and Gas Property

The Company follows the successful efforts method of accounting for its oil and gas property. Under this method of accounting, exploration costs, such as exploratory geological and geophysical costs, delay rentals, and exploration overhead, are expensed as incurred. All costs related to production, general corporate overhead, and similar activities are expensed as incurred. If an exploratory well provides evidence to justify potential development of reserves, drilling costs associated with the well are initially capitalized, or suspended, pending a determination as to whether a commercially sufficient quantity of proved reserves can be attributed to the area as a result of drilling. This determination may take longer than one year in certain areas depending on, among other things, the amount of hydrocarbons discovered, the outcome of planned geological and engineering studies, the need for additional appraisal drilling activities to determine whether the discovery is sufficient to support an economic development plan, and government sanctioning of development activities in certain international locations. At the end of each quarter, management reviews the status of all suspended exploratory well costs in light of ongoing exploration activities; in particular, whether the Company is making sufficient progress in its ongoing exploration and appraisal efforts or, in the case of discoveries requiring government sanctioning, whether development negotiations are underway and proceeding as planned. If management determines that future appraisal drilling or development activities are unlikely to occur, associated suspended exploratory well costs are expensed.

Acquisition costs of unproved properties are assessed for impairment at least annually and are transferred to proved oil and gas properties to the extent the costs are associated with successful exploration activities. Significant undeveloped leases are assessed individually for impairment based on the Company’s current exploration plans. Unproved oil and gas properties with individually insignificant lease acquisition costs are amortized on a group basis over the average lease term at rates that provide for full amortization of unsuccessful leases upon lease expiration or abandonment. Costs of expired or abandoned leases are charged to exploration expense, while costs of productive leases are transferred to proved oil and gas properties. Costs of maintaining and retaining unproved properties, as well as amortization of individually insignificant leases and impairment of unsuccessful leases, are included in exploration costs in the statement of consolidated operations.

Costs to develop proved reserves, including the costs of all development wells and related equipment used in the production of crude oil and natural gas, are capitalized. Depreciation of the cost of proved oil and gas properties is calculated using the unit-of-production (UOP) method. The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the carrying value of associated proved oil and gas properties. The reserve base used to calculate depreciation for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. The reserve base used to calculate the depreciation for capitalized well costs is the sum of proved developed reserves only. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are included in the depreciable cost.

Oil and gas properties are grouped for depreciation in accordance with ASC 932, “Extractive Activities—Oil and Gas.” The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field.

When circumstances indicate that the carrying value of proved oil and gas properties may not be recoverable, the Company compares unamortized capitalized costs to the expected undiscounted pre-tax future cash flows for the associated assets grouped at the lowest level for which identifiable cash flows are independent of cash flows of other assets. If the expected undiscounted pre-tax future cash flows, based on the Company’s estimate of future crude oil and natural gas prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally estimated using the income approach described in ASC 820. The expected future cash flows used for impairment reviews and related fair value calculations are typically based on judgmental assessments, a Level 3 fair value measurement.

Unproved leasehold impairments are typically recorded as a component of “Exploration” expense in the Company’s statement of consolidated operations. Gains and losses on divestitures of the Company’s oil and gas properties are recognized in the statement of consolidated operations upon closing of the transaction. Refer to Note 3—Acquisitions and Divestitures for more detail.

Gathering, Processing, and Transmission (GPT) Facilities

GPT facilities are depreciated on a straight-line basis over the estimated useful lives of the assets. The estimation of useful life takes into consideration anticipated production lives from the fields serviced by the GPT assets, whether Apache-operated or third party-operated, as well as potential development plans by the Company for undeveloped acreage within, or close to, those fields.

The Company assesses the carrying amount of its GPT facilities whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of these facilities is more than the sum of the undiscounted cash flows, an impairment loss is recognized for the excess of the carrying value over its fair value.

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TRANSACTIONS WITH PARENT AFFILIATE

6 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

TRANSACTIONS WITH PARENT AFFILIATE

TRANSACTIONS WITH PARENT AFFILIATE

Apache is a direct, wholly owned subsidiary of APA. Apache holds assets in the U.S., Egypt, and the U.K. and provides administrative and support operations for certain APA subsidiaries with interests in the U.S., Suriname, and the Dominican Republic.

Notes Receivable from APA Corporation

On March 1, 2021, Apache sold to APA all of the equity in the three Apache subsidiaries through which Apache’s interests in Suriname and the Dominican Republic were held. The purchase price is payable pursuant to a senior promissory note made by APA payable to Apache, dated March 1, 2021. The note has a seven-year term, maturing on February 29, 2028, and bears interest at a rate of 4.5 percent per annum, payable semi-annually, subject to APA’s option to allow accrued interest to convert to principal (PIK) during the first 5.5 years of the note’s term (to August 31, 2026). The note is guaranteed by each of the three subsidiaries sold by Apache to APA. APA allowed interest accrued from March 1, 2021 through February 28, 2023, totaling $125 million, to PIK pursuant to the note. As of June 30, 2023 and December 31, 2022, there was $1.4 billion in principal outstanding under this note.

APA also made a senior promissory note payable to Apache, dated March 31, 2023, pursuant to which Apache may loan and APA may borrow, repay, and reborrow up to $1.5 billion in aggregate principal amount outstanding at any time. The note has a five-year term, maturing March 31, 2028. The note bears interest at a rate per annum of 6.0 percent, payable semi-annually; however, APA may allow accrued interest to convert to principal, subject to the aggregate maximum principal amount of the note. APA allowed interest accrued from March 31, 2023 through May 15, 2023, totaling approximately $6 million, to PIK pursuant to the note. As of June 30, 2023, there were $994 million in borrowings outstanding under this note. The note is intended to facilitate cash management of APA and Apache.

These notes are both reflected in “Notes receivable from APA Corporation” on the Company’s consolidated balance sheet. The Company recognized interest income on these notes totaling $29 million and $16 million during the second quarters of 2023 and 2022, respectively, and $45 million and $31 million during the first six months of 2023 and 2022, respectively. The interest income related to these notes is reflected in “Financing costs, net” on the Company’s statement of consolidated operations.

Noncontrolling Interest – APA Corporation

In the fourth quarter of 2021, in conjunction with the ratification of a new merged concession agreement (MCA) with the Egyptian General Petroleum Corporation, Apache entered into an agreement with APA under which the historical value of existing concessions prior to ratifying the MCA was retained by Apache, with any excess value from the MCA terms being allocated to APA. Sinopec owns a one-third minority participation in the Company’s consolidated Egypt oil and gas business, and approximately 50 percent of the remaining net income and distributable cash flow for the Company’s Egyptian operations is being allocated to APA in 2023. Apache consolidates its Egyptian operations, with APA’s noncontrolling interest reflected as a separate component in the Company’s consolidated balance sheet. The Company recorded net income attributable to APA’s noncontrolling interest of $81 million and $85 million in the second quarters of 2023 and 2022, respectively, and $165 million and $156 million in the first six months of 2023 and 2022, respectively. The Company also distributed $100 million and $95 million in the first six months of 2023 and 2022, respectively, of cash to APA in association with its noncontrolling interest.

Accounts Receivable from / Accounts Payable to APA

In connection with the Company’s role as service provider, Apache is reimbursed by APA for employee costs, certain internal costs, and third-party costs paid by the Company on behalf of APA. All reimbursements are based on actual costs incurred, and no market premium is applied by the Company to APA. The Company incurred $6 million and $5 million in the second quarters of 2023 and 2022, respectively, and $11 million and $9 million in the first six months of 2023 and 2022, respectively, in reimbursable corporate overhead charges. The Company also collects third-party receivables on behalf of APA. As of June 30, 2023, the Company had accounts payable to APA in connection with these services totaling $126 million, which is reflected in “Accounts payable to APA Corporation” on the Company’s consolidated balance sheet. As of December 31, 2022, the Company had a receivable from APA totaling $869 million, which is reflected in “Noncurrent receivable from APA Corporation.” This balance was incorporated into the senior promissory note dated March 31, 2023, discussed above during the first six months of 2023.

Other Transactions with APA Corporation

From time to time, the Company may, at its discretion, make distributions of capital to APA. No capital distributions were made during the first six months of 2023. During the first six months of 2022, the Company made capital distributions totaling $638 million primarily in support of dividend payments and capital transactions completed by APA during the period.

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ACQUISITIONS AND DIVESTITURES

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

ACQUISITIONS AND DIVESTITURES

ACQUISITIONS AND DIVESTITURES

2023 Activity

During the second quarter and first six months of 2023, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of approximately $5 million and $10 million, respectively.

During the second quarter and first six months of 2023, the Company completed the sale of non-core assets and leasehold in multiple transactions for total cash proceeds of $7 million and $28 million, respectively, recognizing a gain of approximately $5 million and $6 million, respectively, upon closing of these transactions.

2022 Activity

During the second quarter and first six months of 2022, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $26 million.

During the second quarter and first six months of 2022, the Company completed the sale of non-core assets and leasehold in multiple transactions for total cash proceeds of $7 million and $15 million, respectively, recognizing a gain of approximately $1 million and $2 million, respectively, upon closing of these transactions.

During the first six months of 2022, the Company completed a transaction to sell certain non-core mineral rights in the Delaware Basin. The Company received total cash proceeds of approximately $726 million after certain post-closing adjustments and recognized an associated gain of approximately $560 million.

The BCP Business Combination was completed on February 22, 2022. As consideration for the contribution of the Contributed Interests, ALTM issued 50 million shares of Class C Common Stock (and Altus Midstream LP issued a corresponding number of common units) to BCP’s unitholders, which are principally funds affiliated with Blackstone and I Squared Capital. ALTM’s stockholders continued to hold their existing shares of common stock. As a result of the transaction, the Contributor, or its designees, collectively owned approximately 75 percent of the issued and outstanding shares of ALTM common stock. Apache Midstream LLC, a wholly owned subsidiary of APA, which owned approximately 79 percent of the issued and outstanding shares of ALTM common stock prior to the BCP Business Combination, owned approximately 20 percent of the issued and outstanding shares of Kinetik common stock after the transaction closed.

As a result of the BCP Business Combination, the Company deconsolidated ALTM on February 22, 2022 and recognized a gain of approximately $609 million that reflects the difference between the Company’s share of ALTM’s deconsolidated balance sheet of $193 million and the fair value of $802 million of its approximate 20 percent retained ownership in the combined entity.

During the first quarter of 2022, the Company sold four million of its shares of Kinetik Class A Common Stock for cash proceeds of $224 million and recognized a loss of $25 million, including transaction fees. Refer to Note 7—Equity Method Interests for further detail.

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CAPITALIZED EXPLORATORY WELL COSTS

6 Months Ended

Jun. 30, 2023

Extractive Industries [Abstract]

CAPITALIZED EXPLORATORY WELL COSTS

CAPITALIZED EXPLORATORY WELL COSTS

The Company’s capitalized exploratory well costs were $71 million and $50 million as of June 30, 2023 and December 31, 2022, respectively. The increase is primarily attributable to additional drilling activity in Egypt, partially offset by successful transfer of well costs during the quarter.

Projects with suspended exploratory well costs capitalized for a period greater than one year since the completion of drilling are those identified by management as exhibiting sufficient quantities of hydrocarbons to justify potential development. Management is actively pursuing efforts to assess whether proved reserves can be attributed to these projects.

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Objectives and Strategies

The Company is exposed to fluctuations in crude oil and natural gas prices on the majority of its worldwide production, as well as fluctuations in exchange rates in connection with transactions denominated in foreign currencies. The Company manages the variability in its cash flows by occasionally entering into derivative transactions on a portion of its crude oil and natural gas production and foreign currency transactions. The Company may utilize various types of derivative financial instruments, including forward contracts, futures contracts, swaps, and options, to manage fluctuations in cash flows resulting from changes in commodity prices or foreign currency values.

In December 2022, counterparty agreements for Apache’s commodity derivative instruments were transferred from Apache to APA Corporation. Apache had no outstanding derivative positions as of June 30, 2023 or December 31, 2022.

