EX-99.1 2 h56320exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
CONTACTS:     
         
(Media):
  Bill Mintz   (713) 296-7276
 
        
(Investor):
  Robert Dye
David Higgins 		  (713) 296-6662
(713) 296-6690
 
        
(Web site):
  www.apachecorp.com    
FOR RELEASE AT 7:45 A.M. CENTRAL TIME
APACHE’S FIRST-QUARTER NET INCOME DOUBLES TO $1.02 BILLION
     Houston, May 1, 2008 — Apache Corporation (NYSE, Nasdaq: APA) today reported first-quarter net income of $1.02 billion, or $3.03 per diluted common share, the company’s second consecutive quarter with earnings over $1 billion and a 108-percent increase from earnings of $492 million or $1.47 per share in the prior-year period. Excluding the non-cash impact of foreign currency fluctuations on deferred tax balances, Apache’s first-quarter adjusted earnings* were a record $2.99 per share, up from $1.48 per share in the prior-year period.
     First-quarter production increased 4 percent from the year-earlier period to 557,631 barrels of oil equivalent (boe) per day, driven by higher oil output in the United States, the North Sea and Egypt.
     Cash from operations before changes in operating assets and liabilities* totaled $1.8 billion, compared with $1.2 billion in the prior-year period.
     “Apache delivered strong financial results for the first quarter and — just as important — significant exploration results in each of our ‘ACE’ core growth areas of Australia, Canada and Egypt,” said G. Steven Farris, Apache’s president and chief executive officer. “These successes — and the substantial inventory of wells we plan to drill in each area during 2008 — will fuel the long-term reserve and production growth of the company.
     “We expect production to accelerate into the second half of 2008 with increased activity in the United States, Argentina and Canada along with first production through the Salam gas plant expansion project in Egypt,” Farris said.
     Apache’s discoveries included the Brulimar-1, Julimar Southeast-1 and the Halyard-1 in Australia; the Hydra-1X in Egypt, and three wells in the Muskwa Shale in the Ootla area of British Columbia.

 

 

     The three horizontal wells in the Ootla area test-flowed at rates of 8.8 million cubic feet (MMcf), 6.1 MMcf and 5.3 MMcf of gas per day; the wells are on production and flowing through Apache’s Missile gas plant. Apache and its partner EnCana have amassed 417,000 gross acres — the largest acreage position in the emerging play.
     In Egypt, Apache received approval to build a third gas processing train with capacity of 100 MMcf per day. “We now project that our inventory of development projects will add 135,000 boe per day net to Apache’s interests by the end of 2012,” Farris said.
-end-
 
*   Adjusted earnings and cash from operations before changes in operating assets and liabilities are non-GAAP measures. Please see reconciliations below.
     NOTE: Apache will conduct a conference call to discuss its first-quarter results at 1 p.m. Central time on May 1, 2008. The call will be webcast from Apache’s Web site, http://www.apachecorp.com. The webcast replay and podcast will be archived on Apache’s Web site. The conference call will be available for delayed playback by telephone for one week beginning at approximately 3 p.m. on May 1. To access the telephone playback, dial (719) 457-0820 and provide Apache’s confirmation code, 8602447.
     This news release contains certain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 including, without limitation, expectations, beliefs, plans and objectives regarding production and exploration activities. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions, risks and uncertainties, including, without limitation, risks, uncertainties and other factors discussed in our 2007 Form 10-K and on our Web site. There is no assurance that Apache’s expectations will be realized, and actual results may differ materially from those expressed in the forward-looking statements. We assume no duty to update these statements as of any future date.

 

 

APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
                 
    For the Quarter  
    Ended March 31,  
    2008     2007  
 
                
REVENUES AND OTHER:
                
Oil and gas production revenues
   $ 3,177,949     $ 2,023,067  
Other
     9,792       (20,192 )
 
            
 
     3,187,741       2,002,875  
 
            
 
                
COSTS AND EXPENSES:
                
Depreciation, depletion and amortization
     620,489       530,913  
Asset retirement obligation accretion
     26,497       24,064  
Lease operating expenses
     454,638       382,107  
Gathering and transportation
     40,976       31,263  
Taxes other than income
     242,578       109,970  
General and administrative
     82,423       67,862  
Financing costs, net
     44,253       42,063  
 
            
 
     1,511,854       1,188,242  
 
            
 
                
INCOME BEFORE INCOME TAXES
     1,675,887       814,633  
Current income tax provision
     487,800       186,522  
Deferred income tax provision
     166,574       135,162  
 
            
 
                
NET INCOME
     1,021,513       492,949  
Preferred stock dividends
     1,420       1,420  
 
            
 
                
INCOME ATTRIBUTABLE TO COMMON STOCK
   $ 1,020,093     $ 491,529  
 
            
 
                
NET INCOME PER COMMON SHARE:
                
Basic
   $ 3.06     $ 1.48  
 
            
Diluted
   $ 3.03     $ 1.47  
 
            
 
                
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
     333,393       331,213  
 
            

 

 

APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands)
                 
    For the Quarter  
    Ended March 31,  
    2008     2007  
 
                
COSTS INCURRED: (1)
                
North America exploration and development
   $ 743,356     $ 740,775  
International exploration and development
     608,463       426,369  
 
            
 
   $ 1,351,819     $ 1,167,144  
 
            
 
                
Oil and gas property acquisitions
   $ 7,947     $ 1,026,896  
 
            
 
                
(1)   Includes noncash asset retirement costs and capitalized interest as follows:
 
Capitalized interest
   $ 17,178     $ 21,776  
Asset retirement costs
   $ 85,072     $ 74,821  
                 
    March 31,     December 31,  
    2008     2007  
 
                
BALANCE SHEET DATA:
                
