APACHE CORP - FORM 8-K - EX-99.1

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8-K - 8-K - APACHE CORP	d817849d8k.htm

Exhibit 99.1


		NEWS RELEASE

Apache Corporation Reports Third-Quarter 2014 Financial and Operational Results

•

Third-quarter 2014 highlights

•

Onshore North American liquids production exceeded 211,000 barrels of oil equivalent (boe) per day, up 15 percent from the prior year when adjusted for asset sales

•

Permian production reached 162,000 boe per day, up 23 percent from the prior year

•

Worldwide production averaged 637,000 boe per day; pro forma worldwide production averaged 562,000 boe per day, up 6 percent from the prior year

•

Operating activities provided net cash of $1.9 billion; cash flow from continuing operations before changes in operating assets and liabilities of $2.1 billion

•

Non-cash charges resulted in net loss attributable to common stock of $1.3 billion or $3.50 per diluted share

•

Adjusted earnings of $528 million or $1.38 per share

•

Repurchased 5.7 million shares of common stock during the third quarter; 8.2 million shares remained under existing authorization as of Sept. 30

•

2014 onshore North American liquids growth anticipated at the high end of previously disclosed guidance range of 15-18 percent, adjusted for asset sales

•

Company to provide North American onshore business update on Nov. 20 in New York City

HOUSTON, Nov. 6, 2014 – Apache Corporation (NYSE, Nasdaq: APA) today announced that non-cash charges resulted in a third-quarter 2014 net loss of $1.3 billion or $3.50 per diluted common share. Adjusted earnings, which exclude certain items that impact the comparability of results, totaled $528 million or $1.38 per share. Net cash provided by operating activities totaled approximately $1.9 billion in the third quarter of 2014, with cash from operations before changes in operating assets and liabilities totaling $2.1 billion.

Apache’s third-quarter net loss was the result of three non-cash charges:

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An $814 million U.S. deferred tax charge related to the company’s change in policy and outlook regarding the permanent reinvestment of its foreign earnings;

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A $249 million income tax expense related to the repatriation of cash from its Egyptian operations during the third quarter; and

LOGO

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A $1 billion after-tax reduction in the carrying value of its oil and gas properties driven by lower oil and natural gas liquids price realizations and the previously announced deep water sale.

“Our North American onshore regions delivered another strong quarter as we continued to execute our strategy to profitably grow North American liquids production,” said G. Steven Farris, Apache chairman, chief executive officer and president. “Liquids production increased 5 percent from the second quarter and 15 percent from the prior-year quarter when adjusted for asset sales.

“We are excited about the progress we have made in North America thus far in 2014, particularly in the Permian and Eagle Ford. Our Permian Region continues to deliver impressive liquids growth increasing 26 percent from the prior year quarter,” Farris said. “In our Eagle Ford program we spud 29 wells during the quarter and have now ramped to 10 rigs. We anticipate this region will be a key contributor to profitable liquids growth going forward.”

Apache is advancing its unconventional resource capabilities and high-grading its North American onshore portfolio. During the third quarter, the company opportunistically invested $521 million in new leasehold and property acquisitions. In addition, the company is currently marketing non-core North American asset packages as part of its portfolio high-grading initiative and continues to acquire acreage in key growth areas.

“Our international businesses also delivered during the quarter with strong drilling results in Egypt, first oil production from Balnaves in Australia and a successful turnaround season in the North Sea,” Farris said. “We have built premier businesses in each of these regions and remain highly committed to the strategic separation of these assets. We will provide an update as material events unfold.”

During the quarter, Apache returned capital to shareholders through the purchase of an additional 5.7 million shares of its common stock on the open market. This brings total shares repurchased as of Sept. 30 to approximately 32 million of the 40 million shares authorized. Apache continues to see share buy-backs as an attractive use of capital.

