Exhibit 99.1
|
NEWS RELEASE |
Apache Corporation Announces Second-Quarter 2020
Financial and Operational Results
Key Takeaways
| • | Announced major discovery at Kwaskwasi today, third consecutive discovery in Block 58 offshore Suriname; |
| • | Submitted appraisal plan for first discovery, Maka, in May; announced second discovery, Sapakara, in April; |
| • | Posted second-quarter reported production of 435,000 barrels of oil equivalent (BOE) per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 394,000 BOE per day; |
| • | Delivered upstream capital investment below guidance; tracking toward the low end of full-year 2020 guidance range of $1.0 to $1.2 billion; |
| • | Focused capital investments on higher-return international opportunities; |
| • | Achieved annualized cost savings target of more than $300 million, approximately $225 million of which will be realized in 2020; and |
| • | Implemented operational protocols and work-from-home-processes, successfully mitigating the impact of COVID-19 on Apache’s operations, employees and communities. |
HOUSTON, July 29, 2020 – Apache Corporation (Nasdaq: APA) today announced its financial and operational results for the second-quarter 2020.
Apache reported a loss of $386 million or $1.02 per diluted common share during the second-quarter 2020. When adjusted for certain items that impact the comparability of results, Apache reported a second-quarter loss of $281 million, or $0.74 per share. Net cash provided by operating activities in the second quarter was $84 million, and adjusted EBITDAX was $235 million.
“Our exploration program offshore Suriname continues to deliver exciting results. Earlier today, we announced a major discovery at Kwaskwasi-1, our best well yet and third consecutive success in Block 58,” said John J. Christmann IV, Apache’s chief executive officer and president.
Following completion of operations at Kwaskwasi-1, a fourth exploration prospect, Keskesi East-1, will be drilled approximately 10 kilometers (6 miles) southeast of the Sapakara discovery well.
“Our continued success in Suriname, along with the steps we’ve taken to streamline our organization and further strengthen our financial position, prepare us well for the long term. Apache has achieved more than $300 million of combined, annualized LOE and overhead savings – doubling our original target – and delivered on our activity and capital reduction goal. These actions have lowered our free cash flow breakeven oil price to around $30 per barrel for the second half of 2020,” he continued.
APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2020
FINANCIAL AND OPERATIONAL RESULTS
— PAGE 2 of 5
2020 capital budget and outlook
Apache delivered second-quarter upstream capital investment of $216 million and is tracking toward the lower end of its annual capital guidance range of $1.0 to $1.2 billion dollars. The company guided to third-quarter capital investment of approximately $190 million.
Second-quarter operational summary
Second-quarter reported production was 435,000 BOE per day, and adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 394,000 BOE per day.
Following a thorough operational and economic evaluation of all producing wells, Apache chose to curtail approximately 28,000 BOE per day during the second quarter to minimize the negative cash flow impacts of lower oil and NGL prices. The company shut-in an additional 7,000 BOE per day due to unscheduled pipeline downtime at Alpine High. As prices rebounded over the past several months, the company has now returned its curtailed volumes in the North Sea and Alpine High to production, along with a portion of curtailed oil volumes elsewhere in the Permian Basin.
Closing Remarks
“Our objectives remain unchanged despite the extreme market volatility in 2020. We will budget conservatively and return free cash flow to investors, initially in the form of debt reduction; maintain a balanced and diversified portfolio; and prioritize investment for long-term returns over production growth. We will also continue to advance our exploration program and follow-on appraisal activity in Block 58 offshore Suriname and maintain our capacity to generate material free cash flow in Egypt and the North Sea,” concluded Christmann.
APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2020
FINANCIAL AND OPERATIONAL RESULTS
— PAGE 3 of 5
Conference call
Apache will host a conference call to discuss its second-quarter 2020 results at 10 a.m. Central time, Thursday, July 30. The conference call will be webcast from Apache’s website at www.apachecorp.com and investor.apachecorp.com, and the webcast replay will be archived there as well. The conference call will also be available for playback by telephone for one week beginning at approximately 4 p.m. Central time July 30. The number for the replay is 855-859-2056 or 404-537-3406 for international calls. The conference access code is 6166527. Sign up for email alerts to be reminded of the webcast at investor.apachecorp.com/alerts/email-alerts-subscription.
