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): July 31, 2019
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) |
(IRS Employer Identification No.) |
2000 Post Oak Boulevard
Suite 100
Houston, Texas 77056-4400
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code: (713) 296-6000
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)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Common Stock, $0.625 par value | APA | New York Stock Exchange, Chicago Stock Exchange and NASDAQ Global Select Market | ||
7.75% Notes Due 2029 | APA/29 | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
The information in this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of Section 18, and shall not be incorporated by reference in any filing under the Securities Act or the Exchange Act, except as set forth by specific reference in such filing.
Item 2.02. | Results of Operations and Financial Condition. |
On July 31, 2019, Apache Corporation issued a press release announcing financial and operating results for the fiscal quarter ended June 30, 2019. The full text of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit No. |
Description | |
99.1 | Press Release of Apache Corporation dated July 31, 2019. |
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: August 1, 2019 | By: | /s/ Rebecca A. Hoyt | ||||
Rebecca A. Hoyt | ||||||
Senior Vice President, Chief Accounting Officer, and Controller (Principal Accounting Officer) |
Exhibit 99.1
APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2019
FINANCIAL AND OPERATIONAL RESULTS
| Reported second-quarter production of 455,000 barrels of oil equivalent (BOE) per day. Adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 396,000 BOE per day, exceeding guidance of 392,000 BOE per day; |
| Achieved U.S. production of 264,000 BOE per day, which was reduced by approximately 4,000 BOE per day as a result of asset sales during the quarter; International adjusted production was 132,000 BOE per day, in-line with guidance; |
| Invested $589 million in upstream capital, 13 percent below capital guidance midpoint, remain on track for $2.4 billion for the year; |
| Commissioned first cryogenic processing facility at Alpine High in partnership with Altus Midstream during the quarter and second facility in July, both of which were on budget and schedule; and |
| Closed on the sale of midcontinent assets in two separate transactions in May and July, comprising approximately $560 million of cash proceeds, after customary closing adjustments. $150 million of proceeds were used to retire debt in early July. |
HOUSTON, July 31, 2019 Apache Corporation (NYSE, Nasdaq: APA) today announced its financial and operational results for the second quarter of 2019.
Apache reported a quarterly loss of $360 million or $0.96 per diluted common share for the second quarter of 2019. These results include a number of items outside of core earnings that are typically excluded by the investment community in their published earnings estimates. When adjusted for items that impact the comparability of results, Apaches second-quarter earnings were $41 million or $0.11 per share. Net cash provided by operating activities in the quarter was $856 million. Adjusted EBITDAX was $994 million.
Apache has demonstrated capital discipline, refined our portfolio with the sale of the midcontinent assets, utilized asset sale proceeds to reduce debt, and successfully commissioned our first cryogenic processing facilities at Alpine High. We also delivered strong cash flow as our leverage to WTI and Brent oil prices offset the impact of very weak natural gas and natural gas liquids prices, said John J. Christmann IV, Apaches chief executive officer and president.
APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2019 FINANCIAL AND OPERATIONAL RESULTS
PAGE 2 of 7
We responded quickly to weak Waha and El Paso Permian gas prices and deferred production at Alpine High. While total Permian production volumes were strong, oil volumes trailed guidance due to timing delays bringing wells online during the quarter. We will catch up in the second half of 2019 and exit the year with oil production on plan and with strong momentum heading into 2020.
We have balanced our quarterly investment pace, and through June 30, have invested slightly less than half of our 2019 upstream capital budget. For the full year, we anticipate spending at or below our $2.4 billion budget, continued Christmann.
Second-quarter operational summary
Highlights from the companys three principal areas include:
| Permian Production averaged 226,000 BOE per day during the quarter. Apache operated an average of 12 rigs and drilled and completed 54 gross-operated wells. |
○ | Midland Basin During the quarter, the company averaged four rigs and placed 20 wells on production. A 30-day delay in the commissioning of a new electric-powered frac fleet delayed production from nine wells during the quarter. |
○ | Delaware Basin Outside of Alpine High in the Delaware Basin, Apache averaged three rigs and placed nine wells on production during the quarter. |
At Alpine High, the company averaged five rigs and two frac crews and placed 26 wells on production. Approximately half of these wells came online late in the quarter and were still in the early clean-up phase as of June 30.
Production at Alpine High during the quarter was 49,000 BOE per day. As previously announced, Apache initiated the deferral of certain natural gas production volumes
APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2019 FINANCIAL AND OPERATIONAL RESULTS
PAGE 3 of 7
near the end of the first quarter in response to severe Waha Hub gas price weakness. The impact of these deferrals during the second quarter was approximately 22,000 BOE per day. In the third quarter, the company is continuing to defer a similar amount of lean and rich-gas volumes in response to ongoing price weakness until the GCX pipeline comes online.
Apache continues to deliver cost reductions in the play with average drilling and completion costs per foot down 26 percent and 41 percent, respectively, from 2017 through the end of the second quarter.
| Egypt Apache averaged seven rigs during the quarter and drilled and completed 11 gross-operated wells. Adjusted production in Egypt, which excludes noncontrolling interest and the impact of tax barrels, averaged 72,000 BOE per day. During the quarter, the company made a discovery in the Lower Bahariya on a new concession area and has identified numerous additional low-cost, short-cycle drilling locations in the immediate vicinity. |
| North Sea Apache averaged three rigs during the quarter and produced 60,000 BOE per day. During the second quarter, the company completed a farm-out agreement in a portion of the Beryl area to enable the continuation of tertiary exploration while preserving capital. |
Asset sales and use of proceeds
In May and July, Apache closed the sale of noncore assets in two previously disclosed transactions, comprising approximately $560 million of net proceeds. The asset sales reflect the companys exit from the Western Anadarko Basin and the SCOOP/STACK play. A portion of the proceeds from these asset sales was used to retire $150 million of debt that matured in early July.
APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2019 FINANCIAL AND OPERATIONAL RESULTS
PAGE 4 of 7
Capital and production outlook
Upstream oil and gas investment was $589 million in the second quarter. Apache is reiterating its full-year capital investment guidance of $2.4 billion.
Apache is revising its production guidance for the second half of 2019 in the Permian Basin to reflect the delays experienced in the Midland/Delaware Basins, as well as continuing gas production deferrals at Alpine High in response to ongoing weak Waha gas prices.
For Permian Basin oil, Apache expects third-quarter production to be 94,000 to 98,000 BOE per day and fourth-quarter production to be 100,000 to 105,000 BOE per day.
At Alpine High, Apache expects third-quarter production to be between 70,000 to 75,000 BOE per day, which includes the impact of planned production deferrals. Fourth-quarter Alpine High production guidance of greater than 100,000 BOE per day is unchanged from prior guidance. This assumes that all deferred gas production is returned to sales by the beginning of October in conjunction with the GCX pipeline startup.
Internationally, the company expects third and fourth quarter volumes will be in-line with prior guidance. Details on additional financial and operational guidance can be found in the Second-Quarter 2019 Financial and Operational Supplement at www.apachecorp.com/financialdata.
Our objectives for the second half of 2019 include managing capital investment to a level at or below our full-year budget of $2.4 billion, increasing Permian Basin oil well completions and oil production, continuing to drive capital and operating efficiencies into our business, and enhancing our opportunity set through high-impact exploration initiatives in Suriname and the Lower 48, concluded Christmann.
Conference call
Apache will host a conference call to discuss its second-quarter 2019 results at 10 a.m. Central time, Thursday, Aug. 1. The conference call will be webcast from Apaches website at www.apachecorp.com
APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2019 FINANCIAL AND OPERATIONAL RESULTS
PAGE 5 of 7
and investor.apachecorp.com, and the webcast replay will be archived there as well. A replay of the conference call will be available for seven days following the call. The number for the replay is (855) 859-2056 or (404) 537-3406 for international calls. The conference access code is 7693326 . Sign up for email alerts to be reminded of the webcast at investor.apachecorp.com/alerts/email-alerts-subscription.
Additional information
Additional information follows, including reconciliations of adjusted earnings, cash flow from operations before changes in operating assets and liabilities, adjusted EBITDAX, upstream capital investment and net debt (non-GAAP financial measures) to GAAP measures and information regarding adjusted production. Apaches quarterly supplement is available at www.apachecorp.com/financialdata.
About Apache
Apache Corporation is an oil and gas exploration and production company with operations in the United States, Egypt and the United Kingdom. Apache posts announcements, operational updates, investor information and copies of all press releases on its website, www.apachecorp.com.
Non-GAAP financial measures
Apaches financial information includes information prepared in conformity with generally accepted accounting principles (GAAP) as well as non-GAAP financial information. It is managements intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted earnings, cash flow from operations before changes in operating assets and liabilities, upstream capital investment, adjusted EBITDAX and net debt are non-GAAP measures. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure.
APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2019 FINANCIAL AND OPERATIONAL RESULTS
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Forward-looking statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as anticipates, intends, plans, seeks, believes, estimates, expects, guidance, outlook, projects, will, and similar references to future periods. These statements include, but are not limited to, statements about future plans, expectations and objectives for Apaches operations, including statements about our capital plans, drilling plans, production expectations, asset sales, and monetizations. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See Risk Factors in our 2018 Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development or otherwise, except as may be required by law.
Cautionary note to investors
The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SECs definitions for such terms. Apache may use certain terms in this release, such as resources, potential resources, resource potential, estimated net reserves, recoverable reserves, and other similar terms that the SEC guidelines strictly prohibit Apache from including in filings with the SEC. Such terms do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality and
APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2019 FINANCIAL AND OPERATIONAL RESULTS
PAGE 7 of 7
other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in Apaches Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2018, available from Apache at www.apachecorp.com or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, TX 77056 (Attn: Corporate Secretary). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SECs website at www.sec.gov.