Derivative Activity Recorded in the Statement of Consolidated Operations

The following table summarizes the effect of derivative instruments on the Company’s statement of consolidated operations:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Realized:
Commodity derivative instruments	$	—	$	(4)	$	—	$	(9)
Foreign currency derivative instruments	—		(2)		—		(2)
Realized losses, net	—		(6)		—		(11)
Unrealized:
Commodity derivative instruments	—		(20)		—		(44)
Foreign currency derivative instruments	—		(6)		—		(8)
Preferred Units embedded derivative	—		—		—		(31)
Unrealized losses, net	—		(26)		—		(83)
Derivative instrument losses, net	$	—	$	(32)	$	—	$	(94)

Derivative instrument gains and losses were recorded in “Derivative instrument losses, net” under “Revenues and Other” in the Company’s statement of consolidated operations. Unrealized losses for derivative activity recorded in the statement of consolidated operations are reflected in the statement of consolidated cash flows separately as “Unrealized derivative instrument losses, net” under “Adjustments to reconcile net income to net cash provided by operating activities.”

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OTHER CURRENT ASSETS

6 Months Ended

Jun. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

OTHER CURRENT ASSETS

OTHER CURRENT ASSETS

The following table provides detail of the Company’s other current assets:

	June 30, 2023		December 31, 2022
	(In millions)
Inventories	$	487	$	425
Drilling advances	66		64
Prepaid assets and other	158		54
Current decommissioning security for sold Gulf of Mexico assets	450		450
Total Other current assets	$	1,161	$	993

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EQUITY METHOD INTERESTS

6 Months Ended

Jun. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

EQUITY METHOD INTERESTS

EQUITY METHOD INTERESTS

The Kinetik Class A Common Stock held by the Company is treated as an interest in equity securities measured at fair value. The Company elected the fair value option for measuring its equity method interest in Kinetik based on practical expedience, variances in reporting timelines, and cost-benefit considerations. The fair value of the Company’s interest in Kinetik is determined using observable share prices on a major exchange, a Level 1 fair value measurement. Fair value adjustments are recorded as a component of “Other, net” under “Revenues and other” in the Company’s statement of consolidated operations.

The Company’s initial interest in Kinetik was measured at fair value based on the Company’s ownership of approximately 12.9 million shares of Kinetik Class A Common stock as of February 22, 2022. In March 2022, the Company sold four million of its shares of Kinetik Class A Common Stock for a loss, including underwriters fees, of $25 million, which was recorded as a component of “Gain on divestitures, net” under “Revenues and other” in the Company’s statement of consolidated operations. Refer to Note 3—Acquisitions and Divestitures for further detail. During the second quarter of 2022, Kinetik issued a two-for-one split of its common stock, resulting in the Company owning approximately 17.7 million shares.

The Company has received approximately 2.1 million shares of Kinetik’s Class A Common Stock as paid-in-kind dividends through June 30, 2023. As of June 30, 2023, the Company’s ownership of 19.8 million shares represented approximately 13 percent of Kinetik’s outstanding Class A Common Stock.

The Company recorded changes in the fair value of its equity method interest in Kinetik totaling gains of $90 million and $42 million in the second quarters of 2023 and 2022, respectively, and gains of $71 million and $66 million in the first six months of 2023 and 2022, respectively. These gains were recorded as a component of “Revenues and other” in the Company’s statement of consolidated operations.

The following table represents sales and costs associated with Kinetik:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Natural gas and NGLs sales	$	22	$	—	$	29	$	—
Purchased oil and gas sales	7		—		7		—
	$	29	$	—	$	36	$	—
Gathering, processing, and transmission costs	$	26	$	26	$	50	$	36
Purchased oil and gas costs	26		—		28		—
	$	52	$	26	$	78	$	36

As of June 30, 2023, the Company has recorded accrued costs payable to Kinetik of approximately $37 million and receivables from Kinetik of approximately $19 million.

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OTHER CURRENT LIABILITIES

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

OTHER CURRENT LIABILITIES

OTHER CURRENT LIABILITIES

The following table provides detail of the Company’s other current liabilities:

	June 30, 2023		December 31, 2022
	(In millions)
Accrued operating expenses	$	172	$	139
Accrued exploration and development	352		300
Accrued compensation and benefits	247		514
Accrued interest	93		96
Accrued income taxes	193		90
Current asset retirement obligation	55		55
Current operating lease liability	102		167
Current decommissioning contingency for sold Gulf of Mexico properties	450		450
Other	271		238
Total Other current liabilities	$	1,935	$	2,049

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ASSET RETIREMENT OBLIGATION

6 Months Ended

Jun. 30, 2023

Asset Retirement Obligation Disclosure [Abstract]

ASSET RETIREMENT OBLIGATION

ASSET RETIREMENT OBLIGATION

The following table describes changes to the Company’s asset retirement obligation (ARO) liability:

	June 30, 2023
	(In millions)
Asset retirement obligation, December 31, 2022	$	1,991
Liabilities incurred	6
Liabilities settled	(21)
Accretion expense	57
Asset retirement obligation, June 30, 2023	2,033
Less current portion	(55)
Asset retirement obligation, long-term	$	1,978

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DEBT AND FINANCING COSTS

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

DEBT AND FINANCING COSTS

DEBT AND FINANCING COSTS

The following table presents the carrying values of the Company’s debt:

	June 30, 2023		December 31, 2022
	(In millions)
Notes and debentures before unamortized discount and debt issuance costs(1)	$	4,835	$	4,908
Finance lease obligations	33		34
Unamortized discount	(27)		(27)
Debt issuance costs	(27)		(28)
Total debt	4,814		4,887
Current maturities	(2)		(2)
Long-term debt	$	4,812	$	4,885

(1)    The fair values of the Company’s notes and debentures were $4.1 billion and $4.2 billion as of June 30, 2023 and December 31, 2022, respectively.

Apache uses a market approach to determine the fair values of its notes and debentures using estimates provided by an independent investment financial data services firm (a Level 2 fair value measurement).

At each of June 30, 2023 and December 31, 2022, current debt included $2 million of finance lease obligations.

During the six months ended June 30, 2023, Apache purchased in the open market and canceled senior notes issued under its indentures in an aggregate principal amount of $74 million for an aggregate purchase price of $65 million in cash, including accrued interest and broker fees, reflecting a discount to par of an aggregate $10 million. The Company recognized a $9 million gain on these repurchases. The repurchases were partially financed by Apache’s borrowing under the US dollar-denominated revolving credit facility of APA Corporation described below.

During the six months ended June 30, 2022, Apache closed cash tender offers for certain outstanding notes issued under its indentures, accepting for purchase $1.1 billion aggregate principal amount of notes. Apache paid holders an aggregate $1.2 billion in cash, reflecting principal, premium to par, and accrued and unpaid interest. The Company recognized a $66 million loss on extinguishment of debt, including $11 million of unamortized debt discount and issuance costs in connection with the note purchases. The repurchases were partially financed by borrowing under Apache’s former revolving credit facility.

During the six months ended June 30, 2022, Apache purchased in the open market and canceled senior notes issued under its indentures in an aggregate principal amount of $15 million for an aggregate purchase price of $16 million in cash, including accrued interest and broker fees, reflecting a premium to par of $1 million. The Company recognized a $1 million loss on these repurchases. The repurchases were partially financed by borrowing under Apache’s former revolving credit facility.

On January 18, 2022, Apache redeemed the outstanding $213 million principal amount of 3.25% senior notes due April 15, 2022, at a redemption price equal to 100 percent of their principal amount, plus accrued and unpaid interest to the redemption date. The redemption was financed by borrowing under Apache’s former revolving credit facility.

Apache intends to reduce debt outstanding under its indentures from time to time.

On April 29, 2022, Apache entered into two unsecured guaranties of obligations under two unsecured syndicated credit agreements then entered into by APA, of which Apache is a wholly owned subsidiary. APA’s new credit agreements are for general corporate purposes and replaced and refinanced Apache’s 2018 unsecured syndicated credit agreement (the Former Facility).

•One credit agreement is denominated in US dollars (the USD Agreement) and provides for an unsecured five-year revolving credit facility, with aggregate commitments of US$1.8 billion (including a letter of credit subfacility of up to US$750 million, of which US$150 million currently is committed). APA may increase commitments up to an aggregate US$2.3 billion by adding new lenders or obtaining the consent of any increasing existing lenders. This facility matures in April 2027, subject to APA’s two, one-year extension options.

•The second credit agreement is denominated in pounds sterling (the GBP Agreement) and provides for an unsecured five-year revolving credit facility, with aggregate commitments of £1.5 billion for loans and letters of credit. This facility matures in April 2027, subject to APA’s two, one-year extension options.

In connection with APA’s entry into the USD Agreement and the GBP Agreement (each, a New Agreement), Apache terminated US$4.0 billion of commitments under the Former Facility, borrowings then outstanding under the Former Facility were deemed outstanding under APA’s USD Agreement, and letters of credit then outstanding under the Former Facility were deemed outstanding under a New Agreement, depending upon whether denominated in US dollars or pounds sterling. Apache has guaranteed obligations under each New Agreement effective until the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures is less than US$1.0 billion.

Apache may borrow under APA’s USD Agreement up to an aggregate principal amount of US$300 million outstanding at any given time. As of June 30, 2023 and December 31, 2022, there were no borrowings by Apache outstanding under the USD Agreement.

Apache, from time to time, has and uses uncommitted credit and letter of credit facilities for working capital and credit support purposes. As of June 30, 2023 and December 31, 2022, there were no outstanding borrowings under these facilities. As of June 30, 2023, there were £185 million and $3 million in letters of credit outstanding under these facilities. As of December 31, 2022, there were £199 million and $17 million in letters of credit outstanding under these facilities.

Financing Costs, Net

The following table presents the components of the Company’s financing costs, net:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Interest expense	$	74	$	75	$	149	$	165
Amortization of debt issuance costs	—		4		1		6
Capitalized interest	—		(1)		—		(1)
(Gain) loss on extinguishment of debt	—		—		(9)		67
Interest income	(3)		(1)		(5)		(5)
Interest income from APA Corporation, net (Note 2)	(29)		(15)		(45)		(30)
Financing costs, net	$	42	$	62	$	91	$	202

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INCOME TAXES

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Non-cash impairments on the carrying value of the Company’s oil and gas properties, gains and losses on the sale of assets, statutory tax rate changes, and other significant or unusual items are recognized as discrete items in the quarter in which they occur.

During the second quarter of 2023, the Company’s effective income tax rate was primarily impacted by a decrease in the amount of valuation allowance against its U.S. deferred tax assets. The Company’s 2023 year-to-date effective income tax rate was primarily impacted by a deferred tax expense related to the remeasurement of taxes in the U.K. as a result of the enactment of Finance Act 2023 on January 10, 2023, and a decrease in the amount of valuation allowance against its U.S. deferred tax assets. During the second quarter of 2022, the Company’s effective income tax rate was primarily impacted by a decrease in the amount of valuation allowance against its U.S. deferred tax assets. The Company’s 2022 year-to-date effective income tax rate was primarily impacted by the gain associated with deconsolidation of Altus, the gain on sale of certain non-core mineral rights in the Delaware Basin, and a decrease in the amount of valuation allowance against its U.S. deferred tax assets.

On January 10, 2023, Finance Act 2023 was enacted, receiving Royal Assent, and included amendments to the Energy (Oil and Gas) Profits Levy Act of 2022, increasing the levy from a 25 percent rate to a 35 percent rate, effective for the period of January 1, 2023 through March 31, 2028. Under U.S. GAAP, the financial statement impact of new legislation is recorded in the period of enactment. Therefore, in the first quarter of 2023, the Company recorded a deferred tax expense of $174 million related to the remeasurement of the December 31, 2022 U.K. deferred tax liability.

On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022 (IRA). The IRA includes a new 15 percent corporate alternative minimum tax (Corporate AMT) on applicable corporations with an average annual financial statement income that exceeds $1 billion for any three consecutive years preceding the tax year at issue. The Corporate AMT is effective for tax years beginning after December 31, 2022. The Company is continuing to evaluate the provisions of the IRA and awaits further guidance from the U.S. Treasury Department to properly assess the impact of these provisions on the Company. Under the existing guidance, the Company does not believe the IRA will have a material impact for 2023.

