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

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No ¨

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

Number of shares of registrant’s common stock outstanding as of October 31, 2014 376,482,179


	For the Quarter Ended June 30,						For the Six Months Ended June 30,						For the Quarter Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013			2014			2013			2014			2013
	(In millions, except per common share data)												(In millions, except per common share data)
REVENUES AND OTHER:
Oil and gas production revenues
Oil revenues	$	2,950		$	3,130		$	5,765		$	6,322		$	2,753		$	3,468		$	8,518		$	9,790
Gas revenues		589			721			1,235			1,402			538			645			1,773			2,048
Natural gas liquids revenues		169			150			355			298			177			175			532			473

		3,708			4,001			7,355			8,022			3,468			4,288			10,823			12,311
Derivative instrument gains (losses), net		(174	)		247			(194	)		147			273			(422	)		79			(275	)
Other		(50	)		20			(2	)		45			(1	)		34			(3	)		78

		3,484			4,268			7,159			8,214			3,740			3,900			10,899			12,114

OPERATING EXPENSES:
Depreciation, depletion and amortization:
Depreciation, depletion, and amortization:
Oil and gas property and equipment
Recurring		1,155			1,258			2,264			2,468			1,173			1,272			3,437			3,740
Additional		203			—			203			—			1,562			627			1,765			627
Other assets		99			92			196			194			100			96			296			290
Asset retirement obligation accretion		45			64			89			127			46			65			135			192
Lease operating expenses		613			781			1,210			1,503			652			772			1,862			2,275
Gathering and transportation		66			77			136			150			67			81			203			231
Taxes other than income		181			170			362			399			170			176			532			574
General and administrative		94			126			199			238			112			120			309			359
Acquisition, divestiture, and separation costs		14			—			30			—			34			—			66			—
Financing costs, net		35			52			62			107			41			50			103			157

		2,505			2,620			4,751			5,186			3,957			3,259			8,708			8,445

NET INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		979			1,648			2,408			3,028
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES														(217	)		641			2,191			3,669
Current income tax provision		325			284			741			781			297			409			1,038			1,190
Deferred income tax provision		41			327			203			432
Deferred income tax provision (benefit)														727			(203	)		930			229

NET INCOME FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		613			1,037			1,464			1,815
NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST														(1,241	)		435			223			2,250
Net loss from discontinued operations, net of tax		—			(2	)		(517	)		(63	)		—			(129	)		(517	)		(192	)

NET INCOME INCLUDING NONCONTROLLING INTEREST		613			1,035			947			1,752
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST														(1,241	)		306			(294	)		2,058
Preferred stock dividends		—			19			—			38			—			6			—			44
Net income attributable to noncontrolling interest		108			—			206			—			89			—			295			—

NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	505		$	1,016		$	741		$	1,714
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK													$	(1,330	)	$	300		$	(589	)	$	2,014

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Net income from continuing operations attributable to common shareholders	$	505		$	1,018		$	1,258		$	1,777
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		—			(2	)		(517	)		(63	)		—			(129	)		(517	)		(192	)

Net income attributable to common shareholders	$	505		$	1,016		$	741		$	1,714
Net income (loss) attributable to common shareholders													$	(1,330	)	$	300		$	(589	)	$	2,014

NET INCOME PER COMMON SHARE:
Basic net income from continuing operations per share	$	1.31		$	2.60		$	3.23		$	4.53
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		—			(0.01	)		(1.33	)		(0.16	)		—			(0.33	)		(1.33	)		(0.48	)

Basic net income per share	$	1.31		$	2.59		$	1.90		$	4.37
Basic net income (loss) per share													$	(3.50	)	$	0.75		$	(1.52	)	$	5.11

DILUTED NET INCOME PER COMMON SHARE:
Diluted net income from continuing operations per share	$	1.31		$	2.54		$	3.21		$	4.45
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		—			—			(1.32	)		(0.15	)		—			(0.32	)		(1.33	)		(0.47	)

Diluted net income per share	$	1.31		$	2.54		$	1.89		$	4.30
Diluted net income (loss) per share													$	(3.50	)	$	0.75		$	(1.52	)	$	5.06

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic		385			392			390			392			381			399			387			394
Diluted		387			408			392			408			381			401			387			407

DIVIDENDS DECLARED PER COMMON SHARE	$	0.25		$	0.20		$	0.50		$	0.40		$	0.25		$	0.20		$	0.75		$	0.60


	For the Quarter Ended June 30,				For the Six Months Ended June 30,						For the Quarter Ended September 30,						For the Nine Months Ended September 30,
	2014		2013		2014			2013			2014			2013			2014			2013
	(In millions)										(In millions)

NET INCOME INCLUDING NONCONTROLLING INTEREST	$	613	$	1,035	$	947		$	1,752

NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST											$	(1,241	)	$	306		$	(294	)	$	2,058
OTHER COMPREHENSIVE INCOME (LOSS):
Commodity cash flow hedge activity, net of tax:
Reclassification of loss on settled derivative instruments		—		8		—			14			—			(1	)		—			13
Change in fair value of derivative instruments		—		7		(1	)		(1	)		—			(5	)		(1	)		(6	)
Derivative hedge ineffectiveness reclassified into earnings												—			1			—			1

		—		15		(1	)		13			—			(5	)		(1	)		8

COMPREHENSIVE INCOME INCLUDING NONCONTROLLING INTEREST		613		1,050		946			1,765
COMPREHENSIVE INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST												(1,241	)		301			(295	)		2,066
Preferred stock dividends		—		19		—			38			—			6			—			44
Comprehensive income attributable to noncontrolling interest		108		—		206			—			89			—			295			—

COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCK	$	505	$	1,031	$	740		$	1,727
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK											$	(1,330	)	$	295		$	(590	)	$	2,022


	For the Six Months Ended June 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
	(In millions)						(In millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income including noncontrolling interest	$	947		$	1,752
Net income (loss) including noncontrolling interest							$	(294	)	$	2,058
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations		517			63			517			192
Depreciation, depletion, and amortization		2,663			2,662			5,498			4,657
Asset retirement obligation accretion		89			127			135			192
Provision for deferred income taxes		203			432			930			229
Other		31			(186	)		(263	)		190
Changes in operating assets and liabilities:
Receivables		463			122			572			(49	)
Inventories		(7	)		(33	)		78			(41	)
Drilling advances		28			289			(84	)		123
Deferred charges and other		(114	)		(149	)		(244	)		(205	)
Accounts payable		(140	)		195			(303	)		183
Accrued expenses		(158	)		6			(117	)		(369	)
Deferred credits and noncurrent liabilities		28			(4	)		21			40

NET CASH PROVIDED BY CONTINUING OPERATING ACTIVITIES		4,550			5,276			6,446			7,200
NET CASH PROVIDED BY DISCONTINUED OPERATIONS		82			104			82			158

NET CASH PROVIDED BY OPERATING ACTIVITIES		4,632			5,380			6,528			7,358
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(4,871	)		(5,050	)		(7,131	)		(7,186	)
Additions to gas gathering, transmission, and processing facilities		(721	)		(491	)		(1,035	)		(852	)
Proceeds from divestiture of Gulf of Mexico Shelf properties								—			3,594
Proceeds from sale of Deepwater Gulf of Mexico assets		1,367			—			1,367			—
Restricted cash related to divestitures		(1,367	)		—			(545	)		—
Proceeds from Kitimat LNG transaction, net		—			405			—			396
Proceeds from sale of other oil and gas properties		381			—			390			199
Acquisitions		(5	)		(148	)
Leasehold and property acquisitions								(655	)		(313	)
Other, net		(23	)		14			(80	)		(12	)

NET CASH USED IN CONTINUING INVESTING ACTIVITIES		(5,239	)		(5,270	)		(7,689	)		(4,174	)
NET CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS		748			(94	)		748			(160	)

NET CASH USED IN INVESTING ACTIVITIES		(4,491	)		(5,364	)		(6,941	)		(4,334	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net		(1	)		945			1,246			(539	)
Payments on fixed rate debt		—			(500	)		—			(900	)
Distributions to noncontrolling interest		(66	)		—			(124	)		—
Dividends paid		(176	)		(183	)		(271	)		(280	)
Treasury stock activity, net		(1,263	)		(249	)		(1,830	)		(249	)
Other		25			3			38			38

NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES		(1,481	)		16
NET CASH USED IN CONTINUING FINANCING ACTIVITIES								(941	)		(1,930	)
NET CASH USED IN DISCONTINUED OPERATIONS		(42	)		(8	)		(42	)		(3	)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(1,523	)		8
NET CASH USED IN FINANCING ACTIVITIES								(983	)		(1,933	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(1,382	)		24			(1,396	)		1,091
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		1,906			160			1,906			160

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	524		$	184		$	510		$	1,251

SUPPLEMENTARY CASH FLOW DATA:
Interest paid, net of capitalized interest	$	62		$	79		$	143		$	185
Income taxes paid, net of refunds		781			802			1,134			1,344


	June 30,			December 31,			September 30,			December 31,
	2014			2013			2014			2013
	(In millions)						(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	524		$	1,906		$	510		$	1,906
Short-term restricted cash		778			—			74			—
Receivables, net of allowance		2,407			2,952			2,287			2,952
Inventories		794			891			713			891
Drilling advances		331			371			434			371
Prepaid assets and other		292			246			408			246

		5,126			6,366			4,426			6,366

PROPERTY AND EQUIPMENT:
Oil and gas, on the basis of full-cost accounting:
Proved properties		84,033			83,390			86,963			83,390
Unproved properties and properties under development, not being amortized		7,789			8,363			7,928			8,363
Gathering, transmission and processing facilities		7,587			6,995			7,874			6,995
Other		1,103			1,071			1,107			1,071

		100,512			99,819			103,872			99,819
Less: Accumulated depreciation, depletion and amortization		(48,042	)		(47,398	)
Less: Accumulated depreciation, depletion, and amortization								(50,837	)		(47,398	)

		52,470			52,421			53,035			52,421

OTHER ASSETS:
Long-term restricted cash		589			—			471			—
Goodwill		1,369			1,369			1,369			1,369
Deferred charges and other		1,617			1,481			1,689			1,481

	$	61,171		$	61,637		$	60,990		$	61,637

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	1,491		$	1,616		$	1,316		$	1,616
Current debt		1			53			20			53
Current asset retirement obligation		178			121			177			121
Derivative instruments		272			299			—			299
Other current liabilities		2,628			2,611			2,794			2,611

		4,570			4,700			4,307			4,700

LONG-TERM DEBT		9,674			9,672			10,902			9,672

DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Income taxes		8,566			8,364			9,298			8,364
Asset retirement obligation		3,050			3,101			3,096			3,101
Other		419			407			401			407

		12,035			11,872			12,795			11,872

COMMITMENTS AND CONTINGENCIES (Note 8)

EQUITY:
Common stock, $0.625 par, 860,000,000 shares authorized, 409,441,006 and 408,041,088 shares issued, respectively		256			255
Common stock, $0.625 par, 860,000,000 shares authorized, 409,671,364 and 408,041,088 shares issued, respectively								256			255
Paid-in capital		12,324			12,251			12,379			12,251
Retained earnings		22,581			22,032			21,156			22,032
Treasury stock, at cost, 27,110,079 and 12,268,180 shares, respectively		(2,290	)		(1,027	)
Treasury stock, at cost, 32,853,183 and 12,268,180 shares, respectively								(2,857	)		(1,027	)
Accumulated other comprehensive loss		(116	)		(115	)		(116	)		(115	)

APACHE SHAREHOLDERS’ EQUITY		32,755			33,396			30,818			33,396
Noncontrolling interest		2,137			1,997			2,168			1,997

TOTAL EQUITY		34,892			35,393			32,986			35,393

	$	61,171		$	61,637		$	60,990		$	61,637


	Series D Preferred Stock		Common Stock		Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			APACHE SHAREHOLDERS’ EQUITY			Non Controlling Interest			TOTAL EQUITY
	(In millions)																									Series D Preferred Stock			Common Stock		Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			APACHE SHAREHOLDERS’ EQUITY			Non Controlling Interest			TOTAL EQUITY
																										(In millions)
BALANCE AT DECEMBER 31, 2012	$	1,227	$	245	$	9,859		$	20,161		$	(30	)	$	(131	)	$	31,331		$	—		$	31,331		$	1,227		$	245	$	9,859		$	20,161		$	(30	)	$	(131	)	$	31,331		$	—		$	31,331
Net income		—		—		—			1,752			—			—			1,752			—			1,752			—			—		—			2,058			—			—			2,058			—			2,058
Commodity hedges, net of tax		—		—		—			—			—			13			13			—			13			—			—		—			—			—			8			8			—			8
Dividends:
Preferred		—		—		—			(38	)		—			—			(38	)		—			(38	)		—			—		—			(44	)		—			—			(44	)		—			(44	)
Common ($0.40 per share)		—		—		—			(157	)		—			—			(157	)		—			(157	)
Common ($0.60 per share)																											—			—		—			(237	)		—			—			(237	)		—			(237	)
Common shares issued																											—			9		1,218			—			—			—			1,227			—			1,227
Common stock activity, net																											—			1		(12	)		—			—			—			(11	)		—			(11	)
Treasury stock activity, net																											—			—		(1	)		—			(250	)		—			(251	)		—			(251	)
Conversion of Series D preferred stock																											(1,227	)		—		—			—			—			—			(1,227	)		—			(1,227	)
Compensation expense																											—			—		135			—			—			—			135			—			135
Other																											—			—		(8	)		—			—			—			(8	)		—			(8	)

BALANCE AT SEPTEMBER 30, 2013																										$	—		$	255	$	11,191		$	21,938		$	(280	)	$	(123	)	$	32,981		$	—		$	32,981

BALANCE AT DECEMBER 31, 2013																										$	—		$	255	$	12,251		$	22,032		$	(1,027	)	$	(115	)	$	33,396		$	1,997		$	35,393
Net income (loss)																											—			—		—			(589	)		—			—			(589	)		295			(294	)
Distributions to noncontrolling interest																											—			—		—			—			—			—			—			(124	)		(124	)
Commodity hedges, net of tax																											—			—		—			—			—			(1	)		(1	)		—			(1	)
Dividends:
Common ($0.75 per share)																											—			—		—			(287	)		—			—			(287	)		—			(287	)
Common stock activity, net		—		1		(18	)		—			—			—			(17	)		—			(17	)		—			1		(12	)		—			—			—			(11	)		—			(11	)
Treasury stock activity, net		—		—		—			—			(250	)		—			(250	)		—			(250	)		—			—		(1	)		—			(1,830	)		—			(1,831	)		—			(1,831	)
Compensation expense		—		—		87			—			—			—			87			—			87			—			—		145			—			—			—			145			—			145
Other																											—			—		(4	)		—			—			—			(4	)		—			(4	)

BALANCE AT JUNE 30, 2013	$	1,227	$	246	$	9,928		$	21,718		$	(280	)	$	(118	)	$	32,721		$	—		$	32,721
BALANCE AT SEPTEMBER 30, 2014																										$	—		$	256	$	12,379		$	21,156		$	(2,857	)	$	(116	)	$	30,818		$	2,168		$	32,986


BALANCE AT DECEMBER 31, 2013	$	—	$	255	$	12,251		$	22,032		$	(1,027	)	$	(115	)	$	33,396		$	1,997		$	35,393
Net income		—		—		—			741			—			—			741			206			947
Distributions to noncontrolling interest		—		—		—			—			—			—			—			(66	)		(66	)
Commodity hedges, net of tax		—		—		—			—			—			(1	)		(1	)		—			(1	)
Dividends:
Common ($0.50 per share)		—		—		—			(192	)		—			—			(192	)		—			(192	)
Common stock activity, net		—		1		(25	)		—			—			—			(24	)		—			(24	)
Treasury stock activity, net		—		—		(1	)		—			(1,263	)		—			(1,264	)		—			(1,264	)
Compensation expense		—		—		99			—			—			—			99			—			99

BALANCE AT JUNE 30, 2014	$	—	$	256	$	12,324		$	22,581		$	(2,290	)	$	(116	)	$	32,755		$	2,137		$	34,892

These 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 statement of the results for the interim periods, on a basis consistent with the annual audited financial statements. 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 (U.S. GAAP) have been 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 Apache’s Current Report on Form 8-K dated July 17, 2014 for the fiscal year ended December 31, 2013, which contains a summary of the Company’s significant accounting policies and other disclosures.

The Company’s financial statements for prior periods include reclassifications that were made to conform to the current-period presentation. In March 2014, Apache completed the sale of all of its operations in Argentina. Results of operations and cash flows for Argentina operations are reflected as discontinued operations in the Company’s financial statements for all periods presented. For more information regarding this divestiture, please refer to Note 2–Acquisitions and Divestitures.

As of ~~June~~September 30, 2014, Apache’s significant accounting policies are consistent with those discussed in Note 1—Summary of Significant Accounting Policies to the consolidated financial statements contained in Apache’s Current Report on Form 8-K dated July 17, 2014 for the fiscal year ended December 31, ~~2013.~~2013, other than the change in income taxes noted below and in Note 7—Income Taxes.

The preparation of financial statements in conformity with U.S. GAAP 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. Significant estimates with regard to these financial statements include the fair value determination of acquired assets and liabilities, the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom, assessing asset retirement obligations, and the estimate of income taxes. Actual results could differ from those estimates.