Third-quarter 2014 production and operating highlights

Highlights from the third-quarter include:

•

North American onshore regions increased liquids production to approximately 211,000 barrels per day, an increase of 28,000 barrels per day or 15 percent from the prior-year period when adjusted for asset sales.

•

The Permian Region achieved record production of approximately 162,000 boe per day, up 23 percent from the prior-year period. The region averaged 42 operated rigs during the quarter and drilled 195 gross operated wells.

•

Total reported worldwide net daily production of oil, natural gas and natural gas liquids (NGLs) averaged 637,000 boe per day, with pro forma production averaging 562,000 boe per day, up 6 percent from the prior year.

•

Balnaves, a floating production, storage and offloading project in Australia, commenced production during the quarter and is currently producing at approximately 12,000 barrels of oil per day (net).

Oil and gas prices

Apache’s hydrocarbon production during the third-quarter 2014 consisted of approximately 60 percent liquids and 40 percent natural gas. Liquids contributed 84 percent of the company’s revenue during the period. In North America onshore, Apache received an average price of $90.30 per barrel of crude oil during the third quarter, compared with $103.44 per barrel in the prior-year period. North

American onshore natural gas prices averaged $3.97 per thousand cubic feet (Mcf), compared with $3.26 per Mcf in the prior-year period. Globally, Apache received an average price of $94.69 per barrel of crude oil during the third quarter, compared with $108.27 per barrel in the prior-year period. Global natural gas prices averaged $3.88 per Mcf of natural gas, compared with $3.56 per Mcf in the prior-year period.

In the fourth quarter of 2014, Apache has oil hedges covering 62,500 barrels per day at an average West Texas Intermediate price of $90.83 per barrel and 62,500 barrels per day at an average Brent price of $100.05 per barrel.

Conference call

Apache will conduct a conference call to discuss its 2014 third-quarter results at 1 p.m. Central time Thursday, Nov. 6. The conference call will be webcast from Apache’s website, www.apachecorp.com. The webcast replay will be archived on Apache’s website. The conference call will be available for delayed playback by telephone for one week beginning at approximately 4 p.m. Central time Nov. 6. To access the telephone playback, dial 855-859-2056 or 404-537-3406 for international calls. The conference access code is 30670543.

Additional Information

Additional information follows, including reconciliations of adjusted earnings and cash from operations before changes in operating assets and liabilities (non-GAAP financial measures) to GAAP measures and information regarding pro forma production. Apache’s quarterly supplement is available at www.apachecorp.com/financialdata.

About Apache

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom and Australia. Apache posts announcements, operational updates, investor information and copies of all press releases on its website, www.apachecorp.com, and on its Media and Investor Center mobile application, which is available for free download from the Apple App Store and the Google Play Store.

Non-GAAP financial measures

Apache’s financial information includes information prepared in conformity with generally accepted accounting standards (GAAP) as well as non-GAAP information. It is management’s intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted earnings and cash from continuing operations before changes in operating assets and liabilities are non-GAAP measures. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure.

Forward-looking statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods. These statements include, but are not limited to, statements about future plans, expectations and objectives for Apache’s operations, including statements about our drilling plans and production expectations, asset sales and monetizations and share repurchases. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See “Risk Factors” in our 2013 Form 10-K filed with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development or otherwise, except as may be required by law.

Contacts


Investor:	(281) 302-2286	Gary Clark
Media:	(713)296-7276	Bill Mintz
	(281)302-2286	Castlen Kennedy

Website: www.apachecorp.com

APACHE CORPORATION

STATEMENT OF CONSOLIDATED OPERATIONS

(Unaudited)

(In millions, except per share data)


	For the Quarter Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
REVENUES AND OTHER:
Oil revenues	$	2,753		$	3,468		$	8,518		$	9,790
Gas revenues		538			645			1,773			2,048
NGL revenues		177			175			532			473

Oil and gas production revenues		3,468			4,288			10,823			12,311
Derivative instrument gains (losses)		273			(422	)		79			(275	)
Other		(1	)		34			(3	)		78

