10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 10-Q 

(Mark One)  

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

For the quarterly period ended March 31, 2022

or

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

For the transition period from _________ to _________

Commission File Number: 1-4300

APACHE CORPORATION

(Exact name of registrant as specified in its charter)

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

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

(Address of principal executive offices) (Zip Code)

(713) 296-6000

(Registrant’s telephone number, including area code)

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

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

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

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

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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Number of shares of registrant’s common stock outstanding as of April 30, 2022 (100% owned by APA Corporation) 1,000 

OMISSION OF CERTAIN INFORMATION

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

TABLE OF CONTENTS

Item		Page
	PART I - FINANCIAL INFORMATION
1.	FINANCIAL STATEMENTS	1
	STATEMENT OF CONSOLIDATED OPERATIONS	1
	STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)	2
	STATEMENT OF CONSOLIDATED CASH FLOWS	3
	CONSOLIDATED BALANCE SHEET	4
	STATEMENT OF CONSOLIDATED CHANGES IN EQUITY (DEFICIT) AND NONCONTROLLING INTERESTS	5
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	6
2.	MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS	28
3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36
4.	CONTROLS AND PROCEDURES	36
	PART II - OTHER INFORMATION
1.	LEGAL PROCEEDINGS	37
1A.	RISK FACTORS	37
6.	EXHIBITS	38

FORWARD-LOOKING STATEMENTS AND RISKS

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding the Company’s future financial position, business strategy, budgets, projected revenues, projected costs, and plans and objectives of management for future operations, are forward-looking statements. Such forward-looking statements are based on the Company’s examination of historical operating trends, the information that was used to prepare its estimate of proved reserves as of December 31, 2021, and other data in the Company’s possession or available from third parties. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “could,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “continue,” “seek,” “guidance,” “might,” “outlook,” “possibly,” “potential,” “prospect,” “should,” “would,” or similar terminology, but the absence of these words does not mean that a statement is not forward looking. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable under the circumstances, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, its assumptions about:

•the scope, duration, and reoccurrence of any epidemics or pandemics (including, specifically, the coronavirus disease 2019 (COVID-19) pandemic and any related variants) and the actions taken by third parties, including, but not limited to, governmental authorities, customers, contractors, and suppliers, in response to such epidemics or pandemics;

•the mandate, availability, and effectiveness of vaccine programs and therapeutics related to the treatment of COVID-19;

•the market prices of oil, natural gas, natural gas liquids (NGLs), and other products or services;

•the Company’s commodity hedging arrangements;

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

•production and reserve levels;

•drilling risks;

•economic and competitive conditions, including market and macro-economic disruptions resulting from the Russian war in Ukraine;

•the availability of capital resources;

•capital expenditures and other contractual obligations;

•currency exchange rates;

•weather conditions;

•inflation rates;

•the availability of goods and services;

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

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

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

•terrorism or cyberattacks;

•the occurrence of property acquisitions or divestitures;

•the integration of acquisitions;

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

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

•the Company’s expectations with respect to the new operating structure implemented pursuant to the Holding Company Reorganization (as defined in the Notes to the Company’s Consolidated Financial Statements set forth in Part I, Item 1—Financial Statements of this Quarterly Report on Form 10-Q) and the associated disclosure implications;

•other factors disclosed under Items 1 and 2—Business and Properties—Estimated Proved Reserves and Future Net Cash Flows, Item 1A—Risk Factors, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 7A—Quantitative and Qualitative Disclosures About Market Risk and elsewhere in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021;

•other risks and uncertainties disclosed in APA Corporation’s first-quarter 2022 earnings release;

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

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

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

DEFINITIONS

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

“3-D” means three-dimensional.

“4-D” means four-dimensional.

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

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

“bcf” means billion cubic feet of natural gas.

“bcf/d” means one bcf per day.

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

“boe/d” means boe per day.

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

“Liquids” means oil and NGLs.

“LNG” means liquefied natural gas.

“Mb/d” means Mbbls per day.

“Mbbls” means thousand barrels of oil or NGLs.

“Mboe” means thousand boe.

“Mboe/d” means Mboe per day.

“Mcf” means thousand cubic feet of natural gas.

“Mcf/d” means Mcf per day.

“MMbbls” means million barrels of oil or NGLs.

“MMboe” means million boe.

“MMBtu” means million Btu.

“MMBtu/d” means MMBtu per day.

“MMcf” means million cubic feet of natural gas.

“MMcf/d” means MMcf per day.

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

“NYMEX” means New York Mercantile Exchange.

“oil” includes crude oil and condensate.

“PUD” means proved undeveloped.

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

“Tcf” means trillion cubic feet of natural gas.

“U.K.” means United Kingdom.

“U.S.” means United States.

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

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

PART I – FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED OPERATIONS

(Unaudited)

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
REVENUES AND OTHER:
Oil, natural gas, and natural gas liquids production revenues	$	2,320	$	1,431
Purchased oil and gas sales	349		440
Total revenues	2,669		1,871
Derivative instrument gains (losses), net	(62)		158
Gain on divestitures, net	1,176		2
Other, net	45		61
	3,828		2,092
OPERATING EXPENSES:
Lease operating expenses	344		264
Gathering, processing, and transmission	81		58
Purchased oil and gas costs	351		494
Taxes other than income	70		44
Exploration	25		46
General and administrative	151		83
Transaction, reorganization, and separation	14		—
Depreciation, depletion, and amortization	291		342
Asset retirement obligation accretion	29		28
Financing costs, net	140		107
	1,496		1,466
NET INCOME BEFORE INCOME TAXES	2,332		626
Current income tax provision	392		149
Deferred income tax provision (benefit)	(41)		18
NET INCOME INCLUDING NONCONTROLLING INTERESTS	1,981		459
Net income attributable to noncontrolling interest - Sinopec	119		42
Net income attributable to noncontrolling interest - Altus	14		1
Net income attributable to noncontrolling interest - APA Corporation	71		—
Net income (loss) attributable to Altus Preferred Unit limited partners	(70)		19
NET INCOME ATTRIBUTABLE TO APA CORPORATION	$	1,847	$	397

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

1

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
NET INCOME INCLUDING NONCONTROLLING INTERESTS	$	1,981	$	459
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Share of equity method interests other comprehensive income	—		1
Pension and postretirement benefit plan	(1)		—
COMPREHENSIVE INCOME INCLUDING NONCONTROLLING INTERESTS	1,980		460
Comprehensive income attributable to noncontrolling interest - Sinopec	119		42
Comprehensive income attributable to noncontrolling interest - Altus	14		1
Comprehensive income attributable to noncontrolling interest - APA Corporation	71		—
Comprehensive income (loss) attributable to Altus Preferred Unit limited partners	(70)		19
COMPREHENSIVE INCOME ATTRIBUTABLE TO APA CORPORATION	$	1,846	$	398

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

2

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
	2022		2021
	(In millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income including noncontrolling interests	$	1,981	$	459
Adjustments to reconcile net income to net cash provided by operating activities:
Unrealized derivative instrument losses (gains), net	57		(10)
Gain on divestitures, net	(1,176)		(2)
Exploratory dry hole expense and unproved leasehold impairments	9		37
Depreciation, depletion, and amortization	291		342
Asset retirement obligation accretion	29		28
Provision for (benefit from) deferred income taxes	(41)		18
Loss on extinguishment of debt	67		—
Other, net	(43)		(25)
Changes in operating assets and liabilities:
Receivables	(254)		(166)
Inventories	(43)		(3)
Drilling advances and other current assets	9		12
Deferred charges and other long-term assets	(13)		(13)
Accounts payable	(5)		73
Accounts payable to APA Corporation	(33)		15
Accrued expenses	18		(64)
Deferred credits and noncurrent liabilities	3		(10)
NET CASH PROVIDED BY OPERATING ACTIVITIES	856		691
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to upstream oil and gas property	(334)		(237)
Additions to Altus gathering, processing, and transmission (GPT) facilities	(1)		(1)
Leasehold and property acquisitions	(20)		(2)
Contributions to Altus equity method interests	(2)		(21)
Proceeds from sale of oil and gas properties	767		3
Proceeds from sale of Kinetik shares	224		—
Deconsolidation of Altus cash and cash equivalents	(143)		—
Other, net	(1)		7
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	490		(251)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payments on) Apache credit facility, net	338		(85)
Proceeds from Altus credit facility, net	—		33
Payments on note payable to APA Corporation, net	(21)		—
Payments on fixed-rate debt	(1,370)		(6)
Distributions to noncontrolling interest - Sinopec	(69)		(40)
Distributions to Altus Preferred Unit limited partners	(11)		(11)
Distributions to APA Corporation	(346)		(292)
Dividends paid	—		(9)
Other, net	(2)		(11)
NET CASH USED IN FINANCING ACTIVITIES	(1,481)		(421)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(135)		19
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	279		262
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	144	$	281
SUPPLEMENTARY CASH FLOW DATA:
Interest paid, net of capitalized interest	$	128	$	113
Income taxes paid, net of refunds	305		124

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

3

APACHE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)

	March 31, 2022(1)		December 31, 2021(1)
	(In millions, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($132 related to Altus VIE)	$	144	$	279
Receivables, net of allowance of $111 and $109	1,625		1,390
Other current assets (Note 6) ($9 related to Altus VIE)	695		649
Accounts receivable from APA Corporation	96		77
	2,560		2,395
PROPERTY AND EQUIPMENT:
Oil and gas properties	40,223		40,474
Gathering, processing, and transmission facilities ($209 related to Altus VIE)	464		673
Other ($3 related to Altus VIE)	1,123		1,126
Less: Accumulated depreciation, depletion, and amortization ($25 related to Altus VIE)	(34,058)		(34,213)
	7,752		8,060
OTHER ASSETS:
Equity method interests (Note 7) ($1,365 related to Altus VIE)	576		1,365
Decommissioning security for sold Gulf of Mexico properties (Note 12)	640		640
Deferred charges and other ($6 related to Altus VIE)	583		581
Note receivable from APA Corporation (Note 2)	1,383		1,352
	$	13,494	$	14,393
LIABILITIES, NONCONTROLLING INTERESTS, AND EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable ($12 related to Altus VIE)	$	633	$	651
Note payable to APA Corporation	174		195
Current debt	125		215
Other current liabilities (Note 8) ($15 related to Altus VIE)	1,222		1,170
	2,154		2,231
LONG-TERM DEBT (Note 10) ($657 related to Altus VIE)	5,764		7,295
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Income taxes	105		148
Asset retirement obligation (Note 9) ($68 related to Altus VIE)	2,043		2,089
Decommissioning contingency for sold Gulf of Mexico properties (Note 12)	1,086		1,086
Other ($67 related to Altus VIE)	510		572
	3,744		3,895
REDEEMABLE NONCONTROLLING INTEREST - ALTUS PREFERRED UNIT LIMITED PARTNERS (Note 13)	—		712
EQUITY (DEFICIT):
Common stock, $0.625 par, 1,000 and 1,000 shares authorized, respectively, 1,000 and 1,000 shares issued, respectively	—		—
Paid-in capital	8,381		8,677
Accumulated deficit	(7,470)		(9,317)
Accumulated other comprehensive income	21		22
EQUITY (DEFICIT) ATTRIBUTABLE TO APA CORPORATION	932		(618)
Noncontrolling interest - Sinopec	870		820
Noncontrolling interest - APA Corporation	30		—
Noncontrolling interest - Altus	—		58
TOTAL EQUITY	1,832		260
	$	13,494	$	14,393

(1)    The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

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

4

APACHE CORPORATION AND SUBSIDIARIES

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

(Unaudited)

	Redeemable Noncontrolling Interest - Altus Preferred Unit Limited Partners(1)		Common Stock		Paid-In Capital		Accumulated Deficit		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		PARENT COMPANY EQUITY (DEFICIT)		Noncontrolling Interests(1)		TOTAL EQUITY (DEFICIT)
	(In millions)
For the Quarter Ended March 31, 2021
Balance at December 31, 2020	$	608	$	262	$	11,735	$	(10,461)	$	(3,189)	$	14	$	(1,639)	$	994	$	(645)
Net income attributable to APA Corporation	—		—		—		397		—		—		397		—		397
Net income attributable to noncontrolling interest - Sinopec	—		—		—		—		—		—		—		42		42
Net income attributable to noncontrolling interest - Altus	—		—		—		—		—		—		—		1		1
Net income attributable to Altus Preferred Unit holders	19		—		—		—		—		—		—		—		—
Distributions paid to Altus Preferred Unit limited partners	(11)		—		—		—		—		—		—		—		—
Distributions payable to Altus Preferred Unit limited partners	(11)		—		—		—		—		—		—		—		—
Distributions to noncontrolling interest - Sinopec	—		—		—		—		—		—		—		(40)		(40)
Common dividends declared ($0.025 per share)	—		—		(9)		—		—		—		(9)		—		(9)
APA Corporation share exchange	—		(262)		(2,927)		—		3,189		—		—		—		—
Holding Company Reorganization	—		—		757		82		—		—		839		—		839
Other	—		—		1		—		—		1		2		—		2
Balance at March 31, 2021	$	605	$	—	$	9,557	$	(9,982)	$	—	$	15	$	(410)	$	997	$	587
For the Quarter Ended March 31, 2022
Balance at December 31, 2021	$	712	$	—	$	8,677	$	(9,317)	$	—	$	22	$	(618)	$	878	$	260
Net income attributable to APA Corporation	—		—		—		1,847		—		—		1,847		—		1,847
Net income attributable to noncontrolling interest - APA	—		—		—		—		—		—		—		71		71
Net income attributable to noncontrolling interest - Sinopec	—		—		—		—		—		—		—		119		119
Net income attributable to noncontrolling interest - Altus	—		—		—		—		—		—		—		14		14
Net loss attributable to Altus Preferred Unit limited partners	(70)		—		—		—		—		—		—		—		—
Distributions to noncontrolling interest - Sinopec	—		—		—		—		—		—		—		(69)		(69)
Distributions to APA Corporation	—		—		(305)		—		—		—		(305)		(41)		(346)
Deconsolidation of Altus	(642)		—		—		—		—		—		—		(72)		(72)
Other	—		—		9		—		—		(1)		8		—		8
Balance at March 31, 2022	$	—	$	—	$	8,381	$	(7,470)	$	—	$	21	$	932	$	900	$	1,832

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

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

5

APACHE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

These consolidated financial statements have been prepared by Apache Corporation (Apache or the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). They reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods, on a basis consistent with the annual audited financial statements, with the exception of any recently adopted accounting pronouncements. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10-Q should be read along with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which contains a summary of the Company’s significant accounting policies and other disclosures.

On March 1, 2021, Apache Corporation, the Company’s predecessor registrant, consummated a holding company reorganization (the Holding Company Reorganization), pursuant to which Apache became a direct, wholly owned subsidiary of APA Corporation (APA), and all of Apache’s outstanding shares automatically converted into equivalent corresponding shares of APA. Pursuant to the Holding Company Reorganization, APA became the successor issuer to Apache pursuant to Rule 12g-3(a) under the Exchange Act and replaced Apache as the public company trading on the Nasdaq Global Select Market under the ticker symbol “APA.” The Holding Company Reorganization modernized the Company’s operating and legal structure, making it more consistent with other companies that have affiliates operating around the globe. Refer to Note 2—Transactions with Parent Affiliate for more detail.

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

As of March 31, 2022, the Company's significant accounting policies are consistent with those discussed in Note 1—Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The Company’s financial statements for prior periods include reclassifications that were made to conform to the current-year presentation, if applicable.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Apache and its subsidiaries after elimination of intercompany balances and transactions. Apache’s consolidated financial statements reflect the impacts of the Holding Company Reorganization on a prospective basis, and results prior to completion of the Holding Company Reorganization have not been restated. Refer to Note 2—Transactions with Parent Affiliate for more detail.

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

In conjunction with the ratification of a new merged concession agreement with the Egyptian General Petroleum Corporation (EGPC) in December 2021, Apache modified partnership agreements for certain consolidated subsidiaries. Apache subsequently determined that one of its limited partnership subsidiaries, which has control over Apache’s Egyptian operations, qualified as a variable interest entity (VIE) under GAAP. Apache continues to consolidate this limited partnership subsidiary because the Company has concluded that it has a controlling financial interest in the Egyptian operations and was determined to be the primary beneficiary of the VIE. For all periods presented, Sinopec International Petroleum Exploration and Production Corporation (Sinopec) has owned a one-third minority participation in the Company’s consolidated Egypt oil and gas business as a noncontrolling interest. Under the modified partnership agreements, APA owns a minority participation in the remaining two-thirds of its consolidated Egypt oil and gas business as a noncontrolling interest. Refer to Note 2—Transactions with Parent Affiliate for detail regarding APA’s noncontrolling interest. All noncontrolling interests are reflected as a separate component of equity in the Company’s consolidated balance sheet.

6

Additionally, prior to the BCP Business Combination defined below, third-party investors owned a minority interest of approximately 21 percent of Altus Midstream Company (ALTM or Altus), which was reflected as a separate noncontrolling interest component of equity in the Company’s consolidated balance sheet. ALTM qualified as a VIE under GAAP, which Apache consolidated because a wholly owned subsidiary of Apache had a controlling financial interest and was determined to be the primary beneficiary. Additionally, the assets of ALTM could only be used to settle obligations of ALTM. There was no recourse to the Company for ALTM’s liabilities.

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

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

Use of Estimates

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

Significant estimates with regard to these financial statements include the estimates of fair value for long-lived assets (refer to “Fair Value Measurements” and “Property and Equipment” sections in this Note 1 below), the fair value determination of acquired assets and liabilities (refer to Note 3—Acquisitions and Divestitures), the fair value of equity method interests (refer

to “Equity Method Interests” within this Note 1 below and Note 7—Equity Method Interests), the assessment of asset retirement obligations (refer to Note 9—Asset Retirement Obligation), the estimation of the contingent liability representing Apache’s potential obligation to decommission sold properties in the Gulf of Mexico (refer to Note 12—Commitments and Contingencies), the estimate of income taxes (refer to Note 11—Income Taxes), and the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom.

7

Fair Value Measurements

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

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

Refer to Note 5—Derivative Instruments and Hedging Activities, Note 10—Debt and Financing Costs, and Note 13—Redeemable Noncontrolling Interest - Altus for further detail regarding the Company’s fair value measurements recorded on a recurring basis.

During the quarters ended March 31, 2022 and 2021, the Company recorded no asset impairments in connection with fair value assessments.

Accounts Receivable from / Accounts Payable to APA

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

Revenue Recognition

There have been no significant changes to the Company’s contracts with customers during the three months ended March 31, 2022 and 2021.

Payments under all contracts with customers are typically due and received within a short-term period of one year or less after physical delivery of the product or service has been rendered. Receivables from contracts with customers, net of allowance for credit losses, were $1.5 billion and $956 million as of March 31, 2022 and December 31, 2021, respectively. Refer to Note 15—Business Segment Information for a disaggregation of oil, gas, and natural gas production revenue by product and reporting segment.

Oil and gas production revenues from non-customers represent income taxes paid to the Arab Republic of Egypt by Egyptian General Petroleum Corporation on behalf of the Company. Revenue and associated expenses related to such tax volumes are recorded as “Oil, natural gas, and natural gas liquids production revenues” and “Current income tax provision,” respectively, in the Company’s statement of consolidated operations. Refer to Note 15—Business Segment Information for a disaggregation of revenue by product and reporting segment.

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

Property and Equipment

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

8

Oil and Gas Property

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

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

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

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

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

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

Gathering, Processing, and Transmission Facilities

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

9

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

2.    TRANSACTIONS WITH PARENT AFFILIATE

The Company completed the Holding Company Reorganization on March 1, 2021 and sold to APA all of the equity in the three Apache subsidiaries through which Apache’s interests in Suriname and the Dominican Republic were held. The Company accounted for the divestiture of its subsidiaries as a transfer to an affiliate entity under common control and no longer consolidates the subsidiaries for periods subsequent to the Holding Company Reorganization. The carrying value of the net assets transferred was $483 million, which included approximately $292 million of cash and cash equivalents, $163 million of oil and gas properties, and working capital items. The Company continues to hold its existing assets in the U.S., Egypt, and the U.K.

The Holding Company Reorganization gave rise to a note payable by APA to Apache. The note has a seven-year term, maturing on February 29, 2028, and bears interest at a rate of 4.5 percent per annum, payable semi-annually, subject to APA’s option to allow accrued interest to convert to principal (PIK) during the first 5.5 years of the note’s term (to August 31, 2026). The note is guaranteed by each of the three subsidiaries sold by Apache to APA. During the first quarters of 2022 and 2021, the Company recognized interest income on this note of $15 million and $5 million, respectively, which is reflected in “Financing costs, net” on the Company’s statement of consolidated operations. Apache has allowed interest accrued from March 1, 2021 through February 28, 2022 totaling $61 million to PIK pursuant to the note.

In the fourth quarter of 2021, in conjunction with the ratification of a new merged concession agreement (MCA) with the Egyptian General Petroleum Corporation (EGPC), Apache entered into an agreement with APA under which the historical value of existing concessions prior to ratifying the MCA was retained by Apache, with any excess value from the MCA terms being allocated to APA. Sinopec owns a one-third minority participation in the Company’s consolidated Egypt oil and gas business, and approximately 30 percent of the remaining net income and distributable cash flow for the Company’s Egyptian operations is being allocated to APA in 2022. Apache consolidates its Egyptian operations, with APA’s noncontrolling interest reflected as a separate component in the Company’s consolidated balance sheet. In the first quarter of 2022, the Company recorded net income attributable to APA’s noncontrolling interest of $71 million and distributed $41 million of cash to APA in association with its noncontrolling interest.

The Company continues to provide administrative and support operations to APA related to activities performed for the Suriname and Dominican Republic subsidiaries. The Company is reimbursed by APA for employee costs, certain internal costs, and third-party costs paid by the Company in connection with its role as service provider. All reimbursements are based on actual costs incurred, and no market premium is applied by the Company to APA. The Company incurred $5 million in reimbursable corporate overhead charges for the first quarter of 2022.

In August 2021, Apache entered into a promissory note with APA under which Apache may borrow up to $250 million from APA at APA’s discretion. The note has a term of one year, maturing on August 4, 2022, and bears interest at a variable rate per annum equal to the monthly, short-term applicable federal rate, payable semi-annually. As of March 31, 2022, there was $174 million outstanding under this note, which is reflected as “Note payable to APA Corporation” on the Company’s consolidated balance sheet.

From time to time, the Company may, at its discretion, make distributions of capital to APA Corporation. During the first quarter of 2022, the Company made capital distributions totaling $305 million primarily in support of dividend payments and capital transactions completed by APA during the period. No capital distributions were made in the first quarter of 2021.

3.    ACQUISITIONS AND DIVESTITURES

2022 Activity

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

10

As a result of the BCP Business Combination, the Company deconsolidated ALTM on February 22, 2022 and recognized a gain of approximately $609 million that reflects the difference of the Company’s share of ALTM’s deconsolidated balance sheet and the fair value of its approximate 20 percent retained ownership in the combined entity. A summary of components of the gain, including the ALTM balance sheet amounts deconsolidated at the time of close, is included below:

	As of February 22, 2022
	(In millions)
Fair value of Kinetik Class A Common Stock held by Company	$	802
ASSETS:
Cash and cash equivalents	$	143
Other current assets	29
Property and equipment, net	184
Equity method interests	1,367
Other noncurrent assets	12
Total assets deconsolidated	$	1,735
LIABILITIES:
Current liabilities	$	3
Long-term debt	657
Other noncurrent liabilities	168
Total liabilities deconsolidated	$	828
NONCONTROLLING INTERESTS:
Redeemable noncontrolling interest preferred unit limited partners	$	642
Noncontrolling interest-Altus	72
Total noncontrolling interests deconsolidated	$	714
Net effect of deconsolidating balance sheet	$	(193)
Gain on deconsolidation of ALTM	$	609

In March 2022, the Company sold four million of its shares in Kinetik for cash proceeds of $224 million and recognized a loss of $25 million, including transaction fees. Refer to Note 7—Equity Method Interests for further detail. In connection with this secondary offering, the Company has agreed that within the next 24 months, it will invest a minimum of $100 million of these proceeds for new well drilling and completion activity at the Alpine High play in the Delaware Basin, where Kinetik has exclusive gas and NGL gathering and processing rights.

In March 2022, the Company completed the previously announced transaction to sell certain non-core mineral rights in the Delaware Basin for total cash proceeds of approximately $759 million after certain post-closing adjustments. The Company recognized a gain of approximately $590 million from the transaction. The Company also completed the sale of other non-core assets and leasehold in multiple transactions for total cash proceeds of $8 million. The Company recognized a gain of approximately $2 million upon closing of these transactions during the first quarter of 2022.

11

2021 Activity

During the first quarter of 2021, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $2 million. The Company also completed the sale of certain non-core assets and leasehold, primarily in the Permian Basin, in multiple transactions for total cash proceeds of $3 million. The Company recognized a gain of approximately $2 million upon closing of these transactions during the first quarter of 2021.

4.    CAPITALIZED EXPLORATORY WELL COSTS

The Company’s capitalized exploratory well costs were $59 million and $46 million as of March 31, 2022 and December 31, 2021, respectively. The increase is primarily attributable to additional drilling activity, offset by successful transfer of well costs. No suspended exploratory well costs previously capitalized for greater than one year at December 31, 2021 were charged to dry hole expense during the three months ended March 31, 2022.

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

5.    DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Objectives and Strategies

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

Counterparty Risk

The use of derivative instruments exposes the Company to credit loss in the event of nonperformance by the counterparty. To reduce the concentration of exposure to any individual counterparty, the Company utilizes a diversified group of investment-grade rated counterparties, primarily financial institutions, for its derivative transactions. As of March 31, 2022, the Company had derivative positions with 12 counterparties. The Company monitors counterparty creditworthiness on an ongoing basis; however, it cannot predict sudden changes in counterparties’ creditworthiness. In addition, even if such changes are not sudden, the Company may be limited in its ability to mitigate an increase in counterparty credit risk. Should one of these counterparties not perform, the Company may not realize the benefit of some of its derivative instruments resulting from lower commodity prices or changes in currency exchange rates.

