APACHE CORP - FORM 8-K - EX-99.1

Attached files

file	filename
8-K - 8-K - APACHE CORP	d924875d8k.htm

Exhibit 99.1


			NEWS RELEASE

Apache Corporation announces first-quarter financial and operational results

•

Achieved onshore North American production of 307,000 barrels of oil equivalent (boe) per day exceeding company guidance of 300,000 to 305,000 boe per day

•

Delivered worldwide production of 601,000 boe per day

•

Realized Permian oil production growth of 7 percent year over year

•

Closed the sale of Kitimat and Wheatstone LNG assets and received net proceeds of $3.7 billion in April

•

Announced the sale of remaining oil and gas assets in Australia for $2.1 billion on April 8

•

Reiterates 2015 onshore North American production and capex guidance

•

Updates 2015 international guidance to reflect the pending Australian asset sale

HOUSTON, May 7, 2015 – Apache Corporation (NYSE, Nasdaq: APA) today announced a first-quarter 2015 net loss of $4.7 billion or $12.34 per diluted common share, which includes an after-tax ceiling-test write down of $4.7 billion, as a result of substantially lower commodity prices. When adjusted for certain items that impact the comparability of results, Apache’s first-quarter loss totaled $139 million or $0.37 per share. Net cash provided by operating activities was approximately $650 million in the first quarter of 2015 and cash from operations, before changes in working capital, totaled $900 million.

“During the quarter, we significantly reduced our drilling activity and cost structure in response to the rapid oil-price downturn. Drilling and completion costs across all of our key plays in North America onshore are down between 20 and 40 percent from those we provided in our North American Update last November. Operationally, I am pleased to report that North American onshore production exceeded our first quarter guidance despite a substantial reduction in well completions and the adverse impacts of severe winter weather in the Permian and Anadarko Basins. Internationally, production in both Egypt and the North Sea is tracking ahead of our initial expectations,” said John J. Christmann, IV, Apache’s chief executive officer and president.

LOGO

Portfolio rebalancing update

During 2014, Apache conducted a review of its international portfolio with the goal of best positioning its asset base for the long-term benefit of its shareholders. This review resulted in several key divestitures during the past 12 months. In the first half of April, the company closed the previously announced sale of its Wheatstone and Kitimat LNG projects to Woodside Petroleum for $3.7 billion of net proceeds. On April 8, Apache also announced the sale of its remaining oil and gas assets in Australia for $2.1 billion, subject to customary post-closing adjustments.

The company’s acquisition and divestiture transactions over the last several years have streamlined its portfolio and resulted in greater leverage to onshore North America. When adjusted for the recently announced sale in Australia, pro forma onshore North America now represents nearly two-thirds of total company production.

“Apache’s portfolio now consists of an onshore North American position with a robust inventory of drilling opportunities, complemented by free-cash-flow-generating assets in the North Sea and Egypt. Our international assets benefit from attractive Brent-linked oil prices and also offer a significant inventory of exploration and development opportunities. We are very excited to move forward with a strengthened balance sheet and three key operating areas that offer excellent potential for sustainable long-term growth and capital-allocation flexibility,” Christmann noted.

2015 capital spending and production update

During the quarter, Apache’s capital expenditures before LNG, capitalized interest and Egypt’s minority interest was $1.3 billion, which was in-line with expectations. Spending on LNG facilities during the quarter was $239 million, all of which was reimbursed with the closing of the LNG asset sales. As noted last quarter, management expected the 2015 capital program to be front-end loaded as the drilling program continued to ramp down through the first quarter.

Apache remains on track to meet its 2015 capital-spending guidance for North America of $2.1 billion to $2.3 billion and continues to project relatively flat pro forma production volumes in North America compared to 2014.

The company is lowering its 2015 international capital-spending guidance to between $1.3 billion and $1.6 billion. This reflects a $150-million reduction from the midpoint of the prior range driven by the pending Australian asset sale expected at mid-year. Apache anticipates combined production from Egypt and the North Sea will increase slightly year over year, which is essentially unchanged from its prior international production guidance.