The Company has a full valuation allowance against its U.S. net deferred tax assets. The Company will continue to maintain a full valuation allowance on its U.S. net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of this allowance. However, given the Company’s current and anticipated future domestic earnings, the Company believes that there is a reasonable possibility that within the next 12 months sufficient positive evidence may become available to allow the Company to reach a conclusion that a significant portion of the U.S. valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense, which could be material, for the period the release is recorded.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income or capital taxes in various states and foreign jurisdictions. The Company’s tax reserves are related to tax years that may be subject to examination by the relevant taxing authority.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is party to various legal actions arising in the ordinary course of business, including litigation and governmental and regulatory controls, which also may include controls related to the potential impacts of climate change. As of June 30, 2023, the Company has an accrued liability of approximately $52 million for all legal contingencies that are deemed to be probable of occurring and can be reasonably estimated. The Company’s estimates are based on information known about the matters and its experience in contesting, litigating, and settling similar matters. Although actual amounts could differ from management’s estimate, none of the actions are believed by management to involve future amounts that would be material to the Company’s financial position, results of operations, or liquidity after consideration of recorded accruals. With respect to material matters for which the Company believes an unfavorable outcome is reasonably possible, the Company has disclosed the nature of the matter and a range of potential exposure, unless an estimate cannot be made at this time. It is management’s opinion that the loss for any other litigation matters and claims that are reasonably possible to occur will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity.

For additional information on Legal Matters described below, refer to Note 11—Commitments and Contingencies to the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Argentine Environmental Claims

On March 12, 2014, the Company and its subsidiaries completed the sale of all of the Company’s subsidiaries’ operations and properties in Argentina to YPF Sociedad Anonima (YPF). As part of that sale, YPF assumed responsibility for all of the past, present, and future litigation in Argentina involving Company subsidiaries, except that Company subsidiaries have agreed to indemnify YPF for certain environmental, tax, and royalty obligations capped at an aggregate of $100 million. The indemnity is subject to specific agreed conditions precedent, thresholds, contingencies, limitations, claim deadlines, loss sharing, and other terms and conditions. On April 11, 2014, YPF provided its first notice of claims pursuant to the indemnity. Company subsidiaries have not paid any amounts under the indemnity but will continue to review and consider claims presented by YPF. Further, Company subsidiaries retain the right to enforce certain Argentina-related indemnification obligations against Pioneer Natural Resources Company (Pioneer) in an amount up to $45 million pursuant to the terms and conditions of stock purchase agreements entered in 2006 between Company subsidiaries and subsidiaries of Pioneer.

Louisiana Restoration 

As more fully described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, Louisiana surface owners often file lawsuits or assert claims against oil and gas companies, including the Company, claiming that operators and working interest owners in the chain of title are liable for environmental damages on the leased premises, including damages measured by the cost of restoration of the leased premises to its original condition, regardless of the value of the underlying property. From time to time, restoration lawsuits and claims are resolved by the Company for amounts that are not material to the Company, while new lawsuits and claims are asserted against the Company. With respect to each of the pending lawsuits and claims, the amount claimed is not currently determinable or is not material. Further, the overall exposure related to these lawsuits and claims is not currently determinable. While adverse judgments against the Company are possible, the Company intends to actively defend these lawsuits and claims.

Starting in November of 2013 and continuing into 2023, several parishes in Louisiana have pending lawsuits against many oil and gas producers, including the Company. In these cases, the Parishes, as plaintiffs, allege that defendants’ oil and gas exploration, production, and transportation operations in specified fields were conducted in violation of the State and Local Coastal Resources Management Act of 1978, as amended, and applicable regulations, rules, orders, and ordinances promulgated or adopted thereunder by the Parish or the State of Louisiana. Plaintiffs allege that defendants caused substantial damage to land and water bodies located in the coastal zone of Louisiana. Plaintiffs seek, among other things, unspecified damages for alleged violations of applicable law within the coastal zone, the payment of costs necessary to clear, re-vegetate, detoxify, and otherwise restore the subject coastal zone as near as practicable to its original condition, and actual restoration of the coastal zone to its original condition. While adverse judgments against the Company might be possible, the Company intends to vigorously oppose these claims.

Apollo Exploration Lawsuit

In a case captioned Apollo Exploration, LLC, Cogent Exploration, Ltd. Co. & SellmoCo, LLC v. Apache Corporation, Cause No. CV50538 in the 385th Judicial District Court, Midland County, Texas, plaintiffs alleged damages in excess of $200 million (having previously claimed in excess of $1.1 billion) relating to purchase and sale agreements, mineral leases, and area of mutual interest agreements concerning properties located in Hartley, Moore, Potter, and Oldham Counties, Texas. The trial court entered final judgment in favor of the Company, ruling that the plaintiffs take nothing by their claims and awarding the Company its attorneys’ fees and costs incurred in defending the lawsuit. The court of appeals affirmed in part and reversed in part the trial court’s judgment thereby reinstating some of plaintiffs’ claims. The Texas Supreme Court granted the Company’s petition for review and heard oral argument in October 2022. On April 28, 2023, the Texas Supreme Court reversed the court of appeals’ decision and remanded the case back to the court of appeals for further proceedings. After plaintiffs’ request for rehearing, on July 21, 2023, the Texas Supreme Court reaffirmed its reversal of the court of appeals’ decision and remand of the case back to the court of appeals for further proceedings.

Australian Operations Divestiture Dispute

Pursuant to a Sale and Purchase Agreement dated April 9, 2015 (Quadrant SPA), the Company and its subsidiaries divested Australian operations to Quadrant Energy Pty Ltd (Quadrant). Closing occurred on June 5, 2015. In April 2017, the Company filed suit against Quadrant for breach of the Quadrant SPA. In its suit, the Company seeks approximately AUD $80 million. In December 2017, Quadrant filed a defense of equitable set-off to the Company’s claim and a counterclaim seeking approximately AUD $200 million in the aggregate. The Company believes that Quadrant’s claims lack merit and will not have a material adverse effect on the Company’s financial position, results of operation, or liquidity.

Canadian Operations Divestiture Dispute

Pursuant to a Sale and Purchase Agreement dated July 6, 2017 (Paramount SPA), the Company and its subsidiaries divested their remaining Canadian operations to Paramount Resources LTD (Paramount). Closing occurred on August 16, 2017. On September 11, 2019, four ex-employees of Apache Canada LTD on behalf of themselves and individuals employed by Apache Canada LTD on July 6, 2017, filed an Amended Statement of Claim in a matter styled Stephen Flesch et. al. v Apache Corporation et. al., No. 1901-09160 Court of Queen’s Bench of Alberta against the Company and others seeking class certification and a finding that the Paramount SPA amounted to a Change of Control of the Company, entitling them to accelerated vesting under the Company’s equity plans. In the suit, the class seeks approximately $60 million USD and punitive damages. Without acknowledging or admitting any liability and solely to avoid the expense and uncertainty of future litigation, Apache has agreed to a settlement in the Flesch class action matter under which Apache will pay $7 million USD to resolve all claims against the Company asserted by the class. The settlement is subject to court approval and is expected to be finalized by the end of 2023.

California and Delaware Litigation

On July 17, 2017, in three separate actions, San Mateo and Marin Counties, and the City of Imperial Beach, California, all filed suit individually and on behalf of the people of the state of California against over 30 oil and gas companies alleging damages as a result of global warming. Plaintiffs seek unspecified damages and abatement under various tort theories. On December 20, 2017, in two separate actions, the City of Santa Cruz and Santa Cruz County filed similar lawsuits against many of the same defendants. On January 22, 2018, the City of Richmond filed a similar lawsuit. On November 14, 2018, the Pacific Coast Federation of Fishermen’s Associations, Inc. also filed a similar lawsuit against many of the same defendants.

On September 10, 2020, the State of Delaware filed suit, individually and on behalf of the people of the State of Delaware, against over 25 oil and gas companies alleging damages as a result of global warming. Plaintiffs seek unspecified damages and abatement under various tort theories.

The Company believes that it is not subject to jurisdiction of the California courts and that claims made against it in the California and Delaware litigation are baseless. The Company intends to challenge jurisdiction in California and to vigorously defend the Delaware lawsuit.

Castex Lawsuit

In a case styled Apache Corporation v. Castex Offshore, Inc., et. al., Cause No. 2015-48580, in the 113th Judicial District Court of Harris County, Texas, Castex filed claims for alleged damages of approximately $200 million, relating to overspend on the Belle Isle Gas Facility upgrade, and the drilling of five sidetracks on the Potomac #3 well. After a jury trial, a verdict of approximately $60 million, plus fees, costs, and interest was entered against the Company. The Fourteenth Court of Appeals of Texas reversed the judgment, in part, reducing the judgment to approximately $13.5 million, plus fees, costs, and interest against the Company.

Kulp Minerals Lawsuit

On or about April 7, 2023, Apache was sued in a purported class action in New Mexico styled Kulp Minerals LLC v. Apache Corporation, Case No. D-506-CV-2023-00352 in the Fifth Judicial District. The Kulp Minerals case has not been certified and seeks to represent a group of owners allegedly owed statutory interest under New Mexico law as a result of purported late oil and gas payments. The amount of this claim is not yet reasonably determinable. The Company intends to vigorously defend against the claims asserted in this lawsuit.

Shareholder and Derivative Lawsuits

On February 23, 2021, a case captioned Plymouth County Retirement System v. Apache Corporation, et al. was filed in the United States District Court for the Southern District of Texas (Houston Division) against the Company and certain current and former officers. The complaint, which is a shareholder lawsuit styled as a class action, alleges that (1) the Company intentionally used unrealistic assumptions regarding the amount and composition of available oil and gas in Alpine High; (2) the Company did not have the proper infrastructure in place to safely and/or economically drill and/or transport those resources even if they existed in the amounts purported; (3) certain statements and omissions artificially inflated the value of the Company’s operations in the Permian Basin; and (4) as a result, the Company’s public statements were materially false and misleading. The Company believes that plaintiffs’ claims lack merit and intends to vigorously defend this lawsuit.

On January 18, 2023, a case captioned Jerry Hight, Derivatively and on behalf of APA Corporation v. John J. Christmann IV et al. was filed in the 61st District Court of Harris County, Texas. Then, on February 21, 2023, a case captioned Steve Silverman, Derivatively and on behalf of Nominal Defendant APA Corp. v. John J. Christmann IV, et al. was filed in federal district court for the Southern District of Texas. Then, on April 20, 2023, a case captioned William Wessels, Derivatively and on behalf of APA Corporation v. John J. Christmann IV et al. was filed in the 151st District Court of Harris County, Texas. Then, on July 21, 2023, a case captioned Yang-Li-Yu, Derivatively and on behalf of Nominal Defendant APA Corp. v. John J. Christmann IV, et al. was filed in federal district court for the Southern District of Texas. These cases purport to be derivative actions brought against senior management and Company directors over many of the same allegations included in the Plymouth County Retirement System matter and asserts claims of (1) breach of fiduciary duty; (2) waste of corporate assets; and (3) unjust enrichment. The defendants believe that plaintiffs’ claims lack merit and intend to vigorously defend these lawsuits.

Environmental Matters

As of June 30, 2023, the Company had an undiscounted reserve for environmental remediation of approximately $1 million.

On September 11, 2020, the Company received a Notice of Violation and Finding of Violation, and accompanying Clean Air Act Information Request, from the U.S. Environmental Protection Agency (EPA) following site inspections in April 2019 at several of the Company’s oil and natural gas production facilities in Lea and Eddy Counties, New Mexico. The notice and information request involve alleged emissions control and reporting violations. The Company is cooperating with the EPA and has responded to the information request. The EPA has referred the notice for civil enforcement proceedings; however, at this time the Company is unable to reasonably estimate whether such proceedings will result in monetary sanctions and, if so, whether they would be more or less than $100,000, exclusive of interest and costs.

