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 July 31, 2015 377,987,486~~


	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,
	2015			2014			2015			2014			2015			2014			2015			2014
	(In millions, except per common share data)												(In millions, except per common share data)
REVENUES AND OTHER:
Oil and gas production revenues
Oil revenues	$	1,599		$	2,797		$	2,879		$	5,442		$	1,213		$	2,553		$	4,092		$	7,995
Gas revenues		295			505			595			1,065			309			451			904			1,516
Natural gas liquids revenues		58			169			116			355			50			177			166			532

		1,952			3,471			3,590			6,862			1,572			3,181			5,162			10,043
Derivative instrument gains (losses), net		—			(174	)		—			(194	)
Derivative instrument gains, net														—			273			—			79
Other		25			(8	)		17			9			(76	)		(13	)		(59	)		(4	)

														1,496			3,441			5,103			10,118
		1,977			3,289			3,607			6,677

OPERATING EXPENSES:
Depreciation, depletion, and amortization:
Oil and gas property and equipment
Recurring		923			1,074			1,922			2,096			829			1,086			2,751			3,182
Additional		5,816			203			13,036			203			5,721			1,562			18,757			1,765
Other assets		83			81			166			159			79			87			245			246
Asset retirement obligation accretion		36			38			72			76			37			39			109			115
Lease operating expenses		467			560			948			1,108			450			588			1,398			1,696
Gathering and transportation		49			66			105			136			58			67			163			203
Taxes other than income		55			177			128			358			104			124			232			482
Impairments														367			—			367			—
General and administrative		111			113			193			221			86			111			279			332
Transaction, reorganization, and separation costs		66			14			120			32
Transaction, reorganization, and separation														—			34			120			66
Financing costs, net		63			52			133			97			107			60			240			157

		7,669			2,378			16,823			4,486			7,838			3,758			24,661			8,244


NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(5,692	)		911			(13,216	)		2,191			(6,342	)		(317	)		(19,558	)		1,874
Current income tax provision		665			373			580			740
Current income tax provision (benefit)														(84	)		228			496			968
Deferred income tax provision (benefit)		(1,525	)		(19	)		(4,460	)		144			(707	)		540			(5,167	)		684

NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		(4,832	)		557			(9,336	)		1,307			(5,551	)		(1,085	)		(14,887	)		222
Net income (loss) from discontinued operations, net of tax		(732	)		56			(864	)		(360	)
Net loss from discontinued operations, net of tax														(95	)		(156	)		(959	)		(516	)

NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		(5,564	)		613			(10,200	)		947
NET LOSS INCLUDING NONCONTROLLING INTEREST														(5,646	)		(1,241	)		(15,846	)		(294	)
Net income attributable to noncontrolling interest		36			108			51			206			9			89			60			295

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	(5,600	)	$	505		$	(10,251	)	$	741
NET LOSS ATTRIBUTABLE TO COMMON STOCK													$	(5,655	)	$	(1,330	)	$	(15,906	)	$	(589	)

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Net income (loss) from continuing operations attributable to common shareholders	$	(4,868	)	$	449		$	(9,387	)	$	1,101
Net income (loss) from discontinued operations		(732	)		56			(864	)		(360	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Net loss from continuing operations attributable to common shareholders													$	(5,560	)	$	(1,174	)	$	(14,947	)	$	(73	)
Net loss from discontinued operations														(95	)		(156	)		(959	)		(516	)

Net income (loss) attributable to common shareholders	$	(5,600	)	$	505		$	(10,251	)	$	741
Net loss attributable to common shareholders													$	(5,655	)	$	(1,330	)	$	(15,906	)	$	(589	)

NET INCOME (LOSS) PER COMMON SHARE:
Basic net income (loss) from continuing operations per share	$	(12.89	)	$	1.17		$	(24.88	)	$	2.83
Basic net income (loss) from discontinued operations per share		(1.94	)		0.14			(2.29	)		(0.93	)

Basic net income (loss) per share	$	(14.83	)	$	1.31		$	(27.17	)	$	1.90
NET LOSS PER COMMON SHARE:
Basic net loss from continuing operations per share													$	(14.70	)	$	(3.08	)	$	(39.58	)	$	(0.19	)
Basic net loss from discontinued operations per share														(0.25	)		(0.42	)		(2.54	)		(1.33	)

DILUTED NET INCOME (LOSS) PER COMMON SHARE:
Diluted net income (loss) from continuing operations per share	$	(12.89	)	$	1.17		$	(24.88	)	$	2.82
Diluted net income (loss) from discontinued operations per share		(1.94	)		0.14			(2.29	)		(0.93	)
Basic net loss per share													$	(14.95	)	$	(3.50	)	$	(42.12	)	$	(1.52	)

Diluted net income (loss) per share	$	(14.83	)	$	1.31		$	(27.17	)	$	1.89

DILUTED NET LOSS PER COMMON SHARE:
Diluted net loss from continuing operations per share													$	(14.70	)	$	(3.08	)	$	(39.58	)	$	(0.19	)
Diluted net loss from discontinued operations per share														(0.25	)		(0.42	)		(2.54	)		(1.33	)

Diluted net loss per share													$	(14.95	)	$	(3.50	)	$	(42.12	)	$	(1.52	)


WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic		378			385			377			390			378			381			378			387
Diluted		378			387			377			392			378			381			378			387