The Company classifies cash balances as restricted cash when cash is restricted as to withdrawal or usage. As of ~~June~~September 30, 2014, the Company had ~~approximately $1.4 billion~~$545 million of proceeds from the sale of ~~our~~ deepwater Gulf of Mexico properties held by a qualified intermediary and available for use in a like-kind exchange under Section 1031 of the U.S. Internal Revenue Code. ~~The Company has the option to use these funds for the acquisition of properties or receive the funds in cash after a short-term contractual period.~~ As of the date of this filing, the Company ~~expects~~has utilized or plans to ~~close on~~utilize $471 million of the cash held by the qualified intermediary in the acquisition of like-kind ~~properties for $589 million,~~property, and as such, ~~the balance~~this amount is classified as long-term restricted cash on Apache’s consolidated balance sheet as of ~~June~~September 30, 2014. The remaining ~~proceeds~~$74 million of ~~approximately $778 million are~~restricted cash was returned to Apache in October and, as such, is classified as short-term restricted cash on Apache’s consolidated balance sheet as of ~~June~~September 30, 2014. ~~Should the Company elect to use additional funds for a like-kind exchange, the balance will be reclassified to long-term restricted cash until the funds are expended.~~ For more information regarding the sale of the deepwater Gulf of Mexico properties, please refer to Note 2—Acquisitions and Divestitures.

The Company follows the full-cost method of accounting for its oil and gas property. Under this method of accounting, all costs incurred for both successful and unsuccessful exploration and development activities, including salaries, benefits and other internal costs directly identified with these activities, and oil and gas property acquisitions are capitalized. The net book value of oil and gas properties, less related deferred income taxes, may not exceed a calculated “ceiling.” The ceiling limitation is the estimated after-tax future net cash flows from proved oil and gas reserves, discounted at 10 percent per annum and adjusted for designated cash flow hedges. Estimated future net cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months, held flat for the life of the production, except where prices are defined by contractual arrangements.

Any excess of the net book value of proved oil and gas properties, less related deferred income taxes, over the ceiling is charged to expense and reflected as “Additional depreciation, depletion, and amortization” (DD&A) in the accompanying statement of consolidated operations. Such limitations are imposed separately on a country-by-country basis and are tested quarterly. For a discussion of the calculation of estimated future net cash flows, please refer to Note 14—Supplemental Oil and Gas Disclosures to the consolidated financial statements contained in Apache’s Current Report on Form 8-K dated July 17, 2014 for the fiscal year ended December 31, 2013.

In the third quarter of 2014, the Company recorded $1.5 billion ($996 million net of tax) and $17 million ($7 million net of tax) in non-cash write-downs of the carrying value of the Company’s U.S. and North Sea proved oil and gas properties, respectively. In the second quarter of 2014, the Company recorded a $203 million ($77 million net of tax) non-cash write-down of the carrying value of the Company’s North Sea proved oil and gas properties.

Apache records deferred tax assets and liabilities to account for the expected future tax consequences of events that have been recognized in the financial statements and tax returns. The Company routinely assesses the realizability of its deferred tax assets. If the Company concludes that it is more likely than not that some or all of the deferred tax assets will not be realized, the tax asset is reduced by a valuation allowance. Numerous judgments and assumptions are inherent in the determination of future taxable income, including factors such as future operating conditions (particularly as related to prevailing oil and gas prices) and changing tax laws.

Apache is required to assess whether the undistributed earnings of its foreign subsidiaries will be permanently reinvested. In the third quarter of 2014, Apache evaluated its permanent reinvestment position and determined that undistributed earnings from certain subsidiaries located in Apache’s Australia, Egypt, and North Sea regions will no longer be permanently reinvested. As a result of this change in position, Apache recorded a U.S. deferred income tax liability of $814 million on the undistributed earnings of subsidiaries located in these regions. Undistributed earnings of Apache’s Canadian subsidiaries remain permanently reinvested. Apache does not record U.S. deferred income taxes on foreign subsidiaries that are deemed to be permanently reinvested. When such earnings are no longer deemed permanently reinvested, Apache will recognize the appropriate U.S. current or deferred income tax liabilities. In addition, the Company recorded $249 million of U.S. deferred income tax expense on foreign earnings that were distributed to the U.S. in the third quarter of 2014.

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-08—Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 modifies the criteria for disposals to qualify as discontinued operations and expands related disclosures. The guidance is effective for annual and interim reporting periods beginning after December 15, 2014. Adoption of this amendment will not have a material effect on our financial position or results of operations.

In May 2014, the FASB and the International Accounting Standards Board (IASB) issued a joint revenue recognition standard, ASU 2014-09. The new standard removes inconsistencies in existing standards, changes the way companies recognize revenue from contracts with customers, and increases disclosure requirements. The guidance requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2016. The standard is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to retained earnings on the opening balance sheet. The Company is currently evaluating the level of effort needed to implement the standard, the impact of adopting this standard on its consolidated financial statements, and whether to use the full retrospective approach or the modified retrospective approach.

In August 2014, the FASB issued ASU No. 2014-15, which requires management of public and private companies to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued (or available to be issued when applicable) and, if so, to disclose that fact. Management will be required to make this evaluation for both annual and interim reporting periods, if applicable. ASU No. 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. The Company does not expect the adoption of this amendment to have a material impact on its consolidated financial statements.

On June 30, 2014, Apache completed the sale of non-operated interests in the Lucius and Heidelberg development projects and 11 primary term deepwater exploration blocks in the Gulf of Mexico for $1.4 billion. The effective date of the transaction was May 1, 2014. Apache’s net book value of oil and gas properties was reduced by ~~approximately~~ $850 million of proved property costs and $518 million of unproved property costs as a result of the transaction.

On April 30, 2014, Apache completed the sale of primarily dry gas producing hydrocarbon assets in the Deep Basin area of western Alberta and British Columbia, Canada, for $374 million. The assets comprise 328,400 net acres in the Ojay, Noel, and Wapiti areas. Apache retained 100 percent of its working interest in horizons below the Cretaceous in the Wapiti area, including rights to the liquids-rich Montney and other deeper horizons. The effective date of the transaction was January 1, 2014.

On March 12, 2014, Apache’s subsidiaries completed the sale of all of the Company’s operations in Argentina to YPF Sociedad Anónima for cash consideration of $800 million (subject to customary closing adjustments) plus the assumption of $52 million of bank debt as of June 30, 2013. The results of operations related to Argentina have been classified as discontinued operations in all periods presented in this Quarterly Report on Form 10-Q. The carrying amounts of the major classes of assets and liabilities associated with the disposition were as follows:

Sales and other operating revenues and loss from discontinued operations related to the Argentina disposition were as follows:


	For the Quarter Ended					For the Six Months Ended
	June 30,					June 30,
	2014		2013			2014			2013			For the Quarter Ended September 30,					For the Nine Months Ended September 30,
	(In millions)											2014		2013			2014			2013
												(In millions)
Revenues and other from discontinued operations	$	—	$	115		$	87		$	246		$	—	$	118		$	87		$	364


Loss from Argentina divestiture		—		—			(539	)		—			—		—			(539	)		—
Loss from operations in Argentina		—		(2	)		(1	)		(63	)		—		(129	)		(1	)		(192	)
Income tax benefit		—		—			23			—			—		—			23			—

Loss from discontinued operations, net of tax	$	—	$	(2	)	$	(517	)	$	(63	)	$	—	$	(129	)	$	(517	)	$	(192	)

On November 14, 2013, Apache completed the sale of a one-third minority participation in its Egypt oil and gas business to a subsidiary of Sinopec International Petroleum Exploration and Production Corporation (Sinopec). Apache received cash consideration of $2.95 billion after customary closing adjustments. Apache continues to operate its Egypt upstream oil and gas business. Apache recorded ~~$1.9~~

$1.9 billion of the proceeds as a noncontrolling interest, which is reflected as a separate component of equity in the Company’s consolidated balance sheet. This represents one-third of Apache’s net book value of its Egypt holdings at the time of the transaction. The remaining proceeds were recorded as additional paid-in capital. Included in “Net income including noncontrolling interest” for the quarter ended ~~June~~September 30, 2014, is net income attributable to Sinopec’s interest totaling ~~$108~~$89 million. For the first ~~half~~nine months of 2014, net income attributable to Sinopec’s interest totaled ~~$206~~$295 million, of which the Company has distributed ~~$66~~$124 million to Sinopec.

On September 30, 2013, Apache completed the sale of its Gulf of Mexico Shelf operations and properties to Fieldwood Energy LLC (Fieldwood), an affiliate of Riverstone Holdings. Under the terms of the agreement, Apache received cash consideration of $3.7 billion, and Fieldwood assumed $1.5 billion of discounted asset abandonment liabilities. Additionally, Apache retained 50 percent of its ownership interest in all exploration blocks and in horizons below production in developed blocks.

In February 2013, Apache completed a transaction with Chevron Canada Limited (Chevron Canada) under which each company became a 50-percent owner of the Kitimat LNG plant, the Pacific Trail Pipelines Limited Partnership (PTP), and 644,000 gross undeveloped acres in the Horn River and Liard basins. Chevron Canada will operate the LNG plant and pipeline while Apache Canada will continue to operate the upstream assets. Apache’s net proceeds from the transaction were $396 million after post-closing adjustments, and no gain or loss was recorded.

The Company is exposed to fluctuations in crude oil and natural gas prices on the majority of its worldwide production. Apache manages the variability in its cash flows by occasionally entering into derivative transactions on a portion of its crude oil and natural gas production. The Company utilizes various types of derivative financial instruments, including swaps and options, to manage fluctuations in cash flows resulting from changes in commodity prices.

The use of derivative instruments exposes the Company to counterparty credit risk, or the risk that a counterparty will be unable to meet its commitments. To reduce the concentration of exposure to any individual counterparty, Apache utilizes a diversified group of investment-grade rated counterparties, primarily financial institutions, for its derivative transactions. As of ~~June~~September 30, 2014, Apache had derivative positions with 14 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, Apache may not realize the benefit of some of its derivative instruments resulting from lower commodity prices.

The Company executes commodity derivative transactions under master agreements that have netting provisions that provide for offsetting payables against receivables. In general, if a party to a derivative transaction incurs a material deterioration in its credit ratings, as defined in the applicable agreement, the other party has the right to demand the posting of collateral, demand a transfer, or terminate the arrangement. The Company’s net derivative ~~liability~~asset position at ~~June~~September 30, 2014, represents the aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net ~~liability~~asset position. The Company has not provided any collateral to any of its counterparties as of ~~June~~September 30, 2014.

As of ~~June~~September 30, 2014, Apache had the following commodity derivative positions:


			Fixed-Price Swaps								Fixed-Price Swaps
					MMBtu		Weighted Average
Production Period	Commodity	Settlement Index	Mbbls		(in 000’s)		Fixed Price

Production													MMBtu		Weighted Average
Period									Commodity	Settlement Index	Mbbls		(in 000’s)		Fixed Price
2014	Crude Oil	NYMEX WTI		11,500		—	$	90.83	Crude Oil	NYMEX WTI		5,750		—	$	90.83
2014	Crude Oil	Dated Brent		11,500		—		100.05	Crude Oil	Dated Brent		5,750		—		100.05
2014	Natural Gas	Various⁽¹⁾		—		32,470		4.37	Natural Gas	Various⁽¹⁾		—		16,235		4.37

Apache has currently elected not to designate any of its qualifying natural gas and oil derivatives as cash flow hedges. Changes in the fair value of these derivatives for the current period are recorded in the Company’s statement of consolidated operations.

Apache’s commodity derivative instruments consist of variable-to-fixed price commodity swaps. The fair values of the Company’s derivatives are not actively quoted in the open market. The Company uses a market approach to estimate the fair values of its derivative instruments, utilizing commodity futures price strips for the underlying commodities provided by a reputable third party.

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


	Fair Value Measurements Using													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		Quoted
	(In millions)													Price in		Significant		Significant
June 30, 2014
														Active		Other		Unobservable		Total
														Markets		Inputs		Inputs		Fair					Carrying
														(Level 1)		(Level 2)		(Level 3)		Value		Netting⁽¹⁾			Amount
														(In millions)
September 30, 2014
Assets:
Commodity Derivative Instruments	$	—	$	1	$	—	$	1	$	(1	)	$	—	$	—	$	41	$	—	$	41	$	—		$	41

Liabilities:
Commodity Derivative Instruments		—		273		—		273		(1	)		272		—		—		—		—		—			—

December 31, 2013
Assets:
Commodity Derivative Instruments	$	—	$	3	$	—	$	3	$	(2	)	$	1	$	—	$	3	$	—	$	3	$	(2	)	$	1

Liabilities:
Commodity Derivative Instruments		—		301		—		301		(2	)		299		—		301		—		301		(2	)		299

Derivative Assets and Liabilities 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:

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


	Gain (Loss) on Derivatives	For the Quarter Ended June 30,						For the Six Months Ended June 30,							For the Quarter Ended						For the Nine Months Ended
	Recognized in Income	2014			2013			2014			2013			Gain (Loss) on Derivatives	September 30,						September 30,
		(In millions)												Recognized in Income	2014			2013			2014			2013
Loss on cash flow hedges reclassified from accumulated other comprehensive loss	Oil and Gas Production Revenues	$	—		$	(11	)	$	—		$	(20	)
															(In millions)
Gain (loss) on cash flow hedges reclassified from accumulated other comprehensive loss														Oil and Gas Production Revenues	$	—		$	2		$	—		$	(18	)
Loss for ineffectiveness on cash flow hedges														Revenues and other: Other	$	—		$	(1	)	$	—		$	(1	)
Derivatives not designated as cash flow hedges:
Realized gain (loss)		$	(125	)	$	5		$	(221	)	$	(47	)
Realized loss															$	(41	)	$	(91	)	$	(262	)	$	(138	)
Unrealized gain (loss)			(49	)		242			27			194				314			(331	)		341			(137	)

Gain (loss) on derivatives not designated as cash flow hedges	Derivative instrument gains (losses), net	$	(174	)	$	247		$	(194	)	$	147		Derivative instrument gains (losses), net	$	273		$	(422	)	$	79		$	(275	)

Unrealized gains and losses for derivative activity recorded in the statement of consolidated operations is reflected in the statement of consolidated cash flows as a component of “Other” in “Adjustments to reconcile net income to net cash provided by operating activities.”

A reconciliation of the components of accumulated other comprehensive loss in the statement of consolidated changes in equity related to Apache’s cash flow hedges is presented in the table below. The Company has no derivatives designated as cash flow hedges as of ~~June~~September 30, 2014.


	For the Six Months Ended June 30,												For the Nine Months Ended September 30,
	2014						2013						2014						2013
	Before tax			After tax			Before tax			After tax			Before			After			Before			After
	(In millions)												tax			tax			tax			tax
													(In millions)
Unrealized gain (loss) on derivatives at beginning of period	$	1		$	1		$	(10	)	$	(6	)	$	1		$	1		$	(10	)	$	(6	)
Realized amounts reclassified into earnings		—			—			20			14			—			—			18			13
Net change in derivative fair value		(1	)		(1	)		—			(1	)		(1	)		(1	)		(7	)		(6	)
Ineffectiveness reclassified into earnings														—			—			1			1

Unrealized gain on derivatives at end of period	$	—		$	—		$	10		$	7		$	—		$	—		$	2		$	2


	June 30,		December 31,
	2014		2013		September 30,		December 31,
	(In millions)				2014		2013
					(In millions)
Accrued operating expenses	$	131	$	190	$	127	$	190
Accrued exploration and development		1,616		1,582		1,723		1,582
Accrued compensation and benefits		167		242		217		242
Accrued interest		161		161		119		161
Accrued income taxes		266		248		297		248
Accrued U.K. Petroleum Revenue Tax		64		9		47		9
Other		223		179		264		179


Total Other current liabilities	$	2,628	$	2,611	$	2,794	$	2,611

The following table describes changes to the Company’s asset retirement obligation (ARO) liability for the ~~six-month~~nine-month period ended ~~June~~September 30, 2014:


	(In millions)			(In millions)
Asset retirement obligation at December 31, 2013	$	3,222		$	3,222
Liabilities incurred		63			86
Liabilities divested		(91	)		(91	)
Liabilities settled		(55	)		(79	)
Accretion expense		89			135

Asset retirement obligation at June 30, 2014		3,228

Asset retirement obligation at September 30, 2014					3,273
Less current portion		(178	)		(177	)

Asset retirement obligation, long-term	$	3,050		$	3,096

The following table presents the carrying amounts and estimated fair values of the Company’s outstanding debt:


	June 30, 2014				December 31, 2013				September 30, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying		Fair		Carrying		Fair
	(In millions)								Amount		Value		Amount		Value
									(In millions)
Uncommitted credit lines	$	1	$	1	$	53	$	53	$	20	$	20	$	53	$	53
Commercial paper										1,228		1,228		—		—
Notes and debentures		9,674		10,828		9,672		10,247		9,674		10,463		9,672		10,247

Total Debt	$	9,675	$	10,829	$	9,725	$	10,300	$	10,922	$	11,711	$	9,725	$	10,300

The Company’s debt is recorded at the carrying amount, net of unamortized discount, on its consolidated balance sheet. The carrying amount of the Company’s commercial paper and uncommitted credit facilities and overdraft lines approximates fair value because the interest rates are variable and reflective of market rates. Apache uses a market approach to determine the fair value of its notes and debentures using estimates provided by an independent investment financial data services firm (a Level 2 fair value measurement).