About Apache
Apache Corporation is an oil and gas exploration and production company with operations in the United States, Egypt and the United Kingdom and exploration activities offshore Suriname. Apache posts announcements, operational updates, investor information and all press releases on its website, www.apachecorp.com.
Additional information
Additional information follows, including reconciliations of adjusted earnings, adjusted EBITDAX, and upstream capital investment (non-GAAP financial measures) to GAAP measures and information regarding adjusted production. Apache’s quarterly supplement is available at www.apachecorp.com/financialdata.
Non-GAAP financial measures
Apache’s financial information includes information prepared in conformity with generally accepted accounting principles (GAAP) as well as non-GAAP financial information. It is management’s intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted earnings, adjusted EBITDAX, and upstream capital investment 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 2020
FINANCIAL AND OPERATIONAL RESULTS
— PAGE 4 of 5
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,” “continues,” “could,” “estimates,” “expects,” “guidance,” “may,” “might,” “outlook,” “possibly,” “potential,” “projects,” “prospects,” “should,” “will,” “would,” and similar references to future periods, but the absence of these words does not mean that a statement is not forward-looking. These statements include, but are not limited to, statements about future plans, expectations and objectives for Apache’s 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 2019 Form 10-K, and in our quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission (“SEC”) for a discussion of risk factors that affect our business. Any forward-looking statement made by Apache 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. Apache undertakes 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 United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SEC’s definitions for such terms. Apache may use certain terms in this news 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 other factors, and are therefore not indicative of expected future resource recovery
APACHE CORPORATION ANNOUNCES SECOND-QUARTER 2020
FINANCIAL AND OPERATIONAL RESULTS
— PAGE 5 of 5
and should not be relied upon. Investors are urged to consider carefully the disclosure in Apache’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2019 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 SEC’s website at www.sec.gov.
Contacts
Investor: (281) 302-2286 Gary Clark
Media: (713) 296-7276 Phil West
Website: www.apachecorp.com
APA-F
APACHE CORPORATION
STATEMENT OF CONSOLIDATED OPERATIONS
(Unaudited)
(In millions, except per share data)
| For the Quarter | For the Six Months | |||||||||||||||
| Ended June 30, | Ended June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| REVENUES AND OTHER: |
||||||||||||||||
| Oil, natural gas, and natural gas liquids production revenues |
||||||||||||||||
| Oil revenues |
$ | 513 | $ | 1,397 | $ | 1,545 | $ | 2,707 | ||||||||
| Natural gas revenues |
130 | 118 | 253 | 354 | ||||||||||||
| Natural gas liquids revenues |
54 | 83 | 135 | 191 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 697 | 1,598 | 1,933 | 3,252 | |||||||||||||
| Purchased oil and gas sales |
55 | 18 | 163 | 42 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
752 | 1,616 | 2,096 | 3,294 | ||||||||||||
| Derivative instrument losses, net |
(175 | ) | (8 | ) | (278 | ) | (38 | ) | ||||||||
| Gain on divestitures, net |
— | 17 | 25 | 20 | ||||||||||||
| Other, net |