DIVIDENDS DECLARED PER COMMON SHARE	$	0.25		$	0.25		$	0.50		$	0.50		$	0.25		$	0.25		$	0.75		$	0.75


	For the Six Months Ended June 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014
	(In millions)						(In millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) including noncontrolling interest	$	(10,200	)	$	947		$	(15,846	)	$	(294	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss from discontinued operations		864			360			959			516
Depreciation, depletion, and amortization		15,124			2,458			21,753			5,193
Impairments								367			—
Asset retirement obligation accretion		72			76			109			115
Provision for (benefit from) deferred income taxes		(4,460	)		144			(5,167	)		684
Other		26			12			80			(271	)
Changes in operating assets and liabilities:
Receivables		333			391			585			591
Inventories		74			(13	)		54			74
Drilling advances		118			67			125			(107	)
Deferred charges and other		(171	)		(114	)		(207	)		(244	)
Accounts payable		(410	)		(131	)		(463	)		(268	)
Accrued expenses		298			(252	)		121			(259	)
Deferred credits and noncurrent liabilities		69			4			102			26

NET CASH PROVIDED BY CONTINUING OPERATING ACTIVITIES		1,737			3,949			2,572			5,756
NET CASH PROVIDED BY DISCONTINUED OPERATIONS		196			683			150			772

NET CASH PROVIDED BY OPERATING ACTIVITIES		1,933			4,632			2,722			6,528

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(2,987	)		(4,369	)		(3,844	)		(6,585	)
Leasehold and property acquisitions		(128	)		(112	)		(254	)		(638	)
Additions to gas gathering, transmission, and processing facilities		(94	)		(345	)		(113	)		(503	)
Proceeds from sale of Deepwater Gulf of Mexico assets		—			1,367			—			1,367
Restricted cash related to divestitures		—			(1,367	)		—			(545	)
Proceeds from sale of Kitimat LNG		854			—			854			—
Proceeds from sale of other oil and gas properties		119			381			148			390
Other, net		(67	)		(33	)		(99	)		(96	)

NET CASH USED IN CONTINUING INVESTING ACTIVITIES		(2,303	)		(4,478	)		(3,308	)		(6,610	)
NET CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS		4,335			(13	)		4,335			(331	)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		2,032			(4,491	)		1,027			(6,941	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net		(1,570	)		(1	)		(1,570	)		1,246
Early redemption of fixed-rate debt								(939	)		—
Distributions to noncontrolling interest		(40	)		(66	)		(97	)		(124	)
Dividends paid		(189	)		(176	)		(283	)		(271	)
Treasury stock activity, net		—			(1,263	)		—			(1,830	)
Other		15			25			26			38

NET CASH USED IN CONTINUING FINANCING ACTIVITIES		(1,784	)		(1,481	)		(2,863	)		(941	)
NET CASH USED IN DISCONTINUED OPERATIONS		—			(42	)		—			(42	)

NET CASH USED IN FINANCING ACTIVITIES		(1,784	)		(1,523	)		(2,863	)		(983	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		2,181			(1,382	)		886			(1,396	)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		769			1,906			769			1,906

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	2,950		$	524		$	1,655		$	510

SUPPLEMENTARY CASH FLOW DATA:
Interest paid, net of capitalized interest	$	110		$	62		$	222		$	143
Income taxes paid, net of refunds		218			781			270			1,134


	June 30, 2015			December 31, 2014			September 30, 2015			December 31, 2014
	(In millions)						(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,950		$	769		$	1,655		$	769
Receivables, net of allowance		1,589			2,024			1,332			2,024
Inventories		629			708			667			708
Drilling advances		193			388			186			388
Assets held for sale		—			1,628			79			1,628
Deferred tax asset		84			769			84			769
Prepaid assets and other		48			129			76			129

		5,493			6,415			4,079			6,415

PROPERTY AND EQUIPMENT:
Oil and gas, on the basis of full-cost accounting:
Proved properties		84,627			89,852			85,967			89,852
Unproved properties and properties under development, not being amortized		5,233			7,014			4,857			7,014
Gathering, transmission and processing facilities		4,299			5,440			4,226			5,440
Other		1,084			1,152			1,071			1,152

		95,243			103,458			96,121			103,458
Less: Accumulated depreciation, depletion, and amortization		(66,928	)		(55,382	)		(73,744	)		(55,382	)

		28,315			48,076			22,377			48,076

OTHER ASSETS:
Deferred charges and other		1,504			1,461			1,356			1,461

	$	35,312		$	55,952		$	27,812		$	55,952

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	710		$	1,210		$	659		$	1,210
Other current liabilities (Note 3)		1,673			2,454			1,508			2,454

		2,383			3,664			2,167			3,664

LONG-TERM DEBT		9,676			11,245			8,777			11,245

DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Income taxes		2,644			9,499			1,997			9,499
Asset retirement obligation		2,534			3,048			2,567			3,048
Other		320			359			332			359

		5,498			12,906			4,896			12,906

COMMITMENTS AND CONTINGENCIES (Note 7)

EQUITY:
Common stock, $0.625 par, 860,000,000 shares authorized, 411,169,515 and 409,706,347 shares issued, respectively		257			256
Common stock, $0.625 par, 860,000,000 shares authorized, 411,200,325 and 409,706,347 shares issued, respectively								257			256
Paid-in capital		12,483			12,438			12,497			12,438
Retained earnings		5,809			16,249			60			16,249
Treasury stock, at cost, 33,181,176 and 33,201,455 shares, respectively		(2,889	)		(2,890	)		(2,889	)		(2,890	)
Accumulated other comprehensive loss		(116	)		(116	)		(116	)		(116	)

APACHE SHAREHOLDERS’ EQUITY		15,544			25,937			9,809			25,937
Noncontrolling interest		2,211			2,200			2,163			2,200