As of ~~June~~September 30, 2014, the Company had unsecured committed revolving credit facilities totaling $3.3 billion, of which $1.0 billion matures in August 2016 and $2.3 billion matures in June 2018 pursuant to a one-year extension approved in May 2014 under the terms of the $2.3 billion facilities. The facilities consist of a $1.7 billion facility and $1.0 billion facility for the U.S., a $300 million facility for Australia, and a $300 million facility for Canada. As of ~~June~~September 30, 2014, available borrowing capacity under the Company’s credit facilities was ~~$3.3~~$2.1 billion. The Company’s committed credit facilities are used to support Apache’s commercial paper program.

The Company has available a $3.0 billion commercial paper program, which generally enables Apache to borrow funds for up to 270 days at competitive interest rates. The commercial paper program is fully supported by available borrowing capacity under our committed credit facilities. ~~At June 30, 2014 and December 31, 2013, the Company had no outstanding commercial paper.~~

As of ~~June~~September 30, 2014, the Company had ~~approximately $1~~$1.2 billion outstanding in commercial paper. There was no outstanding commercial paper as of December 31, 2013.

As of September 30, 2014, the Company had $20 million of current debt outstanding borrowed on uncommitted credit facilities and overdraft lines, compared with $53 million as of December 31, 2013.


	For the Quarter Ended June 30,						For the Six Months Ended June 30,						For the Quarter Ended						For the Nine Months Ended
	2014			2013			2014			2013			September 30,						September 30,
	(In millions)												2014			2013			2014			2013
													(In millions)
Interest expense	$	124		$	141		$	248		$	287		$	126		$	142		$	374		$	429
Amortization of deferred loan costs		1			2			3			4			2			2			5			6
Capitalized interest		(90	)		(88	)		(185	)		(178	)		(85	)		(91	)		(270	)		(268	)
Interest income		—			(3	)		(4	)		(6	)		(2	)		(3	)		(6	)		(10	)

Financing costs, net	$	35		$	52		$	62		$	107		$	41		$	50		$	103		$	157

In the third quarter of 2014, Apache evaluated its permanent reinvestment position and determined that undistributed earnings from certain foreign subsidiaries located in Apache’s Australia, Egypt, and North Sea regions will no longer be permanently reinvested. As a result of this change in position, the Company recorded $814 million of U.S. deferred income tax expense on undistributed earnings that were previously considered permanently reinvested. In addition, the Company recorded $249 million of U.S. deferred income tax expense on foreign earnings that were distributed to the U.S. in the third quarter of 2014.

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. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. Accordingly, in the third quarter of 2014, the Company recorded $814 million of U.S. deferred income tax expense on foreign earnings no longer deemed to be permanently reinvested as well as the income tax effect of the $1.5 billion and $17 million non-cash write-downs of its U.S. and North Sea proved oil and gas properties, respectively, as discrete items in the third quarter of 2014. In the second quarter of 2014, the Company recorded the income tax impact of a $203 million non-cash write-down of its North Sea proved oil and gas properties as a discrete ~~item in~~item. In the ~~second~~third quarter of ~~2014.~~2013, the Company recorded the income tax impact of a $552 million non-cash write-down and a $75 million non-cash impairment on its U.S. and Kenyan oil and gas properties, respectively, as discrete items.

Apache and its subsidiaries are 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 under audit with~~In October 2014, the Internal Revenue Service ~~for~~concluded its audit of the 2011 and 2012 tax years. The Company is ~~also~~ under audit in various states and in most of the Company’s foreign jurisdictions as part of its normal course of business.

Apache is party to various legal actions arising in the ordinary course of business, including litigation and governmental and regulatory controls. As of ~~June~~September 30, 2014, the Company has an accrued liability of approximately $21 million for all legal contingencies that are deemed to be probable of occurring and can be reasonably estimated. Apache’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 Apache’s financial position, results of operations, or liquidity after consideration of recorded accruals. For material matters that Apache 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 each of the Legal Matters described below, please see Note 8—Commitments and Contingencies to the consolidated financial statements contained in Apache’s Current Report on Form 8-K dated July 17, 2014 for the fiscal year ended December 31, 2013.

~~In 2003, the~~The Asociación de Superficiarios de la Patagonia (ASSUPA) filed lawsuits against Company subsidiaries in Argentina courts relating to various environmental and remediation claims concerning certain geographic areas of Argentina, including in 2003 the Neuquén basin and in 2012 the Austral ~~basins.~~basin. In addition, effective December 1, 2011, Enargas, an autonomous entity that functions under the Argentine Ministry of Economy, created a tariff charge on all fuel gas used by oil and gas producers in field operations, which is likewise the subject of legal proceedings in Argentina.

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, including the ASSUPA and Enargas matters, 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 $67.5 million pursuant to the terms and conditions of stock purchase agreements entered in 2006 between Company subsidiaries and ~~Pioneer subsidiaries.~~certain subsidiaries of Pioneer. No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Numerous surface owners have filed claims or sent demand letters to various oil and gas companies, including Apache, claiming that, under either expressed or implied lease terms or Louisiana law, they are liable for damage measured by the cost of restoration of leased premises to their original condition as well as damages for contamination and cleanup.

In a case captionedHeloise, LLC, et al. v. BP America Production Company, et al., Case No. 120113 in the District Court for the Parish of Lafourche, plaintiff landowners allege that defendants’ oil and gas operations contaminated their property primarily with chlorides. Apache, a defendant in the case, acquired its interest in the oil and gas operations on plaintiffs’ property from the former operator, Amoco Production Company, when the Company purchased the stock of Amoco’s subsidiary, MW Petroleum Corporation, in 1991. BP America Production Company (BP America), as Amoco’s successor in interest, and Apache dispute whether and to what extent they might owe each other indemnity in the case. Plaintiffs’ expert ~~has recently~~ opined that the cost of remediating plaintiffs’ 825 acres exceeds $200 million. ~~Trial~~Prior to trial, Apache and BP America each settled with plaintiff. The amount paid by Apache in settlement is ~~set for December 2014. While an adverse judgment~~not material and does not have a material effect on the Company’s financial position, results of operations, or liquidity. Further, as part of the overall settlement, each of Apache and BP America released and waived its indemnity claim against the ~~Company might be possible, Apache intends to vigorously defend the case.~~other arising out of this litigation. The lawsuit is concluded.

With respect toBoard of Commissioners of the Southeast Louisiana Flood Protection Authority – East v. Tennessee Gas Pipeline Company et al., Civil Action no. 13-5410, in the United States District Court for the Eastern District of Louisiana, the federal court has retained jurisdiction over the matter after denying plaintiff’s motion to remand on June 27, 2014. Further, the Louisiana state government has passed a new law (SB 469) clarifying that only entities authorized under the Coastal Zone Management Act may bring litigation to assert claims arising out of the permitted activities. Plaintiff is not one of those authorized entities. The Company and other defendants ~~will~~ seek dismissal of the case, including pursuant to SB 469.

No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

In 2008, Company subsidiaries reported a pipeline explosion that interrupted deliveries of natural gas in Australia to customers under various long-term contracts.

In the case captionedAlcoa of Australia Limited v. Apache Energy Limited, Apache Northwest Pty Ltd, Tap (Harriet) Pty Ltd, and Kufpec Australia Pty Ltd, Civ. 1481 of 2011, in the Supreme Court of Western Australia, on June 20, 2012, the Supreme Court struck out Alcoa’s claim that the liquidated damages provisions under two long-term contracts are unenforceable as a penalty and also struck out Alcoa’s claim for damages for breach of statutory duty. On September 17, 2013, the Western Australia Court of Appeal dismissed the Company subsidiaries’ appeal concerning Alcoa’s remaining tort claim for economic loss. On October 15, 2013, the Company subsidiaries applied to the High Court of Australia for special leave to appeal. On April 11, 2014, the High Court refused special leave to appeal. However, on October 8, 2014, the High Court decided a separate case on point captionedBrookfield Multiplex Ltd v. Owners Corporation Strata Plan 61288 & Anor, [2014] HCA 36. The High Court’s holding in theBrookfield case strongly favors the Company subsidiaries’ defenses to Alcoa’s remaining tort claim for economic loss. All of the Company subsidiaries’ defenses remain intact for further proceedings at the trial court level, including the defenses that were the subject of the special leave ~~application.~~application and that have now been considered separately by the High Court in theBrookfield case. Further, in January 2014, an Alcoa affiliate pleaded guilty inUnited States of America v. Alcoa World Alumina LLC, Criminal No. 14-7, in the United States District Court for the Western District of Pennsylvania, to a charge under the Foreign Corrupt Practices Act (FCPA) anti-bribery provisions, 15 U.S.C. Section 78dd-2 and 18 U.S.C. Section 2. This matter overlaps with Alcoa’s claims against Company subsidiaries in that both cases concern alumina produced from Alcoa’s alumina refineries in Western Australia during the period of the gas supply disruption in 2008-2009. In the circumstances of the admitted, agreed, and stipulated facts set forth in the Alcoa affiliate’s Plea Agreement, which is a public document, Company subsidiaries will defend against Alcoa’s claims on the basis that Alcoa is barred by law from recovering economic losses.

In the week prior to expiration of the applicable six-year limitations period on June 3, 2014, the following civil lawsuits were filed in connection with the Varanus Island pipeline explosion (the Incident):, and the amounts specified do not include plaintiffs’ alleged interest and costs:

With respect to the claims in which the plaintiffs have not specified an amount of alleged damages in their court filings, the exposure related to such claims is not material or, in the case ofWesfarmers,not currently determinable but ~~in each case, the alleged damages are~~ not expected to be material. Insurance statistics maintained by the Insurance Council of Australia show that the total insured loss resulting from the gas supply disruption was $230 million AUD.

The applicable six-year limitations period has expired. In six years none of the above-referenced plaintiffs presented a claim to Apache or its subsidiaries prior to filing suit and instead, each allowed the same plaintiff law firm to file suit in Western Australia at the latest possible moment. The Apache defendants do not believe that any of the claims have merit and will vigorously pursue their defenses against such claims. The plaintiffs seek relief primarily in tort, in circumvention of their own positive arrangements regarding risk ~~allocation.~~allocation and in contravention of the High Court’s decision in theBrookfieldcase. In respect of the pending claims filed prior to expiration of the limitations period, contractual liquidated damages under the long-term contracts with such provisions, and under which an Apache subsidiary is a gas supplier, would not be expected to exceed $20 million AUD exclusive of interest. This is a reduction from previous estimates. In addition, Company subsidiaries have received confirmation of liability insurance coverage from both the primary insurer and the excess insurers.

No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

On October 29, 2012, plaintiffs filed an amended complaint inBreton Energy, L.L.C. et al. v. Mariner Energy Resources, Inc., et al., Case 4:11-cv-03561, in the United States District Court for the Southern District of Texas, Houston Division, seeking compensation from defendants for allegedly depriving plaintiffs of rights to hydrocarbons in a reservoir described by plaintiffs as a common reservoir in West Cameron Blocks 171 and 172 offshore Louisiana in the Gulf of Mexico. Plaintiffs assert claims for waste and drainage. On May 28, 2013, the United States District Court for the Southern District of Texas dismissed the plaintiffs’ claims and entered judgment in favor of the defendants. Plaintiffs appealed. On ~~June 3, 2013, the plaintiffs filed a notice of appeal in~~August 12, 2014, the United States Court of Appeals for the Fifth ~~Circuit.~~Circuit affirmed the District Court as to the claims for waste against all defendants except International Paper and also affirmed the District Court as to the claims for drainage against all defendants. The ~~appeal~~Company’s subsidiary, Mariner Energy Resources, Inc. (now known as Apache Shelf, Inc.), was dismissed from the case but is ~~pending. No~~obligated to indemnify the remaining defendant, International Paper, against the sole remaining claim. Prior to trial, which was to commence on November 3, 2014, plaintiffs settled their remaining claim in an amount that is not material ~~change in~~and does not have a material effect on the ~~status~~Company’s financial position, results of ~~this matter has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.~~operations, or liquidity. The lawsuit is concluded.

The State of Delaware, Department of Finance, Division of Revenue (Unclaimed Property), has notified numerous companies, including Apache Corporation, that the State intends to examine its books and records and those of its subsidiaries and related entities to determine compliance with the Delaware Escheat Laws. The review is ongoing, and no material change in the status of this matter has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

On October 11, 2013, a lawsuit captionedPankaj Oswal v. Apache Corporation, No. WAD 389/2013, in the Federal Court of Australia, District of Western Australia, General Division, was filed in which plaintiff asserts claims against the Company under the Australian Trade Practices Act. The case has been set for a preliminary hearing commencing December 8, 2014. The Company does not believe the lawsuit has merit and will vigorously defend against it. No other material change in the status of this matter has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

In the case captionedRadhika Oswal v. Australia and New Zealand Banking Group Limited(ANZ) et al., No. SCI 2011 4653, in the Supreme Court of Victoria, plaintiff filed an application seeking to amend her statement of claim in order to add parties as defendants to the proceedings, including the Company and certain of its subsidiaries. Similarly, in a companion case captionedPankaj Oswal v. Australia and New Zealand Banking Group Limited(ANZ) et al., No. SCI 2012 01995, in the Supreme Court of Victoria, plaintiff also filed an application seeking to amend his statement of claim in order to add parties as defendants to the proceedings, including the Company and certain of its subsidiaries. This iswas the second attempt by the plaintiffs to amend their pleadings, with their first attempt having been unsuccessful. While reserving all rights, including all defenses to the plaintiffs’ proposed amended pleadings, the Company and its subsidiaries did not object to the plaintiffs’ revised applications to amend their pleadings, which is a procedural matter. The court granted plaintiffs’ applications and entered a scheduling order with respect to the filing of all amended pleadings. On July 23, 2014, the Apache defendants filed their responsive pleadings, which include substantial counterclaims against the Oswals by a Company subsidiary. The Company and its subsidiaries do not believe the plaintiffs’ claims have merit and will vigorously defend against them. Trial is set to commence August 3, 2015. No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

Concerning the action filed by Tap (Harriet) Pty Ltd (Tap) against Burrup Fertilisers Pty Ltd et al., Civ. 2329 of 2009, in the Supreme Court of Western Australia, ~~no material change in~~ the ~~status of this matter~~remaining parties have settled and the lawsuit has ~~occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.~~been discontinued by consent. The lawsuit is concluded.

As of ~~June~~September 30, 2014, the Company had an undiscounted reserve for environmental remediation of approximately ~~$89~~$86 million. The Company is not aware of any environmental claims existing as of ~~June~~September 30, 2014, 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.

On May 25, 2011, a panel of the Bureau of Ocean Energy Management (BOEMRE, as it was then known) published a report dated May 23, 2011, and titled “OCS G-2580, Vermilion Block 380 Platform A, Incidents of Noncompliance.” The report concerned the BOEMRE’s investigation of a fire on the Vermilion 380 A platform located in the Gulf of Mexico. At the time of the incident, Mariner operated the platform. On December 27, 2011, the Bureau of Safety and Environmental Enforcement (BSEE, successor to BOEMRE) issued several Incidents of Non-Compliance, which may provide the basis for the assessment of civil penalties against Mariner. The Company’s subsidiary, Apache Deepwater LLC, which is the successor by merger to Mariner effective November 10, 2010, has been presented with a BSEE notice of proposed civil penalty assessment in an amount that is not material and that will not have a material effect on the Company’s financial position, results of operations, or liquidity.

No other material change in the status of these matters has occurred since the filing of Apache’s Current Report on Form 8-K dated July 17, 2014 for its 2013 fiscal year.

A reconciliation of the components of basic and diluted net income (loss) per common share for the quarters and ~~six-month~~nine-month periods ended ~~June~~September 30, 2014 and 2013 is presented in the table below.


	For the Quarter Ended June 30,																For the Quarter Ended September 30,
	2014								2013								2014								2013
	Income			Shares		Per Share			Income			Shares		Per Share			Loss			Shares		Per Share			Income (Loss)			Shares		Per Share
	(In millions, except per share amounts)																(In millions, except per share amounts)
Basic:
Income from continuing operations	$	505			385	$	1.31		$	1,018			392	$	2.60
Income (loss) from continuing operations																	$	(1,330	)		381	$	(3.50	)	$	429			399	$	1.08
Loss from discontinued operations		—			385		—			(2	)		392		(0.01	)		—			381		—			(129	)		399		(0.33	)

Income attributable to common stock	$	505			385	$	1.31		$	1,016			392	$	2.59

Income (loss) attributable to common stock																	$	(1,330	)		381	$	(3.50	)	$	300			399	$	0.75

Effect of Dilutive Securities:
Mandatory Convertible Preferred Stock	$	—			—				$	19			14
Stock options and other		—			2					—			2					—			—					—			2

Diluted:
Income from continuing operations	$	505			387	$	1.31		$	1,037			408	$	2.54
Income (loss) from continuing operations																	$	(1,330	)		381	$	(3.50	)	$	429			401	$	1.07
Loss from discontinued operations		—			387		—			(2	)		408		—			—			381		—			(129	)		401		(0.32	)

Income attributable to common stock	$	505			387	$	1.31		$	1,035			408	$	2.54
Income (loss) attributable to common stock																	$	(1,330	)		381	$	(3.50	)	$	300			401	$	0.75


	For the Six Months Ended June 30,																For the Nine Months Ended September 30,
	2014								2013								2014								2013
	Income			Shares		Per Share			Income			Shares		Per Share			Loss			Shares		Per Share			Income (Loss)			Shares		Per Share
	(In millions, except per share amounts)																(In millions, except per share amounts)
Basic:
Income from continuing operations	$	1,258			390	$	3.23		$	1,777			392	$	4.53
Income (loss) from continuing operations																	$	(72	)		387	$	(0.19	)	$	2,206			394	$	5.59
Loss from discontinued operations		(517	)		390		(1.33	)		(63	)		392		(0.16	)		(517	)		387		(1.33	)		(192	)		394		(0.48	)

Income attributable to common stock	$	741			390	$	1.90		$	1,714			392	$	4.37

Income (loss) attributable to common stock																	$	(589	)		387	$	(1.52	)	$	2,014			394	$	5.11

Effect of Dilutive Securities:
Mandatory Convertible Preferred Stock		—			—					38			14					—			—					44			11
Stock options and other		—			2					—			2					—			—					—			2

Diluted:
Income from continuing operations	$	1,258			392	$	3.21		$	1,815			408	$	4.45
Income (loss) from continuing operations																	$	(72	)		387	$	(0.19	)	$	2,250			407	$	5.53
Loss from discontinued operations		(517	)		392		(1.32	)		(63	)		408		(0.15	)		(517	)		387		(1.33	)		(192	)		407		(0.47	)

Income attributable to common stock	$	741			392	$	1.89		$	1,752			408	$	4.30
Income (loss) attributable to common stock																	$	(589	)		387	$	(1.52	)	$	2,058			407	$	5.06

The diluted earnings per share calculation excludes options and restricted stock units that were anti-dilutive totaling ~~3.2~~4.7 million and ~~6.7~~5.4 million for the quarters ending ~~June~~September 30, 2014 and 2013, respectively, and 55.5 million and ~~7.4~~6.0 million for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively. For the quarter ended September 30, 2013, 4.8 million shares related to the assumed conversion of the Mandatory Convertible Preferred Stock were also anti-dilutive.