On December 29, 2020, the Company received a Notice of Violation and Opportunity to Confer, and accompanying Clean Air Act Information Request, from the EPA following helicopter flyovers in September 2019 of several of the Company’s oil and natural gas production facilities in Reeves County, Texas. The notice and information request involve alleged emissions control and reporting violations. The Company is cooperating with the EPA and has responded to the information request. The EPA has referred the notice for civil enforcement proceedings; however, at this time the Company is unable to reasonably estimate whether such proceedings will result in monetary sanctions and, if so, whether they would be more or less than $100,000, exclusive of interest and costs.

The Company was recently served with two lawsuits filed in Lea County, New Mexico: William O. Stephens v. Apache Corporation; No. D-506-CV-2023-00632, in the Fifth Judicial District and Merchant Livestock Company v. Apache Corporation, Exxon Corporation, et al.; No. D-506-CV-2023-00664, in the Fifth Judicial District. Each lawsuit alleges property damage and environmental impacts from previous oil and gas operations that require remediation. The Company disputes that it is responsible for the damages claimed and/or relief sought and intends to vigorously defend each lawsuit. At this time, the Company is unable to reasonably estimate whether either lawsuit, individually, will result in damages that are more or less than $100,000, exclusive of interest and costs.

The Company is not aware of any environmental claims existing as of June 30, 2023 that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity. There can be no assurance, however, that current regulatory requirements will not change or past non-compliance with environmental laws will not be discovered on the Company’s properties.

Potential Decommissioning Obligations on Sold Properties

In 2013, Apache sold its Gulf of Mexico (GOM) Shelf operations and properties and its GOM operating subsidiary, GOM Shelf LLC (GOM Shelf) to Fieldwood Energy LLC (Fieldwood). Under the terms of the purchase agreement, Apache received cash consideration of $3.75 billion and Fieldwood assumed the obligation to decommission the properties held by GOM Shelf and the properties acquired from Apache and its other subsidiaries (collectively, the Legacy GOM Assets). In respect of such abandonment obligations, Fieldwood posted letters of credit in favor of Apache (Letters of Credit) and established trust accounts (Trust A and Trust B) of which Apache was a beneficiary and which were funded by two net profits interests (NPIs) depending on future oil prices. On February 14, 2018, Fieldwood filed for protection under Chapter 11 of the U.S. Bankruptcy Code. In connection with the 2018 bankruptcy, Fieldwood confirmed a plan under which Apache agreed, inter alia, to (i) accept bonds in exchange for certain of the Letters of Credit and (ii) amend the Trust A trust agreement and one of the NPIs to consolidate the trusts into a single Trust (Trust A) funded by both remaining NPIs. Currently, Apache holds two bonds (Bonds) and five Letters of Credit to secure Fieldwood’s asset retirement obligations on the Legacy GOM Assets as and when Apache is required to perform or pay for decommissioning any Legacy GOM Asset over the remaining life of the Legacy GOM Assets.

On August 3, 2020, Fieldwood again filed for protection under Chapter 11 of the U.S. Bankruptcy Code. On June 25, 2021, the United States Bankruptcy Court for the Southern District of Texas (Houston Division) entered an order confirming Fieldwood’s bankruptcy plan. On August 27, 2021, Fieldwood’s bankruptcy plan became effective. Pursuant to the plan, the Legacy GOM Assets were separated into a standalone company, which was subsequently merged into GOM Shelf. Under GOM Shelf’s limited liability company agreement, the proceeds of production of the Legacy GOM Assets will be used to fund decommissioning of Legacy GOM Assets.

By letter dated April 5, 2022, replacing two prior letters dated September 8, 2021 and February 22, 2022, and by subsequent letter dated March 1, 2023, GOM Shelf notified the Bureau of Safety and Environmental Enforcement (BSEE) that it was unable to fund the decommissioning obligations that it is currently obligated to perform on certain of the Legacy GOM Assets. As a result, Apache and other current and former owners in these assets have received orders from BSEE to decommission certain of the Legacy GOM Assets included in GOM Shelf’s notifications to BSEE. Apache expects to receive similar orders on the other Legacy GOM Assets included in GOM Shelf’s notification letters. Apache has also received orders to decommission other Legacy GOM Assets that were not included in GOM Shelf’s notification letters. Further, Apache anticipates that GOM Shelf may send additional such notices to BSEE in the future and that it may receive additional orders from BSEE requiring it to decommission other Legacy GOM Assets.

As of June 30, 2023, Apache has incurred $464 million in decommissioning costs related to several Legacy GOM Assets. GOM Shelf did not, and has confirmed that it will not, reimburse Apache for these decommissioning costs. As a result, Apache has sought and will continue to seek reimbursement from its security for these costs, of which $276 million had been reimbursed from Trust A as of June 30, 2023. If GOM Shelf does not reimburse Apache for further decommissioning costs incurred with respect to Legacy GOM Assets, then Apache will continue to seek reimbursement from Trust A, to the extent of available funds, and thereafter, will seek reimbursement from the Bonds and the Letters of Credit until all such funds and securities are fully utilized. In addition, after such sources have been exhausted, Apache has agreed to provide a standby loan to GOM Shelf of up to $400 million to perform decommissioning (Standby Loan Agreement), with such standby loan secured by a first and prior lien on the Legacy GOM Assets.

If the combination of GOM Shelf’s net cash flow from its producing properties, the Trust A funds, the Bonds, and the remaining Letters of Credit are insufficient to fully fund decommissioning of any Legacy GOM Assets that Apache may be required to perform or fund, or if GOM Shelf’s net cash flow from its remaining producing properties after the Trust A funds, Bonds, and Letters of Credit are exhausted is insufficient to repay any loans made by Apache under the Standby Loan Agreement, then Apache may be forced to effectively use its available cash to fund the deficit.

As of June 30, 2023, Apache estimates that its potential liability to fund the remaining decommissioning of Legacy GOM Assets it may be ordered to perform or fund ranges from $922 million to $1.1 billion on an undiscounted basis. Management does not believe any specific estimate within this range is a better estimate than any other. Accordingly, the Company has recorded a contingent liability of $922 million as of June 30, 2023, representing the estimated costs of decommissioning it may be required to perform or fund on Legacy GOM Assets. Of the total liability recorded, $472 million is reflected under the caption “Decommissioning contingency for sold Gulf of Mexico properties,” and $450 million is reflected under “Other current liabilities” in the Company’s consolidated balance sheet. Changes in significant assumptions impacting Apache’s estimated liability, including expected decommissioning rig spread rates, lift boat rates, and planned abandonment logistics could result in a liability in excess of the amount accrued.

As of June 30, 2023, the Company has also recorded a $507 million asset, which represents the amount the Company expects to be reimbursed from the Trust A funds, the Bonds, and the Letters of Credit for decommissioning it may be required to perform on Legacy GOM Assets. Of the total asset recorded, $57 million is reflected under the caption “Decommissioning security for sold Gulf of Mexico properties,” and $450 million is reflected under “Other current assets.”

On June 21, 2023, the two sureties that issued bonds directly to Apache and two sureties that issued bonds to the issuing bank on the Letters of Credit filed suit against Apache in a case styled Zurich American Insurance Company, HCC International Insurance Company PLC, Philadelphia Indemnity Insurance Company and Everest Reinsurance Company (Insurers) v. Apache Corporation, Cause No. 2023-38238 in the 281st Judicial District Court, Harris County Texas. Insurers are seeking to prevent Apache from drawing on the Bonds and Letters of Credit and further allege that they are discharged from their reimbursement obligations related to decommissioning costs and are entitled to other relief. On July 20, 2023, the 281st Judicial District Court denied the Insurers’ request for a temporary injunction. Apache believes that Insurers’ claims lack merit, intends to vigorously defend these claims, and will vigorously pursue counterclaims.

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BUSINESS SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION

As of June 30, 2023, the Company is engaged in exploration and production (Upstream) activities across three operating segments: Egypt, North Sea, and the U.S. The Company’s Upstream business explores for, develops, and produces crude oil, natural gas, and natural gas liquids. Prior to the deconsolidation of Altus on February 22, 2022, the Company’s Midstream business was operated by ALTM, which owned, developed, and operated a midstream energy asset network in the Permian Basin of West Texas. Financial information for each segment is presented below:

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Quarter Ended June 30, 2023	(In millions)
Revenues:
Oil revenues	$	618	$	235	$	473	$	—	$	—	$	1,326
Natural gas revenues	90		39		46		—		—		175
Natural gas liquids revenues	—		4		95		—		—		99
Oil, natural gas, and natural gas liquids production revenues	708		278		614		—		—		1,600
Purchased oil and gas sales	—		—		144		—		—		144
	708		278		758		—		—		1,744
Operating Expenses:
Lease operating expenses	121		99		132		—		—		352
Gathering, processing, and transmission	6		12		57		—		—		75
Purchased oil and gas costs	—		—		131		—		—		131
Taxes other than income	—		—		47		—		—		47
Exploration	30		4		3		—		—		37
Depreciation, depletion, and amortization	126		61		152		—		—		339
Asset retirement obligation accretion	—		19		10		—		—		29
Impairments	—		46		—		—		—		46
	283		241		532		—		—		1,056
Operating Income(2)	$	425	$	37	$	226	$	—	$	—	688
Other Income (Expense):
Gain on divestitures, net											5
Other, net											109
General and administrative											(66)
Transaction, reorganization, and separation											(2)
Financing costs, net											(42)
Income Before Income Taxes											$	692

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Six Months Ended June 30, 2023	(In millions)
Revenues:
Oil revenues	$	1,247	$	517	$	912	$	—	$	—	$	2,676
Natural gas revenues	183		99		131		—		—		413
Natural gas liquids revenues	—		14		203		—		—		217
Oil, natural gas, and natural gas liquids production revenues	1,430		630		1,246		—		—		3,306
Purchased oil and gas sales	—		—		383		—		—		383
	1,430		630		1,629		—		—		3,689
Operating Expenses:
Lease operating expenses	218		176		272		—		—		666
Gathering, processing, and transmission	13		23		112		—		—		148
Purchased oil and gas costs	—		—		347		—		—		347
Taxes other than income	—		—		97		—		—		97
Exploration	66		9		6		—		—		81
Depreciation, depletion, and amortization	249		119		279		—		—		647
Asset retirement obligation accretion	—		37		20		—		—		57
Impairments	—		46		—		—		—		46
	546		410		1,133		—		—		2,089
Operating Income(2)	$	884	$	220	$	496	$	—	$	—	1,600
Other Income (Expense):
Gain on divestitures, net											6
Other, net											77
General and administrative											(124)
Transaction, reorganization, and separation											(6)
Financing costs, net											(91)
Income Before Income Taxes											$	1,462
Total Assets(3)	$	3,365	$	1,719	$	9,489	$	—	$	(1)	$	14,572

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Quarter Ended June 30, 2022	(In millions)
Revenues:
Oil revenues	$	902	$	307	$	654	$	—	$	—	$	1,863
Natural gas revenues	88		64		281		—		—		433
Natural gas liquids revenues	3		12		214		—		—		229
Oil, natural gas, and natural gas liquids production revenues	993		383		1,149		—		—		2,525
Purchased oil and gas sales	—		—		522		—		—		522
	993		383		1,671		—		—		3,047
Operating Expenses:
Lease operating expenses	131		118		110		—		—		359
Gathering, processing, and transmission	5		12		77		—		—		94
Purchased oil and gas costs	—		—		528		—		—		528
Taxes other than income	—		—		78		—		—		78
Exploration	12		2		1		—		—		15
Depreciation, depletion, and amortization	91		54		133		—		—		278
Asset retirement obligation accretion	—		20		9		—		—		29
	239		206		936		—		—		1,381
Operating Income(2)	$	754	$	177	$	735	$	—	$	—	1,666
Other Income (Expense):
Derivative instrument losses, net											(32)
Loss on divestitures, net											(27)
Other, net											64
General and administrative											(83)
Transaction, reorganization, and separation											(3)
Financing costs, net											(62)
Income Before Income Taxes											$	1,523