19 | (7 | ) | 32 | (1 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 596 | 1,618 | 1,875 | 3,275 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| OPERATING EXPENSES: |
||||||||||||||||
| Lease operating expenses |
264 | 389 | 599 | 754 | ||||||||||||
| Gathering, processing and transmission |
72 | 76 | 143 | 164 | ||||||||||||
| Purchased oil and gas costs |
46 | 15 | 132 | 37 | ||||||||||||
| Taxes other than income |
23 | 46 | 56 | 97 | ||||||||||||
| Exploration |
72 | 95 | 129 | 164 | ||||||||||||
| General and administrative |
94 | 102 | 162 | 225 | ||||||||||||
| Transaction, reorganization and separation |
10 | 6 | 37 | 10 | ||||||||||||
| Depreciation, depletion and amortization: |
||||||||||||||||
| Oil and gas property and equipment |
387 | 562 | 918 | 1,169 | ||||||||||||
| Other assets |
31 | 40 | 66 | 79 | ||||||||||||
| Asset retirement obligation accretion |
27 | 26 | 54 | 53 | ||||||||||||
| Impairments |
20 | 240 | 4,492 | 240 | ||||||||||||
| Financing costs, net |
(34 | ) | 173 | 69 | 270 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 1,012 | 1,770 | 6,857 | 3,262 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET INCOME (LOSS) BEFORE INCOME TAXES |
(416 | ) | (152 | ) | (4,982 | ) | 13 | |||||||||
| Current income tax provision (benefit) |
(27 | ) | 187 | 62 | 373 | |||||||||||
| Deferred income tax benefit |
(11 | ) | (23 | ) | (44 | ) | (42 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET LOSS INCLUDING NONCONTROLLING INTERESTS |
(378 | ) | (316 | ) | (5,000 | ) | (318 | ) | ||||||||
| Net income (loss) attributable to noncontrolling interest - Egypt |
(11 | ) | 43 | (162 | ) | 87 | ||||||||||
| Net loss attributable to noncontrolling interest - Altus |
— | (3 | ) | (9 | ) | (2 | ) | |||||||||
| Net income attributable to Altus Preferred Unit limited partners |
19 | 4 | 37 | 4 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET LOSS ATTRIBUTABLE TO COMMON STOCK |
$ | (386 | ) | $ | (360 | ) | $ | (4,866 | ) | $ | (407 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET LOSS PER COMMON SHARE: |
||||||||||||||||
| Basic |
$ | (1.02 | ) | $ | (0.96 | ) | $ | (12.88 | ) | $ | (1.08 | ) | ||||
| Diluted |
$ | (1.02 | ) | $ | (0.96 | ) | $ | (12.88 | ) | $ | (1.08 | ) | ||||
| WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: |
||||||||||||||||
| Basic |
378 | 377 | 378 | 376 | ||||||||||||
| Diluted |
378 | 377 | 378 | 376 | ||||||||||||
| DIVIDENDS DECLARED PER COMMON SHARE |
$ | 0.025 | $ | 0.250 | $ | 0.050 | $ | 0.500 | ||||||||
Page 1
APACHE CORPORATION
PRODUCTION INFORMATION
| For the Quarter Ended | % Change | For the Six Months Ended | ||||||||||||||||||||||||||
| June 30, 2020 |
March 31, 2020 |
June 30, 2019 |
2Q20 to 1Q20 |
2Q20 to 2Q19 |
June 30, 2020 |
June 30, 2019 |
||||||||||||||||||||||
| OIL VOLUME - Barrels per day |
||||||||||||||||||||||||||||
| United States |
94,471 | 101,614 | 103,010 | -7 | % | -8 | % | 98,042 | 105,878 | |||||||||||||||||||
| Egypt (1, 2) |
79,839 | 73,178 | 83,761 | 9 | % | -5 | % | 76,509 | 87,667 | |||||||||||||||||||
| North Sea |
47,016 | 55,262 | 50,055 | -15 | % | -6 | % | 51,139 | 52,279 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| International (1) |
126,855 | 128,440 | 133,816 | -1 | % | -5 | % | 127,648 | 139,946 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total (1) |
221,326 | 230,054 | 236,826 | -4 | % | -7 | % | 225,690 | 245,824 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| NATURAL GAS VOLUME - Mcf per day |
||||||||||||||||||||||||||||
| United States |
518,156 | 597,842 | 594,238 | -13 | % | -13 | % | 557,999 | 668,858 | |||||||||||||||||||
| Egypt (1, 2) |
279,561 | 254,579 | 277,552 | 10 | % | 1 | % | 267,070 | 296,425 | |||||||||||||||||||
| North Sea |