For the quarters ended ~~June~~September 30, 2014 and 2013, Apache paid ~~$97~~$95 million and $78 million, respectively, in dividends on its common stock. For the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, Apache paid ~~$176~~$271 million and ~~$145~~$223 million, respectively.

During the first quarter of 2014, Apache’s Board of Directors approved a 25 percent increase for the regular quarterly cash dividend on the Company’s common stock to $0.25 per share. This increase applied to the dividend on common stock payable on May 22, 2014, to stockholders of record on April 22, 2014, and will apply to all subsequent dividends paid.

In the first ~~six~~nine months of 2013, the Company also paid ~~$38~~$57 million in dividends on its Series D Preferred Stock, which was converted to common stock in August 2013.

Apache’s Board of Directors has authorized the purchase of up to 40 million shares of the Company’s common stock. Shares may be purchased either in the open market or through privately held negotiated transactions. The Company initiated the buyback program on June 10, 2013, and through September 30, 2014 has ~~since~~ repurchased a total of ~~26.1~~31.8 million shares at an average price of ~~$86.75.~~$88.90 per share. For the ~~six-months~~nine-month period ended ~~June~~September 30, 2014, the Company repurchased a total of ~~14.9~~20.6 million shares at an average price of ~~$85.14.~~$88.92 per share. The Company is not obligated to acquire any specific number of shares.

Apache is engaged in a single line of business. Both domestically and internationally, the Company explores for, develops, and produces natural gas, crude oil and natural gas liquids. At ~~June~~September 30, 2014, the Company had production in five countries: the United States, Canada, Egypt, Australia, and the United Kingdom (U.K.) North Sea. Apache also pursues exploration interests in other countries that may, over time, result in reportable discoveries and development opportunities. Financial information for each country is presented below:


	United States		Canada		Egypt⁽²⁾		Australia		North Sea			Other International		Total			United											Other
	(In millions)																States			Canada		Egypt⁽²⁾		Australia		North Sea		International			Total
For the Quarter Ended
June 30, 2014
																	(In millions)
For the Quarter Ended September 30, 2014
Oil and Gas Production Revenues	$	1,529	$	293	$	989	$	237	$	660		$	—	$	3,708		$	1,481		$	268	$	910	$	287	$	522	$	—		$	3,468

Operating Income (Loss)⁽¹⁾	$	679	$	47	$	585	$	74	$	(39	)	$	—	$	1,346		$	(988	)	$	11	$	481	$	70	$	124	$	—		$	(302	)

Other Income (Expense):
Derivative instrument gains (losses), net															(174	)																273
Other															(50	)																(1	)
General and administrative															(94	)																(112	)
Acquisition, divestiture, and separation costs															(14	)																(34	)
Financing costs, net															(35	)																(41	)

Income Before Income Taxes														$	979
Loss Before Income Taxes																															$	(217	)


For the Six Months Ended
June 30, 2014
For the Nine Months Ended September 30, 2014
Oil and Gas Production Revenues	$	3,034	$	611	$	1,939	$	493	$	1,278		$	—	$	7,355		$	4,515		$	879	$	2,849	$	780	$	1,800	$	—		$	10,823

Operating Income (Loss)⁽¹⁾	$	1,342	$	119	$	1,121	$	169	$	144		$	—	$	2,895
Operating Income⁽¹⁾																	$	354		$	131	$	1,601	$	239	$	268	$	—		$	2,593

Other Income (Expense):
Derivative instrument gains (losses), net															(194	)																79
Other															(2	)																(3	)
General and administrative															(199	)																(309	)
Acquisition, divestiture, and separation costs															(30	)																(66	)
Financing costs, net															(62	)																(103	)

Income Before Income Taxes														$	2,408																$	2,191


Total Assets	$	31,547	$	6,842	$	7,264	$	8,763	$	6,713		$	42	$	61,171		$	30,613		$	7,100	$	7,246	$	9,148	$	6,824	$	59		$	60,990


For the Quarter Ended
June 30, 2013
For the Quarter Ended September 30, 2013
Oil and Gas Production Revenues⁽³⁾	$	1,836	$	329	$	893	$	291	$	652		$	—	$	4,001		$	2,029		$	325	$	1,022	$	279	$	633	$	—		$	4,288

Operating Income (Loss)⁽¹⁾⁽³⁾	$	712	$	14	$	512	$	119	$	202		$	—	$	1,559		$	310		$	4	$	658	$	117	$	186	$	(76	)	$	1,199

Other Income (Expense):
Derivative instrument gains (losses), net															247																	(422	)
Other															20																	34
General and administrative															(126	)																(120	)
Financing costs, net															(52	)																(50	)

Income Before Income Taxes⁽³⁾														$	1,648																$	641


For the Six Months Ended
June 30, 2013
For the Nine Months Ended September 30, 2013
Oil and Gas Production Revenues⁽³⁾	$	3,513	$	627	$	1,902	$	588	$	1,392		$	—	$	8,022		$	5,543		$	952	$	2,924	$	867	$	2,025	$	—		$	12,311

Operating Income (Loss)⁽¹⁾⁽³⁾	$	1,298	$	11	$	1,170	$	254	$	448		$	—	$	3,181		$	1,607		$	17	$	1,827	$	373	$	634	$	(76	)	$	4,382

Other Income (Expense):
Derivative instrument gains (losses), net															147																	(275	)
Other															45																	78
General and administrative															(238	)																(359	)
Financing costs, net															(107	)																(157	)

Income Before Income Taxes⁽³⁾														$	3,028																$	3,669


Total Assets⁽³⁾	$	33,376	$	6,927	$	6,951	$	7,124	$	7,114		$	130	$	61,622		$	29,503		$	7,083	$	7,142	$	7,567	$	7,292	$	54		$	58,641

In December 1999, Apache Finance Canada issued approximately $300 million of publicly-traded notes due in 2029. The notes are fully and unconditionally guaranteed by Apache. The following condensed consolidating financial statements are provided as an alternative to filing separate financial statements.

Apache Finance Canada ~~has been fully consolidated in Apache’s consolidated financial statements.~~is 100 percent owned by Apache Corporation. As such, these condensed consolidating financial statements should be read in conjunction with Apache’s consolidated financial statements and the notes thereto, of which this note is an integral part.


						All Other
			Apache			Subsidiaries
	Apache		Finance			of Apache			Reclassifications
	Corporation		Canada			Corporation			& Eliminations			Consolidated			Apache Corporation			Apache Finance Canada		All Other Subsidiaries of Apache Corporation			Reclassifications & Eliminations			Consolidated
	(In millions)														(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	1,255	$	—		$	2,746		$	—		$	4,001		$	882		$	—	$	2,586		$	—		$	3,468
Equity in net income (loss) of affiliates		718		(6	)		2			(714	)		—			491			5		1			(497	)		—
Derivative instrument gains (losses), net		247		—			—			—			247			320			—		(47	)		—			273
Other		3		15			3			(1	)		20			(34	)		14		17			2			(1	)

		2,223		9			2,751			(715	)		4,268			1,659			19		2,557			(495	)		3,740

OPERATING EXPENSES:
Depreciation, depletion and amortization		470		—			880			—			1,350
Depreciation, depletion, and amortization																1,914			—		921			—			2,835
Asset retirement obligation accretion		20		—			44			—			64			8			—		38			—			46
Lease operating expenses		267		—			514			—			781			137			—		515			—			652
Gathering and transportation		17		—			60			—			77			15			—		52			—			67
Taxes other than income		57		—			113			—			170			67			—		103			—			170
General and administrative		102		—			25			(1	)		126			89			—		21			2			112
Acquisition, divestiture, and separation costs																34			—		—			—			34
Financing costs, net		34		14			4			—			52			45			11		(15	)		—			41

		967		14			1,640			(1	)		2,620			2,309			11		1,635			2			3,957

NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		1,256		(5	)		1,111			(714	)		1,648			(650	)		8		922			(497	)		(217	)
Provision (benefit) for income taxes		221		(1	)		391			—			611			678			2		344			—			1,024

NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		1,035		(4	)		720			(714	)		1,037			(1,328	)		6		578			(497	)		(1,241	)
Net loss from discontinued operations, net of tax		—		—			(2	)		—			(2	)		—			—		—			—			—

NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		1,035		(4	)		718			(714	)		1,035			(1,328	)		6		578			(497	)		(1,241	)
Preferred stock dividends		19		—			—			—			19
Net income attributable to noncontrolling interest																—			—		89			—			89

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	1,016	$	(4	)	$	718		$	(714	)	$	1,016		$	(1,328	)	$	6	$	489		$	(497	)	$	(1,330	)


COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK⁽¹⁾	$	1,031	$	(4	)	$	718		$	(714	)	$	1,031		$	(1,328	)	$	6	$	489		$	(497	)	$	(1,330	)


						All Other
				Apache		Subsidiaries
	Apache			Finance		of Apache			Reclassifications
	Corporation			Canada		Corporation			& Eliminations			Consolidated			Apache Corporation			Apache Finance Canada			All Other Subsidiaries of Apache Corporation			Reclassifications & Eliminations			Consolidated
	(In millions)														(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	1,787		$	—	$	5,568		$	—		$	7,355		$	1,374		$	—		$	2,914		$	—		$	4,288
Equity in net income (loss) of affiliates		743			53		5			(801	)		—			619			(4	)		3			(618	)		—
Derivative instrument gains (losses), net		(145	)		—		(49	)		—			(194	)		(422	)		—			—			—			(422	)
Other		(72	)		27		40			3			(2	)		2			16			17			(1	)		34

		2,313			80		5,564			(798	)		7,159			1,573			12			2,934			(619	)		3,900

OPERATING EXPENSES:
Depreciation, depletion and amortization		684			—		1,979			—			2,663
Depreciation, depletion, and amortization																1,041			—			954			—			1,995
Asset retirement obligation accretion		15			—		74			—			89			20			—			45			—			65
Lease operating expenses		249			—		961			—			1,210			254			—			518			—			772
Gathering and transportation		28			—		108			—			136			18			—			63			—			81
Taxes other than income		126			—		236			—			362			62			—			114			—			176
General and administrative		189			—		7			3			199			103			—			18			(1	)		120
Acquisition, divestiture, and separation costs		30			—		—			—			30
Financing costs, net		73			20		(31	)		—			62			36			14			—			—			50

		1,394			20		3,334			3			4,751			1,534			14			1,712			(1	)		3,259

NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		919			60		2,230			(801	)		2,408			39			(2	)		1,222			(618	)		641
Provision for income taxes		52			2		890			—			944
Provision (benefit) for income taxes																(267	)		(1	)		474			—			206

NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		867			58		1,340			(801	)		1,464			306			(1	)		748			(618	)		435
Net loss from discontinued operations, net of tax		(127	)		—		(390	)		—			(517	)		—			—			(129	)		—			(129	)

NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		740			58		950			(801	)		947			306			(1	)		619			(618	)		306
Net income attributable to noncontrolling interest		—			—		206			—			206
Preferred stock dividends																6			—			—			—			6

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	740		$	58	$	744		$	(801	)	$	741		$	300		$	(1	)	$	619		$	(618	)	$	300


COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK⁽¹⁾	$	739		$	58	$	744		$	(801	)	$	740		$	295		$	(1	)	$	619		$	(618	)	$	295


						All Other
			Apache			Subsidiaries
	Apache		Finance			of Apache			Reclassifications
	Corporation		Canada			Corporation			& Eliminations			Consolidated			Apache Corporation			Apache Finance Canada		All Other Subsidiaries of Apache Corporation			Reclassifications & Eliminations			Consolidated
	(In millions)														(In millions)
REVENUES AND OTHER:
Oil and gas production revenues	$	2,401	$	—		$	5,621		$	—		$	8,022		$	2,669		$	—	$	8,154		$	—		$	10,823
Equity in net income (loss) of affiliates		1,328		(17	)		5			(1,316	)		—			1,233			58		6			(1,297	)		—
Derivative instrument gains (losses), net		147		—			—			—			147			175			—		(96	)		—			79
Other		1		30			17			(3	)		45			(106	)		41		57			5			(3	)

		3,877		13			5,643			(1,319	)		8,214			3,971			99		8,121			(1,292	)		10,899


OPERATING EXPENSES:
Depreciation, depletion and amortization		871		—			1,791			—			2,662
Depreciation, depletion, and amortization																2,598			—		2,900			—			5,498
Asset retirement obligation accretion		40		—			87			—			127			23			—		112			—			135
Lease operating expenses		548		—			955			—			1,503			386			—		1,476			—			1,862
Gathering and transportation		31		—			119			—			150			43			—		160			—			203
Taxes other than income		101		—			298			—			399			193			—		339			—			532
General and administrative		202		—			39			(3	)		238			276			—		28			5			309
Acquisition, divestiture, and separation costs																66			—		—			—			66
Financing costs, net		68		28			11			—			107			118			31		(46	)		—			103

		1,861		28			3,300			(3	)		5,186			3,703			31		4,969			5			8,708

NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		2,016		(15	)		2,343			(1,316	)		3,028			268			68		3,152			(1,297	)		2,191
Provision (benefit) for income taxes		264		(3	)		952			—			1,213
Provision for income taxes																730			4		1,234			—			1,968

NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		1,752		(12	)		1,391			(1,316	)		1,815			(462	)		64		1,918			(1,297	)		223
Net loss from discontinued operations, net of tax		—		—			(63	)		—			(63	)		(127	)		—		(390	)		—			(517	)

NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		1,752		(12	)		1,328			(1,316	)		1,752			(589	)		64		1,528			(1,297	)		(294	)
Preferred stock dividends		38		—			—			—			38
Net income attributable to noncontrolling interest																—			—		295			—			295

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	1,714	$	(12	)	$	1,328		$	(1,316	)	$	1,714		$	(589	)	$	64	$	1,233		$	(1,297	)	$	(589	)


COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK⁽¹⁾	$	1,727	$	(12	)	$	1,328		$	(1,316	)	$	1,727		$	(590	)	$	64	$	1,233		$	(1,297	)	$	(590	)


							All Other
				Apache			Subsidiaries
	Apache			Finance			of Apache			Reclassifications												All Other
	Corporation			Canada			Corporation			& Eliminations			Consolidated			Apache Corporation			Apache Finance Canada			Subsidiaries of Apache Corporation			Reclassifications & Eliminations			Consolidated
	(In millions)															(In millions)
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	$	688		$	(76	)	$	4,664		$	—		$	5,276		$	3,574		$	(37	)	$	2,909		$	—		$	6,446
CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			104			—			104			—			—			82			—			82

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		688			(76	)		4,768			—			5,380			3,574			(37	)		2,991			—			6,528

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(1,854	)		—			(3,196	)		—			(5,050	)		(5,425	)		—			(1,706	)		—			(7,131	)
Additions to gas gathering, transmission and processing facilities		(54	)		—			(437	)		—			(491	)
Proceeds from Kitimat LNG transaction, net		—			—			405			—			405
Acquisitions		—			—			(148	)		—			(148	)
Additions to gas gathering, transmission, and processing facilities																	(21	)		—			(1,014	)		—			(1,035	)
Proceeds from sale of Deepwater Gulf of Mexico assets																	1,367			—			—			—			1,367
Restricted cash related to divestitures																	(545	)		—			—			—			(545	)
Proceeds from sale of other oil and gas properties																	35			—			355			—			390
Leasehold and property acquisitions																	(503	)		—			(152	)		—			(655	)
Investment in subsidiaries, net		1,258			—			—			(1,258	)		—			2,303			—			—			(2,303	)		—
Other		(58	)		—			72			—			14			(67	)		—			(13	)		—			(80	)

NET CASH USED IN CONTINUING INVESTING ACTIVITIES		(708	)		—			(3,304	)		(1,258	)		(5,270	)		(2,856	)		—			(2,530	)		(2,303	)		(7,689	)
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(94	)		—			(94	)
NET CASH PROVIDED BY DISCONTINUED OPERATIONS																	—			—			748			—			748