Cash and Cash Equivalents
   $ 383,040     $ 125,823  
Other Current Assets
     2,670,063       2,626,428  
Property and Equipment, net
     25,865,386       25,231,593  
Restricted Cash
     228,134       —  
Goodwill
     189,252       189,252  
Other Assets
     480,200       461,555  
 
            
Total Assets
   $ 29,816,075     $ 28,634,651  
 
            
 
                
Current Liabilities
   $ 3,000,482     $ 2,665,016  
Long-Term Debt
     3,911,924       4,011,605  
Deferred Credits and Other Noncurrent Liabilities
     6,823,662       6,580,051  
Shareholders’ Equity
     16,080,007       15,377,979  
 
            
Total Liabilities and Shareholders’ Equity
   $ 29,816,075     $ 28,634,651  
 
            
 
                
Common shares outstanding at end of period
     333,589       332,927  

 

 

APACHE CORPORATION
FINANCIAL INFORMATION
                 
    For the Quarter  
    Ended March 31,  
    2008     2007  
FINANCIAL DATA (In thousands, except per share data):
                
Revenues and other
   $ 3,187,741     $ 2,002,875  
 
            
Income Attributable to Common Stock
   $ 1,020,093     $ 491,529  
 
            
Basic Net Income Per Common Share
   $ 3.06     $ 1.48  
 
            
Diluted Net Income Per Common Share
   $ 3.03     $ 1.47  
 
            
 
                
Weighted Average Common Shares Outstanding
     333,393       331,213  
 
            
Diluted Shares Outstanding
     336,549       333,302  
 
            
 
                
PRODUCTION AND PRICING DATA:
                
OIL VOLUME — Barrels per day
                
United States
     100,679       74,652  
Canada
     17,347       19,032  
Egypt
     62,551       60,371  
Australia
     9,420       12,141  
North Sea
     58,771       53,671  
Argentina
     12,225       10,797  
 
            
Total
     260,993       230,664  
 
            
 
                
AVERAGE OIL PRICE PER BARREL
                
United States
   $ 83.58     $ 55.89  
Canada
     93.21       53.62  
Egypt
     97.85       56.64  
Australia
     101.67       66.96  
North Sea
     95.83       56.35  
Argentina
     45.13       40.61  
Total
     89.25       55.87  
 
                
NATURAL GAS VOLUME — Mcf per day
                
United States
     744,014       739,828  
Canada
     360,750       383,020  
Egypt
     242,977       243,485  
Australia
     191,180       194,961  
North Sea
     2,605       1,889  
Argentina
     165,133       198,239  
 
            
Total
     1,706,659       1,761,422  
 
            
 
                
AVERAGE NATURAL GAS PRICE PER MCF
                
United States
   $ 8.36     $ 6.96  
Canada
     7.56       6.44  
Egypt
     5.20       4.06  
Australia
     2.12       1.77  
North Sea
     16.31       8.30  
Argentina
     1.84       1.14  
Total
     6.42       5.22  
 
                
NGL VOLUME — Barrels per day
                
United States
     7,240       7,195  
Canada
     2,235       2,232  
Argentina
     2,720       2,635  
 
            
Total
     12,195       12,062  
 
            
 
                
AVERAGE NGL PRICE PER BARREL
                
United States
   $ 57.37     $ 35.02  
Canada
     53.35       31.47  
Argentina
     48.18       31.10  
Total
     54.58       33.51  

 

 

APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
NON-GAAP FINANCIAL MEASURES:
Reconciliation of income attributable to common stock to adjusted earnings:
The press release discusses Apache’s adjusted earnings. Adjusted earnings excludes certain items that management believes affect the comparability of operating results. The following provides the reasons adjusted earnings is a meaningful measure:
  •   Management uses adjusted earnings to evaluate the company’s operational trends and performance relative to other oil and gas producing companies.
 
  •   Management believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings for items that may obscure underlying fundamentals and trends.
 
  •   The reconciling items below are the types of items management believes are frequently excluded by analysts when evaluating the operating trends and comparability of the company’s results.
                 
    For the Quarter  
    Ended March 31,  
    2008     2007  
 
                
Income Attributable to Common Stock (GAAP)
   $ 1,020,093     $ 491,529  
 
                
Adjustments:
                
Foreign currency fluctuation impact on deferred tax expense
     (12,360 )     2,396  
 
                
 
            
Adjusted Earnings (Non-GAAP)
   $ 1,007,733     $ 493,925  
 
            
 
                
Adjusted Earnings Per Share (Non-GAAP)
                
Basic
   $ 3.02     $ 1.49  
 
            
Diluted
   $ 2.99     $ 1.48  
 
            
 
                
Average Number of Common Shares
                
Basic
     333,393       331,213  
 
            
Diluted
     336,549       333,302  
 
            
Reconciliation of net cash provided by operating activities to
cash from operations before changes in operating assets and liabilities:
The press release discusses Apache’s cash from operations before changes in operating assets and liabilities. It is presented because management believes the information is useful for investors because it is used internally and widely accepted by those following the oil and gas industry as a financial indicator of a company’s ability to generate cash to internally fund exploration and development activities, fund dividend programs, and service debt. It is also used by research analysts to value and compare oil and gas exploration and production companies, and is frequently included in published research when providing investment recommendations. Cash from operations before changes in operating assets and liabilities, therefore, is an additional measure of liquidity, but is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing, or financing activities.
The following table reconciles net cash provided by operating activities to cash from operations before changes in operating assets and liabilities.
                 
    For the Quarter  
    Ended March 31,  
    2008     2007  
Net cash provided by operating activities
   $ 1,808,404     $ 1,063,559  
Changes in operating assets and liabilities
     36,280       128,901  
 
            
Cash from operations before changes in operating assets and liabilities
   $ 1,844,684     $ 1,192,460