52,612 | 67,278 | 50,121 | -22 | % | 5 | % | 59,945 | 53,488 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| International (1) |
332,173 | 321,857 | 327,673 | 3 | % | 1 | % | 327,015 | 349,913 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total (1) |
850,329 | 919,699 | 921,911 | -8 | % | -8 | % | 885,014 | 1,018,771 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| NGL VOLUME - Barrels per day |
||||||||||||||||||||||||||||
| United States |
69,759 | 81,381 | 61,974 | -14 | % | 13 | % | 75,570 | 60,428 | |||||||||||||||||||
| Egypt (1, 2) |
909 | 918 | 898 | -1 | % | 1 | % | 914 | 1,023 | |||||||||||||||||||
| North Sea |
1,733 | 2,135 | 1,673 | -19 | % | 4 | % | 1,934 | 1,748 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| International (1) |
2,642 | 3,053 | 2,571 | -13 | % | 3 | % | 2,848 | 2,771 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total (1) |
72,401 | 84,434 | 64,545 | -14 | % | 12 | % | 78,418 | 63,199 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| BOE per day |
||||||||||||||||||||||||||||
| United States |
250,589 | 282,636 | 264,024 | -11 | % | -5 | % | 266,612 | 277,782 | |||||||||||||||||||
| Egypt (1, 2) |
127,342 | 116,525 | 130,917 | 9 | % | -3 | % | 121,934 | 138,094 | |||||||||||||||||||
| North Sea |
57,517 | 68,610 | 60,082 | -16 | % | -4 | % | 63,064 | 62,942 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| International (1) |
184,859 | 185,135 | 190,999 | 0 | % | -3 | % | 184,998 | 201,036 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total (1) |
435,448 | 467,771 | 455,023 | -7 | % | -4 | % | 451,610 | 478,818 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total excluding noncontrolling interests |
393,098 | 428,588 | 411,345 | -8 | % | -4 | % | 410,844 | 432,740 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| (1) Includes net production volumes attributed to our noncontrolling partner in Egypt below: |
| |||||||||||||||||||||||||||
| Oil (b/d) |
26,609 | 24,598 | 27,939 | 25,604 | 29,239 | |||||||||||||||||||||||
| Gas (Mcf/d) |
92,625 | 85,672 | 92,639 | 89,148 | 98,990 | |||||||||||||||||||||||
| NGL (b/d) |
303 | 306 | 299 | 304 | 341 | |||||||||||||||||||||||
| BOE per day |
42,350 | 39,183 | 43,678 | 8 | % | -3 | % | 40,766 | 46,078 | |||||||||||||||||||
| (2) Egypt Gross Production |
| |||||||||||||||||||||||||||
| Oil (b/d) |
171,897 | 183,627 | 198,534 | 177,762 | 201,245 | |||||||||||||||||||||||
| Gas (Mcf/d) |
642,003 | 655,410 | 729,378 | 648,706 | 742,474 | |||||||||||||||||||||||
| NGL (b/d) |
1,649 | 1,782 | 1,840 | 1,715 | 1,952 | |||||||||||||||||||||||
| BOE per day |
280,547 | 294,644 | 321,937 | -5 | % | -13 | % | 287,595 | 326,943 | |||||||||||||||||||
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, 2020 |
March 31, 2020 |
June 30, 2019 |
2Q20 to 1Q20 |
2Q20 to 2Q19 |
June 30, 2020 |
June 30, 2019 |
||||||||||||||||||||||
| OIL VOLUME - Barrels per day |
||||||||||||||||||||||||||||
| United States |
94,471 | 101,614 | 103,010 | -7 | % | -8 | % | 98,042 | 105,878 | |||||||||||||||||||
| Egypt |
54,469 | 44,491 | 44,261 | 22 | % | 23 | % | 49,480 | 46,281 | |||||||||||||||||||
| North Sea |
47,016 | 55,262 | 50,055 | -15 | % | -6 | % | 51,139 | 52,279 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| International |
101,485 | 99,753 | 94,316 | 2 | % | 8 | % | 100,619 | 98,560 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total |
195,956 | 201,367 | 197,326 | -3 | % | -1 | % | 198,661 | 204,438 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| NATURAL GAS VOLUME - Mcf per day |
||||||||||||||||||||||||||||
| United States |
518,156 | 597,842 | 594,238 | -13 | % | -13 | % | 557,999 | 668,858 | |||||||||||||||||||
| Egypt |