12

Derivative Instruments

Commodity Derivative Instruments

As of March 31, 2022, the Company had the following open natural gas financial basis swap contracts:

		Basis Swap Purchased		Basis Swap Sold
Production Period	Settlement Index	MMBtu (in 000’s)	Weighted Average Price Differential	MMBtu (in 000’s)	Weighted Average Price Differential
January—December 2022	NYMEX Henry Hub/IF Waha	33,000	$(0.45)	—	—
January—December 2022	NYMEX Henry Hub/IF HSC	—	—	33,000	$(0.08)
July—December 2022	NYMEX Henry Hub/IF Waha	20,240	$(0.97)	—	—
July—December 2022	NYMEX Henry Hub/IF HSC	—	—	20,240	$(0.17)
October—December 2022	NYMEX Henry Hub/IF Waha	920	$(1.19)	—	—
October—December 2022	NYMEX Henry Hub/IF HSC	—	—	920	$(0.19)
January—March 2023	NYMEX Henry Hub/IF Waha	3,150	$(1.06)	—	—
January—March 2023	NYMEX Henry Hub/IF HSC	—	—	3,150	$(0.03)
January—June 2023	NYMEX Henry Hub/IF Waha	4,525	$(1.54)	—	—
January—June 2023	NYMEX Henry Hub/IF HSC	—	—	4,525	$(0.11)
January—December 2023	NYMEX Henry Hub/IF Waha	73,000	$(1.15)	—	—
January—December 2023	NYMEX Henry Hub/IF HSC	—	—	73,000	$(0.08)

Subsequent to March 31, 2022, the Company entered into basis swap contracts purchasing Nymex Henry Hub/Waha totaling 1,840,000 MMBtu with a weighted average strike price of $(1.62) and selling Nymex Henry Hub/HSC totaling 1,840,000 MMBtu with a weighted average strike price of $(0.19) for July to September 2023.

Foreign Currency Derivative Instruments

The Company has open foreign currency costless collar contracts in GBP/USD for £15 million per month for the calendar year 2022 with a weighted average floor and ceiling price of $1.39 and $1.29, respectively.

Embedded Derivatives

Altus Preferred Units Embedded Derivative

The Altus Preferred Units embedded derivative was deconsolidated as of March 31, 2022 as part of the BCP Business Combination. Refer to Note 3—Acquisitions and Divestitures for discussion of the BCP Business Combination and Note 13—Redeemable Noncontrolling Interest - Altus for a description of the Altus Preferred Units and associated embedded derivative.

Pipeline Capacity Embedded Derivatives

During the fourth quarter of 2019 and first quarter of 2020, the Company entered into agreements to assign a portion of its contracted capacity under an existing transportation agreement to third parties. Embedded in these agreements were arrangements under which the Company received payments calculated based on pricing differentials between Houston Ship Channel and Waha during the calendar years 2020 and 2021. This feature required bifurcation and measurement of the change in market value throughout 2020 and 2021. Unrealized gains and losses in the fair value of this feature were recorded as “Derivative instrument gains (losses), net” under “Revenues and Other” in the statement of consolidated operations, and the balance at the end of December 31, 2021 will be amortized into income over the original tenure of the host contract.

13

Fair Value Measurements

The following table presents the Company’s derivative assets and liabilities measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Quoted Price in Active Markets (Level 1)		Significant Other Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value		Netting(1)		Carrying Amount
	(In millions)
March 31, 2022
Assets:
Commodity derivative instruments	$	—	$	—	$	—	$	—	$	5	$	5
Liabilities:
Commodity derivative instruments	—		34		—		34		5		39
Foreign currency derivative instruments	—		2		—		2		—		2
December 31, 2021
Liabilities:
Commodity derivative instruments	$	—	$	10	$	—	$	10	$	—	$	10
Pipeline capacity embedded derivative	—		46		—		46		—		46
Preferred Units embedded derivative	—		—		57		57		—		57

(1)    The derivative fair values are based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties.

The fair values of the Company’s derivative instruments are not actively quoted in the open market. The Company primarily uses a market approach to estimate the fair values of these derivatives on a recurring basis, utilizing futures pricing for the underlying positions provided by a reputable third party, a Level 2 fair value measurement.

Derivative Activity Recorded in the Consolidated Balance Sheet

All derivative instruments are reflected as either assets or liabilities at fair value in the consolidated balance sheet. These fair values are recorded by netting asset and liability positions where counterparty master netting arrangements contain provisions for net settlement. The carrying value of the Company’s derivative assets and liabilities and their locations on the consolidated balance sheet are as follows:

	March 31, 2022		December 31, 2021
	(In millions)
Current Assets: Other current assets	$	4	$	—
Other Assets: Deferred charges and other	1		—
Total derivative assets	$	5	$	—
Current Liabilities: Other current liabilities	$	20	$	4
Deferred Credits and Other Noncurrent Liabilities: Other	21		109
Total derivative liabilities	$	41	$	113

14

Derivative Activity Recorded in the Statement of Consolidated Operations

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

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Realized:
Commodity derivative instruments	$	(5)	$	148
Realized gain (loss), net	(5)		148
Unrealized:
Commodity derivative instruments	(24)		26
Pipeline capacity embedded derivatives	—		1
Foreign currency derivative instruments	(2)		—
Preferred Units embedded derivative	(31)		(17)
Unrealized gain (loss), net	(57)		10
Derivative instrument gains (losses), net	$	(62)	$	158

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

The Company seeks to maintain a balance between “first of month” and “gas daily pricing” for its U.S. natural gas portfolio and sales activities in a given month as part of its ordinary course of business. This is typically implemented through a combination of physical and financial contracts that settle monthly. In January 2021, the Company entered into financial contracts that increased its exposure to “gas daily pricing” and reduced its exposure to “first of month” pricing for February 2021. The Company realized a gain of $147 million in connection with these contracts in the first quarter of 2021 as a result of extreme daily gas price volatility across Texas in February resulting from Winter Storm Uri.

6.    OTHER CURRENT ASSETS

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

	March 31, 2022		December 31, 2021
	(In millions)
Inventories	$	495	$	438
Drilling advances	70		55
Prepaid assets and other	30		56
Current decommissioning security for sold Gulf of Mexico assets	100		100
Total Other current assets	$	695	$	649

7.    EQUITY METHOD INTERESTS

The Kinetik Class A Common Stock held by the Company is treated as an interest in equity securities measured at fair value. The Company elected the fair value option based on practical expedience, variances in reporting timelines, and cost-benefit considerations for measuring its equity method interest in Kinetik. The fair value of the Company’s interest in Kinetik is determined using Level 1 inputs based on observable prices on a major exchange. The initial interest in Kinetik was measured at fair value based on the Company’s ownership of approximately 12.9 million shares of Kinetik Class A Common stock as of February 22, 2022. In March 2022, the Company sold four million of its shares of Kinetik Class A Common Stock for a loss, including underwriters fees, of $25 million, which was recorded as a component of “Gain on divestitures, net” under “Revenues and other” in the Company’s statement of consolidated operations. Refer to Note 3–Acquisitions and Divestitures for further detail.

As of March 31, 2022, the Company holds approximately 8.9 million shares of Kinetik Class A Common Stock, or approximately 13 percent of Kinetik’s outstanding ALTM Common Stock. At March 31, 2022, a fair value adjustment gain of

15

$24 million was recorded based on the Company’s remaining Class A share ownership. The fair value adjustment was recorded as a component of “Other, net” under “Revenues and other” in the Company’s statement of consolidated operations.

The following table presents the activity in the Company’s equity method interest in Kinetik for the quarter ended March 31, 2022:

		Kinetik Holdings Inc
	(In millions)
Balance at December 31, 2021		$	—
Initial interest upon closing the BCP Business Combination		802
Sale of Class A shares		(250)
Fair value adjustment as of March 31, 2022		24
Balance at March 31, 2022		$	576

As of March 31, 2022, the Company has recorded gathering, processing and transportation costs payable to Kinetik of approximately $10 million related to midstream services provided by Kinetik to the Company since the close of the transaction on February 22, 2022.

Prior to the deconsolidation of Altus on February 22, 2022, the Company, through its ownership of Altus, had the following equity method interests in four Permian Basin long-haul pipeline entities, which were accounted for under the equity method of accounting at December 31, 2021. For each of the equity method interests, Altus had the ability to exercise significant influence based on certain governance provisions and its participation in activities and decisions that impact the management and economic performance of the equity method interests. The table below presents the ownership percentages held by the Company and associated carrying values for each entity:

	Interest	December 31, 2021
		(In millions)
Gulf Coast Express Pipeline, LLC	16.0%	$	274
EPIC Crude Holdings, LP	15.0%	—
Permian Highway Pipeline, LLC	26.7%	630
Shin Oak Pipeline (Breviloba, LLC)	33.0%	461
Total Altus equity method interests		$	1,365

The following table presents the activity in Altus’ equity method interests for the three months ended March 31, 2022:

	Gulf Coast Express Pipeline LLC		EPIC Crude Holdings, LP		Permian Highway Pipeline LLC		Breviloba, LLC		Total
	(In millions)
Balance at December 31, 2021	$	274	$	—	$	630	$	461	$	1,365
Capital contributions	—		2		—		—		2
Distributions	(5)		—		(9)		(7)		(21)
Equity income (loss), net	8		(2)		10		5		21
Deconsolidation of Altus	(277)		—		(631)		(459)		(1,367)
Balance at March 31, 2022	$	—	$	—	$	—	$	—	$	—

16

Summarized Combined Financial Information

The following table presents summarized selected income statement data for Altus’ equity method interests (on a 100 percent basis):

		For the Three Months Ended March 31,
		2021
	(In millions)
Operating revenues		$	254
Operating income		112
Net income		89
Other comprehensive income		4

8.    OTHER CURRENT LIABILITIES

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

	March 31, 2022		December 31, 2021
	(In millions)
Accrued operating expenses	$	127	$	129
Accrued exploration and development	221		206
Accrued compensation and benefits	242		292
Accrued interest	69		107
Accrued income taxes	103		28
Current asset retirement obligation	40		41
Current operating lease liability	109		99
Current portion of derivatives at fair value	20		4
Current decommissioning contingency for sold Gulf of Mexico properties	100		100
Other	191		164
Total Other current liabilities	$	1,222	$	1,170

9.    ASSET RETIREMENT OBLIGATION

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

	March 31, 2022
	(In millions)
Asset retirement obligation, December 31, 2021	$	2,130
Liabilities settled	(7)
Deconsolidation of Altus	(69)
Accretion expense	29
Asset retirement obligation, March 31, 2022	2,083
Less current portion	(40)
Asset retirement obligation, long-term	$	2,043

17

10.    DEBT AND FINANCING COSTS

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

	March 31, 2022		December 31, 2021
	(In millions)
Notes and debentures before unamortized discount and debt issuance costs(1)	$	5,032	$	6,344
Altus credit facility(2)	—		657
Apache credit facility(2)	880		542
Finance lease obligations	35		36
Unamortized discount	(28)		(30)
Debt issuance costs	(30)		(39)
Total debt	5,889		7,510
Current maturities	(125)		(215)
Long-term debt	$	5,764	$	7,295

(1)    The fair values of the Company’s notes and debentures were $5.1 billion and $7.1 billion as of March 31, 2022 and December 31, 2021, respectively.

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

(2)    The carrying value of borrowings on credit facilities approximates fair value because interest rates are variable and reflective of market rates.

As of March 31, 2022, current debt included $123 million carrying value of 2.63% senior notes due January 15, 2023 and $2 million of finance lease obligations. As of December 31, 2021, current debt included $213 million carrying value of 3.25% senior notes due April 15, 2022 and $2 million of finance lease obligations.

During the quarter ended March 31, 2022, Apache closed cash tender offers for certain outstanding notes issued under its indentures, accepting for purchase $1.1 billion aggregate principal amount of notes. Apache paid holders an aggregate $1.2 billion in cash, reflecting principal, premium to par, and accrued and unpaid interest. The Company recognized a $66 million loss on extinguishment of debt, including $11 million of unamortized debt discount and issuance costs in connection with the note purchases.

During the quarter ended March 31, 2022, Apache purchased in the open market and canceled senior notes issued under its indentures in an aggregate principal amount of $15 million for an aggregate purchase price of $16 million in cash, including accrued interest and broker fees, reflecting a premium to par of $1 million. The Company recognized a $1 million loss on these repurchases.

During the quarter ended March 31, 2022, Apache redeemed the outstanding $213 million principal amount of 3.25% senior notes due April 15, 2022, at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest to the redemption date. The redemption was financed by borrowing under Apache’s revolving credit facility.

During the quarter ended March 31, 2021, Apache purchased in the open market and canceled senior notes issued under its indentures in an aggregate principal amount of $7 million for an aggregate purchase price of $6 million in cash, including accrued interest and broker fees, reflecting a discount to par of an aggregate $1 million. No gain or loss was recognized on these repurchases.

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

In March 2018, Apache entered into a revolving credit facility with commitments totaling $4.0 billion, that Apache terminated in April 2022 when its parent corporation entered into two new syndicated credit facilities described in “Subsequent Event” below. As of March 31, 2022, there were $880 million of borrowings and an aggregate £748 million and $20 million in letters of credit outstanding under Apache’s 2018 facility. As of December 31, 2021, there were $542 million of borrowings and an aggregate £748 million and $20 million in letters of credit outstanding under Apache’s 2018 facility. The outstanding letters of credit denominated in pounds were issued to support North Sea decommissioning obligations, the terms of which required such support after Standard & Poor’s reduced Apache’s credit rating from BBB to BB+ on March 26, 2020.

Apache, from time to time, has and uses uncommitted credit and letter of credit facilities for working capital and credit support purposes. As of March 31, 2022 and December 31, 2021, there were no outstanding borrowings under these facilities. As of March 31, 2022, there were £117 million and $17 million in letters of credit outstanding under these facilities. As of December 31, 2021, there were £117 million and $17 million in letters of credit outstanding under these facilities.

18

Financing Costs, Net

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

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Interest expense	$	90	$	112
Amortization of debt issuance costs	2		2
Loss on extinguishment of debt	67		—
Interest income	(4)		(2)
Interest income from APA Corporation, net	(15)		(5)
Financing costs, net	$	140	$	107

Subsequent Event

On April 29, 2022, Apache entered into two unsecured guaranties of obligations under two unsecured syndicated credit agreements then entered into by APA Corporation (APA), of which Apache is a wholly owned subsidiary. APA’s new credit agreements are for general corporate purposes and replaced and refinanced Apache’s 2018 syndicated credit agreement (the Former Facility). Apache and certain other subsidiaries of APA may borrow and obtain letters of credit under APA’s new credit agreements, as further described below.

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

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

In connection with APA’s entry into the USD Agreement and the GBP Agreement (each, a New Agreement), Apache terminated US$4.0 billion of commitments under the Former Facility. Apache has guaranteed obligations under each New Agreement effective until the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures is less than US$1.0 billion.

Borrowers under each New Agreement may include APA and certain subsidiaries organized under the laws of, resident of, or domiciled in, the United States, Canada, England and Wales, the United Kingdom, or the Cayman Islands. Apache may borrow under the USD Agreement up to an aggregate principal amount of US$300 million outstanding at any given time.

Letters of credit are available under each New Agreement for credit support needs of APA and its subsidiaries, including in respect of North Sea decommissioning obligations. Letters of credit under each New Agreement may be denominated in US dollars, pounds sterling, Canadian dollars, and any other foreign currency consented to by an issuing bank.

As of April 29, 2022, an aggregate US$680 million in borrowings under the Former Facility were deemed borrowings by APA outstanding under the USD Agreement. As of April 29, 2022, (i) a letter of credit for US$20 million originally issued under the Former Facility is deemed issued and outstanding under the USD Agreement and (ii) letters of credit aggregating £748 million originally issued under the Former Facility are deemed issued and outstanding under the GBP Agreement.

Borrowers under each New Agreement may borrow, prepay, and reborrow loans and obtain letters of credit, and APA may obtain letters of credit for the account of its subsidiaries, in each case subject to representations and warranties, covenants, and events of default substantially similar to those in the Former Facility. The New Agreements do not permit lenders to accelerate maturity or refuse to lend based on unspecified material adverse changes and do not have borrowing restrictions or prepayment obligations in the event of a decline in credit ratings.

19

11.    INCOME TAXES

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

During the first quarter of 2022, the Company’s effective income tax rate was primarily impacted by the gain associated with deconsolidation of Altus, the gain on sale of certain non-core mineral rights in the Delaware Basin, and a decrease in the amount of valuation allowance against its U.S. deferred tax assets. During the first quarter of 2021, the Company’s effective income tax rate was primarily impacted by a decrease in the amount of valuation allowance against its U.S. deferred tax assets.

The Company is subject to U.S. federal income tax as well as income or capital taxes in various state and foreign jurisdictions. The Company’s tax reserves are related to tax years that may be subject to examination by the relevant taxing authority. The Company is currently under audit by the Internal Revenue Service for the 2014-2017 tax years and is also under audit in various states and foreign jurisdictions as part of its normal course of business.

12.    COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is party to various legal actions arising in the ordinary course of business, including litigation and governmental and regulatory controls, which also may include controls related to the potential impacts of climate change. As of March 31, 2022, the Company has an accrued liability of approximately $73 million for all legal contingencies that are deemed to be probable of occurring and can be reasonably estimated. The Company’s estimates are based on information known about the matters and its experience in contesting, litigating, and settling similar matters. Although actual amounts could differ from management’s estimate, none of the actions are believed by management to involve future amounts that would be material to the Company’s financial position, results of operations, or liquidity after consideration of recorded accruals. For material matters that the Company believes an unfavorable outcome is reasonably possible, the Company has disclosed the nature of the matter and a range of potential exposure, unless an estimate cannot be made at this time. It is management’s opinion that the loss for any other litigation matters and claims that are reasonably possible to occur will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity.

For additional information on Legal Matters described below, refer to Note 11—Commitments and Contingencies to the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Argentine Environmental Claims

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

20

Louisiana Restoration 

As more fully described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, Louisiana surface owners often file lawsuits or assert claims against oil and gas companies, including the Company, claiming that operators and working interest owners in the chain of title are liable for environmental damages on the leased premises, including damages measured by the cost of restoration of the leased premises to its original condition, regardless of the value of the underlying property. From time to time, restoration lawsuits and claims are resolved by the Company for amounts that are not material to the Company, while new lawsuits and claims are asserted against the Company. With respect to each of the pending lawsuits and claims, the amount claimed is not currently determinable or is not material. Further, the overall exposure related to these lawsuits and claims is not currently determinable. While adverse judgments against the Company are possible, the Company intends to actively defend these lawsuits and claims.

Starting in November of 2013 and continuing into 2022, several parishes in Louisiana have pending lawsuits against many oil and gas producers, including the Company. These cases were all removed to federal courts in Louisiana. In these cases, the Parishes, as plaintiffs, allege that defendants’ oil and gas exploration, production, and transportation operations in specified fields were conducted in violation of the State and Local Coastal Resources Management Act of 1978, as amended, and applicable regulations, rules, orders, and ordinances promulgated or adopted thereunder by the Parish or the State of Louisiana. Plaintiffs allege that defendants caused substantial damage to land and water bodies located in the coastal zone of Louisiana. Plaintiffs seek, among other things, unspecified damages for alleged violations of applicable law within the coastal zone, the payment of costs necessary to clear, re-vegetate, detoxify, and otherwise restore the subject coastal zone as near as practicable to its original condition, and actual restoration of the coastal zone to its original condition. While adverse judgments against the Company might be possible, the Company intends to vigorously oppose these claims.

Apollo Exploration Lawsuit

In a case captioned Apollo Exploration, LLC, Cogent Exploration, Ltd. Co. & SellmoCo, LLC v. Apache Corporation, Cause No. CV50538 in the 385th Judicial District Court, Midland County, Texas, plaintiffs alleged damages in excess of $200 million (having previously claimed in excess of $1.1 billion) relating to purchase and sale agreements, mineral leases, and area of mutual interest agreements concerning properties located in Hartley, Moore, Potter, and Oldham Counties, Texas. The trial court entered final judgment in favor of the Company, ruling that the plaintiffs take nothing by their claims and awarding the Company its attorneys’ fees and costs incurred in defending the lawsuit. The court of appeals affirmed in part and reversed in part the trial court’s judgment thereby reinstating some of plaintiff’s claims. Further appeal is pending.

Australian Operations Divestiture Dispute

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

Canadian Operations Divestiture Dispute

Pursuant to a Sale and Purchase Agreement dated July 6, 2017 (Paramount SPA), the Company and its subsidiaries divested their remaining Canadian operations to Paramount Resources LTD (Paramount). Closing occurred on August 16, 2017. On September 11, 2019, four ex-employees of Apache Canada LTD on behalf of themselves and individuals employed by Apache Canada LTD on July 6, 2017, filed an Amended Statement of Claim in a matter styled Stephen Flesch et. al. v Apache Corporation et. al., No. 1901-09160 Court of Queen’s Bench of Alberta against the Company and others seeking class certification and a finding that the Paramount SPA amounted to a Change of Control of the Company, entitling them to accelerated vesting under the Company’s equity plans. In the suit, the class seeks approximately $60 million USD and punitive damages. The Company believes that Plaintiffs’ claims lack merit and will not have a material adverse effect on the Company’s financial position, results of operation, or liquidity.

21

California and Delaware Litigation

On July 17, 2017, in three separate actions, San Mateo County, California, Marin County, California, and the City of Imperial Beach, California, all filed suit individually and on behalf of the people of the state of California against over 30 oil and gas companies alleging damages as a result of global warming. Plaintiffs seek unspecified damages and abatement under various tort theories. On December 20, 2017, in two separate actions, the City of Santa Cruz and Santa Cruz County and in a separate action on January 22, 2018, the City of Richmond, filed similar lawsuits against many of the same defendants. On November 14, 2018, the Pacific Coast Federation of Fishermen’s Associations, Inc. also filed a similar lawsuit against many of the same defendants. After removal of all such lawsuits to federal court, the district court remanded them back to state court. The 9th Circuit Court of Appeals’ affirmance of this remand decision was appealed to the U.S. Supreme Court. That appeal was decided by the U.S. Supreme Court ruling in a similar case, BP p.l.c. v. Mayor and City Council of Baltimore. As a result, the California cases were sent back to the 9th Circuit for further appellate review of the decision to remand the cases to state court. The 9th Circuit has since, once again, affirmed the district court’s remand to state court. The defendants are appealing this latest remand decision to the U.S. Supreme Court. Further activity in the cases has been stayed pending further appellate review.

On September 10, 2020, the State of Delaware filed suit, individually and on behalf of the people of the State of Delaware, against over 25 oil and gas companies alleging damages as a result of global warming. Plaintiffs seek unspecified damages and abatement under various tort theories. After removal of this lawsuit to federal court, the district court remanded it back to state court. The remand order is being appealed to the 3rd Circuit Court of Appeals. Further activity in the case has been stayed pending this appellate review.

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

Castex Lawsuit

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

Oklahoma Class Actions

The Company is a party to two purported class actions in Oklahoma styled Bigie Lee Rhea v. Apache Corporation, Case No. 6:14-cv-00433-JH, and Albert Steven Allen v. Apache Corporation, Case No. CJ-2019-00219.

In the Rhea case, which was certified, a class of royalty owners sought damages of approximately $200 million for alleged breach of the implied covenant to market relating to post-production deductions and alleged NGL uplift value. With no admission of liability or wrongdoing, but only to avoid the expense and uncertainty of future litigation, Apache has entered into a settlement agreement in the Rhea case to resolve all claims made against it by the class. The settlement agreement is subject to court approval and a full fairness hearing will be held in the coming months. The settlement will not have a material effect on the Company’s financial position, results of operations, or liquidity.

The Allen case has not been certified and seeks to represent a group of owners who have allegedly received late royalty and other payments under Oklahoma statutes. The amount of this claim is not yet reasonably determinable. While adverse judgments against the Company are possible, the Company intends to vigorously defend these lawsuits and claims.

22

Shareholder and Derivative Lawsuits

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

On March 16, 2021, a case captioned William Wessels, Derivatively and on behalf of APA Corporation v. John J. Christmann IV et al. was filed in the 334th District Court of Harris County, Texas. The case purports to be a derivative action brought against senior management and Company directors over many of the same allegations included in the Plymouth County Retirement System matter and asserts claims of (1) breach of fiduciary duty; (2) waste of corporate assets; and (3) unjust enrichment. The defendants believe the plaintiff’s claims lack merit and intend to vigorously defend this lawsuit.

Environmental Matters

As of March 31, 2022, the Company had an undiscounted reserve for environmental remediation of approximately $2 million.

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

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

The Company is not aware of any environmental claims existing as of March 31, 2022 that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity. There can be no assurance, however, that current regulatory requirements will not change or past non-compliance with environmental laws will not be discovered on the Company’s properties.

Potential Decommissioning Obligations on Sold Properties

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

23

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

By letter dated April 5, 2022, replacing two prior letters dated September 8, 2021 and February 22, 2022, respectively, GOM Shelf notified the Bureau of Safety and Environmental Enforcement (BSEE) that it was unable to fund the decommissioning obligations that it is currently obligated to perform on certain of the Legacy GOM Assets. As a result, Apache and other current and former owners in these assets have received orders from BSEE to decommission certain of the Legacy GOM Assets included in GOM Shelf’s notification to BSEE. Apache expects to receive such orders on the other Legacy GOM Assets included in GOM Shelf’s notification letter. Further, Apache anticipates that GOM Shelf may send additional such notices to BSEE in the future and that it may receive additional orders from BSEE requiring it to decommission other Legacy GOM Assets.