First-quarter 2015 regional activity

•

Permian – Underscoring the significant planned reduction in activity, the Permian region averaged 15 rigs during the quarter, down from 42 the previous quarter. The company continues to reduce its rig count and is currently running 11 rigs. Total production in the Permian was down slightly from the fourth quarter primarily due to severe winter weather. Activity for the remainder of the year will be focused on the Delaware Basin as well as in the deeper, more productive areas of the company’s Southern Midland Basin acreage.

•

Central – As a result of the Dec. 31, 2014 sale of certain Anadarko Basin producing assets, Central region production was down 29 percent compared to the fourth quarter. Excluding property sales, production declined 2 percent. During the quarter, the region averaged four rigs and is currently running three. For the remainder of 2015, activity will be primarily focused on the Canyon Lime and Woodford plays.

•

Gulf Coast – Following the sale of producing properties in Southern Louisiana on Dec. 31, 2014, the region now consists almost entirely of Eagle Ford production. During the quarter, the region averaged four rigs, down from 12 in the fourth quarter. No rigs are currently running in the Eagle Ford as the region focuses on completing wells in backlog. There are currently 38 drilled-but-uncompleted Eagle Ford wells in backlog.

•

Canada – Apache completed four Montney wells, including a successful test of the previously untested lower Montney in the Wapiti area. During the first quarter, the region averaged four rigs and reduced the count to zero as the region moves into breakup season. Activity will be focused on completing a seven-well Duvernay pad in the summer, along with two Montney wells currently in backlog.

•

North Sea – During the quarter, North Sea production declined from record fourth-quarter levels due to natural declines and an approximate 2,600-boe-per-day production disruption from an unplanned equipment outage on the Beryl Alpha platform. In March, favorable tax changes were announced in the United Kingdom that are expected to have a positive impact on cash flow in 2015 and beyond.

•

Egypt – Gross production was flat quarter-over-quarter as the region averaged 21 rigs and reported seven new discoveries in the Khalda area. Delineation-drilling results at the recent Ptah and Berenice oil discoveries have exceeded expectations thus far with current production of approximately 20,000 barrels of oil per day. Subsequent to quarter-end, Apache made several new field discoveries across multiple concessions that increase its confidence in Egypt’s production outlook for the remainder of 2015.

“Our operational teams are doing an excellent job in this challenging price environment, and I am pleased that first-quarter production results exceeded our expectations both domestically and internationally. We will monitor oil prices for the remainder of the quarter, and at mid-year, revisit our planned activity levels for the balance of 2015. Apache remains committed to maintaining operational flexibility and will respond quickly to changes in our cash flow. With more than $5 billion in net proceeds coming from recent asset sales, our balance sheet is now in excellent shape. Accordingly, we will look to be opportunistic but highly disciplined in evaluating new opportunities to grow or enhance our existing portfolio and create shareholder value,” remarked Christmann.

Oil and gas prices

Apache’s production during the first quarter 2015 consisted of approximately 62 percent liquids and 38 percent natural gas. Liquids contributed 79 percent of the company’s revenue during the period. In North America onshore, Apache received an average oil price of $44.07 per barrel during the first quarter, compared with $93.72 per barrel in the prior-year period. North American onshore natural gas prices averaged $2.60 per thousand cubic feet (Mcf), compared with $4.82 per Mcf in the prior-year period. Worldwide, Apache received an average oil price of $47.56 per barrel during the first quarter, compared with $101.03 per barrel in the prior-year period. Worldwide natural gas prices averaged $3.14 per Mcf, compared with $4.46 per Mcf in the prior-year period.

Conference call

Apache Corporation (NYSE: APA) will host a conference call Thursday, May 7, 2015, to discuss the first-quarter 2015 financial results. The call will begin at 1 p.m. CT (2 p.m. ET). Earnings will be released Thursday, May 7, 2015, before the market opens. To access the live audio webcast, please visit the Apache website at www.apachecorp.com.

A replay of the conference call will be available for seven days following the call. The number for the replay is 855-859-2056 or 404-537-3406 for international calls. The conference access code is 31402821.