Contacts
Investor: | (281) 302-2286 | Gary Clark | ||
Media: | (713) 296-7276 | Phil West | ||
Website: | www.apachecorp.com |
-end-
APACHE CORPORATION
STATEMENT OF CONSOLIDATED OPERATIONS
(Unaudited)
(In millions, except per share data)
For the Quarter Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
REVENUES AND OTHER: |
||||||||||||||||
Oil and gas production revenues |
||||||||||||||||
Oil revenues |
$ | 1,397 | $ | 1,576 | $ | 2,707 | $ | 2,969 | ||||||||
Natural gas revenues |
118 | 212 | 354 | 434 | ||||||||||||
Natural gas liquids revenues |
83 | 148 | 191 | 266 | ||||||||||||
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|
|
|
|||||||||
1,598 | 1,936 | 3,252 | 3,669 | |||||||||||||
Derivative instrument gain (loss) |
(8 | ) | (25 | ) | (38 | ) | (23 | ) | ||||||||
Gain (loss) on divestiture |
17 | 2 | 20 | 9 | ||||||||||||
Other |
(4 | ) | 16 | 4 | 21 | |||||||||||
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|
|
|
|
|||||||||
1,603 | 1,929 | 3,238 | 3,676 | |||||||||||||
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|
|
|
|
|||||||||
OPERATING EXPENSES: |
||||||||||||||||
Lease operating expenses |
389 | 356 | 754 | 705 | ||||||||||||
Gathering, processing and transmission |
76 | 82 | 164 | 168 | ||||||||||||
Taxes other than income |
46 | 49 | 97 | 104 | ||||||||||||
Exploration |
95 | 76 | 164 | 152 | ||||||||||||
General and administrative |
102 | 117 | 225 | 231 | ||||||||||||
Transaction, reorganization and separation |
6 | 12 | 10 | 12 | ||||||||||||
Depreciation, depletion and amortization: |
||||||||||||||||
Oil and gas property and equipment |
562 | 573 | 1,169 | 1,091 | ||||||||||||
Other assets |
40 | 35 | 79 | 70 | ||||||||||||
Asset retirement obligation accretion |
26 | 27 | 53 | 54 | ||||||||||||
Impairments |
240 | | 240 | | ||||||||||||
Financing costs, net |
173 | 94 | 270 | 193 | ||||||||||||
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|
|||||||||
1,755 | 1,421 | 3,225 | 2,780 | |||||||||||||
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|
|||||||||
NET INCOME BEFORE INCOME TAXES |
(152 | ) | 508 | 13 | 896 | |||||||||||
Current income tax provision |
187 | 249 | 373 | 447 | ||||||||||||
Deferred income tax provision (benefit) |
(23 | ) | (10 | ) | (42 | ) | (26 | ) | ||||||||
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INCOME INCLUDING NONCONTROLLING INTEREST |
(316 | ) | 269 | (318 | ) | 475 | ||||||||||
Net income attributable to noncontrolling interest - Egypt |
43 | 74 | 87 | 135 | ||||||||||||
Net loss attributable to noncontrolling interest - Altus |
(3 | ) | | (2 | ) | | ||||||||||
Net income attributable to Altus Preferred Unit limited partners |
4 | | 4 | | ||||||||||||
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NET INCOME ATTRIBUTABLE TO COMMON STOCK |
$ | (360 | ) | $ | 195 | $ | (407 | ) | $ | 340 | ||||||
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|||||||||
NET INCOME PER COMMON SHARE: |
||||||||||||||||
Basic |
$ | (0.96 | ) | $ | 0.51 | $ | (1.08 | ) | $ | 0.89 | ||||||
Diluted |
$ | (0.96 | ) | $ | 0.51 | $ | (1.08 | ) | $ | 0.88 | ||||||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: |
||||||||||||||||
Basic |
377 | 382 | 376 | 382 | ||||||||||||
Diluted |
377 | 385 | 376 | 384 | ||||||||||||
DIVIDENDS DECLARED PER COMMON SHARE |
$ | 0.25 | $ | 0.25 | $ | 0.50 | $ | 0.50 |
Page 1
APACHE CORPORATION
PRODUCTION INFORMATION
For the Quarter Ended | % Change | For the Six Months Ended | ||||||||||||||||||||||||||
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
2Q19 to 1Q19 |
2Q19 to 2Q18 |
June 30, 2019 |
June 30, 2018 |
||||||||||||||||||||||
OIL VOLUME - Barrels per day |
||||||||||||||||||||||||||||
Permian |
92,176 | 97,625 | 89,928 | -6 | % | 2 | % | 94,886 | 87,711 | |||||||||||||||||||
MidContinent/Gulf Coast |
7,574 | 8,699 | 11,492 | -13 | % | -34 | % | 8,133 | 10,996 | |||||||||||||||||||
Gulf of Mexico |
3,260 | 2,454 | 3,743 | 33 | % | -13 | % | 2,859 | 3,763 | |||||||||||||||||||
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United States |
103,010 | 108,778 | 105,163 | -5 | % | -2 | % | 105,878 | 102,470 | |||||||||||||||||||
Egypt (1, 2) |
83,761 | 91,616 | 96,185 | -9 | % | -13 | % | 87,667 | 95,730 | |||||||||||||||||||
North Sea |
50,055 | 54,528 | 46,150 | -8 | % | 8 | % | 52,279 | 46,249 | |||||||||||||||||||
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International (1) |
133,816 | 146,144 | 142,335 | -8 | % | -6 | % | 139,946 | 141,979 | |||||||||||||||||||
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Total (1) |