NET CASH USED IN INVESTING ACTIVITIES		(708	)		—			(3,398	)		(1,258	)		(5,364	)		(2,856	)		—			(1,782	)		(2,303	)		(6,941	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net		945			—			—			—			945			1,248			—			(2	)		—			1,246
Intercompany borrowings		—			1			(1,253	)		1,252			—			—			10			(2,322	)		2,312			—
Payments on fixed rate debt		(500	)		—			—			—			(500	)
Distributions to noncontrolling interest																	—			—			(124	)		—			(124	)
Dividends paid		(183	)		—			—			—			(183	)		(271	)		—			—			—			(271	)
Treasury stock activity, net		(249	)		—			—			—			(249	)		(1,830	)		—			—			—			(1,830	)
Other		7			75			(85	)		6			3			—			24			23			(9	)		38

NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES		20			76			(1,338	)		1,258			16			(853	)		34			(2,425	)		2,303			(941	)
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(8	)		—			(8	)		—			—			(42	)		—			(42	)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		20			76			(1,346	)		1,258			8

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		—			—			24			—			24

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES																	(853	)		34			(2,467	)		2,303			(983	)
NET DECREASE IN CASH AND CASH EQUIVALENTS																	(135	)		(3	)		(1,258	)		—			(1,396	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		—			—			160			—			160			155			3			1,748			—			1,906

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	—		$	—		$	184		$	—		$	184		$	20		$	—		$	490		$	—		$	510


					All Other											All Other
			Apache		Subsidiaries									Apache		Subsidiaries
	Apache		Finance		of Apache		Reclassifications					Apache		Finance		of Apache			Reclassifications
	Corporation		Canada		Corporation		& Eliminations			Consolidated		Corporation		Canada		Corporation			& Eliminations			Consolidated
	(In millions)											(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	9	$	—	$	515	$	—		$	524	$	20	$	—	$	490		$	—		$	510
Short-term restricted cash		—		—		778		—			778		74		—		—			—			74
Receivables, net of allowance		873		—		1,534		—			2,407		836		—		1,451			—			2,287
Inventories		24		—		770		—			794		31		—		682			—			713
Drilling advances		29		2		300		—			331		25		1		408			—			434
Derivative instruments													41		—		—			—			41
Prepaid assets and other		90		—		202		—			292		91		—		276			—			367
Intercompany receivable		6,065		—		—		(6,065	)		—		6,442		—		—			(6,442	)		—

		7,090		2		4,099		(6,065	)		5,126		7,560		1		3,307			(6,442	)		4,426

PROPERTY AND EQUIPMENT, NET		17,436		—		35,034		—			52,470		17,039		—		35,996			—			53,035

OTHER ASSETS:
Intercompany receivable		—		—		1,327		(1,327	)		—		—		—		740			(740	)		—
Equity in affiliates		25,486		1,203		445		(27,134	)		—		25,975		1,205		440			(27,620	)		—
Long-term restricted cash		—		—		589		—			589		471		—		—			—			471
Goodwill, net		173		—		1,196		—			1,369		173		—		1,196			—			1,369
Deferred charges and other		191		1,005		1,421		(1,000	)		1,617		221		1,004		1,464			(1,000	)		1,689

	$	50,376	$	2,210	$	44,111	$	(35,526	)	$	61,171	$	51,439	$	2,210	$	43,143		$	(35,802	)	$	60,990

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	831	$	13	$	647	$	—		$	1,491	$	736	$	12	$	568		$	—		$	1,316
Current debt		—		—		1		—			1		20		—		—			—			20
Asset retirement obligation		115		—		63		—			178		115		—		62			—			177
Derivative instruments		272		—		—		—			272
Other current liabilities		1,128		1		1,499		—			2,628		1,300		5		1,489			—			2,794
Intercompany payable		—		—		6,065		(6,065	)		—		—		—		6,442			(6,442	)		—

		2,346		14		8,275		(6,065	)		4,570		2,171		17		8,561			(6,442	)		4,307

LONG-TERM DEBT		9,375		298		1		—			9,674		10,604		298		—			—			10,902

DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable		1,327		—		—		(1,327	)		—		740		—		—			(740	)		—
Income taxes		3,641		—		4,925		—			8,566		4,258		—		5,040			—			9,298
Asset retirement obligation		455		—		2,595		—			3,050		466		—		2,630			—			3,096
Other		477		250		692		(1,000	)		419		2,382		250		(1,231	)		(1,000	)		401

		5,900		250		8,212		(2,327	)		12,035		7,846		250		6,439			(1,740	)		12,795

COMMITMENTS AND CONTINGENCIES APACHE SHAREHOLDERS’ EQUITY		32,755		1,648		25,486		(27,134	)		32,755		30,818		1,645		25,975			(27,620	)		30,818
Noncontrolling interest		—		—		2,137		—			2,137		—		—		2,168			—			2,168

TOTAL EQUITY		32,755		1,648		27,623		(27,134	)		34,892		30,818		1,645		28,143			(27,620	)		32,986

	$	50,376	$	2,210	$	44,111	$	(35,526	)	$	61,171	$	51,439	$	2,210	$	43,143		$	(35,802	)	$	60,990


					All Other											All Other
			Apache		Subsidiaries									Apache		Subsidiaries
	Apache		Finance		of Apache		Reclassifications					Apache		Finance		of Apache		Reclassifications
	Corporation		Canada		Corporation		& Eliminations			Consolidated		Corporation		Canada		Corporation		& Eliminations			Consolidated
	(In millions)															(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	155	$	3	$	1,748	$	—		$	1,906	$	155	$	3	$	1,748	$	—		$	1,906
Receivables, net of allowance		1,043		—		1,909		—			2,952		1,043		—		1,909		—			2,952
Inventories		48		—		843		—			891		48		—		843		—			891
Drilling advances		49		—		322		—			371		49		—		322		—			371
Derivative instruments		1		—		—		—			1		1		—		—		—			1
Prepaid assets and other		99		—		146		—			245		99		—		146		—			245
Intercompany receivable		5,357		—		—		(5,357	)		—		5,357		—		—		(5,357	)		—

		6,752		3		4,968		(5,357	)		6,366		6,752		3		4,968		(5,357	)		6,366

PROPERTY AND EQUIPMENT, NET		16,092		—		36,329		—			52,421		16,092		—		36,329		—			52,421

OTHER ASSETS:
Intercompany receivable		1,572		—		—		(1,572	)		—		1,572		—		—		(1,572	)		—
Equity in affiliates		24,743		1,155		449		(26,347	)		—		24,743		1,155		449		(26,347	)		—
Goodwill, net		173		—		1,196		—			1,369		173		—		1,196		—			1,369
Deferred charges and other		166		1,006		1,309		(1,000	)		1,481		166		1,006		1,309		(1,000	)		1,481

	$	49,498	$	2,164	$	44,251	$	(34,276	)	$	61,637	$	49,498	$	2,164	$	44,251	$	(34,276	)	$	61,637

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	956	$	2	$	658	$	—		$	1,616	$	956	$	2	$	658	$	—		$	1,616
Current debt		—		—		53		—			53		—		—		53		—			53
Asset retirement obligation		115		—		6		—			121		115		—		6		—			121
Derivative instruments		299		—		—		—			299		299		—		—		—			299
Other current liabilities		896		10		1,705		—			2,611		896		10		1,705		—			2,611
Intercompany payable		—		—		5,357		(5,357	)		—		—		—		5,357		(5,357	)		—

		2,266		12		7,779		(5,357	)		4,700		2,266		12		7,779		(5,357	)		4,700

LONG-TERM DEBT		9,374		298		—		—			9,672		9,374		298		—		—			9,672

DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable		—		—		1,572		(1,572	)		—		—		—		1,572		(1,572	)		—
Income taxes		3,586		—		4,778		—			8,364		3,586		—		4,778		—			8,364
Asset retirement obligation		430		—		2,671		—			3,101		430		—		2,671		—			3,101
Other		446		250		711		(1,000	)		407		446		250		711		(1,000	)		407

		4,462		250		9,732		(2,572	)		11,872		4,462		250		9,732		(2,572	)		11,872

COMMITMENTS AND CONTINGENCIES APACHE SHAREHOLDERS’ EQUITY		33,396		1,604		24,743		(26,347	)		33,396		33,396		1,604		24,743		(26,347	)		33,396
Noncontrolling interest		—		—		1,997		—			1,997		—		—		1,997		—			1,997

TOTAL EQUITY		33,396		1,604		26,740		(26,347	)		35,393		33,396		1,604		26,740		(26,347	)		35,393

	$	49,498	$	2,164	$	44,251	$	(34,276	)	$	61,637	$	49,498	$	2,164	$	44,251	$	(34,276	)	$	61,637

Apache Corporation, a Delaware corporation formed in 1954, is an independent energy company that explores for, develops and produces natural gas, crude oil, and natural gas liquids. The Company has exploration and production interests in five countries: the United States (U.S.), Canada, Egypt, Australia, and the United Kingdom (U.K.) North Sea. Apache also pursues exploration interests in other countries that may over time result in reportable discoveries and development opportunities.

This discussion relates to Apache Corporation and its consolidated subsidiaries and should be read in conjunction with our consolidated financial statements and accompanying notes included under Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q, as well as our consolidated financial statements, accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Current Report on Form 8-K dated July 17, 2014 for our 2013 fiscal year.

Over the last five years, Apache has greatly enlarged and enhanced its North American onshore resource base, which we believe is capable of driving our growth and performance ~~over~~for the ~~next several years.~~foreseeable future. During the last 18 months, we have further increased the focus on our North American Onshore business by divesting $10 billion of properties. In North America, we completed the sale of our Gulf of Mexico Shelf region assets, certain non-producing assets in the deepwater Gulf of Mexico, and non-strategic, primarily dry-gas, assets in Canada. Internationally, we sold a one-third noncontrolling interest in our Egypt operations and all of our assets in Argentina. In addition, we intend to completely exit the Wheatstone and Kitimat LNG projects, and, in light of our expanding opportunity set in North American Onshore, we are evaluating our international assets and exploring multiple opportunities, including the potential separation of some or all of them through the capital markets.

In addition, in June 2013 we ~~have~~ launched a share repurchase program. ~~Since June 2013,~~Through September 30, 2014, we have repurchased a total of 2631.8 million of the 40 million shares authorized by our Board of Directors. Under the program, we are not obligated to acquire any specific number of shares.

Average daily production in the ~~second~~third quarter of 2014 totaled ~~636~~637 thousand barrels of oil equivalent (Mboe), a decrease of ~~111~~105 Mboe from the comparative 2013 quarter. The prior-year quarter includes volumes from properties in the Gulf of Mexico Shelf and Canada that have since been divested.

Oil and gas production revenues for the ~~second~~third quarter of 2014 totaled ~~$3.7~~$3.5 billion, a ~~$293~~$820 million decrease from the comparative 2013 quarter. The table below presents revenues by region and each region’s percent contribution to revenues for 2014 and 2013.


	For the Quarter Ended June 30,										For the Six Months Ended June 30,										For the Quarter Ended September 30,										For the Nine Months Ended September 30,
	2014					2013					2014					2013					2014					2013					2014					2013
	$		%			$		%			$		%			$		%			$		%			$		%			$		%			$		%
	Value		Contribution			Value		Contribution			Value		Contribution			Value		Contribution			Value		Contribution			Value		Contribution			Value		Contribution			Value		Contribution
	($ in millions)																				($ in millions)
Total Oil Revenues:
United States	$	1,145		39	%	$	1,390		44	%	$	2,237		39	%	$	2,659		42	%	$	1,121		41	%	$	1,594		46	%	$	3,358		40	%	$	4,253		43	%
Canada		154		5	%		148		5	%		294		5	%		275		4	%		140		5	%		167		5	%		434		5	%		442		5	%

North America		1,299		44	%		1,538		49	%		2,531		44	%		2,934		46	%		1,261		46	%		1,761		51	%		3,792		45	%		4,695		48	%

Egypt⁽¹⁾		885		30	%		796		26	%		1,731		30	%		1,708		27	%		805		29	%		925		26	%		2,536		30	%		2,633		27	%
Australia		153		5	%		199		6	%		323		6	%		402		7	%		200		7	%		201		6	%		523		6	%		603		6	%
North Sea		613		21	%		597		19	%		1,180		20	%		1,278		20	%		487		18	%		581		17	%		1,667		19	%		1,859		19	%

International⁽¹⁾		1,651		56	%		1,592		51	%		3,234		56	%		3,388		54	%		1,492		54	%		1,707		49	%		4,726		55	%		5,095		52	%

Total⁽¹⁾⁽²⁾	$	2,950		100	%	$	3,130		100	%	$	5,765		100	%	$	6,322		100	%	$	2,753		100	%	$	3,468		100	%	$	8,518		100	%	$	9,790		100	%

Total Gas Revenues:
United States	$	245		41	%	$	319		44	%	$	511		41	%	$	607		43	%	$	210		39	%	$	286		44	%	$	721		41	%	$	894		44	%
Canada		122		21	%		166		23	%		270		22	%		318		23	%		112		21	%		139		22	%		382		21	%		457		22	%

North America		367		62	%		485		67	%		781		63	%		925		66	%		322		60	%		425		66	%		1,103		62	%		1,351		66	%

Egypt⁽¹⁾		99		17	%		97		13	%		202		16	%		194		14	%		101		19	%		97		15	%		303		17	%		291		14	%
Australia		84		14	%		92		13	%		170		14	%		186		13	%		87		16	%		78		12	%		257		15	%		264		13	%
North Sea		39		7	%		47		7	%		82		7	%		97		7	%		28		5	%		45		7	%		110		6	%		142		7	%

International⁽¹⁾		222		38	%		236		33	%		454		37	%		477		34	%		216		40	%		220		34	%		670		38	%		697		34	%

Total⁽¹⁾⁽³⁾	$	589		100	%	$	721		100	%	$	1,235		100	%	$	1,402		100	%	$	538		100	%	$	645		100	%	$	1,773		100	%	$	2,048		100	%

Natural Gas Liquids (NGL) Revenues:
Natural Gas Liquids (NGL)
Revenues:
United States	$	139		82	%	$	127		85	%	$	286		81	%	$	247		83	%	$	150		85	%	$	149		85	%	$	436		82	%	$	396		84	%
Canada		17		10	%		15		10	%		47		13	%		34		11	%		16		9	%		19		11	%		63		12	%		53		11	%

North America		156		92	%		142		95	%		333		94	%		281		94	%		166		94	%		168		96	%		499		94	%		449		95	%

Egypt⁽¹⁾		5		3	%		—		0	%		6		2	%		—		0	%		4		2	%		—		0	%		10		2	%		—		0	%
North Sea		8		5	%		8		5	%		16		4	%		17		6	%		7		4	%		7		4	%		23		4	%		24		5	%

International⁽¹⁾		13		8	%		8		5	%		22		6	%		17		6	%		11		6	%		7		4	%		33		6	%		24		5	%

Total⁽¹⁾	$	169		100	%	$	150		100	%	$	355		100	%	$	298		100	%	$	177		100	%	$	175		100	%	$	532		100	%	$	473		100	%

Total Oil and Gas Revenues:
United States	$	1,529		41	%	$	1,836		46	%	$	3,034		41	%	$	3,513		44	%	$	1,481		42	%	$	2,029		47	%	$	4,515		42	%	$	5,543		45	%
Canada		293		8	%		329		8	%		611		9	%		627		8	%		268		8	%		325		8	%		879		8	%		952		8	%

North America		1,822		49	%		2,165		54	%		3,645		50	%		4,140		52	%		1,749		50	%		2,354		55	%		5,394		50	%		6,495		53	%

Egypt⁽¹⁾		989		27	%		893		23	%		1,939		26	%		1,902		24	%		910		27	%		1,022		24	%		2,849		26	%		2,924		24	%
Australia		237		6	%		291		7	%		493		7	%		588		7	%		287		8	%		279		6	%		780		7	%		867		7	%
North Sea		660		18	%		652		16	%		1,278		17	%		1,392		17	%		522		15	%		633		15	%		1,800		17	%		2,025		16	%

International⁽¹⁾		1,886		51	%		1,836		46	%		3,710		50	%		3,882		48	%		1,719		50	%		1,934		45	%		5,429		50	%		5,816		47	%

Total⁽¹⁾	$	3,708		100	%	$	4,001		100	%	$	7,355		100	%	$	8,022		100	%	$	3,468		100	%	$	4,288		100	%	$	10,823		100	%	$	12,311		100	%


Discontinued Operations - Argentina
Oil Revenues	$	—				$	67				$	45				$	130				$	—				$	71				$	45				$	200
Gas Revenues		—					47					39					101					—					47					39					148
NGL Revenues		—					4					3					12					—					4					3					16

Total	$	—				$	118				$	87				$	243				$	—				$	122				$	87				$	364

The table below presents ~~the second-quarter~~third-quarter and year-to-date 2014 and 2013 production and the relative increase or decrease from the prior period.