If Apache incurs costs to decommission any Legacy GOM Asset and GOM Shelf does not reimburse Apache for such costs, then Apache will obtain reimbursement from Trust A, the Bonds, and the Letters of Credit until such funds and securities are fully utilized. In addition, after such sources have been exhausted, Apache has agreed to provide a standby loan to GOM Shelf of up to $400 million to perform decommissioning (Standby Loan Agreement), with such standby loan secured by a first and prior lien on the Legacy GOM Assets.

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

As of March 31, 2022, Apache estimates that its potential liability to fund decommissioning of Legacy GOM Assets it may be ordered to perform ranges from $1.2 billion to $1.4 billion on an undiscounted basis. Management does not believe any specific estimate within this range is a better estimate than any other. Accordingly, the Company has recorded a contingent liability of $1.2 billion as of March 31, 2022, representing the estimated costs of decommissioning it may be required to perform on Legacy GOM Assets. Of the total liability recorded, $1.1 billion is reflected under the caption “Decommissioning contingency for sold Gulf of Mexico properties,” and $100 million is reflected under “Other current liabilities” in the Company’s consolidated balance sheet. The Company has also recorded a $740 million asset, which represents the amount the Company expects to be reimbursed from the Trust A funds, the Bonds, and the Letters of Credit for decommissioning it may be required to perform on Legacy GOM Assets. Of the total asset recorded, $640 million is reflected under the caption “Decommissioning security for sold Gulf of Mexico properties,” and $100 million is reflected under “Other current assets.” Changes in significant assumptions impacting Apache’s estimated liability, including expected decommissioning rig spread rates, lift boat rates, and planned abandonment logistics could result in a liability in excess of the amount accrued. In addition, significant changes in the market price of oil, gas, and NGLs could further impact Apache’s estimate of its contingent liability to decommission Legacy GOM Assets.

13.    REDEEMABLE NONCONTROLLING INTEREST — ALTUS

Preferred Units Issuance

On June 12, 2019, Altus Midstream LP issued and sold Preferred Units for an aggregate issue price of $625 million in a private offering exempt from the registration requirements of the Securities Act (the Closing). Altus Midstream LP received approximately $611 million in cash proceeds from the sale after deducting transaction costs and discounts to certain purchasers.

Classification

Prior to the deconsolidation of Altus on February 22, 2022, at December 31, 2021, the carrying amount of the Preferred Units was recorded as “Redeemable Noncontrolling Interest — Altus Preferred Unit Limited Partners” classified as temporary equity on the Company’s consolidated balance sheet based on the terms of the Preferred Units, including the redemption rights with respect thereto.

24

Measurement

Altus applied a two-step approach to subsequent measurement of the redeemable noncontrolling interest related to the Preferred Units by first allocating a portion of the net income of Altus Midstream LP in accordance with the terms of the partnership agreement. An additional adjustment to the carrying value of the Preferred Unit redeemable noncontrolling interest at each period end was recorded, if applicable. The amount of such adjustment was determined based upon the accreted value method to reflect the passage of time until the Preferred Units were exchangeable at the option of the holder. Pursuant to this method, the net transaction price was accreted using the effective interest method to the Redemption Price calculated at the seventh anniversary of the Closing. The total adjustment was limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end was equal to the greater of (a) the sum of (i) the carrying amount of the Preferred Units, plus (ii) the fair value of the embedded derivative liability and (b) the accreted value of the net transaction price.

Activity related to the Preferred Units is as follows:

	Units Outstanding	Financial Position
	(In millions, except unit data)
Redeemable noncontrolling interest — Preferred Units at: December 31, 2020	660,694	$	608
Cash distributions to Altus Preferred Unit limited partners	—	(46)
Distributions payable to Altus Preferred Unit limited partners	—	(12)
Allocation of Altus Midstream LP net income	N/A	80
Accreted value adjustment	N/A	82
Redeemable noncontrolling interest — Preferred Units at: December 31, 2021	660,694	712
Allocation of Altus Midstream LP net income	N/A	12
Accreted value adjustment(1)	N/A	(82)
Redeemable noncontrolling interest — Preferred Units at: February 22, 2022	660,694	642
Preferred Units embedded derivative		89
Deconsolidation of Altus		(731)
		$	—

(1)    Includes the reversal of previously recorded accreted value adjustments of $53 million due to the deconsolidation of Altus.

N/A - not applicable.

14.    CAPITAL STOCK AND EQUITY

Upon consummation of the Holding Company Reorganization, each outstanding share of Apache common stock automatically converted into a share of APA common stock on a one-for-one basis. As a result, each stockholder of Apache now owns the same number of shares of APA common stock that such stockholder owned of Apache common stock immediately prior to the Holding Company Reorganization. As a result of the Holding Company Reorganization and subsequent activity, Apache recorded various intercompany activities during the first quarter ended March 31, 2021 as capital transactions, which are reflected in Apache’s Statement of Consolidated Changes in Equity (Deficit) and Noncontrolling Interests. Refer to Note 2—Transactions with Parent Affiliate for more detail.

Additionally, in connection with the Holding Company Reorganization, Apache transferred to APA, and APA assumed, sponsorship of all of Apache’s stock plans along with all of Apache’s rights and obligations under each plan. Subsequent to the Holding Company Reorganization, stock-based compensation associated with APA equity awards granted and outstanding to Apache employees are reflected as capital contributions from APA to Apache.

Net Income (Loss) per Common Share

Net income (loss) per share for Apache is no longer required, as its shares are not publicly traded, and Apache is now a direct, wholly owned subsidiary of APA.

Distributions to APA Corporation and Common Stock Dividends

During the quarter ended March 31, 2022, the Company paid $305 million in capital distributions to its parent, APA, which is included as “Distributions to APA Corporation” on the Company’s statement of consolidated cash flows. During the quarter ended March 31, 2021, prior to completion of the Holding Company Reorganization, the Company paid $9 million in dividends on its common stock.

25

15.    BUSINESS SEGMENT INFORMATION

As of March 31, 2022, the Company is engaged in exploration and production (Upstream) activities across three operating segments: Egypt, North Sea, and the U.S. The Company’s Upstream business explores for, develops, and produces crude oil, natural gas, and natural gas liquids. Prior to the deconsolidation of Altus on February 22, 2022, the Company’s Midstream business was operated by Altus Midstream Company, which owned, developed, and operated a midstream energy asset network in the Permian Basin of West Texas. Financial information for each segment is presented below:

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Quarter Ended March 31, 2022	(In millions)
Revenues:
Oil revenues	$	790	$	328	$	599	$	—	$	—	$	1,717
Natural gas revenues	98		99		183		—		—		380
Natural gas liquids revenues	3		16		207		—		(3)		223
Oil, natural gas, and natural gas liquids production revenues	891		443		989		—		(3)		2,320
Purchased oil and gas sales	—		—		344		5		—		349
Midstream service revenues	—		—		—		16		(16)		—
	891		443		1,333		21		(19)		2,669
Operating Expenses:
Lease operating expenses	131		96		118		—		(1)		344
Gathering, processing, and transmission	5		12		77		5		(18)		81
Purchased oil and gas costs	—		—		351		—		—		351
Taxes other than income	—		—		67		3		—		70
Exploration	15		5		4		—		1		25
Depreciation, depletion, and amortization	97		62		130		2		—		291
Asset retirement obligation accretion	—		20		8		1		—		29
	248		195		755		11		(18)		1,191
Operating Income (Loss)(2)	$	643	$	248	$	578	$	10	$	(1)	1,478
Other Income (Expense):
Derivative instrument loss, net											(62)
Gain on divestitures, net											1,176
Other, net											45
General and administrative											(151)
Transaction, reorganization, and separation											(14)
Financing costs, net											(140)
Income Before Income Taxes											$	2,332
Total Assets(3)	$	2,966	$	2,169	$	8,359	$	—	$	—	$	13,494

26

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Quarter Ended March 31, 2021	(In millions)
Revenues:
Oil revenues	$	402	$	241	$	348	$	—	$	—	$	991
Natural gas revenues	70		31		211		—		—		312
Natural gas liquids revenues	2		6		120		—		—		128
Oil, natural gas, and natural gas liquids production revenues	474		278		679		—		—		1,431
Purchased oil and gas sales	—		—		437		3		—		440
Midstream service revenues	—		—		—		32		(32)		—
	474		278		1,116		35		(32)		1,871
Operating Expenses:
Lease operating expenses	104		75		86		—		(1)		264
Gathering, processing, and transmission	1		12		69		7		(31)		58
Purchased oil and gas costs	—		—		492		2		—		494
Taxes other than income	—		—		40		4		—		44
Exploration	8		20		16		—		2		46
Depreciation, depletion, and amortization	130		84		125		3		—		342
Asset retirement obligation accretion	—		19		8		1		—		28
	243		210		836		17		(30)		1,276
Operating Income (Loss)(2)	$	231	$	68	$	280	$	18	$	(2)	$	595
Other Income (Expense):
Derivative instrument gains, net											158
Gain on divestitures, net											2
Other, net											61
General and administrative											(83)
Financing costs, net											(107)
Income Before Income Taxes											$	626
Total Assets(3)	$	3,020	$	2,167	$	6,959	$	1,828	$	1	$	13,975

(1)    Includes revenue from non-customers for the quarters ended March 31, 2022 and 2021 of:

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Oil	$	250	$	93
Natural gas	31		12
Natural gas liquids	1		1

(2)Operating income of U.S. and Egypt includes leasehold impairments of $3 million and $1 million, respectively, for the first quarter of 2022. Operating income of U.S. and Egypt includes leasehold and other asset impairments of $16 million and $2 million, respectively, for the first quarter of 2021.

(3)Intercompany balances are excluded from total assets.

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

27

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

The following discussion relates to Apache Corporation (Apache or the Company) and its consolidated subsidiaries and should be read together with the Company’s Consolidated Financial Statements and accompanying notes included in Part I, Item 1—Financial Statements of this Quarterly Report on Form 10-Q, as well as related information set forth in the Company’s Consolidated Financial Statements, accompanying Notes to Consolidated Financial Statements, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

On March 1, 2021, Apache Corporation consummated a holding company reorganization (the Holding Company Reorganization), pursuant to which Apache Corporation became a direct, wholly owned subsidiary of APA Corporation (APA), and all of the Company’s outstanding shares automatically converted into equivalent corresponding shares of APA. Pursuant to the Holding Company Reorganization, APA became the successor issuer to the Company pursuant to Rule 12g-3(a) under the Exchange Act and replaced the Company as the public company trading on the Nasdaq Global Select Market under the ticker symbol “APA.” The Holding Company Reorganization modernized the Company’s operating and legal structure, making it more consistent with other companies that have affiliates operating around the globe. Refer to Note 2—Transactions with Parent Affiliate for more detail.

Overview

Apache, a direct, wholly owned subsidiary of APA, is an independent energy company that explores for, develops, and produces natural gas, crude oil, and natural gas liquids (NGLs). The Company’s upstream business currently has exploration and production operations in three geographic areas: the U.S., Egypt, and offshore the U.K. in the North Sea (North Sea). Prior to the BCP Business Combination defined below, the Company’s midstream business was operated by Altus Midstream Company (ALTM) through its subsidiary Altus Midstream LP (collectively, Altus). Altus owned, developed, and operated a midstream energy asset network in the Permian Basin of West Texas.

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

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

In the first quarter of 2022, the Company reported net income of $1.8 billion compared to net income of $397 million in the first quarter of 2021. Net income for the first quarter of 2022 benefited from higher revenue attributable to a new merged concession agreement in Egypt, significantly improved commodity prices, and a gain of $1.2 billion associated with asset divestitures. The increase in realized prices was primarily driven by effects of the conflict in Ukraine on global commodity prices, uncertainties around spare capacity and energy security globally, and increased economic activity compared to the first quarter of 2021.

The Company generated $856 million of cash from operating activities during the first three months of 2022, a 24 percent increase from the first three months of 2021, driven by higher revenue attributable to the new merged concession agreement in Egypt and higher commodity prices. Since year-end 2021, the Company has reduced its total outstanding debt and redeemable preferred interests by $1.6 billion and $712 million, respectively, through the deconsolidation of ALTM and the retirement of outstanding notes and debentures. The Company had $144 million of cash on hand at March 31, 2022.

Following this progress and considering the ongoing constructive price environment, the Company has adjusted its cash allocation approach. The capital investment program will be increased to a level intended to sustain or slightly grow global production volumes. This will be primarily accomplished through a gradual ramp in activity over the next few quarters, primarily in Egypt, but also in the Company’s U.S. onshore assets.

28

Operational Highlights

Key operational highlights for the quarter include:

United States

•Daily boe production from the Company’s U.S. assets accounted for 52 percent of its total production during the first quarter of 2022. The Company averaged three rigs in the U.S. during the quarter and has recently added a fourth rig in the Delaware Basin. The Company anticipates that the current level of activity will enable it to return U.S. oil production to a modest rate of growth by the second half of 2022.

•On February 22, 2022, ALTM closed a previously announced transaction to combine with privately owned BCP Raptor Holdco LP (BCP and, together with BCP Raptor Holdco GP, LLC, the Contributed Entities) in an all-stock transaction, pursuant to the Contribution Agreement entered into by and among ALTM, Altus Midstream LP, New BCP Raptor Holdco, LLC (the Contributor), and BCP (the BCP Contribution Agreement). Upon closing the transaction, the combined entity was renamed Kinetik Holdings Inc. (Kinetik). As consideration for the contribution of the Contributed Interests, ALTM issued 50 million shares of Class C Common Stock (and Altus Midstream LP issued a corresponding number of common units) to BCP’s unitholders.

ALTM’s stockholders continued to hold their existing shares of ALTM Common Stock. Apache Midstream LLC, a wholly owned subsidiary of APA, which owned approximately 79 percent of the issued and outstanding shares of ALTM Common Stock prior to the BCP Business Combination, owned approximately 20 percent of the issued and outstanding shares of ALTM Common Stock after the transaction closed. The Company deconsolidated ALTM upon closing the transaction and recognized a gain of approximately $609 million that reflects the difference of the Company’s share of ALTM’s deconsolidated balance sheet and the fair value of its 20 percent retained ownership in the combined entity.

Subsequent to the close of the transaction, in March 2022, the Company sold four million of its shares in Kinetik for $224 million, reducing the Company’s retained ownership percentage in Kinetik to approximately 13 percent.

•In March 2022, the Company completed the previously announced transaction to sell certain non-core mineral rights in the Delaware Basin for total cash proceeds of approximately $759 million after certain post-closing adjustments. The Company recognized a gain of approximately $590 million from the transaction.

International

•In Egypt, the Company averaged 11 drilling rigs and drilled 15 productive wells during the first quarter of 2022. First quarter 2022 gross equivalent production in the Company’s Egypt assets decreased 1 percent from the first quarter of 2021, while net production increased 26 percent, primarily a function of improved cost recovery under the new merged concession agreement ratified at the end of 2021. The Company continues to build and enhance its drilling inventory in Egypt, supplemented with recent seismic acquisitions and new play concept evaluations on both new and existing acreage. The Company plans to increase drilling and workover activity as a result of the merged concession agreement.

•The Company averaged one rig in the North Sea during the first quarter of 2022. Production was impacted by unplanned inspection downtime at the Forties Echo platform during the first quarter of 2022.

29

Results of Operations

Oil, Natural Gas, and Natural Gas Liquids Production Revenues

Revenue

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

	For the Quarter Ended March 31,
	2022				2021
	$ Value		% Contribution		$ Value		% Contribution
	($ in millions)
Oil Revenues:
United States	$	599	35	%	$	348	35	%
Egypt(1)	790		46	%	402		41	%
North Sea	328		19	%	241		24	%
Total(1)	$	1,717	100	%	$	991	100	%
Natural Gas Revenues:
United States	$	183	48	%	$	211	68	%
Egypt(1)	98		26	%	70		22	%
North Sea	99		26	%	31		10	%
Total(1)	$	380	100	%	$	312	100	%
NGL Revenues:
United States	$	204	91	%	$	120	94	%
Egypt(1)	3		2	%	2		1	%
North Sea	16		7	%	6		5	%
Total(1)	$	223	100	%	$	128	100	%
Oil and Gas Revenues:
United States	$	986	43	%	$	679	47	%
Egypt(1)	891		38	%	474		33	%
North Sea	443		19	%	278		20	%
Total(1)	$	2,320	100	%	$	1,431	100	%

(1)    Includes revenues attributable to noncontrolling interests in Egypt.

30

Production

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

	For the Quarter Ended March 31,
	2022	Increase (Decrease)	2021
Oil Volume (b/d)
United States	69,636	3%	67,690
Egypt(1)(2)	85,018	18%	72,170
North Sea	35,242	(19)%	43,524
Total	189,896	4%	183,384
Natural Gas Volume (Mcf/d)
United States	477,637	(6)%	507,517
Egypt(1)(2)	386,577	39%	278,149
North Sea	38,466	(23)%	49,840
Total	902,680	8%	835,506
NGL Volume (b/d)
United States	61,711	7%	57,815
Egypt(1)(2)	491	(16)%	583
North Sea	1,498	10%	1,368
Total	63,700	7%	59,766
BOE per day(3)
United States	210,953	—%	210,091
Egypt(1)(2)	149,938	26%	119,111
North Sea(4)	43,151	(19)%	53,199
Total	404,042	6%	382,401

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

	For the Quarter Ended March 31,
	2022	2021
Oil (b/d)	134,397	135,320
Natural Gas (Mcf/d)	597,812	603,269
NGL (b/d)	735	897

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

	For the Quarter Ended March 31,
	2022	2021
Oil (b/d)	45,332	24,088
Natural Gas (Mcf/d)	206,079	92,936
NGL (b/d)	262	194

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

(4)    Average sales volumes from the North Sea for the first quarter of 2022 and 2021 were 43,668 boe/d and 54,544 boe/d, respectively. Sales volumes may vary from production volumes as a result of the timing of liftings.

31

Pricing

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

	For the Quarter Ended March 31,
	2022		Increase (Decrease)	2021
Average Oil Price - Per barrel
United States	$	95.58	67%	$	57.16
Egypt	103.22		67%	61.89
North Sea	102.20		71%	59.67
Total	100.23		68%	59.62
Average Natural Gas Price - Per Mcf
United States	$	4.25	(8)%	$	4.61
Egypt	2.83		1%	2.79
North Sea	32.35		367%	6.93
Total	4.70		14%	4.14
Average NGL Price - Per barrel
United States	$	36.67	60%	$	22.99
Egypt	77.81		74%	44.74
North Sea	74.64		54%	48.59
Total	38.33		61%	23.79

First-Quarter 2022 compared to First-Quarter 2021

Crude Oil Crude oil revenues for the first quarter of 2022 totaled $1.7 billion, a $726 million increase from the comparative 2021 quarter. A 68 percent increase in average realized prices increased first-quarter 2022 oil revenues by $675 million compared to the prior-year quarter, while 4 percent higher average daily production increased revenues by $51 million. Crude oil revenues accounted for 74 percent of total oil and gas production revenues and 47 percent of worldwide production in the first quarter of 2022. The Company’s worldwide oil production increased 6.5 Mb/d to 189.9 Mb/d during the first quarter of 2022 from the comparative prior-year period, primarily a function of improved cost recovery under the merged concession agreement in Egypt ratified at the end of 2021 and increased drilling and recompletion activity in the U.S. These increases were partially offset by operational downtime in the North Sea and natural production decline across all assets.

Natural Gas Gas revenues for the first quarter of 2022 totaled $380 million, a $68 million increase from the comparative 2021 quarter. A 14 percent increase in average realized prices increased first-quarter 2022 natural gas revenues by $42 million compared to the prior-year quarter, while 8 percent higher average daily production increased revenues by $26 million. Natural gas revenues accounted for 16 percent of total oil and gas production revenues and 37 percent of worldwide production during the first quarter of 2022. The Company’s worldwide natural gas production increased 67.2 MMcf/d to 903 MMcf/d during the first quarter of 2022 from the comparative prior-year period, primarily a result of increased drilling and recompletion activity in the U.S. and increased net production in Egypt resulting from improved cost recovery under the merged concession agreement ratified at the end of 2021. These increases were partially offset by operational downtime in the North Sea and natural production decline across all assets.

NGL NGL revenues for the first quarter of 2022 totaled $223 million, a $95 million increase from the comparative 2021 quarter. A 61 percent increase in average realized prices increased first-quarter 2022 NGL revenues by $78 million compared to the prior-year quarter, while 7 percent higher average daily production increased revenues by $17 million. NGL revenues accounted for 10 percent of total oil and gas production revenues and 16 percent of worldwide production during the first quarter of 2022. The Company’s worldwide NGL production increased 3.9 Mb/d to 63.7 Mb/d during the first quarter of 2022 from the comparative prior-year period, primarily a result of increased drilling and recompletion activity in the U.S.

Altus Midstream Revenues

Prior to the deconsolidation of Altus on February 22, 2022, Altus Midstream services revenues generated through its fee-based contractual arrangements with the Company totaled $16 million and $32 million during the first quarters of 2022 and 2021, respectively. These revenues were eliminated upon consolidation.

32

Purchased Oil and Gas Sales

Purchased oil and gas sales represent volumes primarily attributable to transport, fuel, and physical in-basin gas purchases that were sold by the Company to fulfill natural gas takeaway obligations. Sales related to these purchased volumes totaled $349 million and $440 million during the first quarters of 2022 and 2021, respectively. Purchased oil and gas sales were offset by associated purchase costs of $351 million and $494 million during the first quarters of 2022 and 2021, respectively. Gross purchased oil and gas sales values and the associated net losses were higher in the first quarter of 2021 due to extreme price volatility during the month of February due to Winter Storm Uri in Texas.

Operating Expenses

The Company’s operating expenses were as follows:

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Lease operating expenses	$	344	$	264
Gathering, processing, and transmission	81		58
Purchased oil and gas costs	351		494
Taxes other than income	70		44
Exploration	25		46
General and administrative	151		83
Transaction, reorganization, and separation	14		—
Depreciation, depletion, and amortization:
Oil and gas property and equipment	278		312
Gathering, processing, and transmission assets	5		19
Other assets	8		11
Asset retirement obligation accretion	29		28
Financing costs, net	140		107
Total Operating Expenses	$	1,496	$	1,466

Lease Operating Expenses (LOE)

LOE increased $80 million in the first quarter of 2022 from the comparative prior-year period. On a per-unit basis, LOE increased 24 percent in the first quarter of 2022 from the comparative prior-year period. The increase was driven by overall higher labor costs and operating costs trending with higher oil and gas prices and global inflation. LOE costs for the first quarter of 2022 were also impacted by mark-to-market adjustments for cash-based stock compensation expense resulting from an increase in the Company’s stock price and anticipated achievement of performance and financial objectives as defined in the stock award plans. These increases were coupled with increased workover activity in the U.S. in the first quarter of 2022.

33

Gathering, Processing, and Transmission (GPT)

The Company’s GPT expenses were as follows:

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Third-party processing and transmission costs	$	66	$	51
Midstream service costs - ALTM	18		31
Midstream service costs - Kinetik	10		—
Upstream processing and transmission costs	94		82
Midstream operating expenses	5		7
Intersegment eliminations	(18)		(31)
Total Gathering, processing, and transmission	$	81	$	58

GPT costs increased $23 million in the first quarter of 2022 from the comparative prior-year period. Third-party processing and transmission costs increased $15 million in the first quarter of 2022 from the comparative prior-year period. The increase in third-party costs for the first quarter of 2022 was primarily driven by an increase in average transportation rates during the quarter. Total midstream service costs, which reflect midstream services provided to the Company by ALTM and its successor, Kinetik, were relatively flat in the first quarter of 2022 compared to the same prior-year period. Costs for services provided by ALTM in the first quarter of 2022 and prior to the BCP Business Combination totaling $18 million were eliminated in the Company’s consolidated financial statements and reflected as “Intersegment eliminations” in the table above. Subsequent to the BCP Business Combination and the Company’s deconsolidation of Altus on February 22, 2022, these midstream services continue to be provided by Kinetik but are no longer eliminated. Midstream services provided by Kinetik totaled $10 million in the first quarter of 2022 and will continue to result in higher GPT costs in future periods as compared to periods preceding the ALTM deconsolidation.

Purchased Oil and Gas Costs

Purchased oil and gas costs totaled $351 million during the first quarter of 2022 compared to $494 million during the first quarter of 2021. Purchased oil and gas costs were offset by associated purchase sales of $349 million during the first quarter of 2022 compared to $440 million during the first quarter of 2021, as further discussed above.

Taxes Other Than Income

Taxes other than income increased $26 million from the first quarter of 2021, primarily from higher severance taxes driven by higher commodity prices as compared to the same prior-year period.

Exploration Expenses

The Company’s exploration expenses were as follows:

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Unproved leasehold impairments	$	4	$	18
Dry hole expense	5		19
Geological and geophysical expense	1		2
Exploration overhead and other	15		7
Total Exploration	$	25	$	46

Exploration expenses decreased $21 million from the first quarter of 2021 primarily the result of lower unproved leasehold impairments and lower dry hole expenses as compared to the same prior-year period. These decreases were offset by higher overhead and geological and geophysical expenses resulting from a slight increase in exploration activities and related labor costs compared to the prior year.

34

General and Administrative (G&A) Expenses

G&A expenses increased $68 million in the first quarter of 2022 from the comparative prior-year period, primarily driven by higher cash-based stock compensation expense resulting from an increase in the Company’s stock price and anticipated achievement of performance and financial objectives as defined in the stock award plans. Higher overall wage increases across the Company also impacted G&A expenses during the first quarter of 2022 compared to the prior year period.

Transaction, Reorganization, and Separation (TRS) Costs

TRS costs increased $14 million from the first quarter of 2021 primarily as a result of transaction costs from the BCP Business Combination.