236,826 | 254,922 | 247,498 | -7 | % | -4 | % | 245,824 | 244,449 | |||||||||||||||||||
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NATURAL GAS VOLUME - Mcf per day |
||||||||||||||||||||||||||||
Permian |
492,199 | 618,238 | 403,267 | -20 | % | 22 | % | 554,870 | 380,416 | |||||||||||||||||||
MidContinent/Gulf Coast |
90,555 | 116,272 | 135,629 | -22 | % | -33 | % | 103,343 | 128,378 | |||||||||||||||||||
Gulf of Mexico |
11,484 | 9,797 | 8,881 | 17 | % | 29 | % | 10,645 | 9,530 | |||||||||||||||||||
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United States |
594,238 | 744,307 | 547,777 | -20 | % | 8 | % | 668,858 | 518,324 | |||||||||||||||||||
Egypt (1, 2) |
277,552 | 315,508 | 340,991 | -12 | % | -19 | % | 296,425 | 342,438 | |||||||||||||||||||
North Sea |
50,121 | 56,892 | 43,297 | -12 | % | 16 | % | 53,488 | 42,174 | |||||||||||||||||||
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International (1) |
327,673 | 372,400 | 384,288 | -12 | % | -15 | % | 349,913 | 384,612 | |||||||||||||||||||
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Total (1) |
921,911 | 1,116,707 | 932,065 | -17 | % | -1 | % | 1,018,771 | 902,936 | |||||||||||||||||||
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NGL VOLUME - Barrels per day |
||||||||||||||||||||||||||||
Permian |
52,108 | 47,274 | 44,693 | 10 | % | 17 | % | 49,705 | 41,341 | |||||||||||||||||||
MidContinent/Gulf Coast |
9,505 | 11,552 | 14,050 | -18 | % | -32 | % | 10,523 | 13,563 | |||||||||||||||||||
Gulf of Mexico |
361 | 38 | 293 | 850 | % | 23 | % | 200 | 278 | |||||||||||||||||||
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|
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United States |
61,974 | 58,864 | 59,036 | 5 | % | 5 | % | 60,428 | 55,182 | |||||||||||||||||||
Egypt (1, 2) |
898 | 1,150 | 1,127 | -22 | % | -20 | % | 1,023 | 1,033 | |||||||||||||||||||
North Sea |
1,673 | 1,823 | 1,104 | -8 | % | 52 | % | 1,748 | 1,135 | |||||||||||||||||||
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International (1) |
2,571 | 2,973 | 2,231 | -14 | % | 15 | % | 2,771 | 2,168 | |||||||||||||||||||
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Total |
64,545 | 61,837 | 61,267 | 4 | % | 5 | % | 63,199 | 57,350 | |||||||||||||||||||
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BOE per day |
||||||||||||||||||||||||||||
Permian |
226,318 | 247,939 | 201,832 | -9 | % | 12 | % | 237,069 | 192,455 | |||||||||||||||||||
MidContinent/Gulf Coast |
32,171 | 39,630 | 48,147 | -19 | % | -33 | % | 35,880 | 45,955 | |||||||||||||||||||
Gulf of Mexico |
5,535 | 4,124 | 5,516 | 34 | % | 0 | % | 4,833 | 5,629 | |||||||||||||||||||
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United States |
264,024 | 291,693 | 255,495 | -9 | % | 3 | % | 277,782 | 244,039 | |||||||||||||||||||
Egypt (1, 2) |
130,917 | 145,351 | 154,144 | -10 | % | -15 | % | 138,094 | 153,836 | |||||||||||||||||||
North Sea |
60,082 | 65,833 | 54,470 | -9 | % | 10 | % | 62,942 | 54,413 | |||||||||||||||||||
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International (1) |
190,999 | 211,184 | 208,614 | -10 | % | -8 | % | 201,036 | 208,249 | |||||||||||||||||||
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Total (1) |
455,023 | 502,877 | 464,109 | -10 | % | -2 | % | 478,818 | 452,288 | |||||||||||||||||||
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Total excluding noncontrolling interests |
411,345 | 454,371 | 412,693 | -9 | % | 0 | % | 432,740 | 400,960 | |||||||||||||||||||
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(1) Includes net production volumes attributed to our noncontrolling partner in Egypt below:
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Oil (b/d) |
27,939 | 30,554 | 32,066 | 29,239 | 31,921 | |||||||||||||||||||||||
Gas (Mcf/d) |
92,639 | 105,412 | 113,846 | 98,990 | 114,377 | |||||||||||||||||||||||
NGL (b/d) |
299 | 383 | 376 | 341 | 344 | |||||||||||||||||||||||
(2) Egypt Gross Production - BOE per day |
321,937 | 332,003 | 341,636 | -3 | % | -6 | % | 326,943 | 335,882 |
Page 2
APACHE CORPORATION
ADJUSTED PRODUCTION INFORMATION
Adjusted production excludes certain items that management believes affect the comparability of operating results for the periods presented. Adjusted production excludes production attributable to 1) noncontrolling interest in Egypt and 2) Egypt tax barrels. Management uses adjusted production to evaluate the company's operational trends and performance and believes it is useful to investors and other third parties.