	For the Quarter Ended June 30,							For the Six Months Ended June 30,							For the Quarter Ended September 30,							For the Nine Months Ended September 30,
					Increase							Increase							Increase							Increase
	2014		2013		(Decrease)			2014		2013		(Decrease)			2014		2013		(Decrease)			2014		2013		(Decrease)
Oil Volume – b/d
United States		130,398		157,298		(17	%)		129,181		153,303		(16	%)		133,613		163,690		(18	%)		130,675		156,803		(17	%)
Canada		17,981		18,573		(3	%)		17,786		17,878		(1	%)		17,672		18,573		(5	%)		17,748		18,112		(2	%)

North America		148,379		175,871		(16	%)		146,967		171,181		(14	%)		151,285		182,263		(17	%)		148,423		174,915		(15	%)

Egypt⁽¹⁾⁽²⁾		88,643		88,002		1	%		88,370		89,649		(1	%)		87,499		89,294		(2	%)		88,076		89,530		(2	%)
Australia		14,555		21,810		(33	%)		15,683		20,911		(25	%)		22,014		18,787		17	%		17,817		20,195		(12	%)
North Sea		61,610		63,667		(3	%)		60,358		66,051		(9	%)		55,247		57,861		(5	%)		58,636		63,291		(7	%)

International		164,808		173,479		(5	%)		164,411		176,611		(7	%)		164,760		165,942		(1	%)		164,529		173,016		(5	%)

Total		313,187		349,350		(10	%)		311,378		347,792		(10	%)		316,045		348,205		(9	%)		312,952		347,931		(10	%)

Natural Gas Volume – Mcf/d
United States		596,970		860,661		(31	%)		594,840		857,195		(31	%)		579,188		830,423		(30	%)		589,565		848,173		(30	%)
Canada		316,740		520,797		(39	%)		347,057		519,991		(33	%)		300,803		529,402		(43	%)		331,470		523,163		(37	%)

North America		913,710		1,381,458		(34	%)		941,897		1,377,186		(32	%)		879,991		1,359,825		(35	%)		921,035		1,371,336		(33	%)

Egypt⁽¹⁾⁽²⁾		367,950		357,291		3	%		372,628		361,428		3	%		377,838		350,504		8	%		374,384		357,747		5	%
Australia		210,470		212,022		(1	%)		213,116		213,202		0	%		201,386		212,141		(5	%)		209,163		212,845		(2	%)
North Sea		54,848		48,411		13	%		49,986		51,704		(3	%)		50,647		46,971		8	%		50,209		50,108		0	%

International		633,268		617,724		3	%		635,730		626,334		2	%		629,871		609,616		3	%		633,756		620,700		2	%

Total		1,546,978		1,999,182		(23	%)		1,577,627		2,003,520		(21	%)		1,509,862		1,969,441		(23	%)		1,554,791		1,992,036		(22	%)

NGL Volume – b/d
United States		56,625		57,018		(1	%)		54,851		53,180		3	%		61,712		57,510		7	%		57,163		54,639		5	%
Canada		5,921		6,686		(11	%)		6,840		6,675		2	%		5,381		7,012		(23	%)		6,349		6,788		(6	%)

North America		62,546		63,704		0	%		61,691		59,855		3	%		67,093		64,522		4	%		63,512		61,427		3	%

Egypt⁽¹⁾⁽²⁾		884		—		NM			560		—		NM			726		—		NM			616		—		NM
North Sea		1,367		1,201		14	%		1,230		1,346		(9	%)		1,294		1,097		18	%		1,251		1,263		(1	%)

International		2,251		1,201		87	%		1,790		1,346		33	%		2,020		1,097		84	%		1,867		1,263		48	%

Total		64,797		64,905		0	%		63,481		61,201		4	%		69,113		65,619		5	%		65,379		62,690		4	%

BOE per day⁽³⁾
United States		286,518		357,759		(20	%)		283,173		349,349		(19	%)		291,857		359,604		(19	%)		286,099		352,804		(19	%)
Canada		76,692		112,059		(32	%)		82,469		111,218		(26	%)		73,187		113,819		(36	%)		79,341		112,095		(29	%)

North America		363,210		469,818		(23	%)		365,642		460,567		(21	%)		365,044		473,423		(23	%)		365,440		464,899		(21	%)

Egypt⁽²⁾		150,853		147,551		2	%		151,035		149,887		1	%		151,198		147,711		2	%		151,090		149,154		1	%
Australia		49,633		57,147		(13	%)		51,203		56,444		(9	%)		55,578		54,144		3	%		52,677		55,669		(5	%)
North Sea		72,118		72,936		(1	%)		69,918		76,015		(8	%)		64,982		66,787		(3	%)		68,255		72,905		(6	%)

International		272,604		277,634		(2	%)		272,156		282,346		(4	%)		271,758		268,642		1	%		272,022		277,728		(2	%)

Total		635,814		747,452		(15	%)		637,798		742,913		(8	%)		636,802		742,065		(14	%)		637,462		742,627		(14	%)


Discontinued Operations - Argentina
Discontinued Operations – Argentina
Oil (b/d)		—		9,365		NM			3,424		9,331		NM			—		9,560		NM			2,269		9,408		NM
Gas (Mcf/d)		—		184,528		NM			70,286		186,383		NM			—		185,962		NM			46,599		186,241		NM
NGL (b/d)		—		2,239		NM			640		2,529		NM			—		1,713		NM			424		2,254		NM
BOE/d		—		42,359		NM			15,778		42,924		NM			—		42,266		NM			10,461		42,702		NM


	For the quarter ended June 30,				For the six months ended June 30,				For the Quarter Ended September 30,				For the Nine Months Ended September 30,
	2014		2013		2014		2013		2014		2013		2014		2013
Oil (b/d)		197,069		193,341		197,839		196,242		195,165		193,869		196,938		195,442
Gas (Mcf/d)		907,752		901,181		914,558		907,871		891,392		915,965		906,751		910,599
NGL (b/d)		2,698		—		1,679		—		1,978		—		1,780		—


	For the quarter ended June 30,		For the six months ended June 30,		For the Quarter Ended September 30,				For the Nine Months Ended September 30,
	2014		2014		2014		2013		2014		2013
Oil (b/d)		29,508		29,288		29,201		—		29,259		—
Gas (Mcf/d)		122,665		123,726		127,020		—		124,836		—
NGL (b/d)		295		187		242		—		205		—

The table below presents ~~second-quarter~~third-quarter and year-to-date 2014 and 2013 pricing and the relative increase or decrease from the prior periods.


	For the Quarter Ended June 30,							For the Six Months Ended June 30,							For the Quarter Ended September 30,							For the Nine Months Ended September 30,
	2014		2013		Increase (Decrease)			2014		2013		Increase (Decrease)			2014		2013		Increase (Decrease)			2014		2013		Increase (Decrease)
Average Oil Price - Per barrel
Average Oil Price—Per barrel
United States	$	96.46	$	97.14		(1	%)	$	95.66	$	95.84		0	%	$	91.26	$	105.82		(14	%)	$	94.14	$	99.35		(5	%)
Canada		94.66		87.38		8	%		91.47		84.97		8	%		85.43		97.58		(12	%)		89.45		89.33		0	%
North America		96.24		96.11		0	%		95.15		94.70		0	%		90.58		104.98		(14	%)		93.58		98.31		(5	%)
Egypt		109.74		99.36		10	%		108.24		105.25		3	%		100.06		112.61		(11	%)		105.50		107.73		(2	%)
Australia		115.34		100.79		14	%		113.70		106.29		7	%		98.82		116.21		(15	%)		107.50		109.40		(2	%)
North Sea		109.33		102.95		6	%		108.00		106.85		1	%		95.80		109.33		(12	%)		104.13		107.61		(3	%)
International		110.08		100.86		9	%		108.67		105.97		3	%		98.47		111.87		(12	%)		105.23		107.88		(2	%)
Total⁽¹⁾		103.53		98.47		5	%		102.29		100.43		2	%		94.69		108.27		(13	%)		99.71		103.07		(3	%)
Average Natural Gas Price - Per Mcf
Average Natural Gas Price—Per Mcf
United States	$	4.51	$	4.07		11	%	$	4.75	$	3.92		21	%	$	3.94	$	3.75		5	%	$	4.48	$	3.86		16	%
Canada		4.21		3.52		20	%		4.30		3.37		28	%		4.04		2.87		41	%		4.22		3.20		32	%
North America		4.41		3.86		14	%		4.58		3.71		23	%		3.97		3.41		16	%		4.39		3.61		22	%
Egypt		2.96		3.00		(1	%)		2.99		2.97		1	%		2.91		3.01		(3	%)		2.96		2.98		(1	%)
Australia		4.40		4.70		(6	%)		4.41		4.82		(9	%)		4.70		3.98		18	%		4.51		4.54		(1	%)
North Sea		7.75		10.86		(29	%)		9.07		10.41		(13	%)		6.10		10.29		(41	%)		8.06		10.37		(22	%)
International		3.85		4.20		(8	%)		3.94		4.21		(6	%)		3.74		3.91		(4	%)		3.88		4.11		(6	%)
Total⁽²⁾		4.18		3.97		5	%		4.33		3.87		12	%		3.88		3.56		9	%		4.18		3.77		11	%
Average NGL Price - Per barrel
Average NGL Price—Per barrel
United States	$	27.06	$	24.46		11	%	$	28.86	$	25.61		13	%	$	26.39	$	28.25		(7	%)	$	27.96	$	26.55		5	%
Canada		31.67		24.60		29	%		37.56		28.35		32	%		33.50		28.77		16	%		36.40		28.49		28	%
North America		27.50		24.48		12	%		29.83		25.92		15	%		26.96		28.30		(5	%)		28.81		26.76		8	%
Egypt		57.67		—		NM			59.05		—		NM			52.80		—		NM			56.57		—		NM
North Sea		61.81		70.39		(12	%)		69.77		70.81		(1	%)		59.47		69.77		(15	%)		66.18		70.51		(6	%)
International		60.19		70.39		(14	%)		66.41		70.81		(6	%)		57.07		69.77		(18	%)		63.01		70.51		(11	%)
Total		28.64		25.33		13	%		30.86		26.91		15	%		27.84		29.00		(4	%)		29.78		27.64		8	%

Discontinued Operations - Argentina
Discontinued Operations—Argentina
Oil price ($/Bbl)	$	—	$	77.74		NM		$	72.70	$	76.56		(5	%)	$	—	$	79.77		NM		$	72.70	$	77.66		(6	%)
Gas price ($/Mcf)		—		2.79		NM			3.04		2.99		2	%		—		2.76		NM			3.04		2.91		4	%
NGL price ($/Bbl)		—		20.94		NM			24.57		26.12		(6	%)		—		22.19		NM			24.57		25.11		(2	%)

~~Second-Quarter~~Third-Quarter 2014 compared to ~~Second-Quarter~~Third-Quarter 2013

Crude Oil Revenues Crude oil revenues for the ~~second~~third quarter of 2014 totaled ~~$3.0~~$2.8 billion, a ~~$180~~$715 million decrease from the comparative 2013 quarter. A 59 percent decrease in average daily production decreased ~~second-quarter~~third-quarter 2014 revenues by ~~$341~~$280 million compared to the prior-year quarter, while 513 percent ~~higher~~lower realized prices ~~increased~~decreased revenues by ~~$161~~$435 million. Crude oil prices realized in the ~~second~~third quarter of 2014 averaged ~~$103.53~~$94.69 per barrel, compared with ~~$98.47~~$108.27 in the comparative prior-year quarter. Crude oil accounted for 8079 percent of oil and gas production revenues and 4950 percent of worldwide production in the ~~second~~third quarter of 2014.

Worldwide production decreased 3632 thousand barrels of oil per day (Mb/d) from the ~~second~~third quarter of 2013 to ~~313~~316 Mb/d, primarily as a result of the divestiture of our Gulf of Mexico Shelf assets ~~in the second half of~~on September 30, 2013. Exclusive of production from these divested assets, oil production increased ~~11.5~~13 Mb/d, primarily on drilling and recompletion activity in the U.S. Permian region, partially offset by production decreases in ~~Australia~~Canada, Egypt and the North Sea. ~~Australia’s production decreased 7 Mb/d primarily on downtime for planned maintenance on the Ningaloo Vision FPSO. Production decreased 2 Mb/d in the North Sea primarily due to natural decline.~~

Natural Gas RevenuesGas revenues for the ~~second~~third quarter of 2014 totaled ~~$589~~$538 million, down 1817 percent from the ~~second~~third quarter of 2013. A 23 percent decrease in average production reduced natural gas revenues by ~~$172~~$164 million as compared to the prior-year quarter, while a 59 percent increase in average realized prices increased revenues by ~~$40~~$57 million. Natural gas accounted for 16 percent of our oil and gas production revenues and 4140 percent of our equivalent production.

Worldwide natural gas production was ~~452~~460 million cubic feet per day (MMcf/d) lower than the ~~second~~third quarter of 2013, primarily as a result of the divestiture of our Gulf of Mexico Shelf assets on September 30, 2013 and certain Western Canadian assets inover the ~~second half of 2013.~~last 12 months. Exclusive of production from these divested assets, our worldwide gas production was essentially flat.

NGL RevenuesNGL revenues for the ~~second~~third quarter of 2014 totaled ~~$169~~$177 million, up ~~$19~~$2 million from the ~~second~~third quarter of 2013. ~~Average~~A 5 percent increase in average NGL production ~~remained flat~~increased NGL revenues by $9 million compared to the prior-year quarter, while a 134 percent ~~increase~~decrease in average realized prices ~~increased~~decreased revenues by ~~$19~~$7 million. NGLs accounted for ~~nearly~~approximately 5 percent of our oil and gas production revenues and 10 percent of our equivalent production during the ~~second~~third quarter of 2014.

Worldwide production of NGLs ~~decreased 108 b/~~increased 3.5 Mb/d to ~~64.8~~69.1 Mb/d in the ~~second~~third quarter of 2014, primarily ~~as a result of~~from increased drilling activity in the Permian region offset by the divestiture of our Gulf of Mexico Shelf assets ~~and certain Western Canadian assets in the second half of~~on September 30, 2013. Exclusive of production from these divested assets, our worldwide NGL production increased ~~8.5~~8.7 Mb/d.

Crude Oil Revenues Crude oil revenues for the first ~~six~~nine months of 2014 totaled ~~$5.8~~$8.5 billion, ~~$557 million~~$1.3 billion lower than the comparative 2013 period, the result of a 10 percent decrease in worldwide production ~~partially offset by~~and a 23 percent ~~increase~~decrease in average realized prices. Crude oil accounted for 7879 percent of oil and gas production revenues and 49 percent of worldwide production for the first ~~six~~nine months of ~~2014, and 79 percent of production revenues and 47 percent of worldwide production for the 2013 comparative period.~~2014. Lower production volumes reduced revenue by ~~$674~~$952 million compared to the first ~~six~~nine months of 2013, ~~while higher~~and lower realized prices ~~added $117 million to revenues.~~reduced revenues by $320 million. Crude oil prices realized in the first ~~six~~nine months of 2014 averaged ~~$102.29~~$99.71 per barrel, compared with ~~$100.43~~$103.07 in the comparative prior-year period.

Worldwide production declined 3635 Mb/d to ~~311~~313 Mb/d in the first ~~six~~nine months of this year from the same period last year, primarily as a result of the divestiture of our Gulf of Mexico Shelf assets ~~in the second half of~~on September 30, 2013. Exclusive of production from these divested assets, worldwide production increased ~~8.9~~10 Mb/~~d. Production increased 21 Mb/~~d, primarily a result of drilling and recompletion activity in our Permian region on drilling and recompletion activity. Net production in the North Sea was 6 Mb/d lower on natural decline, and Australia production decreased 5 Mb/d as a result of downtime for planned maintenance.region.

Natural Gas RevenuesGas revenues for the first ~~six~~nine months of 2014 totaled ~~$1.2~~$1.8 billion, down 1213 percent from the comparative 2013 period. A 2122 percent decline in average production reduced natural gas revenues by ~~$333~~$499 million, partially offset by ~~a 12~~an 11 percent increase in average realized prices that added ~~$166~~$224 million to revenues. Natural gas accounted for 1716 percent of our oil and gas production revenues and 41 percent of our equivalent production, compared to 17 percent and 45 percent, respectively, for the 2013 period.

Our worldwide natural gas production was ~~425~~437 MMcf/d lower than the first ~~six~~nine months of 2013 as a result of the divestiture of our Gulf of Mexico Shelf assets on September 30, 2013 and certain Western Canadian assets inover the ~~second half of 2013.~~last 12 months. Exclusive of production from these divested assets, worldwide production was essentially flat.

NGL RevenuesNGL revenues for the first ~~six~~nine months of 2014 totaled ~~$355~~$532 million, up ~~$57~~$59 million from the comparative 2013 period. A 4 percent increase in average production increased NGL revenues by ~~$13~~$22 million as compared to the prior-year period, ~~while a 14~~and an 8 percent increase in average realized prices increased revenues by ~~$44~~$37 million. NGLs accounted for nearly 5 percent of our oil and gas production revenues and 10 percent of our equivalent production during the first ~~six~~nine months of 2014.

Worldwide production of NGLs increased ~~2.3~~2.7 Mb/d to ~~63.5~~65.4 Mb/d in the first ~~six~~nine months of 2014, primarily from drilling and recompletion activity in the Central and Permian regions. Exclusive of production from divested assets, our worldwide NGL production increased ~~9.7~~9.4 Mb/d.

The table below presents a comparison of our expenses on an absolute dollar basis and a boe basis. Our discussion may reference expenses on a boe basis, on an absolute dollar basis or both, depending on their relevance. Operating expenses include costs attributable to a noncontrolling interest in Egypt but exclude discontinued operations in Argentina.