TOTAL EQUITY		17,755			28,137			11,972			28,137

	$	35,312		$	55,952		$	27,812		$	55,952


																								Common Stock		Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			APACHE SHAREHOLDERS’ EQUITY			Non Controlling Interest			TOTAL EQUITY
	Common Stock		Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			APACHE SHAREHOLDERS’ EQUITY			Non Controlling Interest			TOTAL EQUITY
BALANCE AT DECEMBER 31, 2013	$	255	$	12,251		$	22,032		$	(1,027	)	$	(115	)	$	33,396		$	1,997		$	35,393		$	255	$	12,251		$	22,032		$	(1,027	)	$	(115	)	$	33,396		$	1,997		$	35,393
Net income		—		—			741			—			—			741			206			947
Net income (loss)																									—		—			(589	)		—			—			(589	)		295			(294	)
Distributions to noncontrolling interest		—		—			—			—			—			—			(66	)		(66	)		—		—			—			—			—			—			(124	)		(124	)
Commodity hedges, net of tax		—		—			—			—			(1	)		(1	)		—			(1	)		—		—			—			—			(1	)		(1	)		—			(1	)
Common dividends ($0.50 per share)		—		—			(192	)		—			—			(192	)		—			(192	)
Common dividends ($0.75 per share)																									—		—			(287	)		—			—			(287	)		—			(287	)
Common stock activity, net		1		(25	)		—			—			—			(24	)		—			(24	)		1		(12	)		—			—			—			(11	)		—			(11	)
Treasury stock activity, net		—		(1	)		—			(1,263	)		—			(1,264	)		—			(1,264	)		—		(1	)		—			(1,830	)		—			(1,831	)		—			(1,831	)
Compensation expense		—		99			—			—			—			99			—			99			—		145			—			—			—			145			—			145
Other																									—		(4	)		—			—			—			(4	)		—			(4	)

BALANCE AT JUNE 30, 2014	$	256	$	12,324		$	22,581		$	(2,290	)	$	(116	)	$	32,755		$	2,137		$	34,892
BALANCE AT SEPTEMBER 30, 2014																								$	256	$	12,379		$	21,156		$	(2,857	)	$	(116	)	$	30,818		$	2,168		$	32,986


BALANCE AT DECEMBER 31, 2014	$	256	$	12,438		$	16,249		$	(2,890	)	$	(116	)	$	25,937		$	2,200		$	28,137		$	256	$	12,438		$	16,249		$	(2,890	)	$	(116	)	$	25,937		$	2,200		$	28,137
Net income (loss)		—		—			(10,251	)		—			—			(10,251	)		51			(10,200	)		—		—			(15,906	)		—			—			(15,906	)		60			(15,846	)
Distributions to noncontrolling interest		—		—			—			—			—			—			(40	)		(40	)		—		—			—			—			—			—			(97	)		(97	)
Common dividends ($0.50 per share)		—		—			(189	)		—			—			(189	)		—			(189	)
Common dividends ($0.75 per share)																									—		—			(283	)		—			—			(283	)		—			(283	)
Other		1		45			—			1			—			47			—			47			1		59			—			1			—			61			—			61

BALANCE AT JUNE 30, 2015	$	257	$	12,483		$	5,809		$	(2,889	)	$	(116	)	$	15,544		$	2,211		$	17,755
BALANCE AT SEPTEMBER 30, 2015																								$	257	$	12,497		$	60		$	(2,889	)	$	(116	)	$	9,809		$	2,163		$	11,972

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 Annual Report on Form 10-K for the fiscal year ended December 31, 2014, 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. During the second quarter of 2015, Apache completed the sale of its Australian LNG business and oil and gas assets. In March 2014, Apache ~~also~~ completed the sale of all of its operations in Argentina. Results of operations and consolidated cash flows for the divested Australia assets and Argentina operations are reflected as discontinued operations in the Company’s financial statements for all periods presented. For more information regarding these divestitures, please refer to Note 2–Acquisitions and Divestitures.

As of ~~June~~September 30, 2015, 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

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 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. 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

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. ~~In the second quarter of 2015, the Company recorded $4.3 billion ($2.8 billion net of tax), $835 million ($617 million net of tax), and $663 million ($331 million net of tax) in~~The following tables present non-cash write-downs of the carrying value of the Company’s ~~U.S., Canada, and North Sea~~ proved oil and gas properties ~~respectively. In~~by country for the third quarter and first nine months of 2015 and 2014:

For the quarter ofand nine months ended September 30, 2015, the Company recorded ~~$5.3 billion ($3.4 billion net~~asset impairments totaling $367 million in connection with fair value assessments.

Impairments included $210 million on certain gathering, transmission, and processing (GTP) facilities, which were written down to their fair values of ~~tax), $1.4 billion ($1.0 billion net of tax), and $632~~$16 million ~~($316 million net of tax)~~ in ~~non-cash write-downs~~aggregate. The fair values of the ~~carrying~~impaired assets were determined using an income approach, which considered internal estimates of future throughput volumes, processing rates, and costs. These assumptions were applied to develop future cash flow projections that were then discounted to estimate fair value, ofusing a discount rate believed to be consistent with those applied by market participants. Apache has classified these non-recurring fair value measurements as Level 3 in the ~~Company’s U.S., Canada, and North Sea proved oil and gas properties, respectively.~~ fair value hierarchy.