		3,740			3,900			10,899			12,114

COSTS AND EXPENSES:
Depreciation, depletion and amortization
Oil and gas property and equipment
Recurring		1,173			1,272			3,437			3,740
Additional		1,562			627			1,765			627
Other assets		100			96			296			290
Asset retirement obligation accretion		46			65			135			192
Lease operating expenses		652			772			1,862			2,275
Gathering and transportation		67			81			203			231
Taxes other than income		170			176			532			574
General and administrative		112			120			309			359
Acquisition, divestiture & separation costs		34			—			66			—
Financing costs, net		41			50			103			157

		3,957			3,259			8,708			8,445

INCOME (LOSS) BEFORE INCOME TAXES		(217	)		641			2,191			3,669
Current income tax provision		297			409			1,038			1,190
Deferred income tax provision (benefit)		727			(203	)		930			229

INCOME (LOSS) FROM CONTINUING OPS INCLUDING NONCONTROLLING INTEREST		(1,241	)		435			223			2,250
Loss from discontinued operations, net of tax		—			(129	)		(517	)		(192	)

INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		(1,241	)		306			(294	)		2,058
Net income attributable to noncontrolling interest		89			—			295			—
Preferred stock dividends		—			6			—			44

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	(1,330	)	$	300		$	(589	)	$	2,014

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS
Net income (loss) from continuing operations attributable to common shareholders	$	(1,330	)	$	429		$	(72	)	$	2,206
Net loss from discontinued operations		—			(129	)		(517	)		(192	)

Net income (loss) attributable to common shareholders	$	(1,330	)	$	300		$	(589	)	$	2,014

BASIC NET INCOME (LOSS) PER COMMON SHARE:
Basic net income (loss) from continuing operations per share	$	(3.50	)	$	1.08		$	(0.19	)	$	5.59
Basic net loss from discontinued operations per share		—			(0.33	)		(1.33	)		(0.48	)

Basic net income (loss) per share	$	(3.50	)	$	0.75		$	(1.52	)	$	5.11

DILUTED NET INCOME (LOSS) PER COMMON SHARE:
Diluted net income (loss) from continuing operations per share	$	(3.50	)	$	1.07		$	(0.19	)	$	5.53
Diluted net loss from discontinued operations per share		—			(0.32	)		(1.33	)		(0.47	)

Diluted net income (loss) per share	$	(3.50	)	$	0.75		$	(1.52	)	$	5.06

WEIGHTED-AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING:
Basic		381			399			387			394
Diluted		381			401			387			407

DIVIDENDS DECLARED PER COMMON SHARE	$	0.25		$	0.20		$	0.75		$	0.60

APACHE CORPORATION

PRODUCTION INFORMATION


							% Change
	3Q14		2Q14		3Q13		3Q14 to 2Q14			3Q14 to 3Q13			YTD 2014		YTD 2013
OIL VOLUME - Barrels per day
Permian		91,844		90,536		73,910		1	%		24	%		90,249		70,229
Central		22,866		21,987		25,659		4	%		-11	%		22,184		22,730
Gulf Coast		12,923		10,977		11,126		18	%		16	%		11,632		10,570
Canada		17,672		17,981		18,573		-2	%		-5	%		17,748		18,112

N.A. Onshore		145,305		141,481		129,268		3	%		12	%		141,813		121,641

Gulf of Mexico		5,980		6,896		7,564		-13	%		-21	%		6,386		7,675
GOM Shelf		—		2		45,431		NM			NM			224		45,599

North America		151,285		148,379		182,263		2	%		-17	%		148,423		174,915

Egypt^{(1, 2)}		87,499		88,643		89,294		-1	%		-2	%		88,076		89,530
Australia		22,014		14,555		18,787		51	%		17	%		17,817		20,195
North Sea		55,247		61,610		57,861		-10	%		-5	%		58,636		63,291