	For the Quarter Ended June 30,								For the Six Months Ended June 30,								For the Quarter Ended September 30,								For the Nine Months Ended September 30,
	2014		2013		2014		2013		2014		2013		2014		2013		2014		2013		2014		2013		2014		2013		2014		2013
	(In millions)				(Per boe)				(In millions)				(Per boe)				(In millions)				(Per boe)				(In millions)				(Per boe)
Depreciation, depletion and amortization:
Depreciation, depletion, and amortization:
Oil and gas property and equipment
Recurring	$	1,155	$	1,258	$	19.96	$	18.49	$	2,264	$	2,468	$	19.61	$	18.35	$	1,173	$	1,272	$	20.03	$	18.63	$	3,437	$	3,740	$	19.75	$	18.45
Additional		203		—		3.51		—		203		—		1.76		—		1,562		627		26.65		9.18		1,765		627		10.14		3.09
Other assets		99		92		1.71		1.34		196		194		1.69		1.44		100		96		1.72		1.41		296		290		1.70		1.43
Asset retirement obligation accretion		45		64		0.78		0.94		89		127		0.77		0.95		46		65		0.78		0.95		135		192		0.78		0.95
Lease operating costs		613		781		10.59		11.48		1,210		1,503		10.48		11.17		652		772		11.13		11.31		1,862		2,275		10.70		11.22
Gathering and transportation costs		66		77		1.16		1.15		136		150		1.19		1.12		67		81		1.16		1.19		203		231		1.16		1.13
Taxes other than income		181		170		3.12		2.51		362		399		3.14		2.97		170		176		2.90		2.56		532		574		3.06		2.83
General and administrative expense		94		126		1.63		1.85		199		238		1.72		1.77		112		120		1.91		1.78		309		359		1.78		1.77
Acquisition, divestiture, and separation costs		14		—		0.24		—		30		—		0.26		—		34		—		0.58		—		66		—		0.38		—
Financing costs, net		35		52		0.60		0.76		62		107		0.54		0.79		41		50		0.69		0.74		103		157		0.59		0.78

Total	$	2,505	$	2,620	$	43.30	$	38.52	$	4,751	$	5,186	$	41.16	$	38.56	$	3,957	$	3,259	$	67.55	$	47.75	$	8,708	$	8,445	$	50.04	$	41.65

Recurring Depreciation, Depletion, and Amortization (DD&A)The following table details the changes in recurring DD&A of oil and gas properties between the ~~second quarters~~third quarter and ~~six-month~~nine-month periods of 2014 and 2013:


	For the Quarter Ended June 30,			For the Six Months Ended June 30,
	(In millions)			(In millions)			For the Quarter Ended September 30,			For the Nine Months Ended September 30,
							(In millions)			(In millions)
2013 DD&A	$	1,258		$	2,468		$	1,272		$	3,740
Volume change		(164	)		(329	)		(157	)		(487	)
DD&A rate change		61			125			58			184

2014 DD&A	$	1,155		$	2,264		$	1,173		$	3,437

Oil and gas property recurring DD&A expense of $1.2 billion in the ~~second~~third quarter of 2014 decreased ~~$103~~$99 million compared to the prior-year quarter on an absolute dollar basis: ~~$164~~$157 million from lower volumes offset by ~~$61~~$58 million increase on rate. Oil and gas property recurring DD&A expense of ~~$2.3~~$3.4 billion in the first ~~six~~nine months of 2014 decreased ~~$204~~$303 million compared to the prior-year period on an absolute dollar basis: ~~$329~~$487 million from lower volumes offset by ~~$125~~$184 million increase on rate. The Company’s oil and gas property recurring DD&A rate increased ~~$1.47~~$1.40 and ~~$1.26~~$1.30 per boe for the ~~second~~third quarter and first ~~six~~nine months of 2014, respectively, compared to the prior-year periods.

Additional DD&AUnder the full-cost method of accounting, the Company is required to review the carrying value of its proved oil and gas properties each quarter on a country-by-country basis. Under these rules, capitalized costs of oil and gas properties, net of accumulated DD&A and deferred income taxes, may not exceed the present value of estimated future net cash flows from proved oil and gas reserves, net of related tax effects and discounted 10 percent per annum. Estimated future net cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months, held flat for the life of the production, except where prices are defined by contractual arrangements. Any excess of the net book value of proved oil and gas properties, less related deferred income taxes, over the ceiling is charged to expense and reflected as “Additional DD&A” in the statement of consolidated operations.

In the third quarter of 2014, the Company recorded $1.5 billion ($996 million net of tax) and $17 million ($7 million net of tax) in non-cash write-down of the carrying value of the Company’s U.S. and North Sea proved oil and gas properties, respectively. In the second quarter of 2014, the Company recorded a $203 million ($77 million net of tax) non-cash write-down of the carrying value of the Company’s North Sea proved oil and gas properties.

Lease Operating Expenses (LOE)LOE decreased ~~$168~~$120 million, or 2216 percent, for the quarter, and ~~$293~~$413 million, or 1918 percent, for the ~~six month~~nine-month period, on an absolute dollar basis relative to the comparable periods of 2013. On a per unit basis, LOE decreased 7 percent to $10.59 per boe for the second quarter of 2014, as compared to the same prior-year period, and decreased 6 percent to $10.48 per boe for the first six months of 2014, as compared to the prior-year six-month period. The following table identifies changes in Apache’s LOE rate between the ~~second~~third quarters and ~~six-month~~nine-month periods of 2014 and 2013.


For the Quarter Ended June 30,				For the Six Months Ended June 30,
	Per boe				Per boe
For the Quarter Ended September 30,								For the Quarter Ended September 30,				For the Nine Months Ended September 30,
									Per boe				Per boe
2013 LOE	$	11.48		2013 LOE	$	11.17			$	11.31		2013 LOE	$	11.22
Transportation		0.13		Transportation		0.14
Labor and overhead costs										0.42		Labor and overhead costs		0.18
Saltwater disposal										0.12		Saltwater disposal		0.09
Materials		0.13		Materials		0.12				0.07		Materials		0.07
Saltwater disposal		0.09		Labor and overhead costs		0.10
Divestitures⁽¹⁾		(1.28	)	Saltwater disposal		0.07				(0.75	)	Repairs and maintenance		0.07
Power and fuel		(0.20	)	Divestitures⁽¹⁾		(1.64	)
Other		0.29		Other		0.36				0.30		Transportation		0.05
Other increased production		(0.05	)	Other decreased production		0.16				(0.34	)	Equipment rental		0.04
												Workovers		0.04
												Divestitures⁽¹⁾		(1.16	)
												Other		0.36
												Other increased production		(0.26	)

2014 LOE	$	10.59		2014 LOE	$	10.48			$	11.13		2014 LOE	$	10.70

Gathering and TransportationGathering and transportation costs totaled ~~$66~~$67 million and ~~$136~~$203 million in the ~~second~~third quarter and first ~~six~~nine months of 2014, respectively, down ~~$11~~$14 million and ~~$14~~$28 million from the ~~second~~third quarter and first ~~six~~nine months of 2013, respectively. The following table presents gathering and transportation costs paid by Apache directly to third-party carriers for each of the periods presented:


	For the Quarter Ended				For the Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013		For the Quarter Ended September 30,				For the Nine Months Ended September 30,
	(In millions)								2014		2013		2014		2013
									(In millions)
Canada	$	30	$	40	$	64	$	80	$	29	$	38	$	93	$	118
U.S.		23		23		45		44		24		23		69		67
Egypt		11		11		21		20		10		11		31		31
North Sea		2		3		6		6		4		9		10		15

Total Gathering and transportation	$	66	$	77	$	136	$	150	$	67	$	81	$	203	$	231

Taxes other than IncomeTaxes other than income totaled ~~$181~~$170 million and ~~$362~~$532 million for the ~~second~~third quarter and the first ~~six~~nine months of 2014, respectively, ~~an increase of $11 million and~~ a decrease of ~~$37~~$6 million and $42 million, respectively, from the comparative prior-year periods. The following table presents a comparison of these expenses:


	For the Quarter Ended				For the Six Months Ended				For the Quarter Ended September 30,				For the Nine Months Ended September 30,
	June 30,				June 30,				2014		2013		2014		2013
	2014		2013		2014		2013		(In millions)
	(In millions)

U.K. PRT	$	91	$	72	$	154	$	207
Australia PRRT and U.K. PRT									$	61	$	66	$	215	$	273
Severance taxes		52		63		125		114		75		71		199		185
Ad valorem taxes		22		26		62		59		26		29		89		88
Other		16		9		21		19		8		10		29		28

Total Taxes other than income	$	181	$	170	$	362	$	399	$	170	$	176	$	532	$	574

Australia Petroleum Resource Rent Tax (PRRT) expense is a levy assessed on the sale of hydrocarbons derived from specific developmental areas in Australia. We incurred a $45 million charge in the third quarter of 2014. Prior periods reflect no PRRT expense as sales subject to PRRT were fully offset by credits derived from exploration and development expenditures. The North Sea Petroleum Revenue Tax (PRT) is assessed on qualifying fields in the U.K. North Sea. U.K. PRT for the ~~second~~third quarter of 2014 was ~~$19 million higher~~lower than the 2013 period based on ~~an increase in revenues~~lower revenues. Severance tax expense increased $4 million as a result of higher ~~production on qualifying fields. Severance tax expense decreased $11 million as a result of marketing cost recoveries.~~U.S. onshore production.

U.K. PRT for the first ~~six~~nine months of 2014 was ~~$53 million~~ lower when compared to the 2013 period based on a decrease in production revenue. For the first ~~half~~nine months of 2014, higher ~~drilling activity~~sales volumes increased severance taxes by ~~$11~~$14 million as compared to the first ~~six~~nine months of 2013.

General and Administrative Expenses General and administrative expenses (G&A) for the ~~second~~third quarter of 2014 decreased ~~$32~~$8 million from the ~~second~~third quarter of 2013 on an absolute basis and ~~$0.22~~increased $0.13 per boe on a per-unit basis. For the first ~~six~~nine months of 2014 G&A decreased ~~$39~~$50 million on an absolute basis from the comparable 2013 period and ~~decreased $0.05~~increased $0.01 per boe on a per-unit basis. Expense for the ~~three- and six-month~~nine-month 2014 ~~periods~~period includes a $25 million benefit from nonrecurring third party cost reimbursements.

Acquisition, Divestiture and Separation CostsDuring the ~~second~~third quarter of 2014, the Company recognized ~~$14~~$34 million in acquisition, divestiture, and separation costs related to ~~our recent~~acquisition and divestiture activity. For the ~~six-month~~nine-month 2014 period, the Company recognized ~~$30~~$66 million in acquisition, divestiture, and separation costs.

Financing Costs, NetFinancing costs incurred during the period comprised the following:


	For the Quarter Ended						For the Six Months Ended
	June 30,						June 30,						For the Quarter Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013			2014			2013			2014			2013
	(In millions)												(In millions)
Interest expense	$	124		$	141		$	248		$	287		$	126		$	142		$	374		$	429
Amortization of deferred loan costs		1			2			3			4			2			2			5			6
Capitalized interest		(90	)		(88	)		(185	)		(178	)		(85	)		(91	)		(270	)		(268	)
Interest income		—			(3	)		(4	)		(6	)		(2	)		(3	)		(6	)		(10	)

Financing costs, net	$	35		$	52		$	62		$	107		$	41		$	50		$	103		$	157

Net financing costs were down ~~$17~~$9 million and ~~$45~~$54 million in the ~~second~~third quarter and first ~~six~~nine months of 2014, respectively, compared to the same 2013 periods. The ~~$17~~$16 million and ~~$39~~$55 million decreases in interest expense in the ~~second~~third quarter and first ~~six~~nine months of 2014, respectively, were a result of lower average debt balances.

Provision for Income TaxesIn the third quarter of 2014, Apache evaluated its permanent reinvestment position and determined that undistributed earnings from certain foreign subsidiaries located in Apache’s Australia, Egypt, and North Sea regions will no longer be permanently reinvested. As a result of this change in position, the Company recorded $814 million of U.S. deferred income tax expense on the undistributed earnings that were previously considered permanently reinvested. In addition, the Company recorded $249 million of U.S. deferred income tax expense on foreign earnings that were distributed to the U.S. in the third quarter of 2014.

~~The 2014 second-quarter provision for~~2013, the Company recorded the income ~~taxes was $366 million, representing an effective income~~ tax ~~rate of 37 percent for the quarter, unchanged from the 2013 period. The 2014 second-quarter effective rate reflects the~~ impact of a ~~$203~~$552 million non-cash write-down ~~in the North Sea. The effective rate for both quarters also reflects~~and a ~~valuation allowance in Canada, foreign currency fluctuations~~$75 million non-cash impairment on ~~deferred taxes,~~its U.S. and ~~deferred tax expense related to mark-to-market commodity derivatives.~~Kenyan oil and gas properties, respectively, as discrete items. Excluding these items and certain other tax adjustments, the ~~second-quarter~~third quarter 2014 and 2013 ~~effective~~ rates would have been 4044 percent and 41 ~~percent, respectively.~~

The 2014 first six-months provision for income taxes was $944 million, representing an effective income tax rate of 39 percent for the period compared to 40 percent during the 2013 period. The 2014 effective rate reflects the impact of a $203 million non-cash write-down in the North Sea. The effective rate for both quarters also reflects a valuation allowance in Canada, foreign currency fluctuations on deferred taxes, and deferred tax expense related to mark-to-market commodity derivatives. Excluding these items, the 2014 and 2013 effective rates would have been 40 percent and 42 percent, respectively.

Operating cash flows are the Company’s primary source of liquidity. We may also elect to utilize available committed borrowing capacity, access to both debt and equity capital markets, or proceeds from the sale of nonstrategic assets for all other liquidity and capital resource needs. As a majority of our capital investment activity is discretionary, we routinely adjust our capital budget on a quarterly basis in response to changing market conditions and operating cash flow forecasts.

Apache’s operating cash flows, both in the short-term and the long-term, are impacted by volatile oil and natural gas prices. Significant deterioration in commodity prices negatively impacts our revenues, earnings and cash flows, and potentially our liquidity if spending does not trend downward as well. Sales volumes and costs also impact cash flows; however, these historically have not been as volatile and have less impact than commodity prices in the short-term.

Apache’s long-term operating cash flows are dependent on reserve replacement and the level of costs required for ongoing operations. Cash investments are required to fund activity necessary to offset the inherent declines in production and proved crude oil and natural gas reserves. Future success in maintaining and growing reserves and production is highly dependent on the success of our drilling program and our ability to add reserves at reasonable costs.

We believe the liquidity and capital resource alternatives available to Apache, combined with internally generated cash flows, will be adequate to fund short-term and long-term operations, including our capital spending program, repayment of debt maturities, and any amount that may ultimately be paid in connection with contingencies.

For additional information, please see Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q and Part I, Items 1 and 2, “Business and Properties,” and Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for our 2013 fiscal year.

The following table presents the sources and uses of our cash and cash equivalents, and the sources of our restricted cash for the periods presented.


	For the Six Months Ended
	June 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
	(In millions)						(In millions)
Sources of Cash and Cash Equivalents:
Net cash provided by continuing operating activities	$	4,550		$	5,276		$	6,446		$	7,200
Proceeds from the sale of Argentina		786			—			786			—
Net cash provided by Argentina operations		2			2			2			—
Net commercial paper and bank loan borrowings		—			945
Proceeds from sale of Deepwater Gulf of Mexico assets								1,367			—
Proceeds from divestiture of Gulf of Mexico Shelf properties								—			3,594
Proceeds from Kitimat LNG transaction, net		—			405			—			396
Proceeds from sale of other oil and gas properties		381			—			390			199
Net commercial paper and bank loan borrowings								1,246			—
Other		2			17			—			26

		5,721			6,645
								10,237			11,415

Uses of Cash and Cash Equivalents:
Capital expenditures for exploration and development (E&D) activity	$	4,871		$	5,050		$	7,131		$	7,186
Capital expenditures for gas gathering, transmission, and processing facilities		721			491			1,035			852
Acquisitions		5			148	��
Net cash used by Argentina operations								—			5
Leasehold and property acquisitions								655			313
Restricted cash from sale of Deepwater Gulf of Mexico assets								545			—
Payments on fixed rate debt		—			500			—			900
Net commercial paper and bank loan repayments		1			—			—			539
Dividends		176			183			271			280
Treasury stock activity, net		1,263			249			1,830			249
Distributions to noncontrolling interest		66			—			124			—
Other								42			—

		7,103			6,621			11,633			10,324

Increase (decrease) in cash and cash equivalents	$	(1,382	)	$	24		$	(1,396	)	$	1,091


Sources of Restricted Cash:
Short-term restricted cash from sale of Deepwater Gulf of Mexico assets		778			—			74			—
Long-term restricted cash from sale of Deepwater Gulf of Mexico assets		589			—			471			—

Increase in restricted cash	$	1,367		$	—		$	545		$	—

Net Cash Provided by Continuing Operating ActivitiesOperating cash flows are our primary source of capital and liquidity and are impacted, both in the short-term and the long-term, by volatile oil and natural gas prices. The factors that determine operating cash flow are largely the same as those that affect net earnings, with the exception of non-cash expenses such as DD&A, asset retirement obligation (ARO) accretion, and deferred income tax expense, which affect earnings but do not affect cash flows.

Net cash provided by continuing operating activities for the first ~~six~~nine months of 2014 totaled ~~$4.6~~$6.4 billion, a decrease of ~~$726~~$754 million from the first ~~six~~nine months of 2013. The decrease primarily reflects the impact of 2013 divestitures and comparative changes in working capital during the periods.