In ~~the second quarter of 2014,~~addition, the Company recorded ~~a $203~~$148 million ~~($77~~for the impairment of an equity method investment and $9 million ~~net of tax) non-cash write-down~~for inventory write-downs. For discussion of the ~~carrying value of the Company’s North Sea proved oil~~equity method investment impairment, see Note 2—Acquisitions and ~~gas properties.~~Divestitures.

In ~~April~~September 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-16, which eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment, including amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date. ASU 2015-16 is effective for fiscal years 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.

In July 2015, the FASB issued ASU 2015-11, which simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. Entities will continue to apply their existing impairment models to inventories that are accounted for using last-in first-out and the retail inventory method. Under current guidance, net realizable value is one of several calculations an entity needs to make to measure inventory at the lower of cost or market. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company does not expect the adoption of this amendment to have a material impact on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, which simplifies the presentation of debt issuance costs. The new standard requires debt issuance costs to be presented as a direct deduction from the carrying value of the associated debt liability, whereas they are currently being presented as a component of “deferred charges and other” on the balance sheet. The new standard creates consistency in the way debt issuance costs and debt discounts are presented on the balance sheet and better aligns U.S. GAAP with International Financial Reporting ~~Standards (IFRS).~~Standards. ASU 2015-03 is effective for annual and interim reporting periods beginning after December 15, 2015. The Company will apply the change retrospectively and does not expect the adoption of this amendment to have a material impact on its consolidated financial statements.

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. In July 2015, the FASB announced a delay in the effective date of the revenue standard by one year. The deferral results in the new revenue standard being effective for annual and interim periods beginning after December 15, 2017. 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.

On October 28, 2015, Apache completed the sale of its 49 percent interest in Yara Pilbara Holdings Pty Limited (YPHPL) for total cash proceeds of $391 million. The investment in YPHPL was accounted for under the equity method of accounting, with the balance recorded as a component of “Deferred charges and other” in Apache’s consolidated balance sheet and the results of operations recorded as a component of “Other” under “Revenue and other” in the Company’s statement of consolidated operations. As of September 30, 2015, Apache recognized an impairment of $148 million on the YPHPL equity investment based on negotiated sales proceeds. No additional gain or loss was recorded upon completion of the sale.

In April 2015, Apache completed the ~~previously disclosed~~ sale of its 50 percent interest in the Kitimat LNG project and related upstream acreage in the Horn River and Liard natural gas basins to Woodside Petroleum Limited (Woodside). Proceeds at closing were $854 million, of which approximately $345 million were associated with LNG assets and $510 million were associated with upstream assets. The proceeds are subject to ~~customary~~ post-closing adjustments. For additional details related to post-closing adjustments, please see Note 7—Commitments and Contingencies.

The Kitimat LNG assets were impaired in the fourth quarter of 2014 and classified as held for sale on the consolidated balance sheet as of December 31, 2014. No material gain or loss was recognized for the LNG assets upon completion of the sale. No gain or loss was recognized on the sale of the upstream assets. In accordance with full cost accounting rules, sales of oil and gas properties are accounted for as adjustments of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capitalized costs and proved reserves.

Woodside SaleIn April 2015, Apache completed the ~~previously disclosed~~ sale of the Wheatstone LNG project and associated upstream oil and gas assets to Woodside. Proceeds at closing were $2.8 billion, of which approximately $1.4 billion were associated with LNG assets and $1.4 billion were associated with the upstream assets. The proceeds are subject to ~~customary~~ post-closing adjustments. For additional details related to post-closing adjustments, please see Note 7—Commitments and Contingencies.

The Wheatstone LNG assets were impaired in the fourth quarter of 2014 and classified as held for sale on the consolidated balance sheet as of December 31, 2014. No material gain or loss was recognized on the ultimate disposal of the LNG project. A loss of approximately $922 million was recognized on the sale of the Australian upstream assets.

Consortium SaleIn June 2015, Apache completed the ~~previously disclosed~~ sale of its Australian subsidiary Apache Energy Limited (AEL) to a consortium of private equity funds managed by Macquarie Capital Group Limited and Brookfield Asset Management Inc. Total proceeds of $1.9 billion include customary, post-closing adjustments for the period between the effective date, October 1, 2014, and closing. A loss of approximately $1.3 billion was recognized for the sale of AEL.

Upon closing of the sale of substantially all Australian operations, the associated results of operations for the divested Australian assets and the losses on disposal were classified as discontinued operations in all periods presented in this Quarterly Report on Form 10-Q. The carrying amounts of the major classes of consolidated assets and liabilities associated with the Australia dispositions were as follows:


	December 31,		December 31, 2014
	2014
ASSETS
Current assets	$	1,992	$	1,992
Net property and equipment		6,516		6,516

Total assets	$	8,508	$	8,508


LIABILITIES
Current liabilities	$	606	$	606
Asset retirement obligations		517		517
Non-current deferred tax liability		922		922
Other long-term liabilities		33		33

Total liabilities	$	2,078	$	2,078

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


	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,						2015			2014			2015			2014
	2015			2014			2015			2014			(In millions)
	(In millions)
Revenues and other from discontinued operations	$	101		$	195		$	288		$	482		$	—		$	299		$	288		$	781


Loss on Woodside sale	$	(922	)	$	—		$	(922	)	$	—		$	—		$	—		$	(922	)	$	—
Loss on Consortium sale		(1,329	)		—			(1,329	)		—			—			—			(1,329	)		—
Income (loss) from divested Australian operations		(11	)		68			24			217
Income from divested Australian operations														—			99			24			317
Income tax benefit (expense)		1,530			(12	)		1,363			(60	)		(95	)		(255	)		1,268			(316	)

Income (loss) from Australian discontinued operations, net of tax	$	(732	)	$	56		$	(864	)	$	157		$	(95	)	$	(156	)	$	(959	)	$	1

During the ~~second~~third quarter and first ~~six~~nine months of 2015, Apache completed ~~$36~~$126 million and ~~$128~~$254 million, respectively, of leasehold and property acquisitions primarily in our North America onshore regions.