Depreciation, Depletion, and Amortization (DD&A)

DD&A expenses on the Company’s oil and gas properties decreased $34 million from the first quarter of 2021. The Company’s DD&A rate on its oil and gas properties decreased $1.40 per boe from the first quarter of 2021. The decrease on an absolute basis was driven by lower depletion rates in Egypt, partially offset by higher production volumes.

Financing Costs, Net

The Company’s Financing costs were as follows:

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Interest expense	$	90	$	112
Amortization of debt issuance costs	2		2
Capitalized interest	—		—
Loss on extinguishment of debt	67		—
Interest income	(4)		(2)
Interest income from APA Corporation, net	(15)		(5)
Total Financing costs, net	$	140	$	107

Net financing costs increased $33 million from the first quarter of 2021 primarily driven by a $67 million loss on extinguishment of debt recognized in the first quarter of 2022, offset by lower overall interest expense related to the reduction of fixed-rate debt during 2021 and the first quarter of 2022.

Provision for Income Taxes

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

During the first quarter of 2022, the Company’s effective income tax rate was primarily impacted by the gain associated with the deconsolidation of Altus, the gain on sale of certain non-core mineral rights in the Delaware Basin, and a decrease in the amount of valuation allowance against its U.S. deferred tax assets. During the first quarter of 2021, the Company’s effective income tax rate was primarily impacted by a decrease in the amount of valuation allowance against its U.S. deferred tax assets.

The Company recorded a full valuation allowance against its U.S. net deferred tax assets. The Company will continue to maintain a full valuation allowance on its U.S. net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of this allowance.

The Company is subject to U.S. federal income tax as well as income or capital taxes in various state and foreign jurisdictions. The Company’s tax reserves are related to tax years that may be subject to examination by the relevant taxing authority. The Company is currently under audit by the Internal Revenue Service for the 2014-2017 tax years and is also under audit in various states and foreign jurisdictions as part of its normal course of business.

Critical Accounting Estimates

35

The Company prepares its financial statements and accompanying notes in conformity with accounting principles generally accepted in the U.S., which require management to make estimates and assumptions about future events that affect reported amounts in the financial statements and the accompanying notes. The Company identifies certain accounting policies involving estimation as critical accounting estimates based on, among other things, their impact on the portrayal of the Company’s financial condition, results of operations, or liquidity, as well as the degree of difficulty, subjectivity, and complexity in their deployment. Critical accounting estimates address accounting matters that are inherently uncertain due to unknown future resolution of such matters. Management routinely discusses the development, selection, and disclosure of each critical accounting estimate. For a discussion of the Company’s most critical accounting estimates, please see the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Some of the more significant estimates include reserve estimates, oil and gas exploration costs, offshore decommissioning contingency, impairment of equity method interests, long-lived asset impairments, asset retirement obligations, and income taxes.

New Accounting Pronouncements

There were no material changes in recently issued or adopted accounting standards from those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Omitted.

ITEM 4.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

John J. Christmann IV, the Company’s Chief Executive Officer and President, in his capacity as principal executive officer, and Stephen J. Riney, the Company’s Executive Vice President and Chief Financial Officer, in his capacity as principal financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of March 31, 2022, the end of the period covered by this report. Based on that evaluation and as of the date of that evaluation, these officers concluded that the Company’s disclosure controls and procedures were effective, providing effective means to ensure that the information the Company is required to disclose under applicable laws and regulations is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

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

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting that occurred during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

36

PART II - OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

Refer to Part I, Item 3—Legal Proceedings of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and Note 12—Commitments and Contingencies in the Notes to the Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q (which is hereby incorporated by reference herein), for a description of material legal proceedings.

ITEM 1A.    RISK FACTORS

Refer to Part I, Item 1A—Risk Factors of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Given the nature of its business, APA Corporation may be subject to different or additional risks than those applicable to the Company. For a description of these risks, refer to the disclosures in APA Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 and APA Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

37

ITEM 6.    EXHIBITS

2.1	–	Agreement and Plan of Merger, dated as of March 1, 2021, by and among Registrant, APA Corporation, and APA Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed March 1, 2021, SEC File No. 001-4300).
3.1	–	Amended and Restated Certificate of Incorporation of Registrant, dated March 1, 2021, as attached as Annex A to the Certificate of Merger of APA Merger Sub, Inc. with and into Registrant, filed with the Secretary of State of the State of Delaware on March 1, 2021 (incorporated by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed March 1, 2021, SEC File No. 001-4300).
3.2	–	Certificate of Amendment of Amended and Restated Certificate of Incorporation of Registrant, dated June 7, 2021, filed with the Secretary of State of the State of Delaware on June 10, 2021 (incorporated by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed June 14, 2021, SEC File No. 001-4300).
3.3	–	Amended and Restated Bylaws of Registrant, dated March 1, 2021 (incorporated by reference to Exhibit 3.2 to Registrant’s Current Report on Form 8-K filed March 1, 2021, SEC File No. 001-4300).
10.1	–	Guaranty [USD Facility], dated as of April 29, 2022, made by Apache Corporation in favor of each of the lenders, issuing banks, and agents party to the Credit Agreement, dated as of April 29, 2022, among APA Corporation, the lenders party thereto, the issuing banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents party thereto (incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed May 2, 2022, SEC File No. 001-4300).
10.2	–	Credit Agreement [USD Facility], dated as of April 29, 2022, among APA Corporation, the lenders party thereto, the issuing banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, Royal Bank of Canada, HSBC Bank USA, National Association, MUFG Bank, Ltd., Wells Fargo Bank, National Association, Goldman Sachs Bank USA, The Toronto-Dominion Bank, New York Branch, The Bank of Nova Scotia, Houston Branch, Truist Bank, and Mizuho Bank, Ltd., as Co-Documentation Agents (incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed May 2, 2022, SEC File No. 001-4300).
10.3	–	Guaranty [GBP Facility], dated as of April 29, 2022, made by Apache Corporation in favor of each of the lenders, issuing banks, and agents party to the Credit Agreement, dated as of April 29, 2022, among APA Corporation, the lenders party thereto, the issuing banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents party thereto (incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed May 2, 2022, SEC File No. 001-4300).
10.4	–	Credit Agreement [GBP Facility], dated as of April 29, 2022, among APA Corporation, the lenders party thereto, the issuing banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, The Toronto-Dominion Bank, London Branch, as Syndication Agent, Bank of America, N.A., Royal Bank of Canada, HSBC Bank USA, National Association, MUFG Bank, Ltd., Wells Fargo Bank, N.A. London Branch, Goldman Sachs Bank USA, The Bank of Nova Scotia, Houston Branch, Truist Bank, and Mizuho Bank, Ltd., as Co-Documentation Agents (incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed May 2, 2022, SEC File No. 001-4300).
*31.1	–	Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act) by Principal Executive Officer.
*31.2	–	Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act) by Principal Financial Officer.
*32.1	–	Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Executive Officer and Principal Financial Officer.
*101	–	The following financial statements from the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL: (i) Statement of Consolidated Operations, (ii) Statement of Consolidated Comprehensive Income (Loss), (iii) Statement of Consolidated Cash Flows, (iv) Consolidated Balance Sheet, (v) Statement of Consolidated Changes in Equity (Deficit) and Noncontrolling Interests and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
*101.SCH	–	Inline XBRL Taxonomy Schema Document.
*101.CAL	–	Inline XBRL Calculation Linkbase Document.
*101.DEF	–	Inline XBRL Definition Linkbase Document.
*101.LAB	–	Inline XBRL Label Linkbase Document.
*101.PRE	–	Inline XBRL Presentation Linkbase Document.
*104	–	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*    Filed herewith

38

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		APACHE CORPORATION
Dated:	May 5, 2022	/s/ STEPHEN J. RINEY
		Stephen J. Riney
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)
Dated:	May 5, 2022	/s/ REBECCA A. HOYT
		Rebecca A. Hoyt
		Senior Vice President, Chief Accounting Officer, and Controller
		(Principal Accounting Officer)

39

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, John J. Christmann IV, certify that:

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

Date: May 5, 2022

/s/ John J. Christmann IV

John J. Christmann IV

Chief Executive Officer and President

(principal executive officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Stephen J. Riney, certify that:

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

Date: May 5, 2022

/s/ Stephen J. Riney

Stephen J. Riney

Executive Vice President and Chief Financial Officer

(principal financial officer)

EX-32.1

EXHIBIT 32.1

APACHE CORPORATION

Certification of Principal Executive Officer

and Principal Financial Officer

I, John J. Christmann IV, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the quarterly report on Form 10-Q of Apache Corporation for the quarterly period ending March 31, 2022, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §78m or §78o (d)) and that information contained in such report fairly represents, in all material respects, the financial condition and results of operations of Apache Corporation.

Date: May 5, 2022

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

I, Stephen J. Riney, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the quarterly report on Form 10-Q of Apache Corporation for the quarterly period ending March 31, 2022, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §78m or §78o (d)) and that information contained in such report fairly represents, in all material respects, the financial condition and results of operations of Apache Corporation.

Date: May 5, 2022

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

XML

Cover - shares	3 Months Ended
	Mar. 31, 2022	Apr. 30, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	1-4300
Entity Registrant Name	APACHE CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	41-0747868
Entity Address, Address Line One	One Post Oak Central, 2000 Post Oak Boulevard, Suite 100
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77056-4400
City Area Code	713
Local Phone Number	296-6000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		1,000
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Entity Central Index Key	0000006769
Current Fiscal Year End Date	--12-31

XML

STATEMENT OF CONSOLIDATED OPERATIONS (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
REVENUES AND OTHER:
Derivative instrument gains (losses), net	$ (62)	$ 158
Gain on divestitures, net	1,176	2
Other, net	45	61
Total revenues and other	3,828	2,092
OPERATING EXPENSES:
Lease operating expenses	344	264
Taxes other than income	70	44
Exploration	25	46
General and administrative	151	83
Transaction, reorganization, and separation	14	0
Depreciation, depletion, and amortization	291	342
Asset retirement obligation accretion	29	28
Financing costs, net	140	107
Total operating expenses	1,496	1,466
NET INCOME BEFORE INCOME TAXES	2,332	626
Current income tax provision	392	149
Deferred income tax provision (benefit)	(41)	18
NET INCOME INCLUDING NONCONTROLLING INTERESTS	1,981	459
Net income (loss) attributable to Altus Preferred Unit limited partners	(70)	19
NET INCOME ATTRIBUTABLE TO APA CORPORATION	1,847	397
Noncontrolling Interest, Sinopec
OPERATING EXPENSES:
Net income attributable to noncontrolling interest	119	42
Noncontrolling interests, Altus
OPERATING EXPENSES:
Net income attributable to noncontrolling interest	14	1
Noncontrolling interest, APA Corporation
OPERATING EXPENSES:
Net income attributable to noncontrolling interest	71	0
Oil and gas
REVENUES AND OTHER:
Total revenues	2,669	1,871
Oil and gas, excluding purchased
REVENUES AND OTHER:
Oil, natural gas, and natural gas liquids production revenues	2,320	1,431
OPERATING EXPENSES:
Cost of oil and gas purchased	81	58
Purchased oil and gas sales
REVENUES AND OTHER:
Purchased oil and gas sales	349	440
OPERATING EXPENSES:
Cost of oil and gas purchased	$ 351	$ 494

XML

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
NET INCOME INCLUDING NONCONTROLLING INTERESTS	$ 1,981	$ 459
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Share of equity method interests other comprehensive income	0	1
Pension and postretirement benefit plan	(1)	0
COMPREHENSIVE INCOME INCLUDING NONCONTROLLING INTERESTS	1,980	460
Comprehensive income (loss) attributable to Altus Preferred Unit limited partners	(70)	19
COMPREHENSIVE INCOME ATTRIBUTABLE TO APA CORPORATION	1,846	398
Noncontrolling Interest, Sinopec
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Comprehensive income attributable to noncontrolling interest	119	42
Noncontrolling interests, Altus
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Comprehensive income attributable to noncontrolling interest	14	1
Noncontrolling interest, APA Corporation
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Comprehensive income attributable to noncontrolling interest	$ 71	$ 0

XML

STATEMENT OF CONSOLIDATED CASH FLOWS (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income including noncontrolling interests	$ 1,981	$ 459
Adjustments to reconcile net income to net cash provided by operating activities:
Unrealized derivative instrument losses (gains), net	57	(10)
Gain on divestitures, net	(1,176)	(2)
Exploratory dry hole expense and unproved leasehold impairments	9	37
Depreciation, depletion, and amortization	291	342
Asset retirement obligation accretion	29	28
Provision for (benefit from) deferred income taxes	(41)	18
Loss on extinguishment of debt	67	0
Other, net	(43)	(25)
Changes in operating assets and liabilities:
Receivables	(254)	(166)
Inventories	(43)	(3)
Drilling advances and other current assets	9	12
Deferred charges and other long-term assets	(13)	(13)
Accounts payable	(5)	73
Accounts payable to APA Corporation	(33)	15
Accrued expenses	18	(64)
Deferred credits and noncurrent liabilities	3	(10)
NET CASH PROVIDED BY OPERATING ACTIVITIES	856	691
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to upstream oil and gas property	(334)	(237)
Additions to Altus gathering, processing, and transmission (GPT) facilities	(1)	(1)
Leasehold and property acquisitions	(20)	(2)
Contributions to Altus equity method interests	(2)	(21)
Proceeds from sale of oil and gas properties	767	3
Proceeds from sale of Kinetik shares	224	0
Deconsolidation of Altus cash and cash equivalents	(143)	0
Other, net	(1)	7
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	490	(251)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payments on) Apache credit facility, net	338	(85)
Proceeds from Altus credit facility, net	0	33
Payments on note payable to APA Corporation, net	(21)	0
Payments on fixed-rate debt	(1,370)	(6)
Distributions to noncontrolling interest - Sinopec	(69)	(40)
Distributions to Altus Preferred Unit limited partners	(11)	(11)
Distributions to APA Corporation	(346)	(292)
Dividends paid	0	(9)
Other, net	(2)	(11)
NET CASH USED IN FINANCING ACTIVITIES	(1,481)	(421)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(135)	19
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	279	262
CASH AND CASH EQUIVALENTS AT END OF PERIOD	144	281
SUPPLEMENTARY CASH FLOW DATA:
Interest paid, net of capitalized interest	128	113
Income taxes paid, net of refunds	$ 305	$ 124

XML

CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Millions		Mar. 31, 2022	Dec. 31, 2021
CURRENT ASSETS:
Cash and cash equivalents ($132 related to Altus VIE)	[1]	$ 144	$ 279
Receivables, net of allowance of $111 and $109	[1]	1,625	1,390
Other current assets (Note 6) ($9 related to Altus VIE)	[1]	695	649
Accounts receivable from APA Corporation	[1]	96	77
Assets, Current	[1]	2,560	2,395
PROPERTY AND EQUIPMENT:
Oil and gas properties	[1]	40,223	40,474
Gathering, processing, and transmission facilities ($209 related to Altus VIE)	[1]	464	673
Other ($3 related to Altus VIE)	[1]	1,123	1,126
Less: Accumulated depreciation, depletion, and amortization ($25 related to Altus VIE)	[1]	(34,058)	(34,213)
Property and equipment, net	[1]	7,752	8,060
OTHER ASSETS:
Equity method interests (Note 7) ($1,365 related to Altus VIE)	[1]	576	1,365
Decommissioning security for sold Gulf of Mexico properties (Note 12)	[1]	640	640
Deferred charges and other ($6 related to Altus VIE)	[1]	583	581
Note receivable from APA Corporation (Note 2)	[1]	1,383	1,352
Total assets	[1]	13,494	14,393
CURRENT LIABILITIES:
Accounts payable ($12 related to Altus VIE)	[1]	633	651
Note payable to APA Corporation	[1]	174	195
Current debt	[1]	125	215
Other current liabilities (Note 8) ($15 related to Altus VIE)	[1]	1,222	1,170
Total current liabilities	[1]	2,154	2,231
LONG-TERM DEBT (Note 10) ($657 related to Altus VIE)	[1]	5,764	7,295
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Income taxes	[1]	105	148
Asset retirement obligation (Note 9) ($68 related to Altus VIE)	[1]	2,043	2,089
Decommissioning contingency for sold Gulf of Mexico properties (Note 12)	[1]	1,086	1,086
Other ($67 related to Altus VIE)	[1]	510	572
Total deferred credits and other noncurrent liabilities	[1]	3,744	3,895
REDEEMABLE NONCONTROLLING INTEREST - ALTUS PREFERRED UNIT LIMITED PARTNERS (Note 13)	[1]	0	712
EQUITY (DEFICIT):
#REF!	[1]	0	0
Paid-in capital	[1]	8,381	8,677
Accumulated deficit	[1]	(7,470)	(9,317)
Accumulated other comprehensive income	[1]	21	22
EQUITY (DEFICIT) ATTRIBUTABLE TO APA CORPORATION	[1]	932	(618)
TOTAL EQUITY	[1]	1,832	260
TOTAL LIABILITIES AND EQUITY	[1]	13,494	14,393
Noncontrolling Interest, Sinopec
EQUITY (DEFICIT):
Noncontrolling interest	[1]	870	820
Noncontrolling interest, APA Corporation
EQUITY (DEFICIT):
Noncontrolling interest	[1]	30	0
Noncontrolling Interest, Altus
EQUITY (DEFICIT):
Noncontrolling interest	[1]	$ 0	$ 58

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - USD ($) $ in Millions		Mar. 31, 2022	Dec. 31, 2021
Cash and cash equivalents	[1]	$ 144	$ 279
Receivables net of allowance	[1]	1,625	1,390
Receivables, allowance		111	109
Other current assets	[1]	695	649
Gathering, processing and transmission facilities	[1]	464	673
Other property and equipment	[1]	1,123	1,126
Accumulated Depreciation Depletion And Amortization Property And Equipment Including Finance Lease Oil And Gas Properties	[1]	34,058	34,213
Equity method interests	[1]	576	1,365
Deferred charges and other	[1]	583	581
Accounts payable	[1]	633	651
Other current liabilities	[1]	1,222	1,170
Asset retirement obligation	[1]	2,043	2,089
Other current liabilities	[1]	$ 510	$ 572
Common stock, par value (in USD per share)		$ 0.625	$ 0.625
Common stock, shares authorized (in shares)		1,000	1,000
Common stock, shares issued (in shares)		1,000	1,000
Altus VIE
Cash and cash equivalents			$ 132
Other current assets			9
Gathering, processing and transmission facilities			209
Other property and equipment			3
Accumulated Depreciation Depletion And Amortization Property And Equipment Including Finance Lease Oil And Gas Properties			25
Equity method interests			1,365
Deferred charges and other			6
Accounts payable			12
Other current liabilities			15
LONG-TERM DEBT			657
Asset retirement obligation			68
Other current liabilities			$ 67

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

STATEMENT OF CONSOLIDATED CHANGES IN EQUITY (DEFICIT) AND NONCONTROLLING INTERESTS (Unaudited) - USD ($) $ in Millions		Total		Redeemable Noncontrolling Interest - Altus Preferred Unit Limited Partners		Noncontrolling interest, APA Corporation	Noncontrolling Interest, Sinopec	Noncontrolling interests, Altus	PARENT COMPANY EQUITY (DEFICIT)	Common Stock	Paid-In Capital	Accumulated Deficit	Treasury Stock	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests		Noncontrolling Interests Noncontrolling interest, APA Corporation	Noncontrolling Interests Noncontrolling Interest, Sinopec	[1]	Noncontrolling Interests Noncontrolling interests, Altus	[1]
Beginning balance at Dec. 31, 2020	[1]			$ 608
Increase (Decrease) in Temporary Equity [Roll Forward]
Net income attributable to Altus Preferred Unit holders	[1]			19
Cash distributions to Altus Preferred Unit limited partners				(11)	[1]		$ (40)											$ (40)
Distributions payable to Altus Preferred Unit limited partners	[1]			(11)
Ending balance at Mar. 31, 2021	[1]			605
Beginning balance at Dec. 31, 2020		$ (645)							$ (1,639)	$ 262	$ 11,735	$ (10,461)	$ (3,189)	$ 14	$ 994	[1]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to APA Corporation		397							397			397
Net income attributable to noncontrolling interest						$ 0	42	$ 1										42		$ 1
Distributions paid to Altus Preferred Unit limited partners				(11)	[1]		(40)											(40)
Common dividends		(9)							(9)		(9)
APA Corporation share exchange		0								(262)	(2,927)		3,189
Holding Company Reorganization		839							839		757	82
Other		2							2		1			1
Ending balance at Mar. 31, 2021		587							(410)	0	9,557	(9,982)	0	15	997	[1]
Beginning balance at Dec. 31, 2020	[1]			608
Ending balance at Dec. 31, 2021		712	[2]	712	[1]
Beginning balance at Dec. 31, 2020		(645)							(1,639)	262	11,735	(10,461)	(3,189)	14	994	[1]
Ending balance at Dec. 31, 2021		260	[2]						(618)	0	8,677	(9,317)	0	22	878	[1]
Increase (Decrease) in Temporary Equity [Roll Forward]
Net income attributable to Altus Preferred Unit holders	[1]			(70)
Cash distributions to Altus Preferred Unit limited partners							(69)											(69)
Deconsolidation of Altus				(642)	[1]			(72)												(72)
Ending balance at Mar. 31, 2022		0	[2]	0	[1]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to APA Corporation		1,847							1,847			1,847
Net income attributable to noncontrolling interest						$ 71	119	14									$ 71	119		14
Distributions paid to Altus Preferred Unit limited partners							$ (69)											$ (69)
Distributions to APA Corporation		(346)							(305)		(305)				(41)
Deconsolidation of Altus				$ (642)	[1]			$ (72)												$ (72)
Other		8							8		9	0		(1)	0	[1]
Ending balance at Mar. 31, 2022		$ 1,832	[2]						$ 932	$ 0	$ 8,381	$ (7,470)	$ 0	$ 21	$ 900	[1]

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

[2] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

STATEMENT OF CONSOLIDATED CHANGES IN EQUITY (DEFICIT) AND NONCONTROLLING INTERESTS (Unaudited) (Parenthetical)	3 Months Ended
	Mar. 31, 2021 $ / shares
Statement of Stockholders' Equity [Abstract]
Common stock, dividends, per share (in USD per share)	$ 0.025

XML

Nature of Operations

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

These consolidated financial statements have been prepared by Apache Corporation (Apache or the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). They reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods, on a basis consistent with the annual audited financial statements, with the exception of any recently adopted accounting pronouncements. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10-Q should be read along with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which contains a summary of the Company’s significant accounting policies and other disclosures.

On March 1, 2021, Apache Corporation, the Company’s predecessor registrant, consummated a holding company reorganization (the Holding Company Reorganization), pursuant to which Apache became a direct, wholly owned subsidiary of APA Corporation (APA), and all of Apache’s outstanding shares automatically converted into equivalent corresponding shares of APA. Pursuant to the Holding Company Reorganization, APA became the successor issuer to Apache pursuant to Rule 12g-3(a) under the Exchange Act and replaced Apache as the public company trading on the Nasdaq Global Select Market under the ticker symbol “APA.” The Holding Company Reorganization modernized the Company’s operating and legal structure, making it more consistent with other companies that have affiliates operating around the globe. Refer to Note 2—Transactions with Parent Affiliate for more detail.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

As of March 31, 2022, the Company's significant accounting policies are consistent with those discussed in Note 1—Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The Company’s financial statements for prior periods include reclassifications that were made to conform to the current-year presentation, if applicable.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Apache and its subsidiaries after elimination of intercompany balances and transactions. Apache’s consolidated financial statements reflect the impacts of the Holding Company Reorganization on a prospective basis, and results prior to completion of the Holding Company Reorganization have not been restated. Refer to Note 2—Transactions with Parent Affiliate for more detail.

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

In conjunction with the ratification of a new merged concession agreement with the Egyptian General Petroleum Corporation (EGPC) in December 2021, Apache modified partnership agreements for certain consolidated subsidiaries. Apache subsequently determined that one of its limited partnership subsidiaries, which has control over Apache’s Egyptian operations, qualified as a variable interest entity (VIE) under GAAP. Apache continues to consolidate this limited partnership subsidiary because the Company has concluded that it has a controlling financial interest in the Egyptian operations and was determined to be the primary beneficiary of the VIE. For all periods presented, Sinopec International Petroleum Exploration and Production Corporation (Sinopec) has owned a one-third minority participation in the Company’s consolidated Egypt oil and gas business as a noncontrolling interest. Under the modified partnership agreements, APA owns a minority participation in the remaining two-thirds of its consolidated Egypt oil and gas business as a noncontrolling interest. Refer to Note 2—Transactions with Parent Affiliate for detail regarding APA’s noncontrolling interest. All noncontrolling interests are reflected as a separate component of equity in the Company’s consolidated balance sheet.

Additionally, prior to the BCP Business Combination defined below, third-party investors owned a minority interest of approximately 21 percent of Altus Midstream Company (ALTM or Altus), which was reflected as a separate noncontrolling interest component of equity in the Company’s consolidated balance sheet. ALTM qualified as a VIE under GAAP, which Apache consolidated because a wholly owned subsidiary of Apache had a controlling financial interest and was determined to be the primary beneficiary. Additionally, the assets of ALTM could only be used to settle obligations of ALTM. There was no recourse to the Company for ALTM’s liabilities.

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

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

Use of Estimates

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

Significant estimates with regard to these financial statements include the estimates of fair value for long-lived assets (refer to “Fair Value Measurements” and “Property and Equipment” sections in this Note 1 below), the fair value determination of acquired assets and liabilities (refer to Note 3—Acquisitions and Divestitures), the fair value of equity method interests (refer

to “Equity Method Interests” within this Note 1 below and Note 7—Equity Method Interests), the assessment of asset retirement obligations (refer to Note 9—Asset Retirement Obligation), the estimation of the contingent liability representing Apache’s potential obligation to decommission sold properties in the Gulf of Mexico (refer to Note 12—Commitments and Contingencies), the estimate of income taxes (refer to Note 11—Income Taxes), and the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom.