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Six Months Ended June 30, 2022	(In millions)
Revenues:
Oil revenues	$	1,692	$	635	$	1,253	$	—	$	—	$	3,580
Natural gas revenues	186		163		464		—		—		813
Natural gas liquids revenues	6		28		421		—		(3)		452
Oil, natural gas, and natural gas liquids production revenues	1,884		826		2,138		—		(3)		4,845
Purchased oil and gas sales	—		—		866		5		—		871
Midstream service affiliate revenues	—		—		—		16		(16)		—
	1,884		826		3,004		21		(19)		5,716
Operating Expenses:
Lease operating expenses	262		214		228		—		(1)		703
Gathering, processing, and transmission	10		24		154		5		(18)		175
Purchased oil and gas costs	—		—		879		—		—		879
Taxes other than income	—		—		145		3		—		148
Exploration	27		7		5		—		1		40
Depreciation, depletion, and amortization	188		116		263		2		—		569
Asset retirement obligation accretion	—		40		17		1		—		58
	487		401		1,691		11		(18)		2,572
Operating Income (Loss)(2)	$	1,397	$	425	$	1,313	$	10	$	(1)	3,144
Other Income (Expense):
Derivative instrument losses, net											(94)
Gain on divestitures, net											1,149
Other, net											109
General and administrative											(234)
Transaction, reorganization, and separation											(17)
Financing costs, net											(202)
Income Before Income Taxes											$	3,855
Total Assets(3)	$	3,107	$	2,103	$	8,629	$	—	$	—	$	13,839

(1)    Includes revenue from non-customers for the quarters and six months ended June 30, 2023 and 2022 of:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Oil	$	165	$	302	$	337	$	552
Natural gas	24		30		50		61
Natural gas liquids	—		1		—		2

(2)Operating income of U.S. and North Sea includes leasehold impairments of $3 million and $3 million, respectively, for the second quarter of 2023.
Operating income of U.S. and Egypt includes leasehold impairments of $1 million and $1 million, respectively, for the second quarter of 2022. Operating income of U.S. and North Sea includes leasehold impairments of $5 million and $6 million, respectively, for the first six months of 2023. Operating income of U.S. and Egypt includes leasehold impairments of $4 million and $2 million, respectively, for the first six months of 2022.

(3)Intercompany balances are excluded from total assets.

(4)Includes noncontrolling interests of Sinopec, Altus prior to deconsolidation, and APA.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Apache and its subsidiaries after elimination of intercompany balances and transactions.

The Company’s undivided interests in oil and gas exploration and production ventures and partnerships are proportionately consolidated. The Company consolidates all other investments in which, either through direct or indirect ownership, it has more than a 50 percent voting interest or controls the financial and operating decisions. Noncontrolling interests represent third-party ownership in the net assets of a consolidated subsidiary of Apache and are reflected separately in the Company’s financial statements.

Apache has determined that one of its limited partnership subsidiaries, which has control over Apache’s Egyptian operations, qualified as a variable interest entity (VIE) under GAAP. Apache continues to consolidate this limited partnership subsidiary because the Company has concluded that it has a controlling financial interest in the Egyptian operations and was determined to be the primary beneficiary of the VIE. Sinopec International Petroleum Exploration and Production Corporation (Sinopec) owns a one-third minority participation in the Company’s consolidated Egypt oil and gas business as a noncontrolling interest. APA Corporation (APA) also owns a noncontrolling interest in Apache’s consolidated Egypt oil and gas business. Refer to Note 2—Transactions with Parent Affiliate for detail regarding APA’s noncontrolling interest. All noncontrolling interests are reflected as a separate component of equity in the Company’s consolidated balance sheet.

Additionally, prior to the BCP Business Combination defined below, third-party investors owned a minority interest of approximately 21 percent of Altus Midstream Company (ALTM or Altus), which was reflected as a separate noncontrolling interest component of equity in the Company’s consolidated balance sheet. ALTM qualified as a VIE under GAAP, which Apache consolidated because a wholly owned subsidiary of Apache had a controlling financial interest and was determined to be the primary beneficiary.

On February 22, 2022, ALTM closed a previously announced transaction to combine with privately owned BCP Raptor Holdco LP (BCP and, together with BCP Raptor Holdco GP, LLC, the Contributed Entities) in an all-stock transaction, pursuant to the Contribution Agreement entered into by and among ALTM, Altus Midstream LP, New BCP Raptor Holdco, LLC (the Contributor), and BCP (the BCP Contribution Agreement). Pursuant to the BCP Contribution Agreement, the Contributor contributed all of the equity interests of the Contributed Entities (the Contributed Interests) to Altus Midstream LP, with each Contributed Entity becoming a wholly owned subsidiary of Altus Midstream LP (the BCP Business Combination). Upon closing the transaction, the combined entity was renamed Kinetik Holdings Inc. (Kinetik), and the Company determined that it was no longer the primary beneficiary of Kinetik. The Company further determined that Kinetik no longer qualified as a VIE under GAAP. As a result, the Company deconsolidated ALTM on February 22, 2022. Refer to Note 3—Acquisitions and Divestitures for further detail.

The stockholders agreement entered into by and among the Company, ALTM, BCP, and other related and affiliated entities provides that the Company, through one of its wholly owned subsidiaries, retains the ability to designate a director to the board of directors of Kinetik for so long as the Company and its affiliates beneficially own 10 percent or more of Kinetik’s outstanding common stock. Based on this board representation, combined with the Company’s stock ownership, management determined it has significant influence over Kinetik, which is considered a related party of the Company. Investments in which the Company has significant influence, but not control, are accounted for under the equity method of accounting. These investments are recorded separately as “Equity method interests” in the Company’s consolidated balance sheet. The Company elected the fair value option to account for its equity method interest in Kinetik.

Use of Estimates

Use of Estimates

Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of the Company’s financial statements, and changes in these estimates are recorded when known.

Significant estimates with regard to these financial statements include the estimates of fair value for long-lived assets (refer to “Fair Value Measurements” and “Property and Equipment” sections in this Note 1 below), the fair value determination of acquired assets and liabilities (refer to Note 3—Acquisitions and Divestitures), the fair value of equity method interests (refer to “Equity Method Interests” within this Note 1 below and Note 7—Equity Method Interests), the assessment of asset retirement obligations (refer to Note 9—Asset Retirement Obligation), the estimate of income taxes (refer to Note 11—Income Taxes), the estimation of the contingent liability representing Apache’s potential decommissioning obligations on sold properties in the Gulf of Mexico (refer to Note 12—Commitments and Contingencies), and the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom.

Fair Value Measurements

Fair Value Measurements

Certain assets and liabilities are reported at fair value on a recurring basis in the Company’s consolidated balance sheet. Accounting Standards Codification (ASC) 820-10-35, “Fair Value Measurement” (ASC 820), provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority.

The valuation techniques that may be used to measure fair value include a market approach, an income approach, and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models, and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).

Accounts Receivable from / Accounts Payable to APA

Accounts Receivable from / Accounts Payable to APAAccounts receivable from or payable to APA represents the net result of Apache’s administrative and support services provided to APA and other miscellaneous cash management transactions to be settled between the two affiliated entities. Generally, cash in this amount will be transferred to Apache or paid to APA in subsequent periods, after current period transactions are processed and net results of operations are determined. However, from time to time, Apache may estimate and transfer the cash settlement amount in the month the transactions are processed in order to minimize affiliate working capital balances or retain affiliate balances for cash management purposes.

Revenue Recognition

Revenue Recognition

There have been no significant changes to the Company’s contracts with customers during the six months ended June 30, 2023 and 2022.

Oil and gas production revenues from non-customers represent income taxes paid to the Arab Republic of Egypt by Egyptian General Petroleum Corporation on behalf of the Company. Revenue and associated expenses related to such tax volumes are recorded as “Oil, natural gas, and natural gas liquids production revenues” and “Current income tax provision,” respectively, in the Company’s statement of consolidated operations.

Refer to Note 13—Business Segment Information for a disaggregation of oil, gas, and natural gas production revenue by product and reporting segment.

In accordance with the provisions of ASC 606, “Revenue from Contracts with Customers,” variable market prices for each short-term commodity sale are allocated entirely to each performance obligation as the terms of payment relate specifically to the Company’s efforts to satisfy its obligations. As such, the Company has elected the practical expedients available under the standard to not disclose the aggregate transaction price allocated to unsatisfied, or partially unsatisfied, performance obligations as of the end of the reporting period.

Inventories

Inventories

Inventories consist principally of tubular goods and equipment and are stated at the lower of weighted-average cost or net realizable value. Oil produced but not sold, primarily in the North Sea, is also recorded to inventory and is stated at the lower of the cost to produce or net realizable value.

Property and Equipment

Property and Equipment The carrying value of the Company’s property and equipment represents the cost incurred to acquire the property and equipment, including capitalized interest, net of any impairments. For business combinations and acquisitions, property and equipment cost is based on the fair values at the acquisition date.

Oil and Gas Property

Oil and Gas Property

The Company follows the successful efforts method of accounting for its oil and gas property. Under this method of accounting, exploration costs, such as exploratory geological and geophysical costs, delay rentals, and exploration overhead, are expensed as incurred. All costs related to production, general corporate overhead, and similar activities are expensed as incurred. If an exploratory well provides evidence to justify potential development of reserves, drilling costs associated with the well are initially capitalized, or suspended, pending a determination as to whether a commercially sufficient quantity of proved reserves can be attributed to the area as a result of drilling. This determination may take longer than one year in certain areas depending on, among other things, the amount of hydrocarbons discovered, the outcome of planned geological and engineering studies, the need for additional appraisal drilling activities to determine whether the discovery is sufficient to support an economic development plan, and government sanctioning of development activities in certain international locations. At the end of each quarter, management reviews the status of all suspended exploratory well costs in light of ongoing exploration activities; in particular, whether the Company is making sufficient progress in its ongoing exploration and appraisal efforts or, in the case of discoveries requiring government sanctioning, whether development negotiations are underway and proceeding as planned. If management determines that future appraisal drilling or development activities are unlikely to occur, associated suspended exploratory well costs are expensed.

Acquisition costs of unproved properties are assessed for impairment at least annually and are transferred to proved oil and gas properties to the extent the costs are associated with successful exploration activities. Significant undeveloped leases are assessed individually for impairment based on the Company’s current exploration plans. Unproved oil and gas properties with individually insignificant lease acquisition costs are amortized on a group basis over the average lease term at rates that provide for full amortization of unsuccessful leases upon lease expiration or abandonment. Costs of expired or abandoned leases are charged to exploration expense, while costs of productive leases are transferred to proved oil and gas properties. Costs of maintaining and retaining unproved properties, as well as amortization of individually insignificant leases and impairment of unsuccessful leases, are included in exploration costs in the statement of consolidated operations.

Costs to develop proved reserves, including the costs of all development wells and related equipment used in the production of crude oil and natural gas, are capitalized. Depreciation of the cost of proved oil and gas properties is calculated using the unit-of-production (UOP) method. The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the carrying value of associated proved oil and gas properties. The reserve base used to calculate depreciation for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. The reserve base used to calculate the depreciation for capitalized well costs is the sum of proved developed reserves only. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are included in the depreciable cost.

Oil and gas properties are grouped for depreciation in accordance with ASC 932, “Extractive Activities—Oil and Gas.” The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field.

When circumstances indicate that the carrying value of proved oil and gas properties may not be recoverable, the Company compares unamortized capitalized costs to the expected undiscounted pre-tax future cash flows for the associated assets grouped at the lowest level for which identifiable cash flows are independent of cash flows of other assets. If the expected undiscounted pre-tax future cash flows, based on the Company’s estimate of future crude oil and natural gas prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally estimated using the income approach described in ASC 820. The expected future cash flows used for impairment reviews and related fair value calculations are typically based on judgmental assessments, a Level 3 fair value measurement.

Unproved leasehold impairments are typically recorded as a component of “Exploration” expense in the Company’s statement of consolidated operations. Gains and losses on divestitures of the Company’s oil and gas properties are recognized in the statement of consolidated operations upon closing of the transaction.

Gathering, Processing, and Transmission (GPT) Facilities

Gathering, Processing, and Transmission (GPT) Facilities

GPT facilities are depreciated on a straight-line basis over the estimated useful lives of the assets. The estimation of useful life takes into consideration anticipated production lives from the fields serviced by the GPT assets, whether Apache-operated or third party-operated, as well as potential development plans by the Company for undeveloped acreage within, or close to, those fields.