During the ~~second quarter and~~ first ~~six~~nine months of 2015, Apache recorded ~~$66 million and~~ $120 million ~~respectively,~~ in ~~costs~~expense related to various asset transactions, company reorganization, and employee ~~separation costs.~~separation.

In December 2014, Apache completed the sale of certain Anadarko basin and non-core southern Louisiana oil and gas assets for approximately $1.3 billion in two separate transactions. In the Anadarko basin, Apache sold approximately 115,000 net acres in Wheeler County, Texas, and western Oklahoma. In southern Louisiana, Apache sold its working interest in approximately 90,000 net acres. The effective date of both of these transactions was October 1, 2014.

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.

On April 30, 2014, Apache completed the sale of producing oil and gas assets in the Deep Basin area of western Alberta and British Columbia, Canada, for $374 million. Apache sold primarily dry-gas producing properties comprising 328,400 net acres in the Ojay, Noel, and Wapiti areas. In the Wapiti area, Apache retained 100 percent of its working interest in horizons below the Cretaceous, 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 plus the assumption of $52 million of bank debt as of June 30, 2013. The results of operations during 2014 related to Argentina have been classified as discontinued operations in this Quarterly Report on Form 10-Q. The 2014 loss from Argentina discontinued operations of $517 million is included in “Net income (loss) from discontinued operations, net of tax” on the ~~Consolidated Statement~~statement of ~~Operations.~~consolidated operations.


	For the Six Months Ended					For the Nine Months Ended September 30,
	June 30,					2015		2014
	2015		2014			(In millions)
	(In millions)
Revenues and other from discontinued operations	$	—	$	87		$	—	$	87


Loss from Argentina divestiture		—		(539	)		—		(539	)
Loss from operations in Argentina		—		(1	)		—		(1	)
Income tax benefit		—		23			—		23

Loss from discontinued operations, net of tax	$	—	$	(517	)	$	—	$	(517	)

During the ~~second~~third quarter and first ~~six~~nine months of 2014, Apache completed ~~$64~~$526 million and ~~$112~~$638 million, respectively, of leasehold and property acquisitions primarily in our North America onshore regions.

During the ~~second~~third quarter and first ~~six~~nine months of 2014, Apache recorded ~~$14~~$34 million and ~~$32~~$66 million, respectively, in ~~costs~~expense related to various asset transactions, company reorganization, and employee ~~separation costs.~~separation.


					September 30, 2015		December 31, 2014
	June 30, 2015		December 31, 2014		(In millions)
	(In millions)
Accrued operating expenses	$	140	$	163	$	139	$	163
Accrued exploration and development		682		1,606		668		1,606
Accrued compensation and benefits		150		204		158		204
Accrued interest		155		160		107		160
Accrued income taxes		352		54		296		54
Current asset retirement obligation		28		37		28		37
Other		166		230		112		230


Total Other current liabilities	$	1,673	$	2,454	$	1,508	$	2,454

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, 2015:


	(In millions)			(In millions)
Asset retirement obligation at December 31, 2014	$	3,085		$	3,085
Liabilities incurred		47			54
Liabilities divested		(619	)		(619	)
Liabilities settled		(67	)		(78	)
Accretion expense		85			122
Revisions in estimated liabilities		31			31

Asset retirement obligation at June 30, 2015		2,562
Asset retirement obligation at September 30, 2015					2,595

Less current portion		(28	)		(28	)


Asset retirement obligation, long-term	$	2,534		$	2,567

Accretion expense for 2015 includes Australia discontinued operations of $13 million, which is included in “Net income (loss) from discontinued operations, net of tax” on the ~~Consolidated Statement~~statement of ~~Operations.~~consolidated operations.

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


									September 30, 2015				December 31, 2014
	June 30, 2015				December 31, 2014				Carrying Amount		Fair Value		Carrying Amount		Fair Value
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		(In millions)
	(In millions)
Commercial paper and committed bank facilities		—		—		1,570		1,570	$	—	$	—	$	1,570	$	1,570
Notes and debentures		9,676		9,885		9,675		9,944		8,777		8,829		9,675		9,944

Total Debt	$	9,676	$	9,885	$	11,245	$	11,514	$	8,777	$	8,829	$	11,245	$	11,514

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, committed bank facilities and uncommitted bank lines, 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).

In June 2015, the Company entered into a $3.5 billion five-year revolving credit facility which matures in June 2020. Proceeds from borrowings may be used for general corporate purposes. Apache’s available borrowing capacity under this facility supports its commercial paper program. In connection with entry into the $3.5 billion facility, Apache terminated existing credit facilities totaling $5.3 billion.

The Company has available a $3.5 billion commercial paper program, which generally enables Apache to borrow funds for up to 270 days at competitive interest rates. ~~At June~~As of September 30, 2015, the Company had no debt outstanding under commercial ~~paper.~~paper, committed bank facilities, and uncommitted bank lines.

On ~~July 30,~~September 1, 2015, the Company ~~gave notice to~~ fully ~~redeem~~redeemed its $500 million 5.625% notes due in 2017 and its $400 million 1.75% notes due in ~~2017 on September 1, 2015.~~2017. The notes ~~are being~~were redeemed pursuant to the provisions of each respective note’s ~~indenture using~~indenture. Apache paid the holders an aggregate of $939 million in cash ~~on hand.~~reflecting principal and the premium to par, and an additional $8 million in accrued and unpaid interest.