International⁽¹⁾		164,760		164,808		165,942		0	%		-1	%		164,529		173,016

Total⁽¹⁾		316,045		313,187		348,205		1	%		-9	%		312,952		347,931

TOTAL LIQUIDS - Barrels per day
Permian		125,674		119,712		99,967		5	%		26	%		119,702		93,360
Central		47,353		45,725		49,096		4	%		-4	%		46,410		44,736
Gulf Coast		15,322		13,522		13,342		13	%		15	%		14,088		12,913
Canada		23,053		23,902		25,585		-4	%		-10	%		24,097		24,900

N.A. Onshore		211,402		202,861		187,990		4	%		12	%		204,297		175,909

Gulf of Mexico		6,905		8,062		8,130		-14	%		-15	%		7,360		8,546
GOM Shelf		71		2		50,665		NM			NM			278		51,887

North America		218,378		210,925		246,785		4	%		-12	%		211,935		236,342

Egypt^{(1, 2)}		88,225		89,527		89,294		-1	%		-1	%		88,692		89,530
Australia		22,014		14,555		18,787		51	%		17	%		17,817		20,195
North Sea		56,541		62,977		58,958		-10	%		-4	%		59,887		64,554

International⁽¹⁾		166,780		167,059		167,039		0	%		0	%		166,396		174,279

Total⁽¹⁾		385,158		377,984		413,824		2	%		-7	%		378,331		410,621

NATURAL GAS VOLUME - Mcf per day
Permian		216,804		213,192		190,192		2	%		14	%		215,289		188,803
Central		260,443		264,948		274,061		-2	%		-5	%		261,897		275,520
Gulf Coast		82,710		95,765		110,889		-14	%		-25	%		92,512		107,928
Canada		300,803		316,740		529,402		-5	%		-43	%		331,470		523,163

N.A. Onshore		860,760		890,645		1,104,544		-3	%		-22	%		901,168		1,095,414

Gulf of Mexico		19,109		22,804		11,804		-16	%		62	%		19,379		22,562
GOM Shelf		122		261		243,477		NM			NM			488		253,360

North America		879,991		913,710		1,359,825		-4	%		-35	%		921,035		1,371,336

Egypt^{(1, 2)}		377,838		367,950		350,504		3	%		8	%		374,384		357,747
Australia		201,386		210,470		212,141		-4	%		-5	%		209,163		212,845
North Sea		50,647		54,848		46,971		-8	%		8	%		50,209		50,108

International⁽¹⁾		629,871		633,268		609,616		-1	%		3	%		633,756		620,700

Total⁽¹⁾		1,509,862		1,546,978		1,969,441		-2	%		-23	%		1,554,791		1,992,036

BOE per day
Permian		161,808		155,244		131,665		4	%		23	%		155,583		124,826
Central		90,760		89,883		94,773		1	%		-4	%		90,060		90,657
Gulf Coast		29,107		29,483		31,823		-1	%		-9	%		29,507		30,901
Canada		73,187		76,692		113,819		-5	%		-36	%		79,341		112,095

N.A. Onshore		354,862		351,302		372,080		1	%		-5	%		354,491		358,479

Gulf of Mexico		10,090		11,862		10,098		-15	%		0	%		10,589		12,306
GOM Shelf		92		46		91,245		NM			NM			360		94,114

North America		365,044		363,210		473,423		1	%		-23	%		365,440		464,899

Egypt^{(1, 2)}		151,198		150,853		147,711		0	%		2	%		151,090		149,154
Australia		55,578		49,633		54,144		12	%		3	%		52,677		55,669
North Sea		64,982		72,118		66,787		-10	%		-3	%		68,255		72,905

International⁽¹⁾		271,758		272,604		268,642		0	%		1	%		272,022		277,728

Total⁽¹⁾		636,802		635,814		742,065		0	%		-14	%		637,462		742,627

Total excluding noncontrolling interest		586,189		585,567		742,065		0	%		-21	%		587,192		742,627