For the Quarter Ended | % Change | For the Six Months Ended | ||||||||||||||||||||||||||
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
2Q19 to 1Q19 |
2Q19 to 2Q18 |
June 30, 2019 |
June 30, 2018 |
||||||||||||||||||||||
OIL VOLUME - Barrels per day |
||||||||||||||||||||||||||||
Permian |
92,176 | 97,625 | 89,928 | -6 | % | 2 | % | 94,886 | 87,711 | |||||||||||||||||||
MidContinent/Gulf Coast |
7,574 | 8,699 | 11,492 | -13 | % | -34 | % | 8,133 | 10,996 | |||||||||||||||||||
Gulf of Mexico |
3,260 | 2,454 | 3,743 | 33 | % | -13 | % | 2,859 | 3,763 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
United States |
103,010 | 108,778 | 105,163 | -5 | % | -2 | % | 105,878 | 102,470 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Egypt |
44,261 | 48,323 | 47,837 | -8 | % | -7 | % | 46,281 | 47,915 | |||||||||||||||||||
North Sea |
50,055 | 54,528 | 46,151 | -8 | % | 8 | % | 52,279 | 46,249 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
International |
94,316 | 102,851 | 93,988 | -8 | % | 0 | % | 98,560 | 94,164 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total |
197,326 | 211,629 | 199,151 | -7 | % | -1 | % | 204,438 | 196,634 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
NATURAL GAS VOLUME - Mcf per day |
||||||||||||||||||||||||||||
Permian |
492,199 | 618,238 | 403,267 | -20 | % | 22 | % | 554,870 | 380,416 | |||||||||||||||||||
MidContinent/Gulf Coast |
90,555 | 116,272 | 135,629 | -22 | % | -33 | % | 103,343 | 128,378 | |||||||||||||||||||
Gulf of Mexico |
11,484 | 9,797 | 8,881 | 17 | % | 29 | % | 10,645 | 9,530 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
United States |
594,238 | 744,307 | 547,777 | -20 | % | 8 | % | 668,858 | 518,324 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Egypt |
160,306 | 181,118 | 188,012 | -11 | % | -15 | % | 170,655 | 188,991 | |||||||||||||||||||
North Sea |
50,121 | 56,892 | 43,296 | -12 | % | 16 | % | 53,488 | 42,174 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
International |
210,427 | 238,010 | 231,308 | -12 | % | -9 | % | 224,143 | 231,165 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total |
804,665 | 982,317 | 779,085 | -18 | % | 3 | % | 893,001 | 749,489 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
NGL VOLUME - Barrels per day |
||||||||||||||||||||||||||||
Permian |
52,108 | 47,274 | 44,693 | 10 | % | 17 | % | 49,705 | 41,341 | |||||||||||||||||||
MidContinent/Gulf Coast |
9,505 | 11,552 | 14,050 | -18 | % | -32 | % | 10,523 | 13,563 | |||||||||||||||||||
Gulf of Mexico |
361 | 38 | 293 | 850 | % | 23 | % | 200 | 278 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
United States |
61,974 | 58,864 | 59,036 | 5 | % | 5 | % | 60,428 | 55,182 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Egypt |
531 | 678 | 596 | -22 | % | -11 | % | 604 | 546 | |||||||||||||||||||
North Sea |
1,673 | 1,823 | 1,104 | -8 | % | 52 | % | 1,748 | 1,135 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
International |
2,204 | 2,501 | 1,700 | -12 | % | 30 | % | 2,352 | 1,681 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total |
64,178 | 61,365 | 60,736 | 5 | % | 6 | % | 62,780 | 56,863 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
BOE per day |
||||||||||||||||||||||||||||
Permian |
226,318 | 247,939 | 201,832 | -9 | % | 12 | % | 237,069 | 192,455 | |||||||||||||||||||
MidContinent/Gulf Coast |
32,171 | 39,630 | 48,147 | -19 | % | -33 | % | 35,880 | 45,955 | |||||||||||||||||||
Gulf of Mexico |
5,535 | 4,124 | 5,516 | 34 | % | 0 | % | 4,833 | 5,629 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
United States |
264,024 | 291,693 | 255,495 | -9 | % | 3 | % | 277,782 | 244,039 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Egypt |
71,510 | 79,187 | 79,769 | -10 | % | -10 | % | 75,327 | 79,960 | |||||||||||||||||||
North Sea |
60,082 | 65,833 | 54,470 | -9 | % | 10 | % | 62,942 | 54,413 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
International |
131,592 | 145,020 | 134,239 | -9 | % | -2 | % | 138,269 | 134,373 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total |
395,616 | 436,713 | 389,734 | -9 | % | 2 | % | 416,051 | 378,412 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Page 3
APACHE CORPORATION
PRICE INFORMATION
For the Quarter Ended | For the Six Months Ended | |||||||||||||||||||
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
June 30, 2019 |
June 30, 2018 |
||||||||||||||||
AVERAGE OIL PRICE PER BARREL |
||||||||||||||||||||
Permian |
$ | 56.79 | $ | 50.30 | $ | 62.69 | $ | 53.47 | $ | 62.12 | ||||||||||
MidContinent/Gulf Coast |
59.90 | 53.45 | 65.98 | 56.47 | 64.18 | |||||||||||||||
Gulf of Mexico |
63.60 | 58.27 | 67.76 | 61.33 | 68.50 | |||||||||||||||
United States |
57.25 | 50.70 | 63.27 | 53.90 | 62.54 | |||||||||||||||
Egypt |
68.60 | 62.35 | 74.14 | 65.36 | 70.26 | |||||||||||||||
North Sea |
68.43 | 64.15 | 73.05 | 66.35 | 69.58 | |||||||||||||||
International |
68.54 | 63.00 | 73.78 | 65.73 | 70.04 | |||||||||||||||
Total |
63.71 | 57.70 | 69.35 | 60.65 | 66.90 | |||||||||||||||
AVERAGE NATURAL GAS PRICE PER MCF |
||||||||||||||||||||
Permian |
$ | .26 | $ | 1.61 | $ | 1.85 | $ | 1.01 | $ | 2.11 | ||||||||||
MidContinent/Gulf Coast |
1.98 | 2.94 | 2.21 | 2.52 | 2.43 | |||||||||||||||
Gulf of Mexico |
2.62 | 3.69 | 2.95 | 3.11 | 3.32 | |||||||||||||||
United States |
0.55 | 1.83 | 1.94 | 1.26 | 2.20 | |||||||||||||||
Egypt |
2.80 | 2.85 | 2.85 | 2.82 | 2.85 | |||||||||||||||
North Sea |
3.99 | 6.24 | 6.82 | 5.18 | 6.71 | |||||||||||||||
International |
2.98 | 3.36 | 3.29 | 3.18 | 3.27 | |||||||||||||||