Fair Value Measurements

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

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

Refer to Note 5—Derivative Instruments and Hedging Activities, Note 10—Debt and Financing Costs, and Note 13—Redeemable Noncontrolling Interest - Altus for further detail regarding the Company’s fair value measurements recorded on a recurring basis.

During the quarters ended March 31, 2022 and 2021, the Company recorded no asset impairments in connection with fair value assessments.

Accounts Receivable from / Accounts Payable to APA

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

Revenue Recognition

There have been no significant changes to the Company’s contracts with customers during the three months ended March 31, 2022 and 2021.

Payments under all contracts with customers are typically due and received within a short-term period of one year or less after physical delivery of the product or service has been rendered. Receivables from contracts with customers, net of allowance for credit losses, were $1.5 billion and $956 million as of March 31, 2022 and December 31, 2021, respectively. Refer to Note 15—Business Segment Information for a disaggregation of oil, gas, and natural gas production revenue by product and reporting segment.

Oil and gas production revenues from non-customers represent income taxes paid to the Arab Republic of Egypt by Egyptian General Petroleum Corporation on behalf of the Company. Revenue and associated expenses related to such tax volumes are recorded as “Oil, natural gas, and natural gas liquids production revenues” and “Current income tax provision,” respectively, in the Company’s statement of consolidated operations. Refer to Note 15—Business Segment Information for a disaggregation of revenue by product and reporting segment.

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

Property and Equipment

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

Oil and Gas Property

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

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

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

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

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

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

Gathering, Processing, and Transmission Facilities

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

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

XML

TRANSACTIONS WITH PARENT AFFILIATE

3 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

TRANSACTIONS WITH PARENT AFFILIATE

TRANSACTIONS WITH PARENT AFFILIATE

The Company completed the Holding Company Reorganization on March 1, 2021 and sold to APA all of the equity in the three Apache subsidiaries through which Apache’s interests in Suriname and the Dominican Republic were held. The Company accounted for the divestiture of its subsidiaries as a transfer to an affiliate entity under common control and no longer consolidates the subsidiaries for periods subsequent to the Holding Company Reorganization. The carrying value of the net assets transferred was $483 million, which included approximately $292 million of cash and cash equivalents, $163 million of oil and gas properties, and working capital items. The Company continues to hold its existing assets in the U.S., Egypt, and the U.K.

The Holding Company Reorganization gave rise to a note payable by APA to Apache. The note has a seven-year term, maturing on February 29, 2028, and bears interest at a rate of 4.5 percent per annum, payable semi-annually, subject to APA’s option to allow accrued interest to convert to principal (PIK) during the first 5.5 years of the note’s term (to August 31, 2026). The note is guaranteed by each of the three subsidiaries sold by Apache to APA. During the first quarters of 2022 and 2021, the Company recognized interest income on this note of $15 million and $5 million, respectively, which is reflected in “Financing costs, net” on the Company’s statement of consolidated operations. Apache has allowed interest accrued from March 1, 2021 through February 28, 2022 totaling $61 million to PIK pursuant to the note.

In the fourth quarter of 2021, in conjunction with the ratification of a new merged concession agreement (MCA) with the Egyptian General Petroleum Corporation (EGPC), Apache entered into an agreement with APA under which the historical value of existing concessions prior to ratifying the MCA was retained by Apache, with any excess value from the MCA terms being allocated to APA. Sinopec owns a one-third minority participation in the Company’s consolidated Egypt oil and gas business, and approximately 30 percent of the remaining net income and distributable cash flow for the Company’s Egyptian operations is being allocated to APA in 2022. Apache consolidates its Egyptian operations, with APA’s noncontrolling interest reflected as a separate component in the Company’s consolidated balance sheet. In the first quarter of 2022, the Company recorded net income attributable to APA’s noncontrolling interest of $71 million and distributed $41 million of cash to APA in association with its noncontrolling interest.

The Company continues to provide administrative and support operations to APA related to activities performed for the Suriname and Dominican Republic subsidiaries. The Company is reimbursed by APA for employee costs, certain internal costs, and third-party costs paid by the Company in connection with its role as service provider. All reimbursements are based on actual costs incurred, and no market premium is applied by the Company to APA. The Company incurred $5 million in reimbursable corporate overhead charges for the first quarter of 2022.

In August 2021, Apache entered into a promissory note with APA under which Apache may borrow up to $250 million from APA at APA’s discretion. The note has a term of one year, maturing on August 4, 2022, and bears interest at a variable rate per annum equal to the monthly, short-term applicable federal rate, payable semi-annually. As of March 31, 2022, there was $174 million outstanding under this note, which is reflected as “Note payable to APA Corporation” on the Company’s consolidated balance sheet.

From time to time, the Company may, at its discretion, make distributions of capital to APA Corporation. During the first quarter of 2022, the Company made capital distributions totaling $305 million primarily in support of dividend payments and capital transactions completed by APA during the period. No capital distributions were made in the first quarter of 2021.

XML

ACQUISITIONS AND DIVESTITURES

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

ACQUISITIONS AND DIVESTITURES

ACQUISITIONS AND DIVESTITURES

2022 Activity

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

As a result of the BCP Business Combination, the Company deconsolidated ALTM on February 22, 2022 and recognized a gain of approximately $609 million that reflects the difference of the Company’s share of ALTM’s deconsolidated balance sheet and the fair value of its approximate 20 percent retained ownership in the combined entity. A summary of components of the gain, including the ALTM balance sheet amounts deconsolidated at the time of close, is included below:

	As of February 22, 2022
	(In millions)
Fair value of Kinetik Class A Common Stock held by Company	$	802
ASSETS:
Cash and cash equivalents	$	143
Other current assets	29
Property and equipment, net	184
Equity method interests	1,367
Other noncurrent assets	12
Total assets deconsolidated	$	1,735
LIABILITIES:
Current liabilities	$	3
Long-term debt	657
Other noncurrent liabilities	168
Total liabilities deconsolidated	$	828
NONCONTROLLING INTERESTS:
Redeemable noncontrolling interest preferred unit limited partners	$	642
Noncontrolling interest-Altus	72
Total noncontrolling interests deconsolidated	$	714
Net effect of deconsolidating balance sheet	$	(193)
Gain on deconsolidation of ALTM	$	609

In March 2022, the Company sold four million of its shares in Kinetik for cash proceeds of $224 million and recognized a loss of $25 million, including transaction fees. Refer to Note 7—Equity Method Interests for further detail. In connection with this secondary offering, the Company has agreed that within the next 24 months, it will invest a minimum of $100 million of these proceeds for new well drilling and completion activity at the Alpine High play in the Delaware Basin, where Kinetik has exclusive gas and NGL gathering and processing rights.

In March 2022, the Company completed the previously announced transaction to sell certain non-core mineral rights in the Delaware Basin for total cash proceeds of approximately $759 million after certain post-closing adjustments. The Company recognized a gain of approximately $590 million from the transaction. The Company also completed the sale of other non-core assets and leasehold in multiple transactions for total cash proceeds of $8 million. The Company recognized a gain of approximately $2 million upon closing of these transactions during the first quarter of 2022.

2021 ActivityDuring the first quarter of 2021, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $2 million. The Company also completed the sale of certain non-core assets and leasehold, primarily in the Permian Basin, in multiple transactions for total cash proceeds of $3 million. The Company recognized a gain of approximately $2 million upon closing of these transactions during the first quarter of 2021.

XML

CAPITALIZED EXPLORATORY WELL COSTS

3 Months Ended

Mar. 31, 2022

Extractive Industries [Abstract]

CAPITALIZED EXPLORATORY WELL COSTS

CAPITALIZED EXPLORATORY WELL COSTS

The Company’s capitalized exploratory well costs were $59 million and $46 million as of March 31, 2022 and December 31, 2021, respectively. The increase is primarily attributable to additional drilling activity, offset by successful transfer of well costs. No suspended exploratory well costs previously capitalized for greater than one year at December 31, 2021 were charged to dry hole expense during the three months ended March 31, 2022.

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

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Objectives and Strategies

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

Counterparty Risk

The use of derivative instruments exposes the Company to credit loss in the event of nonperformance by the counterparty. To reduce the concentration of exposure to any individual counterparty, the Company utilizes a diversified group of investment-grade rated counterparties, primarily financial institutions, for its derivative transactions. As of March 31, 2022, the Company had derivative positions with 12 counterparties. The Company monitors counterparty creditworthiness on an ongoing basis; however, it cannot predict sudden changes in counterparties’ creditworthiness. In addition, even if such changes are not sudden, the Company may be limited in its ability to mitigate an increase in counterparty credit risk. Should one of these counterparties not perform, the Company may not realize the benefit of some of its derivative instruments resulting from lower commodity prices or changes in currency exchange rates.

Derivative Instruments

Commodity Derivative Instruments

As of March 31, 2022, the Company had the following open natural gas financial basis swap contracts:

		Basis Swap Purchased		Basis Swap Sold
Production Period	Settlement Index	MMBtu (in 000’s)	Weighted Average Price Differential	MMBtu (in 000’s)	Weighted Average Price Differential
January—December 2022	NYMEX Henry Hub/IF Waha	33,000	$(0.45)	—	—
January—December 2022	NYMEX Henry Hub/IF HSC	—	—	33,000	$(0.08)
July—December 2022	NYMEX Henry Hub/IF Waha	20,240	$(0.97)	—	—
July—December 2022	NYMEX Henry Hub/IF HSC	—	—	20,240	$(0.17)
October—December 2022	NYMEX Henry Hub/IF Waha	920	$(1.19)	—	—
October—December 2022	NYMEX Henry Hub/IF HSC	—	—	920	$(0.19)
January—March 2023	NYMEX Henry Hub/IF Waha	3,150	$(1.06)	—	—
January—March 2023	NYMEX Henry Hub/IF HSC	—	—	3,150	$(0.03)
January—June 2023	NYMEX Henry Hub/IF Waha	4,525	$(1.54)	—	—
January—June 2023	NYMEX Henry Hub/IF HSC	—	—	4,525	$(0.11)
January—December 2023	NYMEX Henry Hub/IF Waha	73,000	$(1.15)	—	—
January—December 2023	NYMEX Henry Hub/IF HSC	—	—	73,000	$(0.08)

Subsequent to March 31, 2022, the Company entered into basis swap contracts purchasing Nymex Henry Hub/Waha totaling 1,840,000 MMBtu with a weighted average strike price of $(1.62) and selling Nymex Henry Hub/HSC totaling 1,840,000 MMBtu with a weighted average strike price of $(0.19) for July to September 2023.

Foreign Currency Derivative Instruments

The Company has open foreign currency costless collar contracts in GBP/USD for £15 million per month for the calendar year 2022 with a weighted average floor and ceiling price of $1.39 and $1.29, respectively.

Embedded Derivatives

Altus Preferred Units Embedded Derivative

The Altus Preferred Units embedded derivative was deconsolidated as of March 31, 2022 as part of the BCP Business Combination. Refer to Note 3—Acquisitions and Divestitures for discussion of the BCP Business Combination and Note 13—Redeemable Noncontrolling Interest - Altus for a description of the Altus Preferred Units and associated embedded derivative.

Pipeline Capacity Embedded Derivatives

During the fourth quarter of 2019 and first quarter of 2020, the Company entered into agreements to assign a portion of its contracted capacity under an existing transportation agreement to third parties. Embedded in these agreements were arrangements under which the Company received payments calculated based on pricing differentials between Houston Ship Channel and Waha during the calendar years 2020 and 2021. This feature required bifurcation and measurement of the change in market value throughout 2020 and 2021. Unrealized gains and losses in the fair value of this feature were recorded as “Derivative instrument gains (losses), net” under “Revenues and Other” in the statement of consolidated operations, and the balance at the end of December 31, 2021 will be amortized into income over the original tenure of the host contract.

Fair Value Measurements

The following table presents the Company’s derivative assets and liabilities measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Quoted Price in Active Markets (Level 1)		Significant Other Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value		Netting(1)		Carrying Amount
	(In millions)
March 31, 2022
Assets:
Commodity derivative instruments	$	—	$	—	$	—	$	—	$	5	$	5
Liabilities:
Commodity derivative instruments	—		34		—		34		5		39
Foreign currency derivative instruments	—		2		—		2		—		2
December 31, 2021
Liabilities:
Commodity derivative instruments	$	—	$	10	$	—	$	10	$	—	$	10
Pipeline capacity embedded derivative	—		46		—		46		—		46
Preferred Units embedded derivative	—		—		57		57		—		57

(1)    The derivative fair values are based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties.

The fair values of the Company’s derivative instruments are not actively quoted in the open market. The Company primarily uses a market approach to estimate the fair values of these derivatives on a recurring basis, utilizing futures pricing for the underlying positions provided by a reputable third party, a Level 2 fair value measurement.

Derivative Activity Recorded in the Consolidated Balance Sheet

All derivative instruments are reflected as either assets or liabilities at fair value in the consolidated balance sheet. These fair values are recorded by netting asset and liability positions where counterparty master netting arrangements contain provisions for net settlement. The carrying value of the Company’s derivative assets and liabilities and their locations on the consolidated balance sheet are as follows:

	March 31, 2022		December 31, 2021
	(In millions)
Current Assets: Other current assets	$	4	$	—
Other Assets: Deferred charges and other	1		—
Total derivative assets	$	5	$	—
Current Liabilities: Other current liabilities	$	20	$	4
Deferred Credits and Other Noncurrent Liabilities: Other	21		109
Total derivative liabilities	$	41	$	113

Derivative Activity Recorded in the Statement of Consolidated Operations

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

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Realized:
Commodity derivative instruments	$	(5)	$	148
Realized gain (loss), net	(5)		148
Unrealized:
Commodity derivative instruments	(24)		26
Pipeline capacity embedded derivatives	—		1
Foreign currency derivative instruments	(2)		—
Preferred Units embedded derivative	(31)		(17)
Unrealized gain (loss), net	(57)		10
Derivative instrument gains (losses), net	$	(62)	$	158

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

The Company seeks to maintain a balance between “first of month” and “gas daily pricing” for its U.S. natural gas portfolio and sales activities in a given month as part of its ordinary course of business. This is typically implemented through a combination of physical and financial contracts that settle monthly. In January 2021, the Company entered into financial contracts that increased its exposure to “gas daily pricing” and reduced its exposure to “first of month” pricing for February 2021. The Company realized a gain of $147 million in connection with these contracts in the first quarter of 2021 as a result of extreme daily gas price volatility across Texas in February resulting from Winter Storm Uri.

XML

OTHER CURRENT ASSETS

3 Months Ended

Mar. 31, 2022

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

OTHER CURRENT ASSETS

OTHER CURRENT ASSETS

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

	March 31, 2022		December 31, 2021
	(In millions)
Inventories	$	495	$	438
Drilling advances	70		55
Prepaid assets and other	30		56
Current decommissioning security for sold Gulf of Mexico assets	100		100
Total Other current assets	$	695	$	649

XML

EQUITY METHOD INTERESTS

3 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

EQUITY METHOD INTERESTS

EQUITY METHOD INTERESTS

The Kinetik Class A Common Stock held by the Company is treated as an interest in equity securities measured at fair value. The Company elected the fair value option based on practical expedience, variances in reporting timelines, and cost-benefit considerations for measuring its equity method interest in Kinetik. The fair value of the Company’s interest in Kinetik is determined using Level 1 inputs based on observable prices on a major exchange. The initial interest in Kinetik was measured at fair value based on the Company’s ownership of approximately 12.9 million shares of Kinetik Class A Common stock as of February 22, 2022. In March 2022, the Company sold four million of its shares of Kinetik Class A Common Stock for a loss, including underwriters fees, of $25 million, which was recorded as a component of “Gain on divestitures, net” under “Revenues and other” in the Company’s statement of consolidated operations. Refer to Note 3–Acquisitions and Divestitures for further detail.

As of March 31, 2022, the Company holds approximately 8.9 million shares of Kinetik Class A Common Stock, or approximately 13 percent of Kinetik’s outstanding ALTM Common Stock. At March 31, 2022, a fair value adjustment gain of

$24 million was recorded based on the Company’s remaining Class A share ownership. The fair value adjustment was recorded as a component of “Other, net” under “Revenues and other” in the Company’s statement of consolidated operations.

The following table presents the activity in the Company’s equity method interest in Kinetik for the quarter ended March 31, 2022:

		Kinetik Holdings Inc
	(In millions)
Balance at December 31, 2021		$	—
Initial interest upon closing the BCP Business Combination		802
Sale of Class A shares		(250)
Fair value adjustment as of March 31, 2022		24
Balance at March 31, 2022		$	576

As of March 31, 2022, the Company has recorded gathering, processing and transportation costs payable to Kinetik of approximately $10 million related to midstream services provided by Kinetik to the Company since the close of the transaction on February 22, 2022.

Prior to the deconsolidation of Altus on February 22, 2022, the Company, through its ownership of Altus, had the following equity method interests in four Permian Basin long-haul pipeline entities, which were accounted for under the equity method of accounting at December 31, 2021. For each of the equity method interests, Altus had the ability to exercise significant influence based on certain governance provisions and its participation in activities and decisions that impact the management and economic performance of the equity method interests. The table below presents the ownership percentages held by the Company and associated carrying values for each entity:

	Interest	December 31, 2021
		(In millions)
Gulf Coast Express Pipeline, LLC	16.0%	$	274
EPIC Crude Holdings, LP	15.0%	—
Permian Highway Pipeline, LLC	26.7%	630
Shin Oak Pipeline (Breviloba, LLC)	33.0%	461
Total Altus equity method interests		$	1,365

The following table presents the activity in Altus’ equity method interests for the three months ended March 31, 2022:

	Gulf Coast Express Pipeline LLC		EPIC Crude Holdings, LP		Permian Highway Pipeline LLC		Breviloba, LLC		Total
	(In millions)
Balance at December 31, 2021	$	274	$	—	$	630	$	461	$	1,365
Capital contributions	—		2		—		—		2
Distributions	(5)		—		(9)		(7)		(21)
Equity income (loss), net	8		(2)		10		5		21
Deconsolidation of Altus	(277)		—		(631)		(459)		(1,367)
Balance at March 31, 2022	$	—	$	—	$	—	$	—	$	—

Summarized Combined Financial Information

The following table presents summarized selected income statement data for Altus’ equity method interests (on a 100 percent basis):

		For the Three Months Ended March 31,
		2021
	(In millions)
Operating revenues		$	254
Operating income		112
Net income		89
Other comprehensive income		4

XML

OTHER CURRENT LIABILITIES

3 Months Ended

Mar. 31, 2022

Payables and Accruals [Abstract]

OTHER CURRENT LIABILITIES

OTHER CURRENT LIABILITIES

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

	March 31, 2022		December 31, 2021
	(In millions)
Accrued operating expenses	$	127	$	129
Accrued exploration and development	221		206
Accrued compensation and benefits	242		292
Accrued interest	69		107
Accrued income taxes	103		28
Current asset retirement obligation	40		41
Current operating lease liability	109		99
Current portion of derivatives at fair value	20		4
Current decommissioning contingency for sold Gulf of Mexico properties	100		100
Other	191		164
Total Other current liabilities	$	1,222	$	1,170

XML

ASSET RETIREMENT OBLIGATION

3 Months Ended

Mar. 31, 2022

Asset Retirement Obligation Disclosure [Abstract]

ASSET RETIREMENT OBLIGATION

ASSET RETIREMENT OBLIGATION

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

	March 31, 2022
	(In millions)
Asset retirement obligation, December 31, 2021	$	2,130
Liabilities settled	(7)
Deconsolidation of Altus	(69)
Accretion expense	29
Asset retirement obligation, March 31, 2022	2,083
Less current portion	(40)
Asset retirement obligation, long-term	$	2,043

XML

DEBT AND FINANCING COSTS

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

DEBT AND FINANCING COSTS

DEBT AND FINANCING COSTS

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

	March 31, 2022		December 31, 2021
	(In millions)
Notes and debentures before unamortized discount and debt issuance costs(1)	$	5,032	$	6,344
Altus credit facility(2)	—		657
Apache credit facility(2)	880		542
Finance lease obligations	35		36
Unamortized discount	(28)		(30)
Debt issuance costs	(30)		(39)
Total debt	5,889		7,510
Current maturities	(125)		(215)
Long-term debt	$	5,764	$	7,295

(1)    The fair values of the Company’s notes and debentures were $5.1 billion and $7.1 billion as of March 31, 2022 and December 31, 2021, respectively.

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

(2)    The carrying value of borrowings on credit facilities approximates fair value because interest rates are variable and reflective of market rates.

As of March 31, 2022, current debt included $123 million carrying value of 2.63% senior notes due January 15, 2023 and $2 million of finance lease obligations. As of December 31, 2021, current debt included $213 million carrying value of 3.25% senior notes due April 15, 2022 and $2 million of finance lease obligations.

During the quarter ended March 31, 2022, Apache closed cash tender offers for certain outstanding notes issued under its indentures, accepting for purchase $1.1 billion aggregate principal amount of notes. Apache paid holders an aggregate $1.2 billion in cash, reflecting principal, premium to par, and accrued and unpaid interest. The Company recognized a $66 million loss on extinguishment of debt, including $11 million of unamortized debt discount and issuance costs in connection with the note purchases.

During the quarter ended March 31, 2022, Apache purchased in the open market and canceled senior notes issued under its indentures in an aggregate principal amount of $15 million for an aggregate purchase price of $16 million in cash, including accrued interest and broker fees, reflecting a premium to par of $1 million. The Company recognized a $1 million loss on these repurchases.

During the quarter ended March 31, 2022, Apache redeemed the outstanding $213 million principal amount of 3.25% senior notes due April 15, 2022, at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest to the redemption date. The redemption was financed by borrowing under Apache’s revolving credit facility.

During the quarter ended March 31, 2021, Apache purchased in the open market and canceled senior notes issued under its indentures in an aggregate principal amount of $7 million for an aggregate purchase price of $6 million in cash, including accrued interest and broker fees, reflecting a discount to par of an aggregate $1 million. No gain or loss was recognized on these repurchases.

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

In March 2018, Apache entered into a revolving credit facility with commitments totaling $4.0 billion, that Apache terminated in April 2022 when its parent corporation entered into two new syndicated credit facilities described in “Subsequent Event” below. As of March 31, 2022, there were $880 million of borrowings and an aggregate £748 million and $20 million in letters of credit outstanding under Apache’s 2018 facility. As of December 31, 2021, there were $542 million of borrowings and an aggregate £748 million and $20 million in letters of credit outstanding under Apache’s 2018 facility. The outstanding letters of credit denominated in pounds were issued to support North Sea decommissioning obligations, the terms of which required such support after Standard & Poor’s reduced Apache’s credit rating from BBB to BB+ on March 26, 2020.

Apache, from time to time, has and uses uncommitted credit and letter of credit facilities for working capital and credit support purposes. As of March 31, 2022 and December 31, 2021, there were no outstanding borrowings under these facilities. As of March 31, 2022, there were £117 million and $17 million in letters of credit outstanding under these facilities. As of December 31, 2021, there were £117 million and $17 million in letters of credit outstanding under these facilities.

Financing Costs, Net

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

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Interest expense	$	90	$	112
Amortization of debt issuance costs	2		2
Loss on extinguishment of debt	67		—
Interest income	(4)		(2)
Interest income from APA Corporation, net	(15)		(5)
Financing costs, net	$	140	$	107

Subsequent Event

On April 29, 2022, Apache entered into two unsecured guaranties of obligations under two unsecured syndicated credit agreements then entered into by APA Corporation (APA), of which Apache is a wholly owned subsidiary. APA’s new credit agreements are for general corporate purposes and replaced and refinanced Apache’s 2018 syndicated credit agreement (the Former Facility). Apache and certain other subsidiaries of APA may borrow and obtain letters of credit under APA’s new credit agreements, as further described below.

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

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

In connection with APA’s entry into the USD Agreement and the GBP Agreement (each, a New Agreement), Apache terminated US$4.0 billion of commitments under the Former Facility. Apache has guaranteed obligations under each New Agreement effective until the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures is less than US$1.0 billion.

Borrowers under each New Agreement may include APA and certain subsidiaries organized under the laws of, resident of, or domiciled in, the United States, Canada, England and Wales, the United Kingdom, or the Cayman Islands. Apache may borrow under the USD Agreement up to an aggregate principal amount of US$300 million outstanding at any given time.

Letters of credit are available under each New Agreement for credit support needs of APA and its subsidiaries, including in respect of North Sea decommissioning obligations. Letters of credit under each New Agreement may be denominated in US dollars, pounds sterling, Canadian dollars, and any other foreign currency consented to by an issuing bank.

As of April 29, 2022, an aggregate US$680 million in borrowings under the Former Facility were deemed borrowings by APA outstanding under the USD Agreement. As of April 29, 2022, (i) a letter of credit for US$20 million originally issued under the Former Facility is deemed issued and outstanding under the USD Agreement and (ii) letters of credit aggregating £748 million originally issued under the Former Facility are deemed issued and outstanding under the GBP Agreement.

Borrowers under each New Agreement may borrow, prepay, and reborrow loans and obtain letters of credit, and APA may obtain letters of credit for the account of its subsidiaries, in each case subject to representations and warranties, covenants, and events of default substantially similar to those in the Former Facility. The New Agreements do not permit lenders to accelerate maturity or refuse to lend based on unspecified material adverse changes and do not have borrowing restrictions or prepayment obligations in the event of a decline in credit ratings.

XML

INCOME TAXES

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

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

During the first quarter of 2022, the Company’s effective income tax rate was primarily impacted by the gain associated with deconsolidation of Altus, the gain on sale of certain non-core mineral rights in the Delaware Basin, and a decrease in the amount of valuation allowance against its U.S. deferred tax assets. During the first quarter of 2021, the Company’s effective income tax rate was primarily impacted by a decrease in the amount of valuation allowance against its U.S. deferred tax assets.