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 capital plans, drilling plans, production expectations, asset sales and monetizations. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will

meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See “Risk Factors” in our 2014 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) 296-7189	Castlen Kennedy
	(713) 296-7276	Rory Sweeney

Website: www.apachecorp.com

APACHE CORPORATION

STATEMENT OF CONSOLIDATED OPERATIONS

(Unaudited)

(In millions, except per share data)


	For the Quarter Ended March 31,
	2015			2014
REVENUES AND OTHER:
Oil revenues	$	1,362		$	2,815
Gas revenues		387			646
NGL revenues		57			186

Oil and gas production revenues		1,806			3,647
Derivative instrument gains (losses), net		—			(20	)
Other		12			48

		1,818			3,675

COSTS AND EXPENSES:
Depreciation, depletion and amortization
Oil and gas property and equipment
Recurring		1,089			1,109
Additional		7,220			—
Other assets		98			97
Asset retirement obligation accretion		44			44
Lease operating expenses		538			597
Gathering and transportation		56			70
Taxes other than income		84			181
General and administrative		79			103
Acquisition, divestiture & separation costs		54			18
Financing costs, net		46			27

		9,308			2,246

INCOME (LOSS) BEFORE INCOME TAXES		(7,490	)		1,429
Current income tax provision		44			416
Deferred income tax provision (benefit)		(2,898	)		162

INCOME (LOSS) FROM CONTINUING OPS INCLUDING NONCONTROLLING INTEREST		(4,636	)		851
Income (Loss) from discontinued operations, net of tax		—			(517	)

INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		(4,636	)		334
Net income attributable to noncontrolling interest		15			98
Preferred stock dividends		—			—

INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	(4,651	)	$	236

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS
Net income (loss) from continuing operations attributable to common shareholders	$	(4,651	)	$	753
Net income (loss) from discontinued operations		—			(517	)

Net income (loss) attributable to common shareholders	$	(4,651	)	$	236

BASIC NET INCOME (LOSS) PER COMMON SHARE:
Basic net income (loss) from continuing operations per share	$	(12.34	)	$	1.92
Basic net income (loss) from discontinued operations per share		—			(1.32	)

Basic net income (loss) per share	$	(12.34	)	$	0.60

DILUTED NET INCOME (LOSS) PER COMMON SHARE:
Diluted net income (loss) from continuing operations per share	$	(12.34	)	$	1.90
Diluted net income (loss) from discontinued operations per share		—			(1.30	)

Diluted net income (loss) per share	$	(12.34	)	$	0.60

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic		377			394
Diluted		377			396

DIVIDENDS DECLARED PER COMMON SHARE	$	0.25		$	0.25

APACHE CORPORATION

PRODUCTION INFORMATION


							% Change
	1Q15		4Q14		1Q14		1Q15 to 4Q14			1Q15 to 1Q14
OIL VOLUME - Barrels per day
Permian		94,461		98,017		88,327		-4	%		7	%
Central		18,509		23,832		21,686		-22	%		-15	%
Gulf Coast		7,784		14,380		10,975		-46	%		-29	%
Canada		16,875		17,133		17,589		-2	%		-4	%

N.A. Onshore		137,629		153,362		138,577		-10	%		-1	%
Gulf of Mexico		5,885		6,319		6,284		-7	%		-6	%
GOM Shelf		—		—		679		NM			NM

North America		143,514		159,681		145,540		-10	%		-1	%

Egypt ⁽¹⁾		91,971		87,445		88,093		5	%		4	%
Australia		20,905		28,577		16,825		-27	%		24	%
North Sea		61,699		66,822		59,092		-8	%		4	%

International ⁽¹⁾		174,575		182,844		164,010		-5	%		6	%

Total ⁽¹⁾		318,089		342,525		309,550		-7	%		3	%

TOTAL LIQUIDS - Barrels per day
Permian		122,445		131,429		113,587		-7	%		8	%
Central		34,654		49,246		46,141		-30	%		-25	%
Gulf Coast		10,328		18,555		13,398		-44	%		-23	%
Canada		22,728		22,812		25,358		0	%		-10	%

N.A. Onshore		190,155		222,042		198,484		-14	%		-4	%
Gulf of Mexico		6,433		7,004		7,114		-8	%		-10	%
GOM Shelf		—		—		769		NM			NM