⁽¹⁾ Includes production volume per day attributable to noncontrolling interest in Egypt
Oil (b/d)		29,201		29,508		—								29,259		—
Gas (mcf/d)		127,020		122,665		—								124,836		—
NGL (b/d)		242		295		—								205		—
⁽²⁾ BOE per day Egypt Gross Production		345,708		351,059		346,530		-2	%		0	%		349,843		347,209
Discontinued Operations - Argentina
Oil (b/d)		—		—		9,560								2,269		9,408
Gas (mcf/d)		—		—		185,962								46,599		186,241
NGL (b/d)		—		—		1,713								424		2,254
BOE/d		—		—		42,266								10,461		42,702

APACHE CORPORATION

PRO FORMA PRODUCTION INFORMATION

Pro forma production excludes certain items that management believes affect the comparability of operating results for the periods presented. Pro forma production excludes production attributable to assets that have been divested (in the Gulf of Mexico shelf, Argentina, Canada, and South Texas), production attributable to a noncontrolling interest in our Egypt oil and gas business, and Egypt tax barrels. Management uses pro forma production to evaluate the company’s operational trends and performance and believes it is useful to investors and other third parties.


							% Change
	3Q14		2Q14		3Q13		3Q14 to 2Q14			3Q14 to 3Q13			YTD 2014		YTD 2013
OIL VOLUME - Barrels per day
Permian		91,844		90,536		73,910		1	%		24	%		90,249		70,229
Central		22,866		21,987		25,659		4	%		-11	%		22,184		22,730
Gulf Coast		12,902		10,677		10,543		21	%		22	%		11,416		10,059
Canada		17,649		17,817		17,357		-1	%		2	%		17,626		16,895

N.A. Onshore		145,261		141,017		127,469		3	%		14	%		141,475		119,913

Gulf of Mexico		5,980		6,896		7,564		-13	%		-21	%		6,386		7,675
GOM Shelf		—		—		—		0	%		0	%		—		—

North America		151,241		147,913		135,033		2	%		12	%		147,861		127,588

Egypt		44,372		43,117		41,853		3	%		6	%		43,803		42,510
Australia		22,014		14,555		18,787		51	%		17	%		17,817		20,195
North Sea		55,247		61,610		57,861		-10	%		-5	%		58,636		63,291

International		121,633		119,282		118,501		2	%		3	%		120,256		125,996

Total		272,874		267,195		253,534		2	%		8	%		268,117		253,584

TOTAL LIQUIDS - Barrels per day
Permian		125,674		119,712		99,967		5	%		26	%		119,702		93,360
Central		47,353		45,725		49,096		4	%		-4	%		46,410		44,736
Gulf Coast		15,238		12,701		11,724		20	%		30	%		13,509		11,440
Canada		23,025		23,257		22,849		-1	%		1	%		23,347		22,134

N.A. Onshore		211,290		201,395		183,636		5	%		15	%		202,968		171,670

Gulf of Mexico		6,905		8,062		8,130		-14	%		-15	%		7,360		8,546
GOM Shelf		—		—		—		0	%		0	%		—		—

North America		218,195		209,457		191,766		4	%		14	%		210,328		180,216

Egypt		44,749		43,572		41,853		3	%		7	%		44,123		42,510
Australia		22,014		14,555		18,787		51	%		17	%		17,817		20,195
North Sea		56,541		62,977		58,958		-10	%		-4	%		59,887		64,554

International		123,304		121,104		119,598		2	%		3	%		121,827		127,259

Total		341,499		330,561		311,364		3	%		10	%		332,155		307,475

NATURAL GAS VOLUME - Mcf per day
Permian		216,804		213,192		190,192		2	%		14	%		215,289		188,803
Central		260,443		264,948		274,061		-2	%		-5	%		261,897		275,520
Gulf Coast		82,032		80,976		86,621		1	%		-5	%		81,852		84,078
Canada		300,624		289,744		315,745		4	%		-5	%		294,421		311,241