The Company is subject to U.S. federal income tax as well as income or capital taxes in various state and foreign jurisdictions. The Company’s tax reserves are related to tax years that may be subject to examination by the relevant taxing authority. The Company is currently under audit by the Internal Revenue Service for the 2014-2017 tax years and is also under audit in various states and foreign jurisdictions as part of its normal course of business.

XML

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is party to various legal actions arising in the ordinary course of business, including litigation and governmental and regulatory controls, which also may include controls related to the potential impacts of climate change. As of March 31, 2022, the Company has an accrued liability of approximately $73 million for all legal contingencies that are deemed to be probable of occurring and can be reasonably estimated. The Company’s estimates are based on information known about the matters and its experience in contesting, litigating, and settling similar matters. Although actual amounts could differ from management’s estimate, none of the actions are believed by management to involve future amounts that would be material to the Company’s financial position, results of operations, or liquidity after consideration of recorded accruals. For material matters that the Company believes an unfavorable outcome is reasonably possible, the Company has disclosed the nature of the matter and a range of potential exposure, unless an estimate cannot be made at this time. It is management’s opinion that the loss for any other litigation matters and claims that are reasonably possible to occur will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity.

For additional information on Legal Matters described below, refer to Note 11—Commitments and Contingencies to the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Argentine Environmental Claims

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

Louisiana Restoration 

As more fully described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, Louisiana surface owners often file lawsuits or assert claims against oil and gas companies, including the Company, claiming that operators and working interest owners in the chain of title are liable for environmental damages on the leased premises, including damages measured by the cost of restoration of the leased premises to its original condition, regardless of the value of the underlying property. From time to time, restoration lawsuits and claims are resolved by the Company for amounts that are not material to the Company, while new lawsuits and claims are asserted against the Company. With respect to each of the pending lawsuits and claims, the amount claimed is not currently determinable or is not material. Further, the overall exposure related to these lawsuits and claims is not currently determinable. While adverse judgments against the Company are possible, the Company intends to actively defend these lawsuits and claims.

Starting in November of 2013 and continuing into 2022, several parishes in Louisiana have pending lawsuits against many oil and gas producers, including the Company. These cases were all removed to federal courts in Louisiana. In these cases, the Parishes, as plaintiffs, allege that defendants’ oil and gas exploration, production, and transportation operations in specified fields were conducted in violation of the State and Local Coastal Resources Management Act of 1978, as amended, and applicable regulations, rules, orders, and ordinances promulgated or adopted thereunder by the Parish or the State of Louisiana. Plaintiffs allege that defendants caused substantial damage to land and water bodies located in the coastal zone of Louisiana. Plaintiffs seek, among other things, unspecified damages for alleged violations of applicable law within the coastal zone, the payment of costs necessary to clear, re-vegetate, detoxify, and otherwise restore the subject coastal zone as near as practicable to its original condition, and actual restoration of the coastal zone to its original condition. While adverse judgments against the Company might be possible, the Company intends to vigorously oppose these claims.

Apollo Exploration Lawsuit

In a case captioned Apollo Exploration, LLC, Cogent Exploration, Ltd. Co. & SellmoCo, LLC v. Apache Corporation, Cause No. CV50538 in the 385th Judicial District Court, Midland County, Texas, plaintiffs alleged damages in excess of $200 million (having previously claimed in excess of $1.1 billion) relating to purchase and sale agreements, mineral leases, and area of mutual interest agreements concerning properties located in Hartley, Moore, Potter, and Oldham Counties, Texas. The trial court entered final judgment in favor of the Company, ruling that the plaintiffs take nothing by their claims and awarding the Company its attorneys’ fees and costs incurred in defending the lawsuit. The court of appeals affirmed in part and reversed in part the trial court’s judgment thereby reinstating some of plaintiff’s claims. Further appeal is pending.

Australian Operations Divestiture Dispute

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

Canadian Operations Divestiture Dispute

Pursuant to a Sale and Purchase Agreement dated July 6, 2017 (Paramount SPA), the Company and its subsidiaries divested their remaining Canadian operations to Paramount Resources LTD (Paramount). Closing occurred on August 16, 2017. On September 11, 2019, four ex-employees of Apache Canada LTD on behalf of themselves and individuals employed by Apache Canada LTD on July 6, 2017, filed an Amended Statement of Claim in a matter styled Stephen Flesch et. al. v Apache Corporation et. al., No. 1901-09160 Court of Queen’s Bench of Alberta against the Company and others seeking class certification and a finding that the Paramount SPA amounted to a Change of Control of the Company, entitling them to accelerated vesting under the Company’s equity plans. In the suit, the class seeks approximately $60 million USD and punitive damages. The Company believes that Plaintiffs’ claims lack merit and will not have a material adverse effect on the Company’s financial position, results of operation, or liquidity.

California and Delaware Litigation

On July 17, 2017, in three separate actions, San Mateo County, California, Marin County, California, and the City of Imperial Beach, California, all filed suit individually and on behalf of the people of the state of California against over 30 oil and gas companies alleging damages as a result of global warming. Plaintiffs seek unspecified damages and abatement under various tort theories. On December 20, 2017, in two separate actions, the City of Santa Cruz and Santa Cruz County and in a separate action on January 22, 2018, the City of Richmond, filed similar lawsuits against many of the same defendants. On November 14, 2018, the Pacific Coast Federation of Fishermen’s Associations, Inc. also filed a similar lawsuit against many of the same defendants. After removal of all such lawsuits to federal court, the district court remanded them back to state court. The 9th Circuit Court of Appeals’ affirmance of this remand decision was appealed to the U.S. Supreme Court. That appeal was decided by the U.S. Supreme Court ruling in a similar case, BP p.l.c. v. Mayor and City Council of Baltimore. As a result, the California cases were sent back to the 9th Circuit for further appellate review of the decision to remand the cases to state court. The 9th Circuit has since, once again, affirmed the district court’s remand to state court. The defendants are appealing this latest remand decision to the U.S. Supreme Court. Further activity in the cases has been stayed pending further appellate review.

On September 10, 2020, the State of Delaware filed suit, individually and on behalf of the people of the State of Delaware, against over 25 oil and gas companies alleging damages as a result of global warming. Plaintiffs seek unspecified damages and abatement under various tort theories. After removal of this lawsuit to federal court, the district court remanded it back to state court. The remand order is being appealed to the 3rd Circuit Court of Appeals. Further activity in the case has been stayed pending this appellate review.

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

Castex Lawsuit

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

Oklahoma Class Actions

The Company is a party to two purported class actions in Oklahoma styled Bigie Lee Rhea v. Apache Corporation, Case No. 6:14-cv-00433-JH, and Albert Steven Allen v. Apache Corporation, Case No. CJ-2019-00219.

In the Rhea case, which was certified, a class of royalty owners sought damages of approximately $200 million for alleged breach of the implied covenant to market relating to post-production deductions and alleged NGL uplift value. With no admission of liability or wrongdoing, but only to avoid the expense and uncertainty of future litigation, Apache has entered into a settlement agreement in the Rhea case to resolve all claims made against it by the class. The settlement agreement is subject to court approval and a full fairness hearing will be held in the coming months. The settlement will not have a material effect on the Company’s financial position, results of operations, or liquidity.

The Allen case has not been certified and seeks to represent a group of owners who have allegedly received late royalty and other payments under Oklahoma statutes. The amount of this claim is not yet reasonably determinable. While adverse judgments against the Company are possible, the Company intends to vigorously defend these lawsuits and claims.

Shareholder and Derivative Lawsuits

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

On March 16, 2021, a case captioned William Wessels, Derivatively and on behalf of APA Corporation v. John J. Christmann IV et al. was filed in the 334th District Court of Harris County, Texas. The case purports to be a derivative action brought against senior management and Company directors over many of the same allegations included in the Plymouth County Retirement System matter and asserts claims of (1) breach of fiduciary duty; (2) waste of corporate assets; and (3) unjust enrichment. The defendants believe the plaintiff’s claims lack merit and intend to vigorously defend this lawsuit.

Environmental Matters

As of March 31, 2022, the Company had an undiscounted reserve for environmental remediation of approximately $2 million.

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

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

The Company is not aware of any environmental claims existing as of March 31, 2022 that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity. There can be no assurance, however, that current regulatory requirements will not change or past non-compliance with environmental laws will not be discovered on the Company’s properties.

Potential Decommissioning Obligations on Sold Properties

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

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

By letter dated April 5, 2022, replacing two prior letters dated September 8, 2021 and February 22, 2022, respectively, GOM Shelf notified the Bureau of Safety and Environmental Enforcement (BSEE) that it was unable to fund the decommissioning obligations that it is currently obligated to perform on certain of the Legacy GOM Assets. As a result, Apache and other current and former owners in these assets have received orders from BSEE to decommission certain of the Legacy GOM Assets included in GOM Shelf’s notification to BSEE. Apache expects to receive such orders on the other Legacy GOM Assets included in GOM Shelf’s notification letter. Further, Apache anticipates that GOM Shelf may send additional such notices to BSEE in the future and that it may receive additional orders from BSEE requiring it to decommission other Legacy GOM Assets.

If Apache incurs costs to decommission any Legacy GOM Asset and GOM Shelf does not reimburse Apache for such costs, then Apache will obtain reimbursement from Trust A, the Bonds, and the Letters of Credit until such funds and securities are fully utilized. In addition, after such sources have been exhausted, Apache has agreed to provide a standby loan to GOM Shelf of up to $400 million to perform decommissioning (Standby Loan Agreement), with such standby loan secured by a first and prior lien on the Legacy GOM Assets.

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

As of March 31, 2022, Apache estimates that its potential liability to fund decommissioning of Legacy GOM Assets it may be ordered to perform ranges from $1.2 billion to $1.4 billion on an undiscounted basis. Management does not believe any specific estimate within this range is a better estimate than any other. Accordingly, the Company has recorded a contingent liability of $1.2 billion as of March 31, 2022, representing the estimated costs of decommissioning it may be required to perform on Legacy GOM Assets. Of the total liability recorded, $1.1 billion is reflected under the caption “Decommissioning contingency for sold Gulf of Mexico properties,” and $100 million is reflected under “Other current liabilities” in the Company’s consolidated balance sheet. The Company has also recorded a $740 million asset, which represents the amount the Company expects to be reimbursed from the Trust A funds, the Bonds, and the Letters of Credit for decommissioning it may be required to perform on Legacy GOM Assets. Of the total asset recorded, $640 million is reflected under the caption “Decommissioning security for sold Gulf of Mexico properties,” and $100 million is reflected under “Other current assets.” Changes in significant assumptions impacting Apache’s estimated liability, including expected decommissioning rig spread rates, lift boat rates, and planned abandonment logistics could result in a liability in excess of the amount accrued. In addition, significant changes in the market price of oil, gas, and NGLs could further impact Apache’s estimate of its contingent liability to decommission Legacy GOM Assets.

XML

REDEMABLE NONCONTROLLING INTEREST - ALTUS

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

REDEMABLE NONCONTROLLING INTEREST - ALTUS

REDEEMABLE NONCONTROLLING INTEREST — ALTUS

Preferred Units Issuance

On June 12, 2019, Altus Midstream LP issued and sold Preferred Units for an aggregate issue price of $625 million in a private offering exempt from the registration requirements of the Securities Act (the Closing). Altus Midstream LP received approximately $611 million in cash proceeds from the sale after deducting transaction costs and discounts to certain purchasers.

Classification

Prior to the deconsolidation of Altus on February 22, 2022, at December 31, 2021, the carrying amount of the Preferred Units was recorded as “Redeemable Noncontrolling Interest — Altus Preferred Unit Limited Partners” classified as temporary equity on the Company’s consolidated balance sheet based on the terms of the Preferred Units, including the redemption rights with respect thereto.

Measurement

Altus applied a two-step approach to subsequent measurement of the redeemable noncontrolling interest related to the Preferred Units by first allocating a portion of the net income of Altus Midstream LP in accordance with the terms of the partnership agreement. An additional adjustment to the carrying value of the Preferred Unit redeemable noncontrolling interest at each period end was recorded, if applicable. The amount of such adjustment was determined based upon the accreted value method to reflect the passage of time until the Preferred Units were exchangeable at the option of the holder. Pursuant to this method, the net transaction price was accreted using the effective interest method to the Redemption Price calculated at the seventh anniversary of the Closing. The total adjustment was limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end was equal to the greater of (a) the sum of (i) the carrying amount of the Preferred Units, plus (ii) the fair value of the embedded derivative liability and (b) the accreted value of the net transaction price.

Activity related to the Preferred Units is as follows:

	Units Outstanding	Financial Position
	(In millions, except unit data)
Redeemable noncontrolling interest — Preferred Units at: December 31, 2020	660,694	$	608
Cash distributions to Altus Preferred Unit limited partners	—	(46)
Distributions payable to Altus Preferred Unit limited partners	—	(12)
Allocation of Altus Midstream LP net income	N/A	80
Accreted value adjustment	N/A	82
Redeemable noncontrolling interest — Preferred Units at: December 31, 2021	660,694	712
Allocation of Altus Midstream LP net income	N/A	12
Accreted value adjustment(1)	N/A	(82)
Redeemable noncontrolling interest — Preferred Units at: February 22, 2022	660,694	642
Preferred Units embedded derivative		89
Deconsolidation of Altus		(731)
		$	—

(1)    Includes the reversal of previously recorded accreted value adjustments of $53 million due to the deconsolidation of Altus.

N/A - not applicable.

CAPITAL STOCK AND EQUITY

Upon consummation of the Holding Company Reorganization, each outstanding share of Apache common stock automatically converted into a share of APA common stock on a one-for-one basis. As a result, each stockholder of Apache now owns the same number of shares of APA common stock that such stockholder owned of Apache common stock immediately prior to the Holding Company Reorganization. As a result of the Holding Company Reorganization and subsequent activity, Apache recorded various intercompany activities during the first quarter ended March 31, 2021 as capital transactions, which are reflected in Apache’s Statement of Consolidated Changes in Equity (Deficit) and Noncontrolling Interests. Refer to Note 2—Transactions with Parent Affiliate for more detail.

Additionally, in connection with the Holding Company Reorganization, Apache transferred to APA, and APA assumed, sponsorship of all of Apache’s stock plans along with all of Apache’s rights and obligations under each plan. Subsequent to the Holding Company Reorganization, stock-based compensation associated with APA equity awards granted and outstanding to Apache employees are reflected as capital contributions from APA to Apache.

Net Income (Loss) per Common Share

Net income (loss) per share for Apache is no longer required, as its shares are not publicly traded, and Apache is now a direct, wholly owned subsidiary of APA.

Distributions to APA Corporation and Common Stock Dividends

During the quarter ended March 31, 2022, the Company paid $305 million in capital distributions to its parent, APA, which is included as “Distributions to APA Corporation” on the Company’s statement of consolidated cash flows. During the quarter ended March 31, 2021, prior to completion of the Holding Company Reorganization, the Company paid $9 million in dividends on its common stock.

XML

CAPITAL STOCK AND EQUITY

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

CAPITAL STOCK AND EQUITY

REDEEMABLE NONCONTROLLING INTEREST — ALTUS

Preferred Units Issuance

On June 12, 2019, Altus Midstream LP issued and sold Preferred Units for an aggregate issue price of $625 million in a private offering exempt from the registration requirements of the Securities Act (the Closing). Altus Midstream LP received approximately $611 million in cash proceeds from the sale after deducting transaction costs and discounts to certain purchasers.

Classification

Prior to the deconsolidation of Altus on February 22, 2022, at December 31, 2021, the carrying amount of the Preferred Units was recorded as “Redeemable Noncontrolling Interest — Altus Preferred Unit Limited Partners” classified as temporary equity on the Company’s consolidated balance sheet based on the terms of the Preferred Units, including the redemption rights with respect thereto.

Measurement

Altus applied a two-step approach to subsequent measurement of the redeemable noncontrolling interest related to the Preferred Units by first allocating a portion of the net income of Altus Midstream LP in accordance with the terms of the partnership agreement. An additional adjustment to the carrying value of the Preferred Unit redeemable noncontrolling interest at each period end was recorded, if applicable. The amount of such adjustment was determined based upon the accreted value method to reflect the passage of time until the Preferred Units were exchangeable at the option of the holder. Pursuant to this method, the net transaction price was accreted using the effective interest method to the Redemption Price calculated at the seventh anniversary of the Closing. The total adjustment was limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end was equal to the greater of (a) the sum of (i) the carrying amount of the Preferred Units, plus (ii) the fair value of the embedded derivative liability and (b) the accreted value of the net transaction price.

Activity related to the Preferred Units is as follows:

	Units Outstanding	Financial Position
	(In millions, except unit data)
Redeemable noncontrolling interest — Preferred Units at: December 31, 2020	660,694	$	608
Cash distributions to Altus Preferred Unit limited partners	—	(46)
Distributions payable to Altus Preferred Unit limited partners	—	(12)
Allocation of Altus Midstream LP net income	N/A	80
Accreted value adjustment	N/A	82
Redeemable noncontrolling interest — Preferred Units at: December 31, 2021	660,694	712
Allocation of Altus Midstream LP net income	N/A	12
Accreted value adjustment(1)	N/A	(82)
Redeemable noncontrolling interest — Preferred Units at: February 22, 2022	660,694	642
Preferred Units embedded derivative		89
Deconsolidation of Altus		(731)
		$	—

(1)    Includes the reversal of previously recorded accreted value adjustments of $53 million due to the deconsolidation of Altus.

N/A - not applicable.

CAPITAL STOCK AND EQUITY

Upon consummation of the Holding Company Reorganization, each outstanding share of Apache common stock automatically converted into a share of APA common stock on a one-for-one basis. As a result, each stockholder of Apache now owns the same number of shares of APA common stock that such stockholder owned of Apache common stock immediately prior to the Holding Company Reorganization. As a result of the Holding Company Reorganization and subsequent activity, Apache recorded various intercompany activities during the first quarter ended March 31, 2021 as capital transactions, which are reflected in Apache’s Statement of Consolidated Changes in Equity (Deficit) and Noncontrolling Interests. Refer to Note 2—Transactions with Parent Affiliate for more detail.

Additionally, in connection with the Holding Company Reorganization, Apache transferred to APA, and APA assumed, sponsorship of all of Apache’s stock plans along with all of Apache’s rights and obligations under each plan. Subsequent to the Holding Company Reorganization, stock-based compensation associated with APA equity awards granted and outstanding to Apache employees are reflected as capital contributions from APA to Apache.

Net Income (Loss) per Common Share

Net income (loss) per share for Apache is no longer required, as its shares are not publicly traded, and Apache is now a direct, wholly owned subsidiary of APA.

Distributions to APA Corporation and Common Stock Dividends

During the quarter ended March 31, 2022, the Company paid $305 million in capital distributions to its parent, APA, which is included as “Distributions to APA Corporation” on the Company’s statement of consolidated cash flows. During the quarter ended March 31, 2021, prior to completion of the Holding Company Reorganization, the Company paid $9 million in dividends on its common stock.

XML

BUSINESS SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION

As of March 31, 2022, the Company is engaged in exploration and production (Upstream) activities across three operating segments: Egypt, North Sea, and the U.S. The Company’s Upstream business explores for, develops, and produces crude oil, natural gas, and natural gas liquids. Prior to the deconsolidation of Altus on February 22, 2022, the Company’s Midstream business was operated by Altus Midstream Company, which owned, developed, and operated a midstream energy asset network in the Permian Basin of West Texas. Financial information for each segment is presented below:

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Quarter Ended March 31, 2022	(In millions)
Revenues:
Oil revenues	$	790	$	328	$	599	$	—	$	—	$	1,717
Natural gas revenues	98		99		183		—		—		380
Natural gas liquids revenues	3		16		207		—		(3)		223
Oil, natural gas, and natural gas liquids production revenues	891		443		989		—		(3)		2,320
Purchased oil and gas sales	—		—		344		5		—		349
Midstream service revenues	—		—		—		16		(16)		—
	891		443		1,333		21		(19)		2,669
Operating Expenses:
Lease operating expenses	131		96		118		—		(1)		344
Gathering, processing, and transmission	5		12		77		5		(18)		81
Purchased oil and gas costs	—		—		351		—		—		351
Taxes other than income	—		—		67		3		—		70
Exploration	15		5		4		—		1		25
Depreciation, depletion, and amortization	97		62		130		2		—		291
Asset retirement obligation accretion	—		20		8		1		—		29
	248		195		755		11		(18)		1,191
Operating Income (Loss)(2)	$	643	$	248	$	578	$	10	$	(1)	1,478
Other Income (Expense):
Derivative instrument loss, net											(62)
Gain on divestitures, net											1,176
Other, net											45
General and administrative											(151)
Transaction, reorganization, and separation											(14)
Financing costs, net											(140)
Income Before Income Taxes											$	2,332
Total Assets(3)	$	2,966	$	2,169	$	8,359	$	—	$	—	$	13,494

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Quarter Ended March 31, 2021	(In millions)
Revenues:
Oil revenues	$	402	$	241	$	348	$	—	$	—	$	991
Natural gas revenues	70		31		211		—		—		312
Natural gas liquids revenues	2		6		120		—		—		128
Oil, natural gas, and natural gas liquids production revenues	474		278		679		—		—		1,431
Purchased oil and gas sales	—		—		437		3		—		440
Midstream service revenues	—		—		—		32		(32)		—
	474		278		1,116		35		(32)		1,871
Operating Expenses:
Lease operating expenses	104		75		86		—		(1)		264
Gathering, processing, and transmission	1		12		69		7		(31)		58
Purchased oil and gas costs	—		—		492		2		—		494
Taxes other than income	—		—		40		4		—		44
Exploration	8		20		16		—		2		46
Depreciation, depletion, and amortization	130		84		125		3		—		342
Asset retirement obligation accretion	—		19		8		1		—		28
	243		210		836		17		(30)		1,276
Operating Income (Loss)(2)	$	231	$	68	$	280	$	18	$	(2)	$	595
Other Income (Expense):
Derivative instrument gains, net											158
Gain on divestitures, net											2
Other, net											61
General and administrative											(83)
Financing costs, net											(107)
Income Before Income Taxes											$	626
Total Assets(3)	$	3,020	$	2,167	$	6,959	$	1,828	$	1	$	13,975

(1)    Includes revenue from non-customers for the quarters ended March 31, 2022 and 2021 of:

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Oil	$	250	$	93
Natural gas	31		12
Natural gas liquids	1		1

(2)Operating income of U.S. and Egypt includes leasehold impairments of $3 million and $1 million, respectively, for the first quarter of 2022. Operating income of U.S. and Egypt includes leasehold and other asset impairments of $16 million and $2 million, respectively, for the first quarter of 2021.

(3)Intercompany balances are excluded from total assets.

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

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Apache and its subsidiaries after elimination of intercompany balances and transactions. Apache’s consolidated financial statements reflect the impacts of the Holding Company Reorganization on a prospective basis, and results prior to completion of the Holding Company Reorganization have not been restated. Refer to Note 2—Transactions with Parent Affiliate for more detail.

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

In conjunction with the ratification of a new merged concession agreement with the Egyptian General Petroleum Corporation (EGPC) in December 2021, Apache modified partnership agreements for certain consolidated subsidiaries. Apache subsequently determined that one of its limited partnership subsidiaries, which has control over Apache’s Egyptian operations, qualified as a variable interest entity (VIE) under GAAP. Apache continues to consolidate this limited partnership subsidiary because the Company has concluded that it has a controlling financial interest in the Egyptian operations and was determined to be the primary beneficiary of the VIE. For all periods presented, Sinopec International Petroleum Exploration and Production Corporation (Sinopec) has owned a one-third minority participation in the Company’s consolidated Egypt oil and gas business as a noncontrolling interest. Under the modified partnership agreements, APA owns a minority participation in the remaining two-thirds of its consolidated Egypt oil and gas business as a noncontrolling interest. Refer to Note 2—Transactions with Parent Affiliate for detail regarding APA’s noncontrolling interest. All noncontrolling interests are reflected as a separate component of equity in the Company’s consolidated balance sheet.

Additionally, prior to the BCP Business Combination defined below, third-party investors owned a minority interest of approximately 21 percent of Altus Midstream Company (ALTM or Altus), which was reflected as a separate noncontrolling interest component of equity in the Company’s consolidated balance sheet. ALTM qualified as a VIE under GAAP, which Apache consolidated because a wholly owned subsidiary of Apache had a controlling financial interest and was determined to be the primary beneficiary. Additionally, the assets of ALTM could only be used to settle obligations of ALTM. There was no recourse to the Company for ALTM’s liabilities.

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

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

Use of Estimates

Use of Estimates

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

Significant estimates with regard to these financial statements include the estimates of fair value for long-lived assets (refer to “Fair Value Measurements” and “Property and Equipment” sections in this Note 1 below), the fair value determination of acquired assets and liabilities (refer to Note 3—Acquisitions and Divestitures), the fair value of equity method interests (refer

to “Equity Method Interests” within this Note 1 below and Note 7—Equity Method Interests), the assessment of asset retirement obligations (refer to Note 9—Asset Retirement Obligation), the estimation of the contingent liability representing Apache’s potential obligation to decommission sold properties in the Gulf of Mexico (refer to Note 12—Commitments and Contingencies), the estimate of income taxes (refer to Note 11—Income Taxes), and the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom.

Fair Value Measurements

Fair Value Measurements

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

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

Accounts Receivable from and Accounts Payable to APA

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

Revenue Recognition

Revenue Recognition

There have been no significant changes to the Company’s contracts with customers during the three months ended March 31, 2022 and 2021.