The Company assesses the carrying amount of its GPT facilities whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of these facilities is more than the sum of the undiscounted cash flows, an impairment loss is recognized for the excess of the carrying value over its fair value.

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments on Statement of Consolidated Operations

The following table summarizes the effect of derivative instruments on the Company’s statement of consolidated operations:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Realized:
Commodity derivative instruments	$	—	$	(4)	$	—	$	(9)
Foreign currency derivative instruments	—		(2)		—		(2)
Realized losses, net	—		(6)		—		(11)
Unrealized:
Commodity derivative instruments	—		(20)		—		(44)
Foreign currency derivative instruments	—		(6)		—		(8)
Preferred Units embedded derivative	—		—		—		(31)
Unrealized losses, net	—		(26)		—		(83)
Derivative instrument losses, net	$	—	$	(32)	$	—	$	(94)

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OTHER CURRENT ASSETS (Tables)

6 Months Ended

Jun. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Current Assets

The following table provides detail of the Company’s other current assets:

	June 30, 2023		December 31, 2022
	(In millions)
Inventories	$	487	$	425
Drilling advances	66		64
Prepaid assets and other	158		54
Current decommissioning security for sold Gulf of Mexico assets	450		450
Total Other current assets	$	1,161	$	993

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EQUITY METHOD INTERESTS (Tables)

6 Months Ended

Jun. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Equity Method Investment Information

The following table represents sales and costs associated with Kinetik:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Natural gas and NGLs sales	$	22	$	—	$	29	$	—
Purchased oil and gas sales	7		—		7		—
	$	29	$	—	$	36	$	—
Gathering, processing, and transmission costs	$	26	$	26	$	50	$	36
Purchased oil and gas costs	26		—		28		—
	$	52	$	26	$	78	$	36

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OTHER CURRENT LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Schedule of Other Current Liabilities

The following table provides detail of the Company’s other current liabilities:

	June 30, 2023		December 31, 2022
	(In millions)
Accrued operating expenses	$	172	$	139
Accrued exploration and development	352		300
Accrued compensation and benefits	247		514
Accrued interest	93		96
Accrued income taxes	193		90
Current asset retirement obligation	55		55
Current operating lease liability	102		167
Current decommissioning contingency for sold Gulf of Mexico properties	450		450
Other	271		238
Total Other current liabilities	$	1,935	$	2,049

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ASSET RETIREMENT OBLIGATION (Tables)

6 Months Ended

Jun. 30, 2023

Asset Retirement Obligation Disclosure [Abstract]

Schedule of Asset Retirement Obligation

The following table describes changes to the Company’s asset retirement obligation (ARO) liability:

	June 30, 2023
	(In millions)
Asset retirement obligation, December 31, 2022	$	1,991
Liabilities incurred	6
Liabilities settled	(21)
Accretion expense	57
Asset retirement obligation, June 30, 2023	2,033
Less current portion	(55)
Asset retirement obligation, long-term	$	1,978

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DEBT AND FINANCING COSTS (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Debt

The following table presents the carrying values of the Company’s debt:

	June 30, 2023		December 31, 2022
	(In millions)
Notes and debentures before unamortized discount and debt issuance costs(1)	$	4,835	$	4,908
Finance lease obligations	33		34
Unamortized discount	(27)		(27)
Debt issuance costs	(27)		(28)
Total debt	4,814		4,887
Current maturities	(2)		(2)
Long-term debt	$	4,812	$	4,885

(1)    The fair values of the Company’s notes and debentures were $4.1 billion and $4.2 billion as of June 30, 2023 and December 31, 2022, respectively.

Apache uses a market approach to determine the fair values of its notes and debentures using estimates provided by an independent investment financial data services firm (a Level 2 fair value measurement).

Schedule of Financing Costs, Net

The following table presents the components of the Company’s financing costs, net:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Interest expense	$	74	$	75	$	149	$	165
Amortization of debt issuance costs	—		4		1		6
Capitalized interest	—		(1)		—		(1)
(Gain) loss on extinguishment of debt	—		—		(9)		67
Interest income	(3)		(1)		(5)		(5)
Interest income from APA Corporation, net (Note 2)	(29)		(15)		(45)		(30)
Financing costs, net	$	42	$	62	$	91	$	202

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BUSINESS SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Schedule of Financial Segment Information

Financial information for each segment is presented below:

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Quarter Ended June 30, 2023	(In millions)
Revenues:
Oil revenues	$	618	$	235	$	473	$	—	$	—	$	1,326
Natural gas revenues	90		39		46		—		—		175
Natural gas liquids revenues	—		4		95		—		—		99
Oil, natural gas, and natural gas liquids production revenues	708		278		614		—		—		1,600
Purchased oil and gas sales	—		—		144		—		—		144
	708		278		758		—		—		1,744
Operating Expenses:
Lease operating expenses	121		99		132		—		—		352
Gathering, processing, and transmission	6		12		57		—		—		75
Purchased oil and gas costs	—		—		131		—		—		131
Taxes other than income	—		—		47		—		—		47
Exploration	30		4		3		—		—		37
Depreciation, depletion, and amortization	126		61		152		—		—		339
Asset retirement obligation accretion	—		19		10		—		—		29
Impairments	—		46		—		—		—		46
	283		241		532		—		—		1,056
Operating Income(2)	$	425	$	37	$	226	$	—	$	—	688
Other Income (Expense):
Gain on divestitures, net											5
Other, net											109
General and administrative											(66)
Transaction, reorganization, and separation											(2)
Financing costs, net											(42)
Income Before Income Taxes											$	692

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Six Months Ended June 30, 2023	(In millions)
Revenues:
Oil revenues	$	1,247	$	517	$	912	$	—	$	—	$	2,676
Natural gas revenues	183		99		131		—		—		413
Natural gas liquids revenues	—		14		203		—		—		217
Oil, natural gas, and natural gas liquids production revenues	1,430		630		1,246		—		—		3,306
Purchased oil and gas sales	—		—		383		—		—		383
	1,430		630		1,629		—		—		3,689
Operating Expenses:
Lease operating expenses	218		176		272		—		—		666
Gathering, processing, and transmission	13		23		112		—		—		148
Purchased oil and gas costs	—		—		347		—		—		347
Taxes other than income	—		—		97		—		—		97
Exploration	66		9		6		—		—		81
Depreciation, depletion, and amortization	249		119		279		—		—		647
Asset retirement obligation accretion	—		37		20		—		—		57
Impairments	—		46		—		—		—		46
	546		410		1,133		—		—		2,089
Operating Income(2)	$	884	$	220	$	496	$	—	$	—	1,600
Other Income (Expense):
Gain on divestitures, net											6
Other, net											77
General and administrative											(124)
Transaction, reorganization, and separation											(6)
Financing costs, net											(91)
Income Before Income Taxes											$	1,462
Total Assets(3)	$	3,365	$	1,719	$	9,489	$	—	$	(1)	$	14,572

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Quarter Ended June 30, 2022	(In millions)
Revenues:
Oil revenues	$	902	$	307	$	654	$	—	$	—	$	1,863
Natural gas revenues	88		64		281		—		—		433
Natural gas liquids revenues	3		12		214		—		—		229
Oil, natural gas, and natural gas liquids production revenues	993		383		1,149		—		—		2,525
Purchased oil and gas sales	—		—		522		—		—		522
	993		383		1,671		—		—		3,047
Operating Expenses:
Lease operating expenses	131		118		110		—		—		359
Gathering, processing, and transmission	5		12		77		—		—		94
Purchased oil and gas costs	—		—		528		—		—		528
Taxes other than income	—		—		78		—		—		78
Exploration	12		2		1		—		—		15
Depreciation, depletion, and amortization	91		54		133		—		—		278
Asset retirement obligation accretion	—		20		9		—		—		29
	239		206		936		—		—		1,381
Operating Income(2)	$	754	$	177	$	735	$	—	$	—	1,666
Other Income (Expense):
Derivative instrument losses, net											(32)
Loss on divestitures, net											(27)
Other, net											64
General and administrative											(83)
Transaction, reorganization, and separation											(3)
Financing costs, net											(62)
Income Before Income Taxes											$	1,523

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Six Months Ended June 30, 2022	(In millions)
Revenues:
Oil revenues	$	1,692	$	635	$	1,253	$	—	$	—	$	3,580
Natural gas revenues	186		163		464		—		—		813
Natural gas liquids revenues	6		28		421		—		(3)		452
Oil, natural gas, and natural gas liquids production revenues	1,884		826		2,138		—		(3)		4,845
Purchased oil and gas sales	—		—		866		5		—		871
Midstream service affiliate revenues	—		—		—		16		(16)		—
	1,884		826		3,004		21		(19)		5,716
Operating Expenses:
Lease operating expenses	262		214		228		—		(1)		703
Gathering, processing, and transmission	10		24		154		5		(18)		175
Purchased oil and gas costs	—		—		879		—		—		879
Taxes other than income	—		—		145		3		—		148
Exploration	27		7		5		—		1		40
Depreciation, depletion, and amortization	188		116		263		2		—		569
Asset retirement obligation accretion	—		40		17		1		—		58
	487		401		1,691		11		(18)		2,572
Operating Income (Loss)(2)	$	1,397	$	425	$	1,313	$	10	$	(1)	3,144
Other Income (Expense):
Derivative instrument losses, net											(94)
Gain on divestitures, net											1,149
Other, net											109
General and administrative											(234)
Transaction, reorganization, and separation											(17)
Financing costs, net											(202)
Income Before Income Taxes											$	3,855
Total Assets(3)	$	3,107	$	2,103	$	8,629	$	—	$	—	$	13,839

(1)    Includes revenue from non-customers for the quarters and six months ended June 30, 2023 and 2022 of:

	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(In millions)
Oil	$	165	$	302	$	337	$	552
Natural gas	24		30		50		61
Natural gas liquids	—		1		—		2

(2)Operating income of U.S. and North Sea includes leasehold impairments of $3 million and $3 million, respectively, for the second quarter of 2023.
Operating income of U.S. and Egypt includes leasehold impairments of $1 million and $1 million, respectively, for the second quarter of 2022. Operating income of U.S. and North Sea includes leasehold impairments of $5 million and $6 million, respectively, for the first six months of 2023. Operating income of U.S. and Egypt includes leasehold impairments of $4 million and $2 million, respectively, for the first six months of 2022.

(3)Intercompany balances are excluded from total assets.