N.A. Onshore		859,903		848,860		866,619		1	%		-1	%		853,459		859,642

Gulf of Mexico		19,109		22,804		11,804		-16	%		62	%		19,379		22,562
GOM Shelf		—		—		—		0	%		0	%		—		—

North America		879,012		871,664		878,423		1	%		0	%		872,838		882,204

Egypt		192,484		181,792		167,986		6	%		15	%		189,054		173,311
Australia		201,386		210,470		212,141		-4	%		-5	%		209,163		212,845
North Sea		50,647		54,848		46,971		-8	%		8	%		50,209		50,108

International		444,517		447,110		427,098		-1	%		4	%		448,426		436,264

Total		1,323,529		1,318,774		1,305,521		0	%		1	%		1,321,264		1,318,468

BOE per day
Permian		161,808		155,244		131,665		4	%		23	%		155,583		124,826
Central		90,760		89,883		94,773		1	%		-4	%		90,060		90,657
Gulf Coast		28,910		26,197		26,161		10	%		11	%		27,151		25,453
Canada		73,129		71,548		75,473		2	%		-3	%		72,417		74,008

N.A. Onshore		354,607		342,872		328,072		3	%		8	%		345,211		314,944

Gulf of Mexico		10,090		11,862		10,098		-15	%		0	%		10,589		12,306
GOM Shelf		—		—		—		0	%		0	%		—		—

North America		364,697		354,734		338,170		3	%		8	%		355,800		327,250

Egypt		76,830		73,871		69,851		4	%		10	%		75,633		71,395
Australia		55,578		49,633		54,144		12	%		3	%		52,677		55,669
North Sea		64,982		72,118		66,787		-10	%		-3	%		68,255		72,905

International		197,390		195,622		190,782		1	%		3	%		196,565		199,969

Total		562,087		550,356		528,952		2	%		6	%		552,365		527,219

APACHE CORPORATION

PRICE INFORMATION


	3Q14		2Q14		3Q13		YTD 2014		YTD 2013
AVERAGE OIL PRICE PER BARREL
Permian	$	88.71	$	94.33	$	104.52	$	92.22	$	93.53
Central		95.17		100.39		101.90		96.43		93.71
Gulf Coast		99.41		103.81		110.06		101.56		109.08
Canada		85.43		94.66		97.58		89.45		89.33
N.A. Onshore		90.30		96.06		103.44		93.32		94.27
Gulf of Mexico		97.86		102.63		108.07		100.74		107.91
GOM Shelf		NM		NM		110.40		NM		109.60
North America ⁽¹⁾		90.58		96.24		104.98		93.58		98.31
Egypt		100.06		109.74		112.61		105.50		107.73
Australia		98.82		115.34		116.21		107.50		109.40
North Sea		95.80		109.33		109.33		104.13		107.61
International		98.47		110.08		111.87		105.23		107.88
Total⁽¹⁾		94.69		103.53		108.27		99.71		103.07

AVERAGE NATURAL GAS PRICE PER MCF
Permian	$	3.79	$	4.48	$	3.66	$	4.35	$	3.76
Central		4.00		4.49		3.61		4.56		3.75
Gulf Coast		4.19		4.72		3.67		4.63		3.83
Canada		4.04		4.21		2.87		4.22		3.20
N.A. Onshore		3.97		4.41		3.26		4.41		3.49
Gulf of Mexico		3.50		4.35		3.35		4.31		3.29
GOM Shelf		NM		NM		3.71		NM		3.82
North America ⁽¹⁾		3.97		4.41		3.41		4.39		3.61
Egypt		2.91		2.96		3.01		2.96		2.98
Australia		4.70		4.40		3.98		4.51		4.54
North Sea		6.10		7.75		10.29		8.06		10.37
International		3.74		3.85		3.91		3.88		4.11
Total ⁽¹⁾		3.88		4.18		3.56		4.18		3.77