186,387 | 161,536 | 160,306 | 15 | % | 16 | % | 173,962 | 170,655 | |||||||||||||||||||
| North Sea |
52,612 | 67,278 | 50,121 | -22 | % | 5 | % | 59,945 | 53,488 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| International |
238,999 | 228,814 | 210,427 | 4 | % | 14 | % | 233,907 | 224,143 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total |
757,155 | 826,656 | 804,665 | -8 | % | -6 | % | 791,906 | 893,001 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| NGL VOLUME - Barrels per day |
||||||||||||||||||||||||||||
| United States |
69,759 | 81,381 | 61,974 | -14 | % | 13 | % | 75,570 | 60,428 | |||||||||||||||||||
| Egypt |
607 | 611 | 531 | -1 | % | 14 | % | 609 | 604 | |||||||||||||||||||
| North Sea |
1,733 | 2,135 | 1,673 | -19 | % | 4 | % | 1,934 | 1,748 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| International |
2,340 | 2,746 | 2,204 | -15 | % | 6 | % | 2,543 | 2,352 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total |
72,099 | 84,127 | 64,178 | -14 | % | 12 | % | 78,113 | 62,780 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| BOE per day |
||||||||||||||||||||||||||||
| United States |
250,589 | 282,636 | 264,024 | -11 | % | -5 | % | 266,612 | 277,782 | |||||||||||||||||||
| Egypt |
86,140 | 72,025 | 71,510 | 20 | % | 20 | % | 79,083 | 75,327 | |||||||||||||||||||
| North Sea |
57,517 | 68,610 | 60,082 | -16 | % | -4 | % | 63,064 | 62,942 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| International |
143,657 | 140,635 | 131,592 | 2 | % | 9 | % | 142,147 | 138,269 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total |
394,246 | 423,271 | 395,616 | -7 | % | 0 | % | 408,759 | 416,051 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Page 3
APACHE CORPORATION
PRICE INFORMATION
| For the Quarter Ended | For the Six Months Ended | |||||||||||||||||||
| June 30, 2020 |
March 31, 2020 |
June 30, 2019 |
June 30, 2020 |
June 30, 2019 |
||||||||||||||||
| AVERAGE OIL PRICE PER BARREL |
||||||||||||||||||||
| United States |
$ | 23.02 | $ | 46.32 | $ | 57.25 | $ | 35.09 | $ | 53.90 | ||||||||||
| Egypt |
25.80 | 49.97 | 68.60 | 37.36 | 65.36 | |||||||||||||||
| North Sea |
31.55 | 49.66 | 68.43 | 41.94 | 66.35 | |||||||||||||||
| International |
27.86 | 49.83 | 68.54 | 39.22 | 65.73 | |||||||||||||||
| Total |
25.77 | 48.31 | 63.71 | 37.44 | 60.65 | |||||||||||||||
| AVERAGE NATURAL GAS PRICE PER MCF |
||||||||||||||||||||
| United States |
$ | 1.13 | $ | 0.70 | $ | 0.55 | $ | 0.90 | $ | 1.26 | ||||||||||
| Egypt |
2.73 | 2.83 | 2.80 | 2.78 | 2.82 | |||||||||||||||
| North Sea |
1.43 | 3.17 | 3.99 | 2.41 | 5.18 | |||||||||||||||
| International |
2.53 | 2.90 | 2.98 | 2.71 | 3.18 | |||||||||||||||
| Total |
1.68 | 1.47 | 1.41 | 1.57 | 1.92 | |||||||||||||||
| AVERAGE NGL PRICE PER BARREL |
||||||||||||||||||||
| United States |
$ | 7.81 | $ | 9.59 | $ | 13.57 | $ | 8.77 | $ | 15.96 | ||||||||||
| Egypt |
20.97 | 31.70 | 32.90 | 26.36 | 35.56 | |||||||||||||||
| North Sea |
20.35 | 36.53 | 33.67 | 29.29 | 37.27 | |||||||||||||||
| International |
20.57 | 35.08 | 33.40 | 28.35 | 36.64 | |||||||||||||||
| Total |
8.28 | 10.51 | 14.37 | 9.48 | 16.87 | |||||||||||||||
Page 4
APACHE CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
(Unaudited)
(In millions)
SUMMARY EXPLORATION EXPENSE INFORMATION
| For the Quarter Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Unproved leasehold impairments |
$ | 31 | $ | 39 | $ | 50 | $ | 62 | ||||||||
| Dry hole expense |
23 | 18 | 47 | 28 | ||||||||||||
| Geological and geophysical expense |
4 | 18 | 7 | 36 | ||||||||||||
| Exploration overhead and other |
14 | 20 | 25 | 38 | ||||||||||||
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| $ | 72 | $ | 95 | $ | 129 | $ | 164 | |||||||||