(4)Includes noncontrolling interests of Sinopec, Altus prior to deconsolidation, and APA.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Feb. 21, 2022
Schedule Of Significant Accounting Policies [Line Items]
Other asset impairment charges	$ 0	$ 0	$ 0	$ 0
Receivables from contracts with customer, net	1,200,000,000		1,200,000,000		$ 1,300,000,000
Inventory write-down	$ 46,000,000		$ 46,000,000
Kinetik
Schedule Of Significant Accounting Policies [Line Items]
Ownership percentage by noncontrolling owners	10.00%		10.00%
Sinopec | Apache Egypt
Schedule Of Significant Accounting Policies [Line Items]
Ownership percentage by noncontrolling owners	33.33%		33.33%
Third-Party Investors | ALTM
Schedule Of Significant Accounting Policies [Line Items]
Ownership percentage by noncontrolling owners						21.00%

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TRANSACTIONS WITH PARENT AFFILIATE (Details)			1 Months Ended	3 Months Ended		6 Months Ended		24 Months Ended
	Mar. 31, 2023 USD ($)	Mar. 01, 2021 subsidiary	May 15, 2023 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Feb. 28, 2023 USD ($)	Dec. 31, 2022 USD ($)
Related Party Transaction [Line Items]
Net income attributable to noncontrolling interest, distributed in cash						$ 100,000,000	$ 95,000,000
Capital distributions on note payable to APA Corporation, net						0
Payments of capital distribution							638,000,000
Noncontrolling interest – APA Corporation
Related Party Transaction [Line Items]
Net income attributable to noncontrolling interest				$ 81,000,000	$ 85,000,000	$ 165,000,000	156,000,000
Apache Egypt | Sinopec
Related Party Transaction [Line Items]
Ownership percentage by noncontrolling owners				33.33%		33.33%
Net Income And Distributable Cash Flow For Egyptian Operations | Sinopec
Related Party Transaction [Line Items]
Ownership percentage by noncontrolling owners				50.00%		50.00%
Affiliated Entity
Related Party Transaction [Line Items]
Notes receivable principal outstanding				$ 2,473,000,000		$ 2,473,000,000			$ 1,415,000,000
Interest income				29,000,000	16,000,000	45,000,000	31,000,000
Reimbursable costs charged to Parent				6,000,000	$ 5,000,000	11,000,000	$ 9,000,000
Accounts payable				126,000,000		126,000,000			0
Noncurrent receivable from APA Corporation				0		0			869,000,000
Affiliated Entity | Holding Company Reorganization
Related Party Transaction [Line Items]
Number of subsidiaries | subsidiary		3
Note receivable, term		7 years
Note receivable, interest rate		4.50%
Note receivable, accrued interest converted to principal, term		5 years 6 months
Accrued interest converted to principal								$ 125,000,000
Notes receivable principal outstanding				1,400,000,000		1,400,000,000			$ 1,400,000,000
Affiliated Entity | Senior Promissory Note Dated March 31, 2023
Related Party Transaction [Line Items]
Note receivable, term	5 years
Note receivable, interest rate	6.00%
Accrued interest converted to principal			$ 6,000,000
Notes receivable principal outstanding				$ 994,000,000		$ 994,000,000
Notes receivable, aggregate principal amount	$ 1,500,000,000

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ACQUISITIONS AND DIVESTITURES (Details) - USD ($) shares in Millions, $ in Millions		1 Months Ended	3 Months Ended		6 Months Ended
	Feb. 22, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Feb. 21, 2022
Business Acquisition [Line Items]
Oil and gas assets acquisitions consideration					$ 10	$ 26
Proceeds from sale of oil and gas properties					28	751
Gain on deconsolidation of ALTM	$ 609
Net effect of deconsolidating balance sheet	193
Equity method interests			$ 695		$ 695		$ 624
Proceeds from sale of stock		$ 224
Loss on sale of stock		$ 25
Kinetik
Business Acquisition [Line Items]
Equity method interests	$ 802
Shares sold (in shares)		4
Kinetik
Business Acquisition [Line Items]
Ownership percentage by noncontrolling owners			10.00%		10.00%
Apache Midstream LLC | ALTM
Business Acquisition [Line Items]
Ownership percentage by parent								79.00%
BCP Business Combination | ALTM | ALTM
Business Acquisition [Line Items]
Ownership percentage by noncontrolling owners	20.00%
BCP Business Combination | BCP Business Combination Contributor | Kinetik
Business Acquisition [Line Items]
Ownership percentage by parent	75.00%
Common Class C | BCP Business Combination | ALTM
Business Acquisition [Line Items]
Business acquisition, equity interest issued or issuable, number of shares (in shares)	50
Disposed of by Sale | Non-Core Assets And Leasehold
Business Acquisition [Line Items]
Proceeds from sale of oil and gas properties			$ 7	$ 7	$ 28	15
Gain (loss) on sale of non-core assets			5	1	6	2
Disposed of by Sale | Non-Core Mineral Rights
Business Acquisition [Line Items]
Proceeds from sale of oil and gas properties						726
Gain (loss) on sale of non-core assets						560
Permian Basin
Business Acquisition [Line Items]
Oil and gas assets acquisitions consideration			$ 5	$ 26	$ 10	$ 26

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CAPITALIZED EXPLORATORY WELL COSTS (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Extractive Industries [Abstract]
Capitalized exploratory well costs	$ 71	$ 50

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Derivative Activities Recorded in the Statement of Consolidated Operations (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized losses, net			$ 0	$ (83)
Derivative instrument losses, net	$ 0	$ (32)	0	(94)
Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Realized losses, net	0	(6)	0	(11)
Unrealized losses, net	0	(26)	0	(83)
Derivative instrument losses, net	0	(32)	0	(94)
Commodity derivative instruments | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Realized losses, net	0	(4)	0	(9)
Unrealized losses, net	0	(20)	0	(44)
Foreign currency derivative instruments | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Realized losses, net	0	(2)	0	(2)
Unrealized losses, net	0	(6)	0	(8)
Preferred Units embedded derivative | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized losses, net	$ 0	$ 0	$ 0	$ (31)

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OTHER CURRENT ASSETS (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Inventories	$ 487	$ 425
Drilling advances	66	64
Prepaid assets and other	158	54
Current decommissioning security for sold Gulf of Mexico assets	450	450
Total Other current assets	$ 1,161	$ 993

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EQUITY METHOD INTERESTS - Narrative (Details) shares in Millions, $ in Millions	1 Months Ended	3 Months Ended		6 Months Ended
	Mar. 31, 2022 USD ($) shares	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 USD ($) shares	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 USD ($) shares	Dec. 31, 2022 USD ($)	Feb. 22, 2022 shares
Schedule of Equity Method Investments [Line Items]
Loss on sale of stock	$ 25
Receivables		$ 1,331		$ 1,331		$ 1,424
Kinetik
Schedule of Equity Method Investments [Line Items]
Stock split, conversion ratio			2
Kinetik
Schedule of Equity Method Investments [Line Items]
Equity method investment, number of shares (in shares) | shares		19.8	17.7	19.8	17.7		12.9
Shares sold (in shares) | shares	4.0
Dividends paid-in-kind (in shares) | shares				2.1
Interest percentage		13.00%		13.00%
Changes in fair value of equity method interest gains		$ 90	$ 42	$ 71	$ 66
Accounts payable		37		37
Receivables		$ 19		$ 19

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EQUITY METHOD INTERESTS - Sales and Costs Associated with Equity Method Interest (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Kinetik
Schedule of Equity Method Investments [Line Items]
Sales		$ 29	$ 0	$ 36	$ 0
Costs		52	26	78	36
Natural gas and NGLs sales | Kinetik
Schedule of Equity Method Investments [Line Items]
Sales		22	0	29	0
Gathering, processing, and transmission costs
Schedule of Equity Method Investments [Line Items]
Costs	[1]	75	94	148	175
Gathering, processing, and transmission costs | Kinetik
Schedule of Equity Method Investments [Line Items]
Costs		26	26	50	36
Purchased oil and gas sales
Schedule of Equity Method Investments [Line Items]
Costs	[1]	131	528	347	879
Purchased oil and gas sales | Kinetik
Schedule of Equity Method Investments [Line Items]
Sales		7	0	7	0
Costs		$ 26	$ 0	$ 28	$ 0

[1] For transactions associated with Kinetik, refer to Note 7—Equity Method Interests for further detail.

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OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued operating expenses	$ 172	$ 139
Accrued exploration and development	352	300
Accrued compensation and benefits	247	514
Accrued interest	93	96
Accrued income taxes	193	90
Current asset retirement obligation	55	55
Current operating lease liability	102	167
Current decommissioning contingency for sold Gulf of Mexico properties	450	450
Other	271	238
Total Other current liabilities	$ 1,935	$ 2,049

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ASSET RETIREMENT OBLIGATION (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Asset retirement obligation at the beginning of period			$ 1,991
Liabilities incurred			6
Liabilities settled			(21)
Accretion expense	$ 29	$ 29	57	$ 58
Asset retirement obligation at the end of period	2,033		2,033
Less current portion	(55)		(55)		$ (55)
Asset retirement obligation, long-term	$ 1,978		$ 1,978		$ 1,936

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DEBT AND FINANCING COSTS - Schedule of Debt (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Finance lease obligations	$ 33	$ 34
Unamortized discount	(27)	(27)
Debt issuance costs	(27)	(28)
Total debt	4,814	4,887
Current maturities	(2)	(2)
Long-term debt	4,812	4,885
Apache notes and debentures
Debt Instrument [Line Items]
Debt instrument, fair value	4,100	4,200
Apache notes and debentures | Unsecured Debt
Debt Instrument [Line Items]
Notes and debentures before unamortized discount and debt issuance costs	$ 4,835	$ 4,908

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DEBT AND FINANCING COSTS - Additional Information (Details)			3 Months Ended		6 Months Ended
	Apr. 29, 2022 USD ($) option creditAgreement guarantyOfObligation	Jan. 18, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 GBP (£)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 GBP (£)	Apr. 29, 2022 GBP (£) creditAgreement guarantyOfObligation
Debt Instrument [Line Items]
Finance lease obligations, current			$ 2,000,000		$ 2,000,000			$ 2,000,000
Gain (loss) on extinguishment of debt			0	$ 0	9,000,000	$ (67,000,000)
Number of unsecured guaranties of obligations | guarantyOfObligation	2									2
APA Corp
Debt Instrument [Line Items]
Number of credit agreements | creditAgreement	2									2
USD Agreement | Line of Credit
Debt Instrument [Line Items]
Debt instrument term	5 years
Line of credit facility, committed amount	$ 1,800,000,000
Line of credit facility, increased committed amount	$ 2,300,000,000
Line of credit facility, number of extension options | option	2
Debt extension term	1 year
Debt face amount	$ 300,000,000
Outstanding borrowings			0		0			0
USD Agreement | Line of Credit | Letter of Credit
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	750,000,000
Line of credit facility, current borrowing capacity	$ 150,000,000
GBP Agreement | Line of Credit
Debt Instrument [Line Items]
Debt instrument term	5 years
Line of credit facility, committed amount | £										£ 1,500,000,000
Debt extension term	1 year
GBP Agreement | Line of Credit | Letter of Credit
Debt Instrument [Line Items]
Line of credit facility, number of extension options | option	2
Former Facility | Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, terminated amount	$ 4,000,000,000
Line of credit facility, covenant benchmark amount	$ 1,000,000,000
Apache credit facility
Debt Instrument [Line Items]
Outstanding borrowings			0		0			0
Letters of credit outstanding, amount			3,000,000		3,000,000		£ 185,000,000	$ 17,000,000	£ 199,000,000
Senior Notes
Debt Instrument [Line Items]
Debt repurchased principal amount			74,000,000		74,000,000
Debt repurchase price			$ 65,000,000		65,000,000
Premium (discount) to par of debt repurchase					(10,000,000)
Gain (loss) on extinguishment of debt					$ 9,000,000
Senior Notes | 3.25% notes due 2022
Debt Instrument [Line Items]
Current maturities		$ 213,000,000
Debt interest rate		3.25%
Redemption price, percentage of principal amount redeemed		100.00%
Senior Notes | Cash Tender Offers
Debt Instrument [Line Items]
Debt repurchased principal amount				1,100,000,000		1,100,000,000
Debt repurchase price				1,200,000,000		1,200,000,000
Gain (loss) on extinguishment of debt						(66,000,000)
Debt instrument, unamortized discount and issuance costs				11,000,000		11,000,000
Senior Notes | Open Market Repurchase
Debt Instrument [Line Items]
Debt repurchased principal amount				15,000,000		15,000,000
Debt repurchase price				$ 16,000,000		16,000,000
Premium (discount) to par of debt repurchase						1,000,000
Gain (loss) on extinguishment of debt						$ (1,000,000)

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DEBT AND FINANCING COSTS - Components of Financing Costs, Net (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Debt Disclosure [Abstract]
Interest expense	$ 74	$ 75	$ 149	$ 165
Amortization of debt issuance costs	0	4	1	6
Capitalized interest	0	(1)	0	(1)
(Gain) loss on extinguishment of debt	0	0	(9)	67
Interest income	(3)	(1)	(5)	(5)
Interest income from APA Corporation, net (Note 2)	(29)	(15)	(45)	(30)
Financing costs, net	$ 42	$ 62	$ 91	$ 202

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INCOME TAXES (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Foreign Tax Authority
Deferred Tax Expense [Line Items]
Deferred tax expense, remeasurement of deferred tax liability	$ 174