Oil and gas production revenues from non-customers represent income taxes paid to the Arab Republic of Egypt by Egyptian General Petroleum Corporation on behalf of the Company. Revenue and associated expenses related to such tax volumes are recorded as “Oil, natural gas, and natural gas liquids production revenues” and “Current income tax provision,” respectively, in the Company’s statement of consolidated operations. Refer to Note 15—Business Segment Information for a disaggregation of revenue by product and reporting segment.In accordance with the provisions of ASC 606, “Revenue from Contracts with Customers,” variable market prices for each short-term commodity sale are allocated entirely to each performance obligation as the terms of payment relate specifically to the Company’s efforts to satisfy its obligations. As such, the Company has elected the practical expedients available under the standard to not disclose the aggregate transaction price allocated to unsatisfied, or partially unsatisfied, performance obligations as of the end of the reporting period.

Property and Equipment

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

Oil and Gas Property

Oil and Gas Property

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

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

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

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

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

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

Gathering, Processing, and Transmission Facilities

Gathering, Processing, and Transmission Facilities

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

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

XML

ACQUISITIONS AND DIVESTITURES (Tables)

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Components of Deconsolidation

A summary of components of the gain, including the ALTM balance sheet amounts deconsolidated at the time of close, is included below:

	As of February 22, 2022
	(In millions)
Fair value of Kinetik Class A Common Stock held by Company	$	802
ASSETS:
Cash and cash equivalents	$	143
Other current assets	29
Property and equipment, net	184
Equity method interests	1,367
Other noncurrent assets	12
Total assets deconsolidated	$	1,735
LIABILITIES:
Current liabilities	$	3
Long-term debt	657
Other noncurrent liabilities	168
Total liabilities deconsolidated	$	828
NONCONTROLLING INTERESTS:
Redeemable noncontrolling interest preferred unit limited partners	$	642
Noncontrolling interest-Altus	72
Total noncontrolling interests deconsolidated	$	714
Net effect of deconsolidating balance sheet	$	(193)
Gain on deconsolidation of ALTM	$	609

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Commodity Derivative Positions

As of March 31, 2022, the Company had the following open natural gas financial basis swap contracts:

		Basis Swap Purchased		Basis Swap Sold
Production Period	Settlement Index	MMBtu (in 000’s)	Weighted Average Price Differential	MMBtu (in 000’s)	Weighted Average Price Differential
January—December 2022	NYMEX Henry Hub/IF Waha	33,000	$(0.45)	—	—
January—December 2022	NYMEX Henry Hub/IF HSC	—	—	33,000	$(0.08)
July—December 2022	NYMEX Henry Hub/IF Waha	20,240	$(0.97)	—	—
July—December 2022	NYMEX Henry Hub/IF HSC	—	—	20,240	$(0.17)
October—December 2022	NYMEX Henry Hub/IF Waha	920	$(1.19)	—	—
October—December 2022	NYMEX Henry Hub/IF HSC	—	—	920	$(0.19)
January—March 2023	NYMEX Henry Hub/IF Waha	3,150	$(1.06)	—	—
January—March 2023	NYMEX Henry Hub/IF HSC	—	—	3,150	$(0.03)
January—June 2023	NYMEX Henry Hub/IF Waha	4,525	$(1.54)	—	—
January—June 2023	NYMEX Henry Hub/IF HSC	—	—	4,525	$(0.11)
January—December 2023	NYMEX Henry Hub/IF Waha	73,000	$(1.15)	—	—
January—December 2023	NYMEX Henry Hub/IF HSC	—	—	73,000	$(0.08)

Schedule of Derivative Assets Measured at Fair Value

The following table presents the Company’s derivative assets and liabilities measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Quoted Price in Active Markets (Level 1)		Significant Other Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value		Netting(1)		Carrying Amount
	(In millions)
March 31, 2022
Assets:
Commodity derivative instruments	$	—	$	—	$	—	$	—	$	5	$	5
Liabilities:
Commodity derivative instruments	—		34		—		34		5		39
Foreign currency derivative instruments	—		2		—		2		—		2
December 31, 2021
Liabilities:
Commodity derivative instruments	$	—	$	10	$	—	$	10	$	—	$	10
Pipeline capacity embedded derivative	—		46		—		46		—		46
Preferred Units embedded derivative	—		—		57		57		—		57

(1)    The derivative fair values are based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties.

Schedule of Derivative Liabilities Measured at Fair Value

The following table presents the Company’s derivative assets and liabilities measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Quoted Price in Active Markets (Level 1)		Significant Other Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value		Netting(1)		Carrying Amount
	(In millions)
March 31, 2022
Assets:
Commodity derivative instruments	$	—	$	—	$	—	$	—	$	5	$	5
Liabilities:
Commodity derivative instruments	—		34		—		34		5		39
Foreign currency derivative instruments	—		2		—		2		—		2
December 31, 2021
Liabilities:
Commodity derivative instruments	$	—	$	10	$	—	$	10	$	—	$	10
Pipeline capacity embedded derivative	—		46		—		46		—		46
Preferred Units embedded derivative	—		—		57		57		—		57

(1)    The derivative fair values are based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties.

Schedule of Derivative Instruments on Consolidated Balance Sheet and Statement of Consolidated Operations

The carrying value of the Company’s derivative assets and liabilities and their locations on the consolidated balance sheet are as follows:

	March 31, 2022		December 31, 2021
	(In millions)
Current Assets: Other current assets	$	4	$	—
Other Assets: Deferred charges and other	1		—
Total derivative assets	$	5	$	—
Current Liabilities: Other current liabilities	$	20	$	4
Deferred Credits and Other Noncurrent Liabilities: Other	21		109
Total derivative liabilities	$	41	$	113

Derivative Activity Recorded in the Statement of Consolidated Operations

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

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Realized:
Commodity derivative instruments	$	(5)	$	148
Realized gain (loss), net	(5)		148
Unrealized:
Commodity derivative instruments	(24)		26
Pipeline capacity embedded derivatives	—		1
Foreign currency derivative instruments	(2)		—
Preferred Units embedded derivative	(31)		(17)
Unrealized gain (loss), net	(57)		10
Derivative instrument gains (losses), net	$	(62)	$	158

XML

OTHER CURRENT ASSETS (Tables)

3 Months Ended

Mar. 31, 2022

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

Schedule of Other Current Assets

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

	March 31, 2022		December 31, 2021
	(In millions)
Inventories	$	495	$	438
Drilling advances	70		55
Prepaid assets and other	30		56
Current decommissioning security for sold Gulf of Mexico assets	100		100
Total Other current assets	$	695	$	649

XML

EQUITY METHOD INTERESTS (Tables)

3 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Equity Method Investment Information

The following table presents the activity in the Company’s equity method interest in Kinetik for the quarter ended March 31, 2022:

		Kinetik Holdings Inc
	(In millions)
Balance at December 31, 2021		$	—
Initial interest upon closing the BCP Business Combination		802
Sale of Class A shares		(250)
Fair value adjustment as of March 31, 2022		24
Balance at March 31, 2022		$	576

The table below presents the ownership percentages held by the Company and associated carrying values for each entity:

	Interest	December 31, 2021
		(In millions)
Gulf Coast Express Pipeline, LLC	16.0%	$	274
EPIC Crude Holdings, LP	15.0%	—
Permian Highway Pipeline, LLC	26.7%	630
Shin Oak Pipeline (Breviloba, LLC)	33.0%	461
Total Altus equity method interests		$	1,365

The following table presents the activity in Altus’ equity method interests for the three months ended March 31, 2022:

	Gulf Coast Express Pipeline LLC		EPIC Crude Holdings, LP		Permian Highway Pipeline LLC		Breviloba, LLC		Total
	(In millions)
Balance at December 31, 2021	$	274	$	—	$	630	$	461	$	1,365
Capital contributions	—		2		—		—		2
Distributions	(5)		—		(9)		(7)		(21)
Equity income (loss), net	8		(2)		10		5		21
Deconsolidation of Altus	(277)		—		(631)		(459)		(1,367)
Balance at March 31, 2022	$	—	$	—	$	—	$	—	$	—

The following table presents summarized selected income statement data for Altus’ equity method interests (on a 100 percent basis):

		For the Three Months Ended March 31,
		2021
	(In millions)
Operating revenues		$	254
Operating income		112
Net income		89
Other comprehensive income		4

XML

OTHER CURRENT LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2022

Payables and Accruals [Abstract]

Schedule of Other Current Liabilities

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

	March 31, 2022		December 31, 2021
	(In millions)
Accrued operating expenses	$	127	$	129
Accrued exploration and development	221		206
Accrued compensation and benefits	242		292
Accrued interest	69		107
Accrued income taxes	103		28
Current asset retirement obligation	40		41
Current operating lease liability	109		99
Current portion of derivatives at fair value	20		4
Current decommissioning contingency for sold Gulf of Mexico properties	100		100
Other	191		164
Total Other current liabilities	$	1,222	$	1,170

XML

ASSET RETIREMENT OBLIGATION (Tables)

3 Months Ended

Mar. 31, 2022

Asset Retirement Obligation Disclosure [Abstract]

Schedule of Asset Retirement Obligation

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

	March 31, 2022
	(In millions)
Asset retirement obligation, December 31, 2021	$	2,130
Liabilities settled	(7)
Deconsolidation of Altus	(69)
Accretion expense	29
Asset retirement obligation, March 31, 2022	2,083
Less current portion	(40)
Asset retirement obligation, long-term	$	2,043

XML

DEBT AND FINANCING COSTS (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Schedule of Debt

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

	March 31, 2022		December 31, 2021
	(In millions)
Notes and debentures before unamortized discount and debt issuance costs(1)	$	5,032	$	6,344
Altus credit facility(2)	—		657
Apache credit facility(2)	880		542
Finance lease obligations	35		36
Unamortized discount	(28)		(30)
Debt issuance costs	(30)		(39)
Total debt	5,889		7,510
Current maturities	(125)		(215)
Long-term debt	$	5,764	$	7,295

(1)    The fair values of the Company’s notes and debentures were $5.1 billion and $7.1 billion as of March 31, 2022 and December 31, 2021, respectively.

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

(2)    The carrying value of borrowings on credit facilities approximates fair value because interest rates are variable and reflective of market rates.

Schedule of Financing Costs, Net

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

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Interest expense	$	90	$	112
Amortization of debt issuance costs	2		2
Loss on extinguishment of debt	67		—
Interest income	(4)		(2)
Interest income from APA Corporation, net	(15)		(5)
Financing costs, net	$	140	$	107

XML

REDEMABLE NONCONTROLLING INTEREST - ALTUS (Tables)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Schedule of Preferred Units

Activity related to the Preferred Units is as follows:

	Units Outstanding	Financial Position
	(In millions, except unit data)
Redeemable noncontrolling interest — Preferred Units at: December 31, 2020	660,694	$	608
Cash distributions to Altus Preferred Unit limited partners	—	(46)
Distributions payable to Altus Preferred Unit limited partners	—	(12)
Allocation of Altus Midstream LP net income	N/A	80
Accreted value adjustment	N/A	82
Redeemable noncontrolling interest — Preferred Units at: December 31, 2021	660,694	712
Allocation of Altus Midstream LP net income	N/A	12
Accreted value adjustment(1)	N/A	(82)
Redeemable noncontrolling interest — Preferred Units at: February 22, 2022	660,694	642
Preferred Units embedded derivative		89
Deconsolidation of Altus		(731)
		$	—

(1)    Includes the reversal of previously recorded accreted value adjustments of $53 million due to the deconsolidation of Altus.

N/A - not applicable.

XML

BUSINESS SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Schedule of Financial Segment Information

Financial information for each segment is presented below:

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Quarter Ended March 31, 2022	(In millions)
Revenues:
Oil revenues	$	790	$	328	$	599	$	—	$	—	$	1,717
Natural gas revenues	98		99		183		—		—		380
Natural gas liquids revenues	3		16		207		—		(3)		223
Oil, natural gas, and natural gas liquids production revenues	891		443		989		—		(3)		2,320
Purchased oil and gas sales	—		—		344		5		—		349
Midstream service revenues	—		—		—		16		(16)		—
	891		443		1,333		21		(19)		2,669
Operating Expenses:
Lease operating expenses	131		96		118		—		(1)		344
Gathering, processing, and transmission	5		12		77		5		(18)		81
Purchased oil and gas costs	—		—		351		—		—		351
Taxes other than income	—		—		67		3		—		70
Exploration	15		5		4		—		1		25
Depreciation, depletion, and amortization	97		62		130		2		—		291
Asset retirement obligation accretion	—		20		8		1		—		29
	248		195		755		11		(18)		1,191
Operating Income (Loss)(2)	$	643	$	248	$	578	$	10	$	(1)	1,478
Other Income (Expense):
Derivative instrument loss, net											(62)
Gain on divestitures, net											1,176
Other, net											45
General and administrative											(151)
Transaction, reorganization, and separation											(14)
Financing costs, net											(140)
Income Before Income Taxes											$	2,332
Total Assets(3)	$	2,966	$	2,169	$	8,359	$	—	$	—	$	13,494

	Egypt(1)		North Sea		U.S.		Altus Midstream		Intersegment Eliminations & Other		Total(4)
	Upstream
For the Quarter Ended March 31, 2021	(In millions)
Revenues:
Oil revenues	$	402	$	241	$	348	$	—	$	—	$	991
Natural gas revenues	70		31		211		—		—		312
Natural gas liquids revenues	2		6		120		—		—		128
Oil, natural gas, and natural gas liquids production revenues	474		278		679		—		—		1,431
Purchased oil and gas sales	—		—		437		3		—		440
Midstream service revenues	—		—		—		32		(32)		—
	474		278		1,116		35		(32)		1,871
Operating Expenses:
Lease operating expenses	104		75		86		—		(1)		264
Gathering, processing, and transmission	1		12		69		7		(31)		58
Purchased oil and gas costs	—		—		492		2		—		494
Taxes other than income	—		—		40		4		—		44
Exploration	8		20		16		—		2		46
Depreciation, depletion, and amortization	130		84		125		3		—		342
Asset retirement obligation accretion	—		19		8		1		—		28
	243		210		836		17		(30)		1,276
Operating Income (Loss)(2)	$	231	$	68	$	280	$	18	$	(2)	$	595
Other Income (Expense):
Derivative instrument gains, net											158
Gain on divestitures, net											2
Other, net											61
General and administrative											(83)
Financing costs, net											(107)
Income Before Income Taxes											$	626
Total Assets(3)	$	3,020	$	2,167	$	6,959	$	1,828	$	1	$	13,975

(1)    Includes revenue from non-customers for the quarters ended March 31, 2022 and 2021 of:

	For the Quarter Ended March 31,
	2022		2021
	(In millions)
Oil	$	250	$	93
Natural gas	31		12
Natural gas liquids	1		1

(2)Operating income of U.S. and Egypt includes leasehold impairments of $3 million and $1 million, respectively, for the first quarter of 2022. Operating income of U.S. and Egypt includes leasehold and other asset impairments of $16 million and $2 million, respectively, for the first quarter of 2021.

(3)Intercompany balances are excluded from total assets.

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

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Schedule Of Significant Accounting Policies [Line Items]
Impairments	$ 0	$ 0
Receivables from contracts with customer, net	$ 1,500,000,000		$ 956,000,000
Apache Egypt
Schedule Of Significant Accounting Policies [Line Items]
Ownership percentage by parent	66.67%
Kinetik
Schedule Of Significant Accounting Policies [Line Items]
Ownership percentage by noncontrolling owners	10.00%
Third-Party Investors | ALTM
Schedule Of Significant Accounting Policies [Line Items]
Ownership percentage by noncontrolling owners	21.00%
Sinopec | Apache Egypt
Schedule Of Significant Accounting Policies [Line Items]
Ownership percentage by noncontrolling owners	33.33%

XML

TRANSACTIONS WITH PARENT AFFILIATE (Details) $ in Millions			1 Months Ended	3 Months Ended		12 Months Ended
		Mar. 01, 2021 USD ($) subsidiary	Aug. 31, 2021 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Feb. 28, 2022 USD ($)	Dec. 31, 2021 USD ($)
Related Party Transaction [Line Items]
Interest income from APA Corporation, net				$ 15	$ 5
Interest accrued						$ 61
Distributions to APA Corporation				(346)
Reimbursable costs charged to Parent				5
Note payable to APA Corporation	[1]			174			$ 195
Payments on note payable to APA Corporation, net				$ (305)	0
Apache Egypt | Sinopec
Related Party Transaction [Line Items]
Ownership percentage by noncontrolling owners				33.33%
Net Income And Distributable Cash Flow For Egyptian Operations | Sinopec
Related Party Transaction [Line Items]
Ownership percentage by noncontrolling owners				30.00%
Noncontrolling Interests
Related Party Transaction [Line Items]
Distributions to APA Corporation				$ (41)
Paid-In Capital
Related Party Transaction [Line Items]
Distributions to APA Corporation				(305)
Noncontrolling interest, APA Corporation
Related Party Transaction [Line Items]
Net income attributable to noncontrolling interest				71	$ 0
Noncontrolling interest, APA Corporation | Noncontrolling Interests
Related Party Transaction [Line Items]
Net income attributable to noncontrolling interest				$ 71
Affiliated Entity | Promissory Note
Related Party Transaction [Line Items]
Debt face amount			$ 250
Debt instrument term			1 year
Affiliated Entity | Holding Company Reorganization
Related Party Transaction [Line Items]
Number of subsidiaries | subsidiary		3
Note receivable, term		7 years
Note receivable, interest rate		4.50%
Note receivable, accrued interest converted to principal, term		5 years 6 months
Affiliated Entity | Holding Company Reorganization | Disposed of by Sale | Three Apache Subsidiaries
Related Party Transaction [Line Items]
Net assets transferred		$ 483
Cash and cash equivalents transferred		292
Oil and gas properties, and working capital items transferred		$ 163

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

ACQUISITIONS AND DIVESTITURES - Additional Information (Details) - USD ($) shares in Millions, $ in Millions		1 Months Ended	3 Months Ended
	Feb. 22, 2022	Mar. 31, 2022	Mar. 31, 2022	Mar. 31, 2021	Feb. 21, 2022
Business Acquisition [Line Items]
Gain on deconsolidation of ALTM	$ 609
Shares sold (in shares)		4
Proceeds from sale of stock		$ 224
Loss on sale of stock		$ 25
Proceeds from sale of oil and gas properties			$ 767	$ 3
Leasehold and property acquisitions consideration			$ 20	2
Kinetik
Business Acquisition [Line Items]
Ownership percentage by noncontrolling owners		10.00%	10.00%
Permian Basin
Business Acquisition [Line Items]
Leasehold and property acquisitions consideration				2
Kinetik
Business Acquisition [Line Items]
Shares sold (in shares)		4
Expected future minimum investment, period		24 months
Expected future minimum investment, amount		$ 100	$ 100
Apache Midstream LLC | ALTM
Business Acquisition [Line Items]
Ownership percentage by parent					79.00%
BCP Business Combination | ALTM | ALTM
Business Acquisition [Line Items]
Ownership percentage by noncontrolling owners	20.00%
BCP Business Combination | BCP Business Combination Contributor | Kinetik
Business Acquisition [Line Items]
Ownership percentage by parent	75.00%
Disposed of by Sale | Permian Basin
Business Acquisition [Line Items]
Proceeds from sale of oil and gas properties				3
Gain (loss) on sale of non-core assets				$ 2
Disposed of by Sale | Non-Core Mineral Rights
Business Acquisition [Line Items]
Proceeds from sale of oil and gas properties		759
Gain (loss) on sale of non-core assets		590
Disposed of by Sale | Other Non-Core Assets And Leasehold
Business Acquisition [Line Items]
Proceeds from sale of oil and gas properties		8
Gain (loss) on sale of non-core assets		$ 2
Common Class C | BCP Business Combination | ALTM
Business Acquisition [Line Items]
Business acquisition, equity interest issued or issuable, number of shares (in shares)	50

XML

ACQUISITIONS AND DIVESTITURES - Components of Deconsolidation (Details) - USD ($) $ in Millions		Feb. 22, 2022	Mar. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Fair value of Kinetik Class A Common Stock held by Company	[1]		$ 576	$ 1,365
ASSETS:
Cash and cash equivalents		$ 143
Other current assets		29
Property and equipment, net		184
Equity method interests		1,367
Other noncurrent assets		12
Total assets deconsolidated		1,735
LIABILITIES:
Current liabilities		3
Long-term debt		657
Other noncurrent liabilities		168
Total liabilities deconsolidated		828
NONCONTROLLING INTERESTS:
Redeemable noncontrolling interest preferred unit limited partners		642
Noncontrolling interest-Altus		72
Total noncontrolling interests deconsolidated		714
Net effect of deconsolidating balance sheet		(193)
Deconsolidation of Altus		609
Kinetik
Business Acquisition [Line Items]
Fair value of Kinetik Class A Common Stock held by Company		$ 802	$ 576	$ 0

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

CAPITALIZED EXPLORATORY WELL COSTS (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Extractive Industries [Abstract]
Capitalized exploratory well costs	$ 59	$ 46

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Additional Information (Details) MMBTU in Thousands, £ in Millions, $ in Millions		3 Months Ended
	Apr. 01, 2022 $ / MMBTU MMBTU	Mar. 31, 2022 GBP (£) Counterparty $ / MMBTU	Mar. 31, 2021 USD ($)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of derivative counterparties | Counterparty		12
Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Realized gain in connection with contracts | $			$ 147
Foreign currency derivative instruments
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, notional amount | £		£ 15
Derivative, weighted average floor price (USD per MMBtu)		1.39
Derivative, weighted average ceiling price (USD per MMBtu)		1.29
Basis Swap Purchased | July to September 2023 | NYMEX Henry Hub/IF Waha | Natural gas revenues | Subsequent Event
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	1,840
Weighted Average Price Differential	(1.62)
Basis Swap Sold | July to September 2023 | NYMEX Henry Hub/IF HSC | Natural gas revenues | Subsequent Event
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	1,840
Weighted Average Price Differential	(0.19)

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Derivative Instruments (Details) - Natural gas revenues MMBTU in Thousands	3 Months Ended
	Mar. 31, 2022 $ / MMBTU MMBTU
Basis Swap Purchased | January—December 2022 | NYMEX Henry Hub/IF Waha
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	33,000
Weighted Average Price Differential | $ / MMBTU	(0.45)
Basis Swap Purchased | July—December 2022 | NYMEX Henry Hub/IF Waha
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	20,240
Weighted Average Price Differential | $ / MMBTU	(0.97)
Basis Swap Purchased | October—December 2022 | NYMEX Henry Hub/IF Waha
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	920
Weighted Average Price Differential | $ / MMBTU	(1.19)
Basis Swap Purchased | January—March 2023 | NYMEX Henry Hub/IF Waha
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	3,150
Weighted Average Price Differential | $ / MMBTU	(1.06)
Basis Swap Purchased | January—June 2023 | NYMEX Henry Hub/IF Waha
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	4,525
Weighted Average Price Differential | $ / MMBTU	(1.54)
Basis Swap Purchased | January—December 2023 | NYMEX Henry Hub/IF Waha
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	73,000
Weighted Average Price Differential | $ / MMBTU	(1.15)
Basis Swap Sold | January—December 2022 | NYMEX Henry Hub/IF HSC
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	33,000
Weighted Average Price Differential | $ / MMBTU	(0.08)
Basis Swap Sold | July—December 2022 | NYMEX Henry Hub/IF HSC
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	20,240
Weighted Average Price Differential | $ / MMBTU	(0.17)
Basis Swap Sold | October—December 2022 | NYMEX Henry Hub/IF HSC
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	920
Weighted Average Price Differential | $ / MMBTU	(0.19)
Basis Swap Sold | January—March 2023 | NYMEX Henry Hub/IF HSC
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	3,150
Weighted Average Price Differential | $ / MMBTU	(0.03)
Basis Swap Sold | January—June 2023 | NYMEX Henry Hub/IF HSC
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	4,525
Weighted Average Price Differential | $ / MMBTU	(0.11)
Basis Swap Sold | January—December 2023 | NYMEX Henry Hub/IF HSC
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, nonmonetary notional amount (in MMBtu) | MMBTU	73,000
Weighted Average Price Differential | $ / MMBTU	(0.08)

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Derivative Assets and Liabilities Measured at Fair Value (Details) - Recurring - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Assets:
Derivative asset	$ 5	$ 0
Liabilities:
Derivative liability	41	113
Commodity derivative instruments
Assets:
Derivative asset, fair value	0
Derivative asset, netting	5
Derivative asset	5
Liabilities:
Derivative liability, fair value	34	10
Derivative liability, netting	5	0
Derivative liability	39	10
Commodity derivative instruments | Quoted Price in Active Markets (Level 1)
Assets:
Derivative asset, fair value	0
Liabilities:
Derivative liability, fair value	0	0
Commodity derivative instruments | Significant Other Inputs (Level 2)
Assets:
Derivative asset, fair value	0
Liabilities:
Derivative liability, fair value	34	10
Commodity derivative instruments | Significant Unobservable Inputs (Level 3)
Assets:
Derivative asset, fair value	0
Liabilities:
Derivative liability, fair value	0	0
Foreign currency derivative instruments
Liabilities:
Derivative liability, fair value	2
Derivative liability, netting	0
Derivative liability	2
Foreign currency derivative instruments | Quoted Price in Active Markets (Level 1)
Liabilities:
Derivative liability, fair value	0
Foreign currency derivative instruments | Significant Other Inputs (Level 2)
Liabilities:
Derivative liability, fair value	2
Foreign currency derivative instruments | Significant Unobservable Inputs (Level 3)
Liabilities:
Derivative liability, fair value	$ 0
Pipeline capacity embedded derivatives
Liabilities:
Derivative liability, fair value		46
Derivative liability, netting		0
Derivative liability		46
Pipeline capacity embedded derivatives | Quoted Price in Active Markets (Level 1)
Liabilities:
Derivative liability, fair value		0
Pipeline capacity embedded derivatives | Significant Other Inputs (Level 2)
Liabilities:
Derivative liability, fair value		46
Pipeline capacity embedded derivatives | Significant Unobservable Inputs (Level 3)
Liabilities:
Derivative liability, fair value		0
Preferred Units embedded derivative
Liabilities:
Derivative liability, fair value		57
Derivative liability, netting		0
Derivative liability		57
Preferred Units embedded derivative | Quoted Price in Active Markets (Level 1)
Liabilities:
Derivative liability, fair value		0
Preferred Units embedded derivative | Significant Other Inputs (Level 2)
Liabilities:
Derivative liability, fair value		0
Preferred Units embedded derivative | Significant Unobservable Inputs (Level 3)
Liabilities:
Derivative liability, fair value		$ 57