For a detailed discussion of commodity prices, production, and expenses, refer to the “Results of Operations” of this Item 2. For additional detail on the changes in operating assets and liabilities and the non-cash expenses that do not impact net cash provided by operating activities, please see the statement of consolidated cash flows in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q.

Proceeds from the Sale of ArgentinaIn March 2014, we completed the previously disclosed sale of our Argentina operations and properties to YPF Sociedad Anònima for cash consideration of $800 million (subject to customary closing adjustments) plus the assumption of $52 million of bank debts as of June 30, 2013. The results of operations related to Argentina have been classified as discontinued operations in all periods presented in this Quarterly Report on Form 10-Q.

Capital ExpendituresDuring the first ~~six~~nine months of 2014, capital spending for E&D activities totaled ~~$4.9~~$7.1 billion compared to ~~$5.0~~$7.2 billion in the prior year period. Apache’s E&D capital spending was primarily focused on our North American onshore assets. In the Permian region we averaged 3742 operated drilling rigs during the quarter. Our recent drilling successes in the Permian ~~has~~have led the region to increase the number of horizontal drilling rigs being utilized, and now ~~almost~~ two-thirds of our rigs are drilling horizontal wells that, given their nature, are more costly than vertical wells. In our Gulf Coast region, we are increasing activity on our Eagle Ford acreage in Texas and have nearly ~~doubled~~tripled E&D spending over the ~~prior-year~~2013 nine-month period.

Apache also completed leasehold and property acquisitions totaling $655 million during the first nine months of 2014, compared with $313 million in the 2013 period. Our 2014 acquisition investments focused on adding new leasehold positions to our North American onshore portfolio.

Apache’s investment in gas gathering, transmission, and processing facilities totaled ~~$721 million~~$1.0 billion during the first ~~six~~nine months of 2014 compared to ~~$491~~$852 million in the prior year period. Apache’s 2014 GTP capital expenditures were primarily for the Wheatstone and Kitimat LNG facilities.

For the year, we have invested a total of $894 million for E&D and facility costs in the Wheatstone and Kitimat LNG projects. We recently announced our intentions to completely exit both of these projects.

Dividends For the ~~six-month~~nine-month periods ended ~~June~~September 30, 2014 and 2013, the Company paid ~~$176~~$271 million and ~~$145~~$223 million, respectively, in dividends on its common stock. In the first ~~six~~nine months of 2013, the Company also paid ~~$38~~$57 million in dividends on its Series D Preferred Stock, which was converted to common stock in August 2013.

Shares Repurchased Apache’s Board of Directors has authorized the purchase of up to 40 million shares of the Company’s common stock. Shares may be purchased either in the open market or through privately held negotiated transactions. The Company initiated the buyback program on June 10, 2013, and through September 30, 2014 has ~~since~~ repurchased a total of ~~26.1~~31.8 million shares at an average price of ~~$86.75.~~$88.90 per share. For the ~~six-months~~nine-month period ended ~~June~~September 30, 2014, the Company repurchased a total of ~~14.9~~20.6 million shares at an average price of ~~$85.14.~~$88.92 per share. The Company is not obligated to acquire any specific number of shares.

Restricted CashThe Company classifies cash balances as restricted cash when cash is restricted as to withdrawal or usage. As of ~~June~~September 30, 2014, the Company had ~~approximately $1.4 billion~~$545 million of proceeds from the sale of ~~our~~ deepwater Gulf of Mexico properties held by a qualified intermediary and available for use in a like-kind exchange under Section 1031 of the U.S. Internal Revenue Code. ~~The Company has the option to use these funds for the acquisition of properties or receive the funds in cash after a short-term contractual period.~~ As of the date of this filing, the Company ~~expects~~has utilized or plans to ~~close on~~utilize $471 million of the cash held by the qualified intermediary in the acquisition of like-kind ~~properties for $589 million,~~property, and as such, ~~the balance~~this amount is classified as long-term restricted cash on Apache’s consolidated balance sheet as of ~~June~~September 30, 2014. The remaining ~~proceeds~~$74 million of ~~$778 million are~~restricted cash was returned to Apache in October and, as such, is classified as short-term restricted cash on Apache’s consolidated balance sheet as of ~~June~~September 30, 2014. ~~Should~~For more information regarding the ~~Company elect~~sale of the deepwater Gulf of Mexico properties, please refer to ~~use additional funds for a like-kind exchange, the balance will be reclassified to long-term restricted cash until the funds are expended.~~Note 2—Acquisitions and Divestitures.

The following table presents a summary of our key financial indicators at the dates presented:


	June 30,			December 31,
	2014			2013			September 30,			December 31,
	(In millions of dollars, except as indicated)						2014			2013
							(In millions of dollars, except as indicated)
Cash and cash equivalents	$	524		$	1,906		$	510		$	1,906
Short-term restricted cash		778			—			74			—
Total debt		9,675			9,725			10,922			9,725
Equity		34,892			35,393			32,986			35,393
Available committed borrowing capacity		3,300			3,300			2,072			3,300
Percent of total debt-to-capitalization		22	%		22	%		25	%		22	%

Cash and cash equivalents The Company had ~~$524~~$510 million in cash and cash equivalents as of ~~June~~September 30, 2014, compared to $1.9 billion at December 31, 2013. Approximately ~~$512~~$487 million of the cash was held by foreign subsidiaries. The cash held by foreign subsidiaries may be subject to additional U.S. income taxes if repatriated. Almost all of the cash is denominated in U.S. dollars and, at times, is invested in highly liquid investment grade securities with maturities of three months or less at the time of purchase.

~~Short-term restricted cash~~The Company has approximately $778 million classified as short-term restricted cash as of June 30, 2014. The Company has the option to use these funds for the acquisition of properties or receive the funds in cash after a short-term contractual period. Should the Company elect to use these funds for a like-kind exchange, the balance will be reclassified to long-term restricted cash until the funds are expended.

DebtAs of ~~June~~September 30, 2014, outstanding debt, which consisted of notes, debentures, and uncommitted bank lines, totaled ~~$9.7~~$10.9 billion. The Company had approximately $1$20 million of current debt outstanding borrowed on uncommitted credit facilities and overdraft lines as of ~~June~~September 30, 2014, compared with $53 million as of December 31, 2013.

Available committed borrowing capacity As of ~~June~~September 30, 2014, the Company had unsecured committed revolving syndicated bank credit facilities totaling $3.3 billion, of which $1.0 billion matures in August 2016 and $2.3 billion matures in June 2018 pursuant to a one-year extension approved in May 2014 under the terms of the $2.3 billion facilities. The facilities consist of a $1.7 billion facility and a $1.0 billion facility in the U.S., a $300 million facility in Australia, and a $300 million facility in Canada. As of ~~June~~September 30, 2014, available borrowing capacity under the Company’s credit facilities was ~~$3.3~~$2.1 billion. The Company’s committed credit facilities are used to support Apache’s commercial paper program.

The Company has available a $3.0 billion commercial paper program, which generally enables Apache to borrow funds for up to 270 days at competitive interest rates. The commercial paper program is fully supported by available borrowing capacity under the Company’s committed credit facilities. ~~At June~~As of September 30, 2014, ~~and December 31, 2013,~~ the Company had $1.2 billion of outstanding commercial paper. There was no outstanding commercial ~~paper.~~paper as of December 31, 2013.

The Company was in compliance with the terms of all credit facilities as of ~~June~~September 30, 2014.

Percent of total debt-to-capitalizationThe Company’s debt-to-capitalization ratio at ~~June~~September 30, 2014 and December 31, 2013 was 25 percent and 22 ~~percent.~~percent, respectively.

The Company’s revenues, earnings, cash flow, capital investments and, ultimately, future rate of growth are highly dependent on the prices we receive for our crude oil, natural gas and NGLs, which have historically been very volatile because of unpredictable events such as economic growth or retraction, weather, and political climate. Our average crude oil realizations ~~have increased~~decreased to ~~$103.53~~$94.69 per barrel in the ~~second~~third quarter of 2014 from ~~$98.47~~$108.27 per barrel in the comparable period of 2013. Our average natural gas price realizations ~~have also risen, increasing 5~~increased 9 percent to ~~$4.18~~$3.88 per Mcf in the ~~second~~third quarter of 2014 from ~~$3.97~~$3.56 per Mcf in the comparable period of 2013.

We periodically enter into derivative positions on a portion of our projected oil and natural gas production through a variety of financial and physical arrangements intended to manage fluctuations in cash flows resulting from changes in commodity prices. For the ~~second~~third quarter and first ~~six~~nine months of 2014, approximately 11 percent and 89 percent, respectively, of our natural gas production and approximately 40 percent of our crude oil production in each period was subject to financial derivatives. Apache does not hold or issue derivative instruments for trading purposes.

On ~~June~~September 30, 2014, the Company had open natural gas derivatives in ~~a liability~~an asset position with a fair value of $1$6 million. A 10 percent ~~increase~~movement in natural gas prices would ~~increase~~move the ~~liability~~fair value by approximately ~~$14 million, while a 10 percent decrease in prices would move the derivatives to an asset position of $13~~$6 million. The Company also had open oil derivatives in ~~a liability~~an asset position with a fair value of ~~$271~~$35 million. A 10 percent ~~movement~~decrease in oil prices would increase the asset by approximately $107 million, while a 10 percent increase in prices would move the ~~fair value by approximately $250~~derivatives to a liability position of $71 million. These fair value changes assume volatility based on prevailing market parameters at ~~June~~September 30, 2014. See Note 3—Derivative Instruments and Hedging Activities of the Notes to Consolidated Financial Statements in Item 1 of this Form 10-Q for notional volumes and terms associated with the Company’s derivative contracts.

The Company considers its interest rate risk exposure to be minimal as a result of fixing interest rates on ~~greater than 99~~approximately 89 percent of the Company’s debt. At ~~June~~September 30, 2014, total debt included approximately ~~$1 million~~$1.2 billion of floating-rate debt. As a result, Apache’s annual interest costs will fluctuate based on short-term interest rates on ~~less than 1~~11 percent of our total debt outstanding at ~~June~~September 30, 2014. The impact on cash flow of a 10 percent change in the floating interest rate based on debt balances at ~~June~~September 30, 2014, would be approximately ~~$573~~$103,000 per quarter.

The Company’s cash flow stream relating to certain international operations is based on the U.S. dollar equivalent of cash flows measured in foreign currencies. In Australia, oil production is sold under U.S. dollar contracts, and gas production is sold under a combination of Australian dollar and U.S. dollar fixed-price contracts. Approximately 40 percent of the costs incurred for Australian operations are paid in U.S. dollars. In Canada, oil and gas prices and costs, such as equipment rentals and services, are generally denominated in Canadian dollars but heavily influenced by U.S. markets. Our North Sea production is sold under U.S. dollar contracts, and the majority of costs incurred are paid in British pounds. In Egypt, all oil and gas production is sold under U.S. dollar contracts, and the majority of the costs incurred are denominated in U.S. dollars. Revenue and disbursement transactions denominated in Australian dollars, Canadian dollars, and British pounds are converted to U.S. dollar equivalents based on average exchange rates during the period.

Foreign currency gains and losses also arise when monetary assets and monetary liabilities denominated in foreign currencies are translated at the end of each month. Currency gains and losses are included as either a component of “Other” under “Revenues and Other” or, as is the case when we re-measure our foreign tax liabilities, as a component of the Company’s provision for income tax expense on the statement of consolidated operations. A foreign currency net gain or loss of ~~$136~~$176 million would result from a 10 percent weakening or strengthening, respectively, in the Australian dollar, Canadian dollar, and British pound as of ~~June~~September 30, 2014.

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding our 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 our examination of historical operating trends, the information that was used to prepare our estimate of proved reserves as of December 31, 2013, and other data in our 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,” or “continue” or similar terminology. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, our assumptions about:

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 the cautionary statements. We assume no duty to update or revise our forward-looking statements based on changes in internal estimates or expectations or otherwise.

G. Steven Farris, the Company’s Chairman of the Board, Chief Executive Officer, and President, in his capacity as principal executive officer, and ~~Alfonso Leon,~~P. Anthony Lannie, the Company’s Executive Vice President and Chief Financial Officer, in his capacity as principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~June~~September 30, 2014, 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 information we are required to disclose under applicable laws and regulations is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

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

There was no change in our internal controls over financial reporting during the period covered by this Quarterly Report on Form 10-Q that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Please refer to both ~~Part I, Item 3~~Note 8—Commitments and Contingencies of the ~~Company’s Annual Report on Form 10-K~~notes to the consolidated financial statements for the fiscal year ended December 31, 2013 ~~(filed with the SEC~~contained in Apache’s Current Report on ~~February 28, 2014)~~Form 8-K dated July 17, 2014, and Note 8—Commitments and Contingencies of the notes to the consolidated financial statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q, for a description of material legal proceedings.

Please 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, 2013, and as noted above in Part I, Item 3—Quantitative and Qualitative Disclosures About Market Risk of this Quarterly Report on Form 10-Q.

The following table presents information on shares of common stock repurchased by the Company during the quarter ended ~~June~~September 30, 2014:


Issuer Purchases of Equity Securities	Issuer Purchases of Equity Securities									Issuer Purchases of Equity Securities
Period		Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs⁽¹⁾			Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs⁽¹⁾

April 1 to April 30, 2014			4,431,031	$	84.46		4,431,031		8,427,967
May 1 to May 31, 2014			2,876,000		88.04		2,876,000		15,551,967
June 1 to June 30, 2014			1,629,305		93.70		1,629,305		13,922,662
July 1 to July 31, 2014												—	$	—		—		13,922,662
August 1 to August 31, 2014												2,504,119		99.68		2,504,119		11,418,543
September 1 to September 30, 2014												3,239,674		97.93		3,239,674		8,178,869

Total			8,936,336	$	87.30							5,743,793	$	98.69

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.



*10.1	–	~~Amendment to Apache Corporation 401(k) Savings Plan, effective May 16, 2014.~~

*10.2	–	~~Non-Qualified Retirement/Savings Plan of Apache Corporation, as amended and restated, dated July 16, 2014, effective January 1, 2015.~~

*10.3	–	~~Apache Corporation Non-Qualified Restorative Retirement Savings Plan, as amended and restated, dated July 16, 2014, effective January 1, 2015.~~

*10.4	–	~~Apache Corporation Non-Employee Directors’ Compensation Plan, as amended and restated July 16, 2014, effective July 1, 2014.~~

*10.5	–	~~Apache Corporation Outside Directors’ Retirement Plan, as amended and restated July 16, 2014, effective June 30, 2014.~~

*10.6	–	~~Apache Corporation Non-Employee Directors’ Restricted Stock Units Program, as amended and restated July 16, 2014.~~

*10.7	–	~~Apache Corporation Outside Directors’ Deferral Program, effective July 16, 2014.~~

*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.INS	–	~~XBRL Instance Document.~~

*101.SCH	–	~~XBRL Taxonomy Schema Document.~~

*101.CAL	–	~~XBRL Calculation Linkbase Document.~~

*101.LAB	–	~~XBRL Label Linkbase Document.~~

*101.PRE	–	~~XBRL Presentation Linkbase Document.~~

*101.DEF	–	~~XBRL Definition Linkbase Document.~~


3.1	–	Restated Certificate of Incorporation of Registrant, dated September 19, 2013, as filed with the Secretary of State of Delaware on September 19, 2013 (incorporated by reference to Exhibit 3.2 to Registrant’s Current Report on Form 8-K filed September 20, 2013, SEC File No. 001-4300).

3.2	–	Bylaws of Registrant, as amended May 16, 2013 (incorporated by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed May 17, 2013, SEC File No. 001-4300).

*10.1	–	2014 Employee Release and Settlement Agreement, by and between Registrant and Thomas P. Chambers, effective as of August 31, 2014.

*10.2	–	Amendment of Stock Option Grants (2007 and 2011 Omnibus Equity Compensation Plans) by and between Registrant and Thomas P. Chambers, effective as of August 31, 2014.

*10.3	–	Amendment of Restricted Stock Unit Awards (2007 and 2011 Omnibus Equity Compensation Plans) by and between Registrant and Thomas P. Chambers, effective as of August 31, 2014.

*10.4	–	Employee Resignation Agreement by and between Registrant and Alfonso Leon, effective as of October 13, 2014.

*10.5	–	Amendment of Stock Option Grants (2007 and 2011 Omnibus Equity Compensation Plans) by and between Registrant and Alfonso Leon, effective as of October 9, 2014.

*10.6	–	Amendment of Restricted Stock Unit Awards (2007 and 2011 Omnibus Equity Compensation Plans), effective October 9, 2014, between Registrant and Alfonso Leon.

*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.INS	–	XBRL Instance Document.

*101.SCH	–	XBRL Taxonomy Schema Document.

*101.CAL	–	XBRL Calculation Linkbase Document.

*101.LAB	–	XBRL Label Linkbase Document.

*101.PRE	–	XBRL Presentation Linkbase Document.

*101.DEF	–	XBRL Definition Linkbase Document.


		APACHE CORPORATION

Dated:	~~August 8,~~ November 6, 2014	/s/ ~~ALFONSO LEON~~P. ANTHONY LANNIE
		~~Alfonso Leon~~P. Anthony Lannie
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

Dated:	~~August 8,~~ November 6, 2014	/s/ REBECCA A. HOYT
		Rebecca A. Hoyt
		Senior Vice President, Chief Accounting Officer and Controller
		(Principal Accounting Officer)


~~Number of shares of registrant’s common stock outstanding as of July 31, 2014~~			~~382,473,038~~

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