AVERAGE NGL PRICE PER BARREL
Permian	$	27.29	$	28.46	$	29.93	$	28.86	$	27.25
Central		24.94		25.03		25.61		26.78		24.51
Gulf Coast		24.85		27.86		30.06		29.48		30.80
Canada		33.50		31.67		28.77		36.40		28.49
N.A. Onshore		26.83		27.42		28.07		28.84		26.45
Gulf of Mexico		34.44		31.73		31.68		32.67		32.50
GOM Shelf		NM		NM		30.52		NM		28.66
North America		26.96		27.50		28.30		28.81		26.76
Egypt		52.80		57.67		—		56.57		—
North Sea		59.47		61.81		69.77		66.18		70.51
International		57.07		60.19		69.77		63.01		70.51
Total		27.84		28.64		29.00		29.78		27.64

Discontinued Operations - Argentina
Oil price ($/Bbl)	$	—	$	—	$	79.77	$	72.70	$	77.66
Gas price ($/Mcf)		—		—		2.76		3.04		2.91
NGL price ($/Bbl)		—		—		22.19		24.57		25.11

⁽¹⁾	Prices reflect the impact of financial derivative hedging activities.

APACHE CORPORATION

SUMMARY BALANCE SHEET INFORMATION

(Unaudited)

(In millions)


	September 30, 2014			December 31, 2013
Cash and Cash Equivalents	$	510		$	1,906
Short-Term Restricted Cash		74			—
Other Current Assets		3,842			4,460
Property and Equipment, net		53,035			52,421
Long-Term Restricted Cash		471			—
Goodwill		1,369			1,369
Other Assets		1,689			1,481

Total Assets	$	60,990		$	61,637

Short-Term Debt	$	20		$	53
Other Current Liabilities		4,287			4,647
Long-Term Debt		10,902			9,672
Deferred Credits and Other Noncurrent Liabilities		12,795			11,872
Apache Shareholders’ Equity		30,818			33,396
Noncontrolling interest		2,168			1,997

Total Liabilities and Shareholders’ Equity	$	60,990		$	61,637

Common shares outstanding at end of period		377			396

% of total debt-to-capitalization		25	%		22	%

APACHE CORPORATION

SUMMARY OF COSTS INCURRED AND GTP CAPITAL INVESTMENTS

(Unaudited)

(In millions)


	For the Quarter Ended September 30,				For the Nine Months Ended September 30,
	2014		2013		2014		2013
Costs Incurred in Oil and Gas Property:
Acquisitions
Proved	$	98	$	4	$	103	$	130
Unproved		429		51		552		325
Exploration and Development		2,538		2,640		7,524		7,696

		3,065		2,695		8,179		8,151

GTP Capital Investments:
Acquisitions	$	—	$	—	$	—	$	83
GTP Facilities		300		361		1,022		853

		300		361		1,022		936

Total Costs Incurred and GTP Capital Investments	$	3,365	$	3,056	$	9,201	$	9,087

APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(Unaudited)

(In millions, except per share data)

Reconciliation of income attributable to common stock to adjusted earnings:

Adjusted earnings and adjusted earnings per share are non-GAAP financial measures. Adjusted earnings generally exclude certain items that management believes affect the comparability of operating results or are not related to Apache’s ongoing operations. Management uses adjusted earnings to evaluate the company’s operational trends and performance relative to other oil and gas companies. Management believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings for items that may obscure underlying fundamentals and trends.


