8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 30, 2013

APACHE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-4300	41-0747868
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

2000 Post Oak Boulevard

Suite 100

Houston, Texas 77056-4400

(Address of principal executive offices, including zip code)

(713) 296-6000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

On July 18, 2013, Apache Corporation (Apache or the Company) and Fieldwood Energy LLC (Fieldwood), an affiliate of Riverstone Holdings, entered into a Purchase and Sale Agreement (the “Agreement”), pursuant to which Apache agreed to sell its Gulf of Mexico Shelf operations and properties to Fieldwood for a purchase price of $3.75 billion, subject to customary adjustments to reflect an economic effective date of July 1, 2013. The transaction closed on September 30, 2013. In the transaction, Fieldwood assumed all asset retirement obligations for the acquired properties, which are estimated by Apache to be at a discounted value of approximately $1.5 billion. Apache has retained 50 percent of its ownership interest in all exploration blocks and in horizons below production in developed blocks, where high-potential deep hydrocarbon plays are being tested. The Company intends to use the proceeds from the transaction to reduce debt and enhance financial flexibility. Pursuant to the Agreement, Apache will continue to operate the acquired properties during a transitional period.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(b) Pro Forma Financial Information

The unaudited pro forma financial statements of Apache Corporation and its subsidiaries reflecting the closing of the sale of its Gulf of Mexico Shelf Assets are filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated into this Item 9.01 by reference.

(d) Exhibits

Exhibit No.

Description

99.1

Unaudited Pro Forma Condensed Consolidated Statement of Operations of Apache Corporation and Subsidiaries, for the six months ended June 30, 2013 and year ended December 31, 2012, the Unaudited Pro Forma Condensed Consolidated Balance Sheet of Apache Corporation and Subsidiaries, as of June 30, 2013, and the related notes thereto, to show the pro forma effects of Apache’s sale of its Gulf of Mexico Shelf operations and properties. The financial statements contained herein incorporate by reference the financial statements of Apache Corporation and Subsidiaries contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and its Quarterly Report on Form 10-Q for the six months ended June 30, 2013.

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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
Date: October 3, 2013	/s/ Thomas P. Chambers
	Thomas P. Chambers
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

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INDEX TO EXHIBITS

Exhibit No.

Description

99.1

Unaudited Pro Forma Condensed Consolidated Statement of Operations of Apache Corporation and Subsidiaries, for the six months ended June 30, 2013 and year ended December 31, 2012, the Unaudited Pro Forma Condensed Consolidated Balance Sheet of Apache Corporation and Subsidiaries, as of June 30, 2013, and the related notes thereto, to show the pro forma effects of Apache’s sale of its Gulf of Mexico Shelf operations and properties.

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EX-99.1

EXHIBIT 99.1

APACHE CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On July 18, 2013, Apache Corporation (“Apache” or the “Company”) and Fieldwood Energy LLC (“Fieldwood”), an affiliate of Riverstone Holdings, entered into a Purchase and Sale Agreement (the “Agreement”), pursuant to which Apache agreed to sell its Gulf of Mexico Shelf operations and properties (“Shelf Assets”) to Fieldwood for a purchase price of $3.75 billion, subject to customary adjustments to reflect an economic effective date of July 1, 2013. The transaction closed on September 30, 2013. In the transaction, Fieldwood assumed all asset retirement obligations for the acquired properties, which are estimated by Apache to be at a discounted value of approximately $1.5 billion. Apache has retained 50 percent of its ownership interest in all exploration blocks and in horizons below production in developed blocks, where high-potential deep hydrocarbon plays are being tested. The Company intends to use the proceeds from the transaction to reduce debt and enhance financial flexibility. Pursuant to the Agreement, Apache will continue to operate the acquired properties during a transitional period.

The following unaudited pro forma condensed consolidated financial statements and explanatory notes present how the condensed consolidated financial statements of Apache may have appeared had the sales of the Shelf Assets occurred as of January 1, 2012 (with respect to the statement of operations information presented) or as of June 30, 2013 (with respect to the balance sheet information presented).

The unaudited pro forma condensed consolidated financial statements have been derived from and should be read together with the historical consolidated financial statements and the related notes of Apache included in its Annual Report on Form 10-K for the year ended December 31, 2012 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.

The unaudited pro forma condensed consolidated financial statement information is based on financial statements prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the use of estimates that affect the reported amounts of revenues and expenses. The unaudited pro forma condensed consolidated financial information does not purport to represent what the results of operations or financial position of Apache would actually have been had the transaction described above occurred on the dates noted above, or to project the results of operations or financial position of Apache for any future periods. The pro forma adjustments are based on available information and certain assumptions that management believes are reasonable. The pro forma adjustments are directly attributable to the transaction and are expected to have a continuing impact on the results of operations of Apache. In the opinion of management, all adjustments necessary to present fairly the unaudited pro forma financial information have been made.