Total |
1.41 | 2.34 | 2.50 | 1.92 | 2.65 | |||||||||||||||
AVERAGE NGL PRICE PER BARREL |
||||||||||||||||||||
Permian |
$ | 13.12 | $ | 18.73 | $ | 26.97 | $ | 15.92 | $ | 25.90 | ||||||||||
MidContinent/Gulf Coast |
14.72 | 17.38 | 22.90 | 16.18 | 22.53 | |||||||||||||||
Gulf of Mexico |
20.47 | 17.62 | 32.52 | 20.21 | 31.52 | |||||||||||||||
United States |
13.57 | 18.47 | 26.03 | 15.96 | 25.10 | |||||||||||||||
Egypt |
32.90 | 37.66 | 40.80 | 35.56 | 38.72 | |||||||||||||||
North Sea |
33.67 | 40.60 | 44.71 | 37.27 | 43.75 | |||||||||||||||
International |
33.40 | 39.47 | 42.73 | 36.64 | 41.35 | |||||||||||||||
Total |
14.37 | 19.49 | 26.64 | 16.87 | 25.72 |
Page 4
APACHE CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
(Unaudited)
(In millions)
SUMMARY OF DERIVATIVE INSTRUMENT GAINS (LOSSES), NET
For the Quarter Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative settlements - realized gain/(loss) |
$ | 13 | $ | (75 | ) | $ | 28 | $ | (117 | ) | ||||||
Amortization of call and put premium |
| (5 | ) | | (10 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Realized gain/(loss) |
13 | (80 | ) | 28 | (127 | ) | ||||||||||
Unrealized mark-to-market gain/(loss) |
(21 | ) | 55 | (66 | ) | 104 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | (8 | ) | $ | (25 | ) | $ | (38 | ) | $ | (23 | ) | |||||
|
|
|
|
|
|
|
|
SUMMARY EXPLORATION EXPENSE INFORMATION
For the Quarter Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Unproved leasehold impairments |
$ | 39 | $ | 21 | $ | 62 | $ | 37 | ||||||||
Dry hole expense |
18 | 16 | 28 | 36 | ||||||||||||
Geological and geophysical expense |
18 | 17 | 38 | 35 | ||||||||||||
Exploration overhead and other |
20 | 22 | 36 | 44 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 95 | $ | 76 | $ | 164 | $ | 152 | |||||||||
|
|
|
|
|
|
|
|
SUMMARY CASH FLOW INFORMATION
For the Quarter Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net cash provided by operating activities |
$ | 856 | $ | 1,113 | $ | 1,454 | $ | 1,728 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Additions to oil and gas property |
(676 | ) | (861 | ) | (1,420 | ) | (1,610 | ) | ||||||||
Additions to Altus gathering, processing, and transmission facilities |
(127 | ) | (156 | ) | (246 | ) | (284 | ) | ||||||||
Altus equity method interests |
(320 | ) | | (438 | ) | | ||||||||||
Proceeds from sale of oil and gas properties |
238 | 4 | 247 | 13 | ||||||||||||
Other, net |
(9 | ) | (11 | ) | 25 | (33 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash used in investing activities |
$ | (894 | ) | $ | (1,024 | ) | $ | (1,832 | ) | $ | (1,914 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Debt borrowings and payments, net |
(170 | ) | | (11 | ) | (150 | ) | |||||||||
Distributions to noncontrolling interest - Egypt |
(57 | ) | (86 | ) | (164 | ) | (155 | ) | ||||||||
Redeemable noncontrolling interest - Altus Preferred Unit limited partners |
611 | | 611 | | ||||||||||||
Dividends paid |
(94 | ) | (96 | ) | (188 | ) | (191 | ) | ||||||||
Other |
(30 | ) | (12 | ) | (35 | ) | (14 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash used in financing activities |
$ | 260 | $ | (194 | ) | $ | 213 | $ | (510 | ) | ||||||
|
|
|
|
|
|
|
|
SUMMARY BALANCE SHEET INFORMATION
June 30, 2019 |
December 31, 2018 |
|||||||
Cash and cash equivalents |
$ | 549 | $ | 714 | ||||
Other current assets |
2,242 | 1,973 | ||||||
Property and equipment, net |
17,756 | 18,421 | ||||||
Other assets |
1,259 | 474 | ||||||
|
|
|
|
|||||
Total assets |
$ | 21,806 | $ | 21,582 | ||||
|
|
|
|
|||||
Current debt |
$ | 175 | $ | 151 | ||||
Current liabilities |
2,087 | 2,050 | ||||||
Long-term debt |
8,157 | 8,093 | ||||||
Deferred credits and other noncurrent liabilities |
2,712 | 2,476 | ||||||
Redeemable noncontrolling interest - Altus Preferred Unit limited partners |
521 | | ||||||
Apache shareholders' equity |
6,551 | 7,130 | ||||||
Noncontrolling interest - Egypt |
1,198 | 1,275 | ||||||
Noncontrolling interest - Altus |
405 | 407 | ||||||
|
|
|
|
|||||
Total Liabilities, redeemable noncontrolling interest, and equity |
$ | 21,806 | $ | 21,582 | ||||
|
|
|
|
|||||
Common shares outstanding at end of period |
376 | 375 |
Page 5
APACHE CORPORATION
NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
Reconciliation of Net cash provided by operating activities to Adjusted EBITDAX
Management believes EBITDAX, or earnings before income tax expense, interest expense, depreciation, amortization and exploration expense is a widely accepted financial indicator, and useful for investors, to assess a company's ability to incur and service debt, fund capital expenditures, and make distributions to shareholders. We define adjusted EBITDAX, a non-GAAP financial measure, as EBITDAX adjusted for certain items presented in the accompanying reconciliation. Management uses adjusted EBITDAX to evaluate our ability to fund our capital expenditures, debt services and other operational requirements and to compare our results from period to period by eliminating the impact of certain items that management does not consider to be representative of the Companys on-going operations. Management also believes adjusted EBITDAX facilitates investors and analysts in evaluating and comparing EBITDAX from period to period by eliminating differences caused by the existence and timing of certain operating expenses that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted EBITDAX may not be comparable to similar measures of other companies in our industry.