	For the Quarter Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
Income (Loss) Attributable to Common Stock (GAAP)	$	(1,330	)	$	300		$	(589	)	$	2,014

Adjustments:
Oil & gas property write-downs, net of tax	$	1,002		$	402		$	1,079		$	402
Deferred tax adjustments ⁽¹⁾		1,054			(79	)		1,049			(51	)
Argentina discontinued operations, net of tax		—			129			517			192
Acquisition, divestiture & separation costs, net of tax		22			—			43			—
Rig stacking costs, net of tax		18			—			27			—
Unrealized foreign currency fluctuation impact on deferred tax expense		(36	)		(28	)		(16	)		(98	)
Unrealized commodity derivative mark-to-market, net of tax		(202	)		213			(220	)		88

Adjusted Earnings (Non-GAAP)	$	528		$	937		$	1,890		$	2,547

Net Income (Loss) per Common Share - Diluted (GAAP)	$	(3.50	)	$	0.75		$	(1.52	)	$	5.06

Adjustments:
Oil & gas property write-downs, net of tax	$	2.62		$	0.99		$	2.78		$	0.98
Deferred tax adjustments ⁽¹⁾		2.76			(0.19	)		2.70			(0.12	)
Argentina discontinued operations, net of tax		—			0.31			1.33			0.47
Acquisition, divestiture & separation costs, net of tax		0.06			—			0.11			—
Rig stacking costs, net of tax		0.05			—			0.07			—
Unrealized foreign currency fluctuation impact on deferred tax expense		(0.09	)		(0.07	)		(0.04	)		(0.24	)
Unrealized commodity derivative mark-to-market, net of tax		(0.52	)		0.53			(0.57	)		0.22

Adjusted Earnings Per Share - Diluted (Non-GAAP)	$	1.38		$	2.32		$	4.86		$	6.37

Total income tax provision (GAAP)	$	1,024		$	206		$	1,968		$	1,419

Adjustments:
Tax impact on oil & gas property write-downs	$	560		$	225		$	686		$	225
Tax impact on acquisition, divestiture & separation costs		12			—			23			—
Foreign currency fluctuation impact on deferred tax expense		36			28			16			98
Tax impact on rig stacking costs		9			—			15			—
Tax impact on unrealized commodity derivative mark-to-market		(111	)		117			(121	)		49
Deferred tax adjustments ⁽¹⁾		(1,054	)		79			(1,049	)		51

Adjusted total income tax provision	$	476		$	655		$	1,538		$	1,842

Adjusted Effective Tax Rate (Non-GAAP)		43.5	%		41.0	%		41.3	%		41.5	%

⁽¹⁾	Deferred tax adjustments for the third quarter and nine-month period of 2014 include $814 million related to undistributed foreign earnings, $249 million related to distributed foreign earnings, and certain other adjustments.

APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(Unaudited)

(In millions, except per share data)

Reconciliation of net cash provided by operating activities to cash from continuing operations before changes in operating assets and liabilities:

Cash from operations before changes in operating assets and liabilities is a non-GAAP financial measure. Apache uses it internally and provides the information because management believes it is useful for investors and widely accepted by those following the oil and gas industry as a financial indicator of a company’s ability to generate cash to internally fund exploration and development activities, fund dividend programs, and service debt. It is also used by research analysts to value and compare oil and gas exploration and production companies and is frequently included in published research when providing investment recommendations. Cash from operations before changes in operating assets and liabilities, therefore, is an additional measure of liquidity but is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing, or financing activities.

The following table reconciles net cash provided by operating activities to cash from operations before changes in operating assets and liabilities.


	For the Quarter Ended September 30,					For the Nine Months Ended September 30,
	2014		2013			2014			2013
Net cash provided by operating activities (GAAP)	$	1,896	$	1,978		$	6,528		$	7,358
Less: Discontinued operations		—		(54	)		(82	)		(158	)

Net cash provided by operating activities excluding discontinued operations	$	1,896	$	1,924		$	6,446		$	7,200
Changes in operating assets and liabilities		177		744			77			318

Cash from continuing operations before changes in operating assets and liabilities	$	2,073	$	2,668		$	6,523		$	7,518

APACHE CORP - FORM 8-K - EX-99.1 - November 6, 2014

Attached files

APACHE CORP Reports