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SUMMARY CASH FLOW INFORMATION
| For the Quarter Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Net cash provided by operating activities |
$ | 84 | $ | 856 | $ | 586 | $ | 1,454 | ||||||||
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|||||||||
| Additions to upstream oil and gas property |
(329 | ) | (676 | ) | (841 | ) | (1,420 | ) | ||||||||
| Additions to Altus gathering, processing, and transmission facilities |
(6 | ) | (127 | ) | (25 | ) | (246 | ) | ||||||||
| Altus equity method interests |
(71 | ) | (320 | ) | (154 | ) | (438 | ) | ||||||||
| Proceeds from sale of oil and gas properties |
— | 238 | 126 | 247 | ||||||||||||
| Other, net |
(2 | ) | (9 | ) | (23 | ) | 25 | |||||||||
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| Net cash used in investing activities |
$ | (408 | ) | $ | (894 | ) | $ | (917 | ) | $ | (1,832 | ) | ||||
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| Debt borrowings and payments, net |
51 | (170 | ) | 301 | (11 | ) | ||||||||||
| Altus credit facility borrowings |
25 | — | 97 | — | ||||||||||||
| Distributions to noncontrolling interest - Egypt |
(8 | ) | (57 | ) | (40 | ) | (164 | ) | ||||||||
| Redeemable noncontrolling interest - Altus Preferred Unit limited partners |
— | 611 | — | 611 | ||||||||||||
| Dividends paid |
(10 | ) | (94 | ) | (104 | ) | (188 | ) | ||||||||
| Other |
(27 | ) | (30 | ) | (35 | ) | (35 | ) | ||||||||
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| Net cash provided by financing activities |
$ | 31 | $ | 260 | $ | 219 | $ | 213 | ||||||||
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| SUMMARY BALANCE SHEET INFORMATION |
| |||||||||||||||
| June 30, | December 31, | |||||||||||||||
| 2020 | 2019 | |||||||||||||||
| Cash and cash equivalents |
$ | 135 | $ | 247 | ||||||||||||
| Other current assets |
1,523 | 1,714 | ||||||||||||||
| Property and equipment, net |
9,344 | 14,158 | ||||||||||||||
| Other assets |
1,997 | 1,988 | ||||||||||||||
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| Total assets |
$ | 12,999 | $ | 18,107 | ||||||||||||
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| Current debt - Apache * |
$ | 294 | $ | 1 | ||||||||||||
| Current debt - Altus |
— | 10 | ||||||||||||||
| Current liabilities |
1,416 | 1,844 | ||||||||||||||
| Long-term debt - Apache * |
8,030 | 8,159 | ||||||||||||||
| Long-term debt - Altus |
493 | 396 | ||||||||||||||
| Deferred credits and other noncurrent liabilities |
2,810 | 2,677 | ||||||||||||||
| Redeemable noncontrolling interest - Altus Preferred Unit limited partners |
592 | 555 | ||||||||||||||
| Apache shareholders’ equity (deficit) |
(1,635 | ) | 3,255 | |||||||||||||
| Noncontrolling interest - Egypt |
935 | 1,137 | ||||||||||||||
| Noncontrolling interest - Altus |
64 | 73 | ||||||||||||||
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| Total Liabilities and equity |
$ | 12,999 | $ | 18,107 | ||||||||||||
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| Common shares outstanding at end of period |
377 | 377 | ||||||||||||||
| * | Excludes Altus |
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 Company’s 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, | |||||||||||||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
| Net cash provided by operating activities |
$ | 84 | $ | 502 | $ | 856 | $ | 586 | $ | 1,454 | ||||||||||
| Adjustments: |
||||||||||||||||||||
| Exploration expense other than dry hole expense and unproved leasehold impairments |
18 | 14 | 38 | 32 | 74 | |||||||||||||||
| Current income tax provision (benefit) |
(27 | ) | 89 | 187 | 62 | 373 | ||||||||||||||