	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,						2015			2014			2015			2014
	2015			2014			2015			2014			(In millions)
	(In millions)
Interest expense	$	123		$	124		$	251		$	248		$	120		$	125		$	371		$	373
Amortization of deferred loan costs		2			1			4			3			6			2			10			5
Capitalized interest		(59	)		(72	)		(117	)		(150	)		(56	)		(66	)		(173	)		(216	)
Loss on extinguishment of debt														39			—			39			—
Interest income		(3	)		(1	)		(5	)		(4	)		(2	)		(1	)		(7	)		(5	)

Financing costs, net	$	63		$	52		$	133		$	97		$	107		$	60		$	240		$	157

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

During the ~~second~~third quarter of 2015 Apache’s effective tax rate was primarily impacted by an increase in the amount of valuation allowances. ~~The~~With the further commodity price declines since the second quarter, management continues to assess the potential realization of its deferred tax assets. In the third quarter, the Company ~~repatriated~~recorded a deferred tax expense of $1.1 billion and $69 million related to an increase in valuation allowances associated with U.S. foreign tax credits and net operating loss carryforwards, respectively. In addition to the allowance recorded during the third quarter, the Company had previously recorded tax expense of $853 million in the second quarter of 2015 related to an increase in valuation allowance associated with management’s assessment on the realizability of U.S. foreign tax credits subsequent to repatriating the majority of net cash proceeds from the Kitimat LNG project and Australia divestitures and is now positioned to efficiently repatriate future foreign earnings. The Company utilized an existing deferred tax asset related to net operating losses to offset a portion of the taxable income from the repatriated proceeds. In addition, the Company established a deferred tax asset related to the creditable foreign taxes that accompanied the repatriated proceeds. Management has assessed the potential to utilize foreign tax credit carryforwards and has determined that more likely than not a portion of this deferred tax asset will not be realized. Accordingly the Company recorded tax expense of $853 million related to an increase in valuation allowance associated with the foreign tax credit carryforward.divestitures.

Apache’s year-to-date effective tax rate is primarily driven by the ~~impact~~increase in U.S. valuation allowances described above and an increase in the valuation allowance on Canadian deferred tax assets, partially offset by ~~the first quarter~~a first-quarter 2015 deferred tax benefit from the previously announced U.K. tax rate change.

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, 2015, the Company has an accrued liability of approximately ~~$15~~$20 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

No material change in the status of the YPF Sociedad Anónima and Pioneer Natural Resources Company indemnities matters has occurred since the filing of Apache’s Annual Report on Form 10-K for its 2014 fiscal year.

As more fully described in Apache’s Annual Report on Form 10-K for its 2014 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~~the companies 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 captionedState of Louisiana and the Cameron Parish School Board v. Apache Corporation et al., Docket No. 10-18672, in the 38^th Judicial District Court, Parish of Cameron, State of Louisiana, plaintiffs allege that defendants’ oil and gas exploration and production activities contaminated plaintiffs’ property. Plaintiffs claim damages in the range of $7 million to $96 million, depending upon the extent of any remediation that may be ~~ordered.~~ordered, plus exemplary damages, costs, and fees. Apache, a defendant in the case, acquired its interest in the oil and gas operations on plaintiffs’ property from the former operator, defendant Davis Oil Company, and subsequently sold the interest to defendant Wagner Oil Company (Wagner). Apache claims indemnity from Wagner. ~~The case~~Apache and plaintiffs have reached a tentative settlement agreement on confidential terms, including for an exchange of consideration that is ~~set for~~not material to Apache, and have sought an abeyance of their November 2015 trial ~~in November 2015. While an adverse judgment~~setting as they finalize their settlement agreement. Apache has reserved all of its rights against ~~Apache might be possible, Apache disagrees with plaintiffs’ damage models and will vigorously oppose the claims.~~Wagner.

In respect of three lawsuits filed by the Parish of Plaquemines against the Company and other oil and gas producers in the 25^th Judicial District Court for the Parish of Plaquemines, State of Louisiana (captionedParish of Plaquemines v. Rozel Operating Company et al., Docket No. 60-996;Parish of Plaquemines v. Apache Oil Corporation et al.,Docket No. 61-000; andParish of Plaquemines v. HHE Energy Company et al.,Docket No. 60-983), defendants filed notices to remove the cases to the United States District Court for the Eastern District of Louisiana, civil action Nos. 13-6722, 13-6711, and 13-6735. Plaintiff’s motions to remand have been granted.

No other material change in the status of these matters has occurred since the filing of Apache’s Annual Report on Form 10-K for its 2014 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. The civil lawsuits concerning the pipeline explosion, all of which were filed in the Supreme Court of Western Australia, have been resolved fully and dismissed on confidential terms, including for an exchange of consideration that is not material to Apache. The lawsuits are described in Apache’s Annual Report on Form 10-K for its 2014 fiscal year. On April 10, 2015, the court dismissed the lawsuits filed by plaintiffs Alcoa (Civ. 1481 of 2011), Barrick (Civ. 2656 of 2013), EDL LNG (Civ. 1751 of 2014), and Yara (Civ. 1742 of 2014). On April 9, 2015, plaintiffs Harvey (Civ. 1749 of 2014), Iluka (Civ. 1748 of 2014), Newmont (Civ. 1727 of 2014), and Wesfarmers (Civ. 1740 of 2014) discontinued their lawsuits, which were never served on the Apache defendants. All matters relating to the Australia gas pipeline force majeure are concluded.