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APACHE CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2012

	Apache Historical		Pro Forma Adjustments			Apache Pro Forma
	(In millions, except per common share data)
Revenues and Other	$	17,078	$	(2,090	) (a)	$	14,988
Operating Expenses
Depreciation, depletion and amortization		7,109		(681	) (b)		6,428
Asset retirement obligation accretion		232		(78	) (c)		154
Lease operating expenses		2,968		(718	) (a)		2,250
Gathering and transportation		303		(28	) (a)		275
Taxes other than income		862		(3	) (a)		859
Merger, acquisition & transition		31		—			31
General and administrative		531		(21	) (a)		510
Financing costs, net		165		—			165
	$	12,201	$	(1,529	)	$	10,672
Income (Loss) Before Income Taxes	$	4,877	$	(561	)	$	4,316
Provision for income taxes		2,876		(196	) (d)		2,680
Net Income (Loss)	$	2,001	$	(365	)	$	1,636
Preferred dividend requirements		76		—			76
Income (Loss) Attributable to Common Stock	$	1,925	$	(365	)	$	1,560
Net Income (Loss) per Common Share:
Basic		4.95					4.01
Diluted		4.92					3.99
Weighted average common shares outstanding		389					389
Diluted shares outstanding		391					391

The accompanying notes to unaudited pro forma condensed consolidated

financial statements are an integral part of these statements.

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APACHE CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2013

	Apache Historical		Pro Forma Adjustments			Apache Pro Forma
	(In millions, except per common share data)
Revenues and Other	$	8,459	$	(1,119	) (a)	$	7,340
Operating Expenses
Depreciation, depletion and amortization		2,839		(356	) (b)		2,483
Asset retirement obligation		130		(36	) (c)		94
Lease operating expenses		1,600		(392	) (a)		1,208
Gathering and transportation		154		(17	) (a)		137
Taxes other than income		425		(1	) (a)		424
General and administrative		249		(11	) (a)		238
Financing costs, net		104		—			104
	$	5,501	$	(813	)	$	4,688
Income (Loss) Before Income Taxes	$	2,958	$	(306	)	$	2,652
Provision for income taxes		1,206		(107	) (d)		1,099
Net Income (Loss)	$	1,752	$	(199	)	$	1,553
Preferred stock dividends		38		—			38
Income (Loss) Attributable to Common Stock	$	1,714	$	(199	)	$	1,515
Net Income per Common Share:
Basic		4.37					3.87
Diluted		4.30					3.81
Weighted average common shares outstanding		392					392
Diluted shares outstanding		408					408

The accompanying notes to unaudited pro forma condensed consolidated

financial statements are an integral part of these statements.

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APACHE CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of June 30, 2013

	Apache Historical			Pro Forma Adjustments			Apache Pro Forma
	(In millions)
Assets
Current assets	$	4,758		$	2,279	(e),(f)	$	7,037
Property and equipment		99,493			(5,191	) (g)		94,302
Less: Accumulated DD&A		(43,672	)		—			(43,672	)
Other noncurrent assets		2,771			—			2,771
	$	63,350		$	(2,912	)	$	60,438
Liabilities and Shareholders’ Equity
Current liabilities	$	5,158		$	(213	) (e),(h)	$	4,945
Long-term debt		12,297			(1,430	) (e)		10,867
Deferred income tax liabilities		8,496			—			8,496
Asset retirement obligation		4,278			(1,269	) (h)		3,009
Other noncurrent liabilities		400			—			400
Total Liabilities	$	30,629		$	(2,912	)	$	27,717
Preferred stock	$	1,227		$	—		$	1,227
Common stock		246			—			246
Other shareholders’ equity		31,248			—			31,248
Shareholders’ equity	$	32,721		$	—		$	32,721
	$	63,350		$	(2,912	)	$	60,438

The accompanying notes to unaudited pro forma condensed consolidated

financial statements are an integral part of these statements.

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APACHE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

JUNE 30, 2013 AND DECEMBER 31, 2012

1. BASIS OF PRESENTATION

The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2012, is based on the Company’s audited consolidated financial statements in its annual report on Form 10-K for the year ended December 31, 2012 and the adjustments and assumptions described below.

The unaudited pro forma condensed consolidated balance sheet as of June 30, 2013 and unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2013 is based on the Company’s unaudited condensed consolidated financial statements in its quarterly report on Form 10-Q as of and for the six months ended June 30, 2013 and the adjustments and assumptions described below.

2. PRO FORMA ADJUSTMENTS

The following adjustments were made in the preparation of the unaudited pro forma condensed consolidated financial statements:

Condensed Consolidated Statements of Operations

(a) To eliminate the revenues and direct operating expense for the assets sold.

(b) To adjust depletion to give effect to the reduction in Apache’s pro forma oil and gas property and equipment carrying value, total estimated proved reserves, and production volumes as a result of the assets sold.

(c) To eliminate accretion expense attributable to asset retirement obligations associated with the assets sold.

(d) To eliminate income tax expense based on the Company’s current federal statutory tax rate of 35%.

Condensed Consolidated Balance Sheet

(e) Adjustments reflect $3.79 billion of cash consideration for the sales of the Shelf Assets to Fieldwood and for properties subject to preferential purchase rights. Of the net cash proceeds received, approximately $1.4 billion was used to repay the Company’s commercial paper and approximately $26 million was used to repay the Company’s money market lines in the U.S. and Canada.

(f) To eliminate current assets of approximately $58 million related to the assets sold.

(g) To record the sales proceeds attributable to the proved and unproved oil and gas properties in accordance with the full cost method of accounting. For a detailed discussion of the Company’s Significant Accounting Policy for property and equipment, please see Note 1 – Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements set forth in Part IV, Item 15 of the Company’s annual report on Form 10-K for the year ended December 31, 2012.

(h) To eliminate approximately $1.5 billion related to the current and non-current portion of asset retirement obligation associated with the assets sold.

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