| Other adjustments to reconcile net income to net cash provided by operating activities |
(22 | ) | 8 | (13 | ) | (14 | ) | (22 | ) | |||||||||||
| Changes in operating assets and liabilities |
66 | 21 | (178 | ) | 87 | (40 | ) | |||||||||||||
| Financing costs, net |
106 | 103 | 98 | 209 | 195 | |||||||||||||||
| Transaction, reorganization & separation costs |
10 | 27 | 6 | 37 | 10 | |||||||||||||||
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| Adjusted EBITDAX (Non-GAAP) |
$ | 235 | $ | 764 | $ | 994 | $ | 999 | $ | 2,044 | ||||||||||
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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 Company’s 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 Company’s on-going business operations. As a performance measure, adjusted earnings may be useful to investors in facilitating comparisons to others in the Company’s 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, 2020 |
For the Quarter Ended June 30, 2019 |
|||||||||||||||||||||||||||||||
| Before Tax |
Tax Impact |
After Tax |
Diluted EPS |
Before Tax |
Tax Impact |
After Tax |
Diluted EPS |
|||||||||||||||||||||||||
| Net loss including noncontrolling interests (GAAP) |
$ | (416 | ) | $ | 38 | $ | (378 | ) | $ | (1.00 | ) | $ | (152 | ) | $ | (164 | ) | $ | (316 | ) | $ | (0.84 | ) | |||||||||
| Income (loss) attributable to noncontrolling interests |
(17 | ) | 6 | (11 | ) | (0.03 | ) | 80 | (40 | ) | 40 | 0.11 | ||||||||||||||||||||
| Income attributable to Altus preferred unit limited partner |
19 | — | 19 | 0.05 | 4 | — | 4 | 0.01 | ||||||||||||||||||||||||
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| Net loss attributable to common stock |
(418 | ) | 32 | (386 | ) | (1.02 | ) | (236 | ) | (124 | ) | (360 | ) | (0.96 | ) | |||||||||||||||||
| Adjustments:* |
||||||||||||||||||||||||||||||||
| Asset impairments |
51 | (6 | ) | 45 | 0.12 | 279 | (59 | ) | 220 | 0.58 | ||||||||||||||||||||||
| Noncontrolling interest & tax barrel impact on Egypt adjustments |
(7 | ) | — | (7 | ) | (0.02 | ) | — | — | — | — | |||||||||||||||||||||
| Valuation allowance and other tax adjustments |
— | 64 | 64 | 0.17 | — | 114 | 114 | 0.31 | ||||||||||||||||||||||||
| (Gain)/Loss on extinguishment of debt |
(140 | ) | 29 | (111 | ) | (0.29 | ) | 75 | (16 | ) | 59 | 0.16 | ||||||||||||||||||||
| Unrealized derivative instrument losses, net |
138 | (30 | ) | 108 | 0.29 | 21 | (4 | ) | 17 | 0.04 | ||||||||||||||||||||||
| Noncontrolling interest on Altus preferred units embedded derivative |
(2 | ) | 1 | (1 | ) | (0.01 | ) | — | — | — | — | |||||||||||||||||||||
| Transaction, reorganization & separation costs |
10 | (3 | ) | 7 | 0.02 | 6 | (1 | ) | 5 | 0.01 | ||||||||||||||||||||||
| Gain on divestitures, net |
— | — | — | — | (17 | ) | 3 | (14 | ) | (0.03 | ) | |||||||||||||||||||||
| Contract termination charges |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
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| Adjusted earnings (Non-GAAP) |
$ | (368 | ) | $ | 87 | $ | (281 | ) | $ | (0.74 | ) | $ | 128 | $ | (87 | ) | $ | 41 | $ | 0.11 | ||||||||||||
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| For the Six Months Ended June 30, 2020 |
For the Six Months Ended June 30, 2019 |
|||||||||||||||||||||||||||||||
| Before Tax |
Tax Impact |
After Tax |
Diluted EPS |
Before Tax |
Tax Impact |
After Tax |
Diluted EPS |
|||||||||||||||||||||||||
| Net loss including noncontrolling interests (GAAP) |
$ | (4,982 | ) | $ | (18 | ) | $ | (5,000 | ) | $ | (13.23 | ) | $ | 13 | $ | (331 | ) | $ | (318 | ) | $ | (0.84 | ) | |||||||||
| Income (loss) attributable to noncontrolling interest |
(161 | ) | (10 | ) | (171 | ) | (0.45 | ) | 165 | (80 | ) | 85 | 0.23 | |||||||||||||||||||