In a second amended petition filed on February 27, 2015, in a case captionedApollo Exploration, LLC, Cogent Exploration, Ltd. Co. & SellmoCo, LLC v. Apache Corporation, Cause No. CV50538 in the 385^th Judicial District Court, Midland County, Texas, plaintiffs allege damages in excess of $1.1 billion relating to certain purchase and sale agreements, mineral leases, and areas of mutual interest agreements concerning properties located in Hartley, Moore, Potter, and Oldham Counties, Texas. Apache believes that plaintiffs’ claims lack merit, and further that plaintiffs’ alleged damages are grossly inflated. Apache will vigorously oppose the claims.

As part of its ongoing review of the books and records of the Company to determine the Company’s compliance with Delaware Escheat Laws, the State of Delaware, Department of Finance (Unclaimed Property) has advised the Company, by letter dated September 30, 2015, that the liability related to disbursements due to the State of Delaware for the years 2004 through 2009 is less than $237,000 and that its review for the years 1986 through 2003 is not complete. The exposure for the years 1986 through 2003 is not currently determinable. The Company will review the claim for the years 2004 through 2009, respond to the September 30 letter in due course, and continue to cooperate fully until the review is complete. There has been no other material change with respect to the review of the books and records of the Company and its subsidiaries and related entities by the State of Delaware, Department of Finance ~~Division of Revenue~~ (Unclaimed Property), to determine compliance with the Delaware Escheat Laws, since the filing of Apache’s Annual Report on Form 10-K for its 2014 fiscal year.

In the lawsuit captionedPankaj Oswal v. Apache Corporation, No. WAD 389/2013, in the Federal Court of Australia, District of Western Australia, General Division, on the eve of a trial that was to commence on February 9, 2015, plaintiff decided to discontinue his claim. On March 18, 2015, the court entered an order dismissing the case. The lawsuit is concluded in the Company’s favor.

In the cases captionedRadhika Oswal v. Australia and New Zealand Banking Group Limited(ANZ) et al., No. SCI 2011 4653 andPankaj Oswal v. Australia and New Zealand Banking Group Limited(ANZ) et al., No. SCI 2012 01995, in the Supreme Court of Victoria, trial is set to commence in March 2016. The Company is defending these proceedings for and on behalf of itself and Apache Energy Limited (now known as Quadrant Energy Limited) and Apache Northwest Pty Ltd (now known as Quadrant Northwest Pty Ltd). As of October 28, 2015, Yara Australia Pty Ltd and its related bodies corporate acquired all of the shares of Apache Fertilisers Pty Ltd and assumed full conduct and control of the defense of Apache Fertilisers Pty Ltd (now known as Chemical Holdings Pty Ltd) in these proceedings. Certain Oswal-related proceedings (in which neither the Company nor its former subsidiaries are parties) have been cross-vested with these proceedings. The Company, Apache Energy, and ~~its subsidiaries~~Apache Northwest believe that plaintiffs’ claims lack merit and will vigorously oppose them. No other material change in the status of this matter has occurred since the filing of Apache’s Annual Report on Form 10-K for its 2014 fiscal year.

As of ~~June~~September 30, 2015, the Company had an undiscounted reserve for environmental remediation of approximately $62 million. The Company is not aware of any environmental claims existing as of ~~June~~September 30, 2015, 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.

With respect to the June 1, 2013, leak of produced water from a below ground pipeline in the Zama Operations area in northern Alberta, the Alberta Energy Regulator has completed its investigation of the incident and issued an administrative penalty to Apache Canada Ltd. in the amount of $16,500 CAD. On October 19, 2015, the Crown served Apache Canada Ltd. with a notice to attend to answer a charge relating to a leak of produced water in the Zama area that occurred on or between October 3, 2013 and October 25, 2013. The leak resulted from a riser that was damaged by force by an independent agent following Apache Canada Ltd.’s discontinued use of the pipeline segment. The seven-count charge could result in the levying of a fine. Apache Canada Ltd. will review the charge and respond in due course. It is possible that additional discharges in Apache Canada Ltd. operating areas, including in the Zama Operations area, could result in additional government fines or sanction.

No other material change in the status of these matters has occurred since the filing of Apache’s Annual Report on Form 10-K for its 2014 fiscal year.

In respect of the purchase by Woodside of the Wheatstone and Kitimat LNG projects and accompanying upstream oil and gas reserves from the Company and its subsidiaries, the base purchase price is subject to adjustment in accordance with the terms of the applicable sale and purchase agreement. Woodside has notified the Company and its subsidiaries that it seeks purchase price adjustments in the net amounts of $175 million (for working capital adjustments), which the Company and its subsidiaries believe is time-barred, and $214 million (for all other adjustments). To the extent the parties are unable to resolve their differences through settlement or court proceedings, the dispute will be referred to an independent accounting expert for final determination under the terms of the applicable sale and purchase agreement. The Company believes that under the terms of the sale and purchase agreements, Woodside’s requests for payment of purchase price adjustments lack merit; therefore, the Company has not recorded a liability associated with this dispute.

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, 2015, and 2014 is presented in the table below.