North America		196,588		229,046		206,367		-14	%		-5	%

Egypt ⁽¹⁾		93,002		88,278		88,326		5	%		5	%
Australia		20,905		28,577		16,825		-27	%		24	%
North Sea		62,585		68,632		60,183		-9	%		4	%

International ⁽¹⁾		176,492		185,487		165,334		-5	%		7	%

Total		373,080		414,533		371,701		-10	%		0	%

NATURAL GAS VOLUME - Mcf per day
Permian		216,968		223,787		215,860		-3	%		1	%
Central		190,214		268,130		260,298		-29	%		-27	%
Gulf Coast		7,659		85,625		99,242		-91	%		-92	%
Canada		287,556		297,004		377,712		-3	%		-24	%

N.A. Onshore		702,397		874,546		953,112		-20	%		-26	%
Gulf of Mexico		20,977		18,955		16,193		11	%		30	%
GOM Shelf		—		—		1,092		NM			NM

North America		723,374		893,501		970,397		-19	%		-25	%

Egypt ⁽¹⁾		363,989		358,031		377,357		2	%		-4	%
Australia		230,691		228,284		215,792		1	%		7	%
North Sea		50,445		73,042		45,071		-31	%		12	%

International ⁽¹⁾		645,125		659,357		638,220		-2	%		1	%

Total ⁽¹⁾		1,368,499		1,552,858		1,608,617		-12	%		-15	%

BOE per day
Permian		158,606		168,728		149,564		-6	%		6	%
Central		66,357		93,933		89,524		-29	%		-26	%
Gulf Coast		11,604		32,826		29,939		-65	%		-61	%
Canada		70,653		72,312		88,310		-2	%		-20	%

N.A. Onshore		307,220		367,799		357,337		-16	%		-14	%
Gulf of Mexico		9,930		10,163		9,813		-2	%		1	%
GOM Shelf		—		—		950		NM			NM

North America		317,150		377,962		368,100		-16	%		-14	%

Egypt ^{(1, 2)}		153,667		147,950		151,219		4	%		2	%
Australia		59,353		66,625		52,790		-11	%		12	%
North Sea		70,993		80,806		67,695		-12	%		5	%

International ⁽¹⁾		284,013		295,381		271,704		-4	%		5	%

Total ⁽¹⁾		601,163		673,343		639,804		-11	%		-6	%

Total excluding noncontrolling interests		549,914		623,743		589,860		-12	%		-7	%


⁽¹⁾ Includes net production volumes attributed to our noncontrolling partner in Egypt below:
Oil (b/d)		30,671		29,391		29,066
Gas (Mcf/d)		121,408		119,578		124,799
NGL (b/d)		343		279		78
⁽²⁾ Egypt Gross Production - BOE per day		343,762		344,122		352,841		0	%		-3	%

Discontinued Operations - Argentina:
Oil (b/d)		—		—		6,885
Gas (Mcf/d)		—		—		141,352
NGL (b/d)		—		—		1,287
BOE/d		—		—		31,731

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 divested assets, divestitures announced but not yet closed, 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
	1Q15		4Q14		1Q14		1Q15 to 4Q14			1Q15 to 1Q14
OIL VOLUME - Barrels per day
Permian		94,461		98,017		88,327		-4	%		7	%
Central		18,514		19,828		15,877		-7	%		17	%
Gulf Coast		7,753		6,459		2,853		20	%		172	%
Canada		16,817		17,117		17,409		-2	%		-3	%

N.A. Onshore		137,545		141,421		124,466		-3	%		11	%
Gulf of Mexico		5,885		6,319		6,284		-7	%		-6	%

North America		143,430		147,740		130,750		-3	%		10	%

Egypt		54,558		49,361		43,915		11	%		24	%
North Sea		59,818		64,344		55,085		-7	%		9	%

International		114,376		113,705		99,000		1	%		16	%

Total		257,806		261,445		229,750		-1	%		12	%

TOTAL LIQUIDS - Barrels per day
Permian		122,445		131,429		113,587		-7	%		8	%
Central		34,773		37,442		31,234		-7	%		11	%
Gulf Coast		10,205		9,042		3,428		13	%		198	%
Canada		22,670		22,794		23,768		-1	%		-5	%