| Income attributable to Altus preferred unit limited partner |
37 | — | 37 | 0.10 | 4 | — | 4 | 0.01 | ||||||||||||||||||||||||
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| Net loss attributable to common stock |
(4,858 | ) | (8 | ) | (4,866 | ) | (12.88 | ) | (156 | ) | (251 | ) | (407 | ) | (1.08 | ) | ||||||||||||||||
| Adjustments:* |
||||||||||||||||||||||||||||||||
| Asset impairments |
4,542 | (844 | ) | 3,698 | 9.79 | 302 | (64 | ) | 238 | 0.62 | ||||||||||||||||||||||
| Noncontrolling interest & tax barrel impact on Egypt adj |
(170 | ) | (7 | ) | (177 | ) | (0.47 | ) | — | — | — | — | ||||||||||||||||||||
| Valuation allowance and other tax adjustments |
— | 932 | 932 | 2.46 | — | 145 | 145 | 0.39 | ||||||||||||||||||||||||
| (Gain)/Loss on extinguishment of debt |
(140 | ) | 29 | (111 | ) | (0.29 | ) | 75 | (16 | ) | 59 | 0.16 | ||||||||||||||||||||
| Unrealized derivative instrument losses, net |
241 | (51 | ) | 190 | 0.50 | 66 | (14 | ) | 52 | 0.14 | ||||||||||||||||||||||
| Noncontrolling interest on Altus preferred units embedded derivative |
(15 | ) | 4 | (11 | ) | (0.03 | ) | — | — | — | — | |||||||||||||||||||||
| Transaction, reorganization & separation costs |
37 | (9 | ) | 28 | 0.07 | 10 | (2 | ) | 8 | 0.02 | ||||||||||||||||||||||
| Gain on divestitures, net |
(25 | ) | 8 | (17 | ) | (0.04 | ) | (20 | ) | 4 | (16 | ) | (0.04 | ) | ||||||||||||||||||
| Contract termination charges |
3 | (1 | ) | 2 | 0.01 | — | — | — | — | |||||||||||||||||||||||
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| Adjusted Earnings (Non-GAAP) |
$ | (385 | ) | $ | 53 | $ | (332 | ) | $ | (0.88 | ) | $ | 277 | $ | (198 | ) | $ | 79 | $ | 0.21 | ||||||||||||
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| * | 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 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, |
|||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Costs incurred in oil and gas property: |
||||||||||||||||
| Acquisitions |
||||||||||||||||
| Proved |
$ | 1 | $ | — | $ | 7 | $ | — | ||||||||
| Unproved |
2 | 22 | 3 | 41 | ||||||||||||
| Exploration and development |
266 | 639 | 756 | 1,294 | ||||||||||||
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| Total Costs incurred in oil and gas property |
$ | 269 | $ | 661 | $ | 766 | $ | 1,335 | ||||||||
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| Reconciliation of Costs incurred to Upstream capital investment: |
||||||||||||||||
| Total Costs incurred in oil and gas property |
$ | 269 | $ | 661 | $ | 766 | $ | 1,335 | ||||||||
| Asset retirement obligations settled vs. incurred - oil and gas property |
5 | 9 | 13 | 19 | ||||||||||||
| Capitalized interest |
— | (8 | ) | — | (16 | ) | ||||||||||
| Exploration seismic and administration costs |
(18 | ) | (38 | ) | (32 | ) | (74 | ) | ||||||||
| Less noncontrolling interest - Egypt |
(40 | ) | (35 | ) | (89 | ) | (78 | ) | ||||||||
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| Total Upstream capital investment |
$ | 216 | $ | 589 | $ | 658 | $ | 1,186 | ||||||||
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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, | |||||||||||||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
| Net cash provided by operating activities |
$ | 84 | $ | 502 | $ | 856 | $ | 586 | $ | 1,454 | ||||||||||
| Changes in operating assets and liabilities |
66 | 21 | (178 | ) | 87 | (40 | ) | |||||||||||||
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| Cash flows from operations before changes in operating assets and liabilities |
$ | 150 | $ | 523 | $ | 678 | $ | 673 | $ | 1,414 | ||||||||||
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Page 7