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COMMITMENTS AND CONTINGENCIES (Details) $ in Millions							6 Months Ended	12 Months Ended
	Sep. 10, 2020 defendant	Sep. 11, 2019 USD ($) plaintiff	Dec. 20, 2017 action	Jul. 17, 2017 defendant action	Mar. 21, 2016 USD ($)	Mar. 20, 2016 USD ($)	Jun. 30, 2023 USD ($) bond letterOfCredit	Dec. 31, 2022 USD ($) sidetrack	Dec. 31, 2013 USD ($) profitInterest	Dec. 31, 2017 AUD ($)	Apr. 30, 2017 AUD ($)	Mar. 12, 2014 USD ($)
Commitment And Contingencies [Line Items]
Accrued liability for legal contingencies							$ 52,000,000
Environmental tax and royalty obligations												$ 100,000,000
Retain right of obligations							45,000,000
Undiscounted reserve for environmental remediation							1,000,000
Decommissioning costs incurred							464,000,000
Decommissioning costs reimbursed amount							276,000,000
Standby loan agreed to provide related to ARO (up to)							400,000,000
Current decommissioning contingency for sold Gulf of Mexico properties							922,000,000
Decommissioning contingency for sold Gulf of Mexico properties, total							472,000,000	$ 738,000,000
Current decommissioning contingency for sold Gulf of Mexico properties							450,000,000	450,000,000
Decommissioning security for sold properties							507,000,000
Trust account for disposal group, number of net profits interests							57,000,000	217,000,000
Current decommissioning security for sold Gulf of Mexico assets							$ 450,000,000
Gulf Of Mexico Shelf Operations and Properties | Disposed of by Sale
Commitment And Contingencies [Line Items]
Proceeds from sale of operations and properties									$ 3,750,000,000
Trust account for disposal group, number of net profits interests | profitInterest									2
Number of bonds held | bond							2
Number of debt instruments held | letterOfCredit							5
Minimum
Commitment And Contingencies [Line Items]
Asset retirement obligation, estimated liability							$ 922,000,000
Maximum
Commitment And Contingencies [Line Items]
Asset retirement obligation, estimated liability							1,100,000,000
Apollo Exploration Lawsuit
Commitment And Contingencies [Line Items]
Plaintiffs alleged damages					$ 200,000,000
Apollo Exploration Lawsuit | Minimum
Commitment And Contingencies [Line Items]
Plaintiffs alleged damages						$ 1,100,000,000
Australian Operations Divestiture Dispute | Apache Australia Operation
Commitment And Contingencies [Line Items]
Gain contingency, unrecorded amount											$ 80
Loss contingency, estimated of possible loss amount										$ 200
Canadian Operations Divestiture Dispute
Commitment And Contingencies [Line Items]
Plaintiffs alleged damages		$ 60,000,000
Number of plaintiffs | plaintiff		4
Litigation settlement, amount							7,000,000
California Litigation
Commitment And Contingencies [Line Items]
Number of actions filed | action			2	3
Number of defendants | defendant				30
Delaware Litigation
Commitment And Contingencies [Line Items]
Number of defendants | defendant	25
Castex Lawsuit
Commitment And Contingencies [Line Items]
Plaintiffs alleged damages								200,000,000
Loss contingency, estimated of possible loss amount							$ 13,500,000	$ 60,000,000
Number of sidetracks | sidetrack								5

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BUSINESS SEGMENT INFORMATION - Additional Information (Details)	6 Months Ended
	Jun. 30, 2023 segment
Segment Reporting [Abstract]
Number of operating segments	3

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BUSINESS SEGMENT INFORMATION - Financial Segment Information (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Operating Expenses:
Lease operating expenses		$ 352	$ 359	$ 666	$ 703
Taxes other than income		47	78	97	148
Exploration		37	15	81	40
Depreciation, depletion, and amortization		339	278	647	569
Asset retirement obligation accretion		29	29	57	58
Impairments		46	0	46	0
Total operating expenses		1,056	1,381	2,089	2,572
Operating Income (Loss)		688	1,666	1,600	3,144
Other Income (Expense):
Derivative instrument losses, net		0	(32)	0	(94)
Gain (loss) on divestitures, net		5	(27)	6	1,149
Other, net		109	64	77	109
General and administrative		(66)	(83)	(124)	(234)
Transaction, reorganization, and separation		(2)	(3)	(6)	(17)
Financing costs, net		(42)	(62)	(91)	(202)
NET INCOME BEFORE INCOME TAXES		692	1,523	1,462	3,855
Total assets		14,572	13,839	14,572	13,839	$ 14,255
Operating Segments | Egypt
Operating Expenses:
Lease operating expenses		121	131	218	262
Taxes other than income		0	0	0	0
Exploration		30	12	66	27
Depreciation, depletion, and amortization		126	91	249	188
Asset retirement obligation accretion		0	0	0	0
Impairments		0		0
Total operating expenses		283	239	546	487
Operating Income (Loss)		425	754	884	1,397
Other Income (Expense):
Total assets		3,365	3,107	3,365	3,107
Impairments of oil and gas properties			1		2
Operating Segments | North Sea
Operating Expenses:
Lease operating expenses		99	118	176	214
Taxes other than income		0	0	0	0
Exploration		4	2	9	7
Depreciation, depletion, and amortization		61	54	119	116
Asset retirement obligation accretion		19	20	37	40
Impairments		46		46
Total operating expenses		241	206	410	401
Operating Income (Loss)		37	177	220	425
Other Income (Expense):
Total assets		1,719	2,103	1,719	2,103
Impairments of oil and gas properties		3		6
Operating Segments | U.S.
Operating Expenses:
Lease operating expenses		132	110	272	228
Taxes other than income		47	78	97	145
Exploration		3	1	6	5
Depreciation, depletion, and amortization		152	133	279	263
Asset retirement obligation accretion		10	9	20	17
Impairments		0		0
Total operating expenses		532	936	1,133	1,691
Operating Income (Loss)		226	735	496	1,313
Other Income (Expense):
Total assets		9,489	8,629	9,489	8,629
Impairments of oil and gas properties		3	1	5	4
Reportable Legal Entities | Altus Midstream
Operating Expenses:
Lease operating expenses		0	0	0	0
Taxes other than income		0	0	0	3
Exploration		0	0	0	0
Depreciation, depletion, and amortization		0	0	0	2
Asset retirement obligation accretion		0	0	0	1
Impairments		0		0
Total operating expenses		0	0	0	11
Operating Income (Loss)		0	0	0	10
Other Income (Expense):
Total assets		0	0	0	0
Intersegment Eliminations & Other
Operating Expenses:
Lease operating expenses		0	0	0	(1)
Taxes other than income		0	0	0	0
Exploration		0	0	0	1
Depreciation, depletion, and amortization		0	0	0	0
Asset retirement obligation accretion		0	0	0	0
Impairments		0		0
Total operating expenses		0	0	0	(18)
Operating Income (Loss)		0	0	0	(1)
Other Income (Expense):
Total assets		(1)	0	(1)	0
Oil and gas
Segment Reporting Information [Line Items]
Revenues		1,744	3,047	3,689	5,716
Oil and gas | Operating Segments | Egypt
Segment Reporting Information [Line Items]
Revenues		708	993	1,430	1,884
Oil and gas | Operating Segments | North Sea
Segment Reporting Information [Line Items]
Revenues		278	383	630	826
Oil and gas | Operating Segments | U.S.
Segment Reporting Information [Line Items]
Revenues		758	1,671	1,629	3,004
Oil and gas | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Revenues		0	0	0	21
Oil and gas | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Revenues		0	0	0	(19)
Gathering, processing, and transmission costs
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	[1]	1,600	2,525	3,306	4,845
Operating Expenses:
Gathering, processing, and transmission/Purchased oil and gas costs	[1]	75	94	148	175
Gathering, processing, and transmission costs | Operating Segments | Egypt
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		708	993	1,430	1,884
Operating Expenses:
Gathering, processing, and transmission/Purchased oil and gas costs		6	5	13	10
Gathering, processing, and transmission costs | Operating Segments | North Sea
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		278	383	630	826
Operating Expenses:
Gathering, processing, and transmission/Purchased oil and gas costs		12	12	23	24
Gathering, processing, and transmission costs | Operating Segments | U.S.
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		614	1,149	1,246	2,138
Operating Expenses:
Gathering, processing, and transmission/Purchased oil and gas costs		57	77	112	154
Gathering, processing, and transmission costs | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		0	0	0	0
Operating Expenses:
Gathering, processing, and transmission/Purchased oil and gas costs		0	0	0	5
Gathering, processing, and transmission costs | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		0	0	0	(3)
Operating Expenses:
Gathering, processing, and transmission/Purchased oil and gas costs		0	0	0	(18)
Purchased oil and gas sales
Segment Reporting Information [Line Items]
Purchased oil and gas sales	[1]	144	522	383	871
Operating Expenses:
Gathering, processing, and transmission/Purchased oil and gas costs	[1]	131	528	347	879
Purchased oil and gas sales | Operating Segments | Egypt
Segment Reporting Information [Line Items]
Purchased oil and gas sales		0	0	0	0
Operating Expenses:
Gathering, processing, and transmission/Purchased oil and gas costs		0	0	0	0
Purchased oil and gas sales | Operating Segments | North Sea
Segment Reporting Information [Line Items]
Purchased oil and gas sales		0	0	0	0
Operating Expenses:
Gathering, processing, and transmission/Purchased oil and gas costs		0	0	0	0
Purchased oil and gas sales | Operating Segments | U.S.
Segment Reporting Information [Line Items]
Purchased oil and gas sales		144	522	383	866
Operating Expenses:
Gathering, processing, and transmission/Purchased oil and gas costs		131	528	347	879
Purchased oil and gas sales | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Purchased oil and gas sales		0	0	0	5
Operating Expenses:
Gathering, processing, and transmission/Purchased oil and gas costs		0	0	0	0
Purchased oil and gas sales | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Purchased oil and gas sales		0	0	0	0
Operating Expenses:
Gathering, processing, and transmission/Purchased oil and gas costs		0	0	0	0
Midstream service affiliate revenues | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Purchased oil and gas sales					16
Midstream service affiliate revenues | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Purchased oil and gas sales					(16)
Oil revenues
Other Income (Expense):
Revenue from non-customers		165	302	337	552
Oil revenues | Gathering, processing, and transmission costs
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		1,326	1,863	2,676	3,580
Oil revenues | Gathering, processing, and transmission costs | Operating Segments | Egypt
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		618	902	1,247	1,692
Oil revenues | Gathering, processing, and transmission costs | Operating Segments | North Sea
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		235	307	517	635
Oil revenues | Gathering, processing, and transmission costs | Operating Segments | U.S.
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		473	654	912	1,253
Oil revenues | Gathering, processing, and transmission costs | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		0	0	0	0
Oil revenues | Gathering, processing, and transmission costs | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		0	0	0	0
Natural gas revenues
Other Income (Expense):
Revenue from non-customers		24	30	50	61
Natural gas revenues | Gathering, processing, and transmission costs
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		175	433	413	813
Natural gas revenues | Gathering, processing, and transmission costs | Operating Segments | Egypt
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		90	88	183	186
Natural gas revenues | Gathering, processing, and transmission costs | Operating Segments | North Sea
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		39	64	99	163
Natural gas revenues | Gathering, processing, and transmission costs | Operating Segments | U.S.
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		46	281	131	464
Natural gas revenues | Gathering, processing, and transmission costs | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		0	0	0	0
Natural gas revenues | Gathering, processing, and transmission costs | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		0	0	0	0
Natural gas liquids revenues
Other Income (Expense):
Revenue from non-customers		0	1	0	2
Natural gas liquids revenues | Gathering, processing, and transmission costs
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		99	229	217	452
Natural gas liquids revenues | Gathering, processing, and transmission costs | Operating Segments | Egypt
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		0	3	0	6
Natural gas liquids revenues | Gathering, processing, and transmission costs | Operating Segments | North Sea
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		4	12	14	28
Natural gas liquids revenues | Gathering, processing, and transmission costs | Operating Segments | U.S.
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		95	214	203	421
Natural gas liquids revenues | Gathering, processing, and transmission costs | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		0	0	0	0
Natural gas liquids revenues | Gathering, processing, and transmission costs | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues		$ 0	$ 0	$ 0	$ (3)

[1] For transactions associated with Kinetik, refer to Note 7—Equity Method Interests for further detail.