N.A. Onshore		190,093		200,707		172,017		-5	%		11	%
Gulf of Mexico		6,433		7,004		7,114		-8	%		-10	%

North America		196,526		207,711		179,131		-5	%		10	%

Egypt		55,170		49,834		44,039		11	%		25	%
North Sea		60,657		66,020		55,921		-8	%		8	%

International		115,827		115,854		99,960		0	%		16	%

Total		312,353		323,565		279,091		-3	%		12	%

NATURAL GAS VOLUME - Mcf per day
Permian		216,968		223,787		215,860		-3	%		1	%
Central		189,967		184,074		166,096		3	%		14	%
Gulf Coast		9,190		15,771		9,326		-42	%		-1	%
Canada		285,520		294,664		290,752		-3	%		-2	%

N.A. Onshore		701,645		718,296		682,034		-2	%		3	%
Gulf of Mexico		20,977		18,955		16,193		11	%		30	%

North America		722,622		737,251		698,227		-2	%		3	%

Egypt		223,548		201,475		192,889		11	%		16	%
North Sea		49,325		70,116		37,648		-30	%		31	%

International		272,873		271,591		230,537		0	%		18	%

Total		995,495		1,008,842		928,764		-1	%		7	%

BOE per day
Permian		158,607		168,727		149,564		-6	%		6	%
Central		66,434		68,121		58,917		-2	%		13	%
Gulf Coast		11,737		11,671		4,982		1	%		136	%
Canada		70,257		71,905		72,227		-2	%		-3	%

N.A. Onshore		307,035		320,424		285,690		-4	%		7	%
Gulf of Mexico		9,929		10,163		9,813		-2	%		1	%

North America		316,964		330,587		295,503		-4	%		7	%

Egypt		92,428		83,413		76,187		11	%		21	%
North Sea		68,878		77,706		62,196		-11	%		11	%

International		161,306		161,119		138,383		0	%		17	%

Total		478,270		491,706		433,886		-3	%		10	%

APACHE CORPORATION

PRICE INFORMATION


	1Q15		4Q14		1Q14
AVERAGE OIL PRICE PER BARREL
Permian	$	44.44	$	67.59	$	93.76
Central		44.50		69.83		93.72
Gulf Coast		47.92		73.13		101.87
Canada		39.76		65.52		88.19
N.A. Onshore		44.07		68.21		93.72
Gulf of Mexico		45.87		73.94		101.42
North America		44.14		68.44		94.03
Egypt		52.29		73.34		106.70
Australia		43.17		71.83		112.26
North Sea		49.95		73.16		106.60
International		50.37		73.04		107.24
Total		47.56		70.89		101.03

AVERAGE NATURAL GAS PRICE PER MCF
Permian	$	2.44	$	3.71	$	4.78
Central		2.93		4.03		5.20
Gulf Coast		1.42		4.06		4.93
Canada		2.58		3.56		4.38
N.A. Onshore		2.60		3.79		4.82
Gulf of Mexico		2.92		3.88		5.23
North America		2.61		3.79		4.75
Egypt		2.92		2.94		3.02
Australia		4.19		4.24		4.42
North Sea		7.40		8.77		10.69
International		3.73		4.03		4.03
Total		3.14		3.89		4.46

AVERAGE NGL PRICE PER BARREL
Permian	$	11.62	$	20.53	$	31.46
Central		9.65		17.17		30.39
Gulf Coast		12.17		20.34		35.90
Canada		11.09		24.38		42.09
N.A. Onshore		10.98		19.59		32.58
Gulf of Mexico		13.77		21.46		32.00
North America		11.01		19.61		32.25
Egypt		36.29		41.35		64.34
North Sea		24.74		45.55		79.84
International		30.95		44.22		77.11
Total		11.71		20.52		33.20

Discontinued Operations - Argentina:
Oil price ($/Bbl)	$	—	$	—	$	72.70
Gas price ($/Mcf)		—		—		3.04
NGL price ($/Bbl)		—		—		24.57

APACHE CORPORATION

SUMMARY BALANCE SHEET INFORMATION

(Unaudited)

(In millions)