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Derivative Assets and Liabilities and Locations on Consolidated Balance Sheet (Details) - Recurring - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Derivatives, Fair Value [Line Items]
Derivative asset	$ 5	$ 0
Derivative liability	41	113
Current Assets: Other current assets
Derivatives, Fair Value [Line Items]
Derivative asset	4	0
Other Assets: Deferred charges and other
Derivatives, Fair Value [Line Items]
Derivative asset	1	0
Current Liabilities: Other current liabilities
Derivatives, Fair Value [Line Items]
Derivative liability	20	4
Deferred Credits and Other Noncurrent Liabilities: Other
Derivatives, Fair Value [Line Items]
Derivative liability	$ 21	$ 109

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Derivative Activities Recorded in the Statement of Consolidated Operations (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized gain (loss), net	$ (57)	$ 10
Derivative instrument gains (losses), net	(62)	158
Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Realized gain (loss), net	(5)	148
Unrealized gain (loss), net	(57)	10
Derivative instrument gains (losses), net	(62)	158
Commodity derivative instruments | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Realized gain (loss), net	(5)	148
Unrealized gain (loss), net	(24)	26
Pipeline capacity embedded derivatives | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized gain (loss), net	0	1
Foreign currency derivative instruments | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized gain (loss), net	(2)	0
Preferred Units embedded derivative | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized gain (loss), net	$ (31)	$ (17)

XML

OTHER CURRENT ASSETS (Details) - USD ($) $ in Millions		Mar. 31, 2022	Dec. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Inventories		$ 495	$ 438
Drilling advances		70	55
Prepaid assets and other		30	56
Current decommissioning security for sold Gulf of Mexico assets		100	100
Total Other current assets	[1]	$ 695	$ 649

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

EQUITY METHOD INTERESTS - Additional Information (Details) shares in Millions, $ in Millions	1 Months Ended	3 Months Ended
	Mar. 31, 2022 USD ($) shares	Mar. 31, 2022 USD ($) shares	Feb. 22, 2022 shares	Dec. 31, 2021 entity
Schedule of Equity Method Investments [Line Items]
Shares sold (in shares) | shares	4.0
Loss on sale of stock | $	$ 25
ALTM
Schedule of Equity Method Investments [Line Items]
Number of long-haul pipeline entities | entity				4
Kinetik
Schedule of Equity Method Investments [Line Items]
Equity method investment, number of shares (in share) | shares	8.9	8.9	12.9
Shares sold (in shares) | shares	4.0
Interest percentage	13.00%	13.00%
Gain on equity fair value adjustment | $	$ 24	$ 24
Gathering, processing and transportation costs payable | $	$ 10	$ 10

XML

EQUITY METHOD INTERESTS - Roll Forward Activity of Kinetik Holdings (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended
		Mar. 31, 2022	Mar. 31, 2022
Movement In Equity Method Interests [Roll Forward]
Equity method interest, beginning balance	[1]		$ 1,365
Equity method interest, ending balance	[1]	$ 576	576
Kinetik
Movement In Equity Method Interests [Roll Forward]
Equity method interest, beginning balance			0
Initial interest upon closing the BCP Business Combination			802
Sale of Class A shares			(250)
Fair value adjustment as of March 31, 2022		24	24
Equity method interest, ending balance		$ 576	$ 576

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

EQUITY METHOD INTERESTS - Summary of Investments (Details) - USD ($) $ in Millions		Mar. 31, 2022	Dec. 31, 2021
Schedule of Equity Method Investments [Line Items]
Equity method interests	[1]	$ 576	$ 1,365
ALTM
Schedule of Equity Method Investments [Line Items]
Equity method interests		$ 0	1,365
Gulf Coast Express Pipeline, LLC
Schedule of Equity Method Investments [Line Items]
Interest		16.00%
Gulf Coast Express Pipeline, LLC | ALTM
Schedule of Equity Method Investments [Line Items]
Equity method interests		$ 0	274
EPIC Crude Holdings, LP
Schedule of Equity Method Investments [Line Items]
Interest		15.00%
EPIC Crude Holdings, LP | ALTM
Schedule of Equity Method Investments [Line Items]
Equity method interests		$ 0	0
Permian Highway Pipeline, LLC
Schedule of Equity Method Investments [Line Items]
Interest		26.70%
Permian Highway Pipeline, LLC | ALTM
Schedule of Equity Method Investments [Line Items]
Equity method interests		$ 0	630
Shin Oak Pipeline (Breviloba, LLC)
Schedule of Equity Method Investments [Line Items]
Interest		33.00%
Shin Oak Pipeline (Breviloba, LLC) | ALTM
Schedule of Equity Method Investments [Line Items]
Equity method interests		$ 0	$ 461

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

EQUITY METHOD INTERESTS - Rollforward Activity (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2022	Mar. 31, 2021
Movement In Equity Method Interests [Roll Forward]
Equity method interest, beginning balance	[1]	$ 1,365
Capital contributions		2	$ 21
Equity method interest, ending balance	[1]	576
ALTM
Movement In Equity Method Interests [Roll Forward]
Equity method interest, beginning balance		1,365
Capital contributions		2
Distributions		(21)
Equity income (loss), net		21
Deconsolidation of Altus		(1,367)
Equity method interest, ending balance		0
Gulf Coast Express Pipeline LLC | ALTM
Movement In Equity Method Interests [Roll Forward]
Equity method interest, beginning balance		274
Capital contributions		0
Distributions		(5)
Equity income (loss), net		8
Deconsolidation of Altus		(277)
Equity method interest, ending balance		0
EPIC Crude Holdings, LP | ALTM
Movement In Equity Method Interests [Roll Forward]
Equity method interest, beginning balance		0
Capital contributions		2
Distributions		0
Equity income (loss), net		(2)
Deconsolidation of Altus		0
Equity method interest, ending balance		0
Permian Highway Pipeline LLC | ALTM
Movement In Equity Method Interests [Roll Forward]
Equity method interest, beginning balance		630
Capital contributions		0
Distributions		(9)
Equity income (loss), net		10
Deconsolidation of Altus		(631)
Equity method interest, ending balance		0
Breviloba, LLC | ALTM
Movement In Equity Method Interests [Roll Forward]
Equity method interest, beginning balance		461
Capital contributions		0
Distributions		(7)
Equity income (loss), net		5
Deconsolidation of Altus		(459)
Equity method interest, ending balance		$ 0

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

EQUITY METHOD INTERESTS - Summary of Combined Statement of Operations Equity Method Interests (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Schedule of Equity Method Investments [Line Items]
Operating income	$ 1,478	$ 595
Net income	$ 1,981	459
Equity Method Investment, Nonconsolidated Investee or Group of Investees
Schedule of Equity Method Investments [Line Items]
Operating revenues		254
Operating income		112
Net income		89
Other comprehensive income		$ 4

XML

OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Millions		Mar. 31, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued operating expenses		$ 127	$ 129
Accrued exploration and development		221	206
Accrued compensation and benefits		242	292
Accrued interest		69	107
Accrued income taxes		103	28
Current asset retirement obligation		40	41
Current operating lease liability		109	99
Current portion of derivatives at fair value		20	4
Current decommissioning contingency for sold Gulf of Mexico properties		100	100
Other		191	164
Total Other current liabilities	[1]	$ 1,222	$ 1,170

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

ASSET RETIREMENT OBLIGATION (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Asset retirement obligation at the beginning of period		$ 2,130
Liabilities settled		(7)
Deconsolidation of Altus		(69)
Accretion expense		29	$ 28
Asset retirement obligation at the end of period		2,083
Less current portion		(40)		$ (41)
Asset retirement obligation, long-term	[1]	$ 2,043		$ 2,089

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

DEBT AND FINANCING COSTS - Schedule of Debt (Details) - USD ($) $ in Millions		Mar. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Finance lease obligations		$ 35	$ 36
Unamortized discount		(28)	(30)
Debt issuance costs		(30)	(39)
Total debt		5,889	7,510
Current maturities		(125)	(215)
Long-term debt	[1]	5,764	7,295
Notes and debentures before unamortized discount and debt issuance costs
Debt Instrument [Line Items]
Debt instrument, fair value		5,100	7,100
Notes and debentures before unamortized discount and debt issuance costs | Unsecured Debt
Debt Instrument [Line Items]
Long-term debt, gross		5,032	6,344
Altus credit facility | Line of Credit | Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility		0	657
Apache credit facility
Debt Instrument [Line Items]
Credit facility			542
Apache credit facility | Line of Credit | Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility		$ 880	$ 542

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

DEBT AND FINANCING COSTS - Additional Information (Details)		3 Months Ended
	Apr. 29, 2022 USD ($) agreement contract guaranty	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Apr. 29, 2022 GBP (£) agreement guaranty	Mar. 31, 2022 GBP (£)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 GBP (£)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 GBP (£)	Mar. 31, 2018 USD ($)
Debt Instrument [Line Items]
Finance lease obligations, current		$ 2,000,000				$ 2,000,000
Loss on extinguishment of debt		67,000,000	$ 0
Subsequent Event
Debt Instrument [Line Items]
Number of guaranties of obligations | guaranty	2			2
Number of syndicated credit agreements | agreement	2			2
Cash Tender Offers | Senior Notes
Debt Instrument [Line Items]
Debt repurchased principal amount		1,100,000,000
Debt instrument repurchase program		1,200,000,000
Loss on extinguishment of debt		66,000,000
Debt instrument, unamortized discount and issuance costs		11,000,000
Open Market Repurchase | Senior Notes
Debt Instrument [Line Items]
Debt repurchased principal amount		15,000,000	7,000,000
Debt instrument repurchase program		16,000,000	6,000,000
Loss on extinguishment of debt		1,000,000	0
Premium (discount) to par of debt repurchase		1,000,000	$ (1,000,000)
Senior Notes Due April 15, 2022 | Senior Notes
Debt Instrument [Line Items]
Current debt outstanding amount		$ 213,000,000
Debt instrument, stated interest rate		3.25%			3.25%
Redemption price, percentage of principal amount		100.00%
Apache credit facility
Debt Instrument [Line Items]
Credit facility						542,000,000
Letters of credit outstanding, amount		$ 17,000,000			£ 117,000,000			$ 17,000,000	£ 117,000,000
Apache credit facility | Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, committed amount										$ 4,000,000,000
Former Facility | Revolving Credit Facility | Subsequent Event
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	$ 680,000,000
Line of credit facility, terminated Amount	4,000,000,000
Line of credit facility, covenant benchmark amount	1,000,000,000
Senior Notes | Senior Notes Due April 15, 2022
Debt Instrument [Line Items]
Current debt outstanding amount						$ 213,000,000
Debt instrument, stated interest rate						3.25%	3.25%
Senior Notes | Senior Notes Due January 15, 2023
Debt Instrument [Line Items]
Current debt outstanding amount		$ 123,000,000
Debt instrument, stated interest rate		2.63%			2.63%
Line of Credit | Apache credit facility | Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility		$ 880,000,000				$ 542,000,000
Line of Credit | Apache credit facility | Letter of Credit
Debt Instrument [Line Items]
Letters of credit outstanding, amount		$ 20,000,000			£ 748,000,000	$ 20,000,000	£ 748,000,000
Line of Credit | USD Agreement | Subsequent Event
Debt Instrument [Line Items]
Line of credit facility, committed amount	$ 1,800,000,000
Debt instrument term	5 years
Line of credit facility, number of extension options | contract	2
Debt extension term	1 year
Line of credit facility, increased committed amount	$ 2,300,000,000
Line of Credit | USD Agreement | Letter of Credit | Subsequent Event
Debt Instrument [Line Items]
Letters of credit outstanding, amount	20,000,000
Credit facility maximum borrowing capacity	750,000,000
Line of credit facility, current borrowing capacity	150,000,000
Principal amount outstanding	$ 300,000,000
Line of Credit | GBP Agreement | Subsequent Event
Debt Instrument [Line Items]
Line of credit facility, committed amount | £				£ 1,500,000,000
Debt instrument term	5 years
Debt extension term	1 year
Line of Credit | GBP Agreement | Letter of Credit | Subsequent Event
Debt Instrument [Line Items]
Letters of credit outstanding, amount	$ 748,000,000
Line of credit facility, number of extension options | contract	2

XML

DEBT AND FINANCING COSTS - Components of Financing Costs, Net (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Debt Disclosure [Abstract]
Interest expense	$ 90	$ 112
Amortization of debt issuance costs	2	2
Loss on extinguishment of debt	67	0
Interest income	(4)	(2)
Interest income from APA Corporation, net	(15)	(5)
Financing costs, net	$ 140	$ 107

XML

COMMITMENTS AND CONTINGENCIES (Details) $ in Millions								3 Months Ended	12 Months Ended
		Sep. 10, 2020 defendant	Sep. 11, 2019 USD ($) plaintiff	Dec. 20, 2017 Action	Jul. 17, 2017 Action defendant	Mar. 21, 2016 USD ($)	Mar. 20, 2016 USD ($)	Mar. 31, 2022 USD ($) bond subsidiary Action	Dec. 31, 2021 USD ($) sidetrack	Dec. 31, 2013 USD ($) source	Sep. 30, 2021 USD ($)	Dec. 31, 2017 AUD ($)	Apr. 30, 2017 AUD ($)	Mar. 12, 2014 USD ($)
Commitment And Contingencies [Line Items]
Accrued liability for legal contingencies								$ 73,000,000
Environmental tax and royalty obligations														$ 100,000,000
Retain right of obligations								45,000,000
Undiscounted reserve for environmental remediation								2,000,000
Standby loan agreed to provide related to ARO								400,000,000
Current decommissioning contingency for sold Gulf of Mexico properties								1,200,000,000
Decommissioning contingency for sold Gulf of Mexico properties, total	[1]							1,086,000,000	$ 1,086,000,000
Current decommissioning contingency for sold Gulf of Mexico properties								100,000,000	100,000,000
Decommissioning security for sold properties									740,000,000
Trust account for disposal group, number of net profits interests	[1]							$ 640,000,000	640,000,000
Current decommissioning security for sold Gulf of Mexico assets									100,000,000
Gulf Of Mexico Shelf Operations and Properties | Disposed of by Sale
Commitment And Contingencies [Line Items]
Proceeds from sale of operations and properties										$ 3,750,000,000
Trust account for disposal group, number of net profits interests | source										2
Number of bonds held | bond								2
Number of debt instruments held | subsidiary								5
Minimum
Commitment And Contingencies [Line Items]
Asset retirement obligation, estimated liability											$ 1,200,000,000
Maximum
Commitment And Contingencies [Line Items]
Asset retirement obligation, estimated liability											$ 1,400,000,000
Apollo Exploration Lawsuit
Commitment And Contingencies [Line Items]
Plaintiffs alleged damages						$ 200,000,000
Apollo Exploration Lawsuit | Minimum
Commitment And Contingencies [Line Items]
Plaintiffs alleged damages							$ 1,100,000,000
Australian Operations Divestiture Dispute | Apache Australia Operation
Commitment And Contingencies [Line Items]
Gain contingency, unrecorded amount													$ 80
Loss contingency, estimated of possible loss amount												$ 200
Canadian Operations Divestiture Dispute
Commitment And Contingencies [Line Items]
Plaintiffs alleged damages			$ 60,000,000
Number of plaintiffs | plaintiff			4
California Litigation
Commitment And Contingencies [Line Items]
Number of actions filed | Action				2	3
Number of defendants | defendant					30
Delaware Litigation
Commitment And Contingencies [Line Items]
Number of defendants | defendant		25
Castex Lawsuit
Commitment And Contingencies [Line Items]
Plaintiffs alleged damages									200,000,000
Loss contingency, estimated of possible loss amount								$ 13,500,000	$ 60,000,000
Number of sidetracks | sidetrack									5
Oklahoma Class Actions
Commitment And Contingencies [Line Items]
Plaintiffs alleged damages								$ 200,000,000
Number of actions filed | Action								2

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

XML

REDEMABLE NONCONTROLLING INTEREST - ALTUS - Additional Information (Details) - USD ($) $ in Millions		1 Months Ended
	Jun. 12, 2019	Mar. 31, 2022
Class of Stock [Line Items]
Proceeds from sale of stock		$ 224
Altus Midstream LP | Redeemable Noncontrolling Interest - Altus Preferred Unit Limited Partners
Class of Stock [Line Items]
Proceeds from sale of stock	$ 625
Proceeds from issuance or sale of equity	$ 611

XML

REDEMABLE NONCONTROLLING INTEREST - ALTUS - Activity Related to Preferred Units (Details) - USD ($) $ in Millions		2 Months Ended	3 Months Ended		12 Months Ended
		Feb. 22, 2022	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance	[1]	$ 712	$ 712
Ending balance	[1]		0		$ 712
Redeemable Noncontrolling Interest - Altus Preferred Unit Limited Partners
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance	[2]	712	712	$ 608	608
Cash distributions to Altus Preferred Unit limited partners	[2]			(11)
Dividends payable to Altus Preferred Unit limited partners	[2]			(11)
Ending balance	[2]		0	$ 605	$ 712
Altus Midstream LP
Increase (Decrease) in Temporary Equity [Roll Forward]
Accreted value adjustment			$ 53
Preferred Units embedded derivative		89
Deconsolidation of Subsidiary		(731)
Redeemable noncontrolling interest, net of embedded derivative liability		$ 0
Altus Midstream LP | Redeemable Noncontrolling Interest - Altus Preferred Unit Limited Partners
Movement In Preferred Units [Roll Forward]
Preferred units: beginning of period (in shares)		660,694	660,694	660,694	660,694
Preferred units: end of period (in shares)		660,694,000			660,694
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance		$ 712	$ 712	$ 608	$ 608
Cash distributions to Altus Preferred Unit limited partners					(46)
Dividends payable to Altus Preferred Unit limited partners					(12)
Allocation of Altus Midstream LP net income		12			80
Accreted value adjustment		(82)			82
Ending balance		$ 642			$ 712

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.

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

XML

CAPITAL STOCK AND EQUITY (Details) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)
Equity [Abstract]
Common stock, conversion ratio	1
Payments on note payable to APA Corporation, net	$ (305)	$ 0
Payments of dividend on common stock	$ 0	$ 9

XML

BUSINESS SEGMENT INFORMATION - Additional Information (Details)	3 Months Ended
	Mar. 31, 2022 Segment
Segment Reporting [Abstract]
Number of operating segments	3

XML

BUSINESS SEGMENT INFORMATION - Financial Segment Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022		Mar. 31, 2021	Dec. 31, 2021	[1]
Segment Reporting Information [Line Items]
Lease operating expenses	$ 344		$ 264
Taxes other than income	70		44
Exploration	25		46
Depreciation, depletion, and amortization	291		342
Asset retirement obligation accretion	29		28
Total operating expenses	1,191		1,276
Operating Income (Loss)	1,478		595
Other Income (Expense):
Derivative instrument gains, net	(62)		158
Gain on divestitures, net	1,176		2
Other, net	45		61
General and administrative	(151)		(83)
Transaction, reorganization, and separation	(14)		0
Financing costs, net	(140)		(107)
NET INCOME BEFORE INCOME TAXES	2,332		626
Total assets	13,494	[1]	13,975	$ 14,393
Operating Segments | Egypt(1)
Segment Reporting Information [Line Items]
Lease operating expenses	131		104
Taxes other than income	0		0
Exploration	15		8
Depreciation, depletion, and amortization	97		130
Asset retirement obligation accretion	0		0
Total operating expenses	248		243
Operating Income (Loss)	643		231
Other Income (Expense):
Total assets	2,966		3,020
Impairments of oil and gas properties	1		2
Operating Segments | North Sea
Segment Reporting Information [Line Items]
Lease operating expenses	96		75
Taxes other than income	0		0
Exploration	5		20
Depreciation, depletion, and amortization	62		84
Asset retirement obligation accretion	20		19
Total operating expenses	195		210
Operating Income (Loss)	248		68
Other Income (Expense):
Total assets	2,169		2,167
Operating Segments | U.S.
Segment Reporting Information [Line Items]
Lease operating expenses	118		86
Taxes other than income	67		40
Exploration	4		16
Depreciation, depletion, and amortization	130		125
Asset retirement obligation accretion	8		8
Total operating expenses	755		836
Operating Income (Loss)	578		280
Other Income (Expense):
Total assets	8,359		6,959
Impairments of oil and gas properties	3		16
Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Purchased oil and gas sales	16		32
Lease operating expenses	0		0
Taxes other than income	3		4
Exploration	0		0
Depreciation, depletion, and amortization	2		3
Asset retirement obligation accretion	1		1
Total operating expenses	11		17
Operating Income (Loss)	10		18
Other Income (Expense):
Total assets	0		1,828
Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Purchased oil and gas sales	(16)		(32)
Lease operating expenses	(1)		(1)
Taxes other than income	0		0
Exploration	1		2
Depreciation, depletion, and amortization	0		0
Asset retirement obligation accretion	0		0
Total operating expenses	(18)		(30)
Operating Income (Loss)	(1)		(2)
Other Income (Expense):
Total assets	0		1
Oil and gas, excluding purchased
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	2,320		1,431
Cost of oil and gas purchased	81		58
Oil and gas, excluding purchased | Operating Segments | Egypt(1)
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	891		474
Cost of oil and gas purchased	5		1
Oil and gas, excluding purchased | Operating Segments | North Sea
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	443		278
Cost of oil and gas purchased	12		12
Oil and gas, excluding purchased | Operating Segments | U.S.
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	989		679
Cost of oil and gas purchased	77		69
Oil and gas, excluding purchased | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	0		0
Cost of oil and gas purchased	5		7
Oil and gas, excluding purchased | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	(3)
Cost of oil and gas purchased	(18)		(31)
Purchased oil and gas sales
Segment Reporting Information [Line Items]
Purchased oil and gas sales	349		440
Cost of oil and gas purchased	351		494
Purchased oil and gas sales | Operating Segments | Egypt(1)
Segment Reporting Information [Line Items]
Purchased oil and gas sales	0		0
Cost of oil and gas purchased	0		0
Purchased oil and gas sales | Operating Segments | North Sea
Segment Reporting Information [Line Items]
Purchased oil and gas sales	0		0
Cost of oil and gas purchased	0		0
Purchased oil and gas sales | Operating Segments | U.S.
Segment Reporting Information [Line Items]
Purchased oil and gas sales	344		437
Cost of oil and gas purchased	351		492
Purchased oil and gas sales | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Purchased oil and gas sales	5		3
Cost of oil and gas purchased	0		2
Purchased oil and gas sales | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Purchased oil and gas sales	0		0
Cost of oil and gas purchased	0		0
Oil and gas
Segment Reporting Information [Line Items]
Total revenues	2,669		1,871
Oil and gas | Operating Segments | Egypt(1)
Segment Reporting Information [Line Items]
Total revenues	891		474
Oil and gas | Operating Segments | North Sea
Segment Reporting Information [Line Items]
Total revenues	443		278
Oil and gas | Operating Segments | U.S.
Segment Reporting Information [Line Items]
Total revenues	1,333		1,116
Oil and gas | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Total revenues	21		35
Oil and gas | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Total revenues	(19)		(32)
Oil revenues
Other Income (Expense):
Revenue from non-customers	250		93
Oil revenues | Oil and gas, excluding purchased
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	1,717		991
Oil revenues | Oil and gas, excluding purchased | Operating Segments | Egypt(1)
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	790		402
Oil revenues | Oil and gas, excluding purchased | Operating Segments | North Sea
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	328		241
Oil revenues | Oil and gas, excluding purchased | Operating Segments | U.S.
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	599		348
Oil revenues | Oil and gas, excluding purchased | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	0		0
Oil revenues | Oil and gas, excluding purchased | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	0		0
Natural gas revenues
Other Income (Expense):
Revenue from non-customers	31		12
Natural gas revenues | Oil and gas, excluding purchased
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	380		312
Natural gas revenues | Oil and gas, excluding purchased | Operating Segments | Egypt(1)
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	98		70
Natural gas revenues | Oil and gas, excluding purchased | Operating Segments | North Sea
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	99		31
Natural gas revenues | Oil and gas, excluding purchased | Operating Segments | U.S.
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	183		211
Natural gas revenues | Oil and gas, excluding purchased | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	0		0
Natural gas revenues | Oil and gas, excluding purchased | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	0		0
Natural gas liquids revenues
Other Income (Expense):
Revenue from non-customers	1		1
Natural gas liquids revenues | Oil and gas, excluding purchased
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	223		128
Natural gas liquids revenues | Oil and gas, excluding purchased | Operating Segments | Egypt(1)
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	3		2
Natural gas liquids revenues | Oil and gas, excluding purchased | Operating Segments | North Sea
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	16		6
Natural gas liquids revenues | Oil and gas, excluding purchased | Operating Segments | U.S.
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	207		120
Natural gas liquids revenues | Oil and gas, excluding purchased | Reportable Legal Entities | Altus Midstream
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	0		0
Natural gas liquids revenues | Oil and gas, excluding purchased | Intersegment Eliminations & Other
Segment Reporting Information [Line Items]
Oil, natural gas, and natural gas liquids production revenues	$ (3)		$ 0

[1] The Altus VIE amounts are disclosed as of December 31, 2021. All Altus balances were deconsolidated as of February 22, 2022. Refer to Note 1—Summary of Significant Accounting Policies and Note 3—Acquisitions and Divestitures for further detail.