For the Quarter Ended | For the Six Months Ended | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Net cash provided by operating activities |
$ | 856 | $ | 598 | $ | 1,113 | $ | 1,454 | $ | 1,728 | ||||||||||
Adjustments: |
||||||||||||||||||||
Exploration siesmic and administration costs |
38 | 36 | 39 | 74 | 79 | |||||||||||||||
Current income tax provision |
187 | 186 | 249 | 373 | 447 | |||||||||||||||
Other adjustments to reconcile net income to net cash provided by operating activities |
(13 | ) | (9 | ) | (43 | ) | (22 | ) | (82 | ) | ||||||||||
Changes in operating assets and liabilities |
(178 | ) | 138 | (196 | ) | (40 | ) | (22 | ) | |||||||||||
Financing costs, net (excluding loss on early extinguishment of debt) |
98 | 97 | 94 | 195 | 193 | |||||||||||||||
Transaction, reorganization & separation costs |
6 | 4 | 12 | 10 | 12 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Adjusted EBITDAX (Non-GAAP) |
$ | 994 | $ | 1,050 | $ | 1,268 | $ | 2,044 | $ | 2,355 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Reconciliation of Income attributable to common stock to Adjusted earnings
Our presentation of adjusted earnings and adjusted earnings per share are non-GAAP measures because they exclude the effect of certain items included in Income Attributable to Common Stock. Management believes that adjusted earnings and adjusted earnings per share provides relevant and useful information, which is widely used by analysts, investors and competitors in our industry as well as by our management in assessing the Companys operational trends and comparability of results to our peers.
Management uses adjusted earnings and adjusted earnings per share to evaluate our operating and financial performance because it eliminates the impact of certain items that management does not consider to be representative of the Companys on-going business operations. As a performance measure, adjusted earnings may be useful to investors in facilitating comparisons to others in the Companys industry because certain items can vary substantially in the oil and gas industry from company to company depending upon accounting methods, book value of assets, capital structure and asset sales and other divestitures, among other factors. Management believes excluding these items facilitates investors and analysts in evaluating and comparing the underlying operating and financial performance of our business from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted earnings and adjusted earnings per share may not be comparable to similar measures of other companies in our industry.
For the Quarter Ended June 30, 2019 |
For the Quarter Ended June 30, 2018 |
|||||||||||||||||||||||||||||||
Before Tax |
Tax Impact |
After Tax |
Diluted EPS |
Before Tax |
Tax Impact |
After Tax |
Diluted EPS |
|||||||||||||||||||||||||
Income including noncontrolling interest (GAAP) |
$ | (152 | ) | $ | (164 | ) | $ | (316 | ) | $ | (0.84 | ) | $ | 508 | $ | (239 | ) | $ | 269 | $ | 0.70 | |||||||||||
Income attributable to noncontrolling interest |
80 | (40 | ) | 40 | 0.11 | 134 | (60 | ) | 74 | 0.19 | ||||||||||||||||||||||
Loss attributable to Altus preferred unit limited partner |
4 | | 4 | 0.01 | | | | | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income attributable to common stock |
(236 | ) | (124 | ) | (360 | ) | (0.96 | ) | 374 | (179 | ) | 195 | 0.51 | |||||||||||||||||||
Adjustments: * |
||||||||||||||||||||||||||||||||
Asset impairments |
279 | (59 | ) | 220 | 0.58 | 21 | (4 | ) | 17 | 0.05 | ||||||||||||||||||||||
Valuation allowance and other tax adjustments |
| 114 | 114 | 0.31 | | 5 | 5 | 0.01 | ||||||||||||||||||||||||
Loss on extinguishment of debt |
75 | (16 | ) | 59 | 0.16 | | | | | |||||||||||||||||||||||
Unrealized derivative instrument (gain)/loss |
21 | (4 | ) | 17 | 0.04 | (55 | ) | 12 | (43 | ) | (0.11 | ) | ||||||||||||||||||||
Transaction, reorganization & separation costs |
6 | (1 | ) | 5 | 0.01 | 12 | (3 | ) | 9 | 0.02 | ||||||||||||||||||||||
Modification of stock comp plans |
| | | | 14 | (3 | ) | 11 | 0.03 | |||||||||||||||||||||||
(Gain)/loss on divestitures |
(17 | ) | 3 | (14 | ) | (0.03 | ) | (2 | ) | | (2 | ) | (0.01 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Adjusted earnings (Non-GAAP) |
$ | 128 | $ | (87 | ) | $ | 41 | $ | 0.11 | $ | 364 | $ | (172 | ) | $ | 192 | $ | 0.50 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
For the Six Months Ended June 30, 2019 |
For the Six Months Ended June 30, 2018 |
|||||||||||||||||||||||||||||||
Before Tax |
Tax Impact |
After Tax |
Diluted EPS |
Before Tax |
Tax Impact |
After Tax |
Diluted EPS |
|||||||||||||||||||||||||
Income including noncontrolling interest (GAAP) |
$ | 13 | $ | (331 | ) | $ | (318 | ) | $ | (0.84 | ) | $ | 896 | $ | (421 | ) | $ | 475 | $ | 1.23 | ||||||||||||
Income attributable to noncontrolling interest |
165 | (80 | ) | 85 | 0.23 | 246 | (111 | ) | 135 | 0.35 | ||||||||||||||||||||||
Loss attributable to Altus preferred unit limited partner |
4 | | 4 | 0.01 | | | | | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income attributable to common stock |
(156 | ) | (251 | ) | (407 | ) | (1.08 | ) | 650 | (310 | ) | 340 | 0.88 | |||||||||||||||||||
Adjustments: * |
||||||||||||||||||||||||||||||||
Asset impairments |
302 | (64 | ) | 238 | 0.62 | 37 | (7 | ) | 30 | 0.08 | ||||||||||||||||||||||