	March 31, 2015			December 31, 2014
Cash and Cash Equivalents	$	229		$	769
Assets Held for Sale		1,804			1,628
Other Current Assets		3,873			4,018
Property and Equipment, net		41,230			48,076
Goodwill		87			87
Other Assets		1,427			1,374

Total Assets	$	48,650		$	55,952

Short-Term Debt	$	2,598		$	—
Other Current Liabilities		2,895			3,664
Long-Term Debt		9,675			11,245
Deferred Credits and Other Noncurrent Liabilities		10,077			12,906
Apache Shareholders’ Equity		21,211			25,937
Noncontrolling interest		2,194			2,200

Total Liabilities and Shareholders’ Equity	$	48,650		$	55,952

Common shares outstanding at end of period		377			377

% of total debt-to-capitalization		34	%		29	%

APACHE CORPORATION

SUMMARY OF COSTS INCURRED AND GTP CAPITAL INVESTMENTS

(Unaudited)

(In millions)


	For the Quarter Ended March 31,
	2015		2014
Costs Incurred in Oil and Gas Property:
Acquisitions
Proved	$	—	$	2
Unproved		92		44
Exploration and Development		1,418		2,509

		1,510		2,555
GTP Capital Investments:
GTP Facilities		224		344

Total Costs Incurred and GTP Capital Investments	$	1,734	$	2,899

APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(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 March 31,
	2015			2014
Income (Loss) Attributable to Common Stock (GAAP)	$	(4,651	)	$	236
Adjustments:
Oil & gas property write-downs, net of tax		4,704			—
Acquisition, divestiture & separation costs, net of tax		36			12
Rig stacking costs, net of tax		28			—
Unrealized foreign currency fluctuation impact on deferred tax expense		10			7
Impairments		—			—
Argentina discontinued operations, net of tax		—			517
Loss on divested assets, net of tax		—			—
Unrealized commodity derivative mark-to-market, net of tax		—			(49	)
Deferred tax adjustments ⁽¹⁾		(266	)		(5	)

Adjusted Earnings (Non-GAAP)	$	(139	)	$	718

Net Income (Loss) per Common Share - Diluted (GAAP)	$	(12.34	)	$	0.60
Adjustments:
Oil & gas property write-downs, net of tax		12.48			—
Acquisition, divestiture & separation costs, net of tax		0.09			0.02
Rig stacking costs, net of tax		0.07			—
Unrealized foreign currency fluctuation impact on deferred tax expense		0.03			0.02
Impairments		—			—
Argentina discontinued operations, net of tax		—			1.30
Loss on divested assets, net of tax		—			—
Unrealized commodity derivative mark-to-market, net of tax		—			(0.12	)
Deferred tax adjustments ⁽¹⁾		(0.70	)		(0.01	)

Adjusted Earnings Per Share - Diluted (Non-GAAP)	$	(0.37	)	$	1.81

Total income tax provision (GAAP)	$	(2,854	)	$	578
Adjustments:
Tax impact on oil & gas property write-downs		2,516			—
Deferred tax adjustments ⁽¹⁾		266			5
Tax impact on acquisition, divestiture & separation costs		18			6
Tax impact on rig stacking costs		15			—
Tax impact on impairments		—			—
Tax impact on loss on divested assets		—			—
Tax impact on unrealized commodity derivative mark-to-market		—			(27	)
Unrealized foreign currency fluctuation impact on deferred tax expense		(10	)		(7	)

Adjusted total income tax provision	$	(49	)	$	555

Adjusted Effective Tax Rate (Non-GAAP)		28.3	%		40.5	%

(1)	Deferred tax for the first quarter 2015 includes $619 million in benefits for the North Sea tax rate adjustment partially offset by Canada valuation allowance. Fourth quarter 2014 includes $840 million related to undistributed foreign earnings and 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 March 31,
	2015		2014
Net cash provided by operating activities (GAAP)	$	650	$	2,293
Less: Discontinued operations		—		(82	)

Net cash provided by operating activities excluding discontinued operations	$	650	$	2,211
Changes in operating assets and liabilities		250		11

Cash from continuing operations before changes in operating assets and liabilities	$	900	$	2,222

APACHE CORP - FORM 8-K - EX-99.1 - May 7, 2015

Attached files

APACHE CORP Reports