Valuation allowance and other tax adjustments |
| 145 | 145 | 0.39 | | 6 | 6 | 0.02 | ||||||||||||||||||||||||
Loss on extinguishment of debt |
75 | (16 | ) | 59 | 0.16 | | | | | |||||||||||||||||||||||
Unrealized derivative instrument (gain)/loss |
66 | (14 | ) | 52 | 0.14 | (104 | ) | 22 | (82 | ) | (0.21 | ) | ||||||||||||||||||||
Transaction, reorganization & separation costs |
10 | (2 | ) | 8 | 0.02 | 12 | (3 | ) | 9 | 0.02 | ||||||||||||||||||||||
Modification of stock comp plans |
| | | | 28 | (7 | ) | 21 | 0.05 | |||||||||||||||||||||||
(Gain)/loss on divestitures |
(20 | ) | 4 | (16 | ) | (0.04 | ) | (9 | ) | 1 | (8 | ) | (0.02 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Adjusted Earnings (Non-GAAP) |
$ | 277 | $ | (198 | ) | $ | 79 | $ | 0.21 | $ | 614 | $ | (298 | ) | $ | 316 | $ | 0.82 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | The income tax effect of the reconciling items are calculated based on the statutory rate of the jurisdiction in which the discrete item resides. |
Page 6
APACHE CORPORATION
NON-GAAP FINANCIAL MEASURES
(In millions)
Reconciliation of Debt to Net debt
Net debt, or outstanding debt obligations less cash and cash equivalents, is a non-GAAP financial measure. Management uses net debt as a measure of the Company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand.
June 30, 2019 |
March 31, 2019 |
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
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Current debt |
$ | 175 | $ | 339 | $ | 151 | $ | 151 | $ | 401 | ||||||||||
Long-term debt |
8,157 | 8,094 | 8,093 | 8,092 | 7,976 | |||||||||||||||
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Total debt |
8,332 | 8,433 | 8,244 | 8,243 | 8,377 | |||||||||||||||
Cash and cash equivalents |
549 | 327 | 714 | 593 | 972 | |||||||||||||||
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Net debt |
$ | 7,783 | $ | 8,106 | $ | 7,530 | $ | 7,650 | $ | 7,405 | ||||||||||
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Reconciliation of Costs incurred to Upstream capital investment
Management believes the presentation of upstream capital investments is useful for investors to assess Apache's expenditures related to our upstream capital activity. We define capital investments as costs incurred for oil and gas activities, adjusted to exclude asset retirement obligation revisions and liabilities incurred, capitalized interest, and certain exploration expenses, while including amounts paid during the period for abandonment and decommissioning expenditures. Upstream capital expenditures attributable to a one-third noncontrolling interest in Egypt are also excluded. Management believes this provides a more accurate reflection of Apache's cash expenditures related to upstream capital activity and is consistent with how we plan our capital budget.
For the Quarter Ended June 30, |
For the Six Months Ended June 30, |
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2019 | 2018 | 2019 | 2018 | |||||||||||||
Costs incurred in oil and gas property: |
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Acquisitions |
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Proved |
$ | | $ | | $ | | $ | 5 | ||||||||
Unproved |
22 | 26 | 41 | 33 | ||||||||||||
Exploration and development |
639 | 772 | 1,294 | 1,589 | ||||||||||||
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Total Costs incurred in oil and gas property |
$ | 661 | $ | 798 | $ | 1,335 | $ | 1,627 | ||||||||
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Reconciliation of Costs incurred to Upstream capital investment: |
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Total Costs incurred in oil and gas property |
$ | 661 | $ | 798 | $ | 1,335 | $ | 1,627 | ||||||||
Asset retirement obligations settled vs. incurred - oil and gas property |
9 | 12 | 19 | 18 | ||||||||||||
Capitalized interest |
(8 | ) | (9 | ) | (16 | ) | (20 | ) | ||||||||
Exploration siesmic and administration costs |
(38 | ) | (39 | ) | (74 | ) | (79 | ) | ||||||||
Less noncontrolling interest - Egypt |
(35 | ) | (55 | ) | (78 | ) | (107 | ) | ||||||||
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Total Upstream capital investment |
$ | 589 | $ | 707 | $ | 1,186 | $ | 1,439 | ||||||||
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Reconciliation of Net cash provided by operating activities to Cash flows from operations before changes in operating assets and liabilities
Cash flows from operations before changes in operating assets and liabilities is a non-GAAP financial measure. Apache uses it internally and provides the information because management believes it is useful for investors 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 flows 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.
For the Quarter Ended | For the Six Months Ended | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Net cash provided by operating activities |
$ | 856 | $ | 598 | $ | 1,113 | $ | 1,454 | $ | 1,728 | ||||||||||
Changes in operating assets and liabilities |
(178 | ) | 138 | (196 | ) | (40 | ) | (22 | ) | |||||||||||
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Cash flows from operations before changes in operating assets and liabilities |
$ | 678 | $ | 736 | $ | 917 | $ | 1,414 | $ | 1,706 | ||||||||||
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