		For the Six Months Ended June 30,																For the Nine Months Ended September 30,
		2015								2014								2015								2014
		Loss			Shares		Per Share			Income (loss)			Shares		Per Share			Loss			Shares		Per Share			Loss			Shares		Per Share
		(In millions, except per share amounts)																(In millions, except per share amounts)
Basic:	Basic:
Income (loss) from continuing operations		$	(9,387	)		377	$	(24.88	)	$	1,101			390	$	2.83
Loss from continuing operations																		$	(14,947	)		378	$	(39.58	)	$	(73	)		387	$	(0.19	)
Loss from discontinued operations			(864	)		377		(2.29	)		(360	)		390		(0.93	)		(959	)		378		(2.54	)		(516	)		387		(1.33	)

Income (loss) attributable to common stock		$	(10,251	)		377	$	(27.17	)	$	741			390	$	1.90
Loss attributable to common stock																		$	(15,906	)		378	$	(42.12	)	$	(589	)		387	$	(1.52	)


Effect of Dilutive Securities:
Stock options and other			—			—					—			2					—			—					—			—

Diluted:
Income (loss) from continuing operations		$	(9,387	)		377	$	(24.88	)	$	1,101			392	$	2.82
Loss from continuing operations																		$	(14,947	)		378	$	(39.58	)	$	(73	)		387	$	(0.19	)
Loss from discontinued operations			(864	)		377		(2.29	)		(360	)		392		(0.93	)		(959	)		378		(2.54	)		(516	)		387		(1.33	)

Income (loss) attributable to common stock		$	(10,251	)		377	$	(27.17	)	$	741			392	$	1.89
Loss attributable to common stock																		$	(15,906	)		378	$	(42.12	)	$	(589	)		387	$	(1.52	)

The diluted earnings per share calculation excludes options and restricted stock units that were anti-dilutive totaling ~~8.3~~10.4 million and ~~3.2~~4.7 million for the quarters ended ~~June~~September 30, 2015 and 2014, respectively, and ~~8.3~~8.9 million and 55.5 million for the ~~six~~nine months ended ~~June~~September 30, 2015, and 2014, respectively.

For each of the quarters ended ~~June~~September 30, 2015, and 2014, Apache paid $95 million ~~and $97 million, respectively,~~ in dividends on its common stock. For the ~~six~~nine months ended ~~June~~September 30, 2015, and 2014, Apache paid ~~$189~~$283 million and ~~$176~~$271 million, respectively.

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 December 31, 2014, had repurchased a total of 32.2 million shares at an average price of $88.96 per share. The Company has not purchased any additional shares during 2015, and 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, 2015, the Company had production in four countries: the United States, Canada, Egypt, 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											Other					United											Other
	States			Canada			Egypt⁽¹⁾		North Sea			International		Total⁽³⁾			States			Canada			Egypt⁽¹⁾		North Sea			International		Total⁽³⁾
	(In millions)																(In millions)
For the Quarter Ended June 30, 2015
For the Quarter Ended September 30, 2015
Oil and Gas Production Revenues	$	767		$	138		$	664	$	383		$	—	$	1,952		$	639		$	116		$	500	$	317		$	—	$	1,572

Operating Income (Loss)⁽²⁾	$	(4,224	)	$	(886	)	$	214	$	(581	)	$	—	$	(5,477	)	$	(4,253	)	$	(1,022	)	$	43	$	(474	)	$	—	$	(5,706	)

Other Income (Expense):
Other															25																(76	)
General and administrative															(111	)															(86	)
Transaction, reorganization, and separation costs															(66	)
Impairments																															(367	)
Financing costs, net															(63	)															(107	)

Loss Before Income Taxes														$	(5,692	)														$	(6,342	)

For the Six Months Ended June 30, 2015

For the Nine Months Ended September 30, 2015
Oil and Gas Production Revenues	$	1,427		$	271		$	1,196	$	696		$	—	$	3,590		$	2,066		$	387		$	1,696	$	1,013		$	—	$	5,162

Operating Income (Loss)⁽²⁾	$	(9,546	)	$	(2,314	)	$	318	$	(1,245	)	$	—	$	(12,787	)	$	(13,800	)	$	(3,336	)	$	361	$	(1,718	)	$	—	$	(18,493	)

Other Income (Expense):
Other															17																(59	)
General and administrative															(193	)															(279	)
Transaction, reorganization, and separation costs															(120	)
Impairments																															(367	)
Transaction, reorganization, and separation																															(120	)
Financing costs, net															(133	)															(240	)

Loss Before Income Taxes														$	(13,216	)														$	(19,558	)


Total Assets	$	18,615		$	3,585		$	7,679	$	4,838		$	595	$	35,312		$	12,806		$	2,438		$	7,788	$	4,323		$	457	$	27,812

For the Quarter Ended June 30, 2014

For the Quarter Ended September 30, 2014
Oil and Gas Production Revenues	$	1,529		$	293		$	989	$	660		$	—	$	3,471		$	1,481		$	268		$	910	$	522		$	—	$	3,181

Operating Income (Loss)⁽²⁾	$	679		$	47		$	585	$	(39	)	$	—	$	1,272		$	(988	)	$	11		$	481	$	124		$	—	$	(372	)

Other Income (Expense):
Derivative instrument gains (losses), net															(174	)															273
Other															(8	)															(13	)
General and administrative															(113	)															(111	)
Transaction, reorganization, and separation costs															(14	)
Transaction, reorganization, and separation																															(34	)
Financing costs, net															(52	)															(60	)

Income Before Income Taxes														$	911															$	(317	)

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	$	1,278		$	—	$	6,862		$	4,515		$	879		$	2,849	$	1,800		$	—	$	10,043

Operating Income⁽²⁾	$	1,342		$	119		$	1,121	$	144		$	—	$	2,726		$	354		$	131		$	1,601	$	268		$	—	$	2,354

Other Income (Expense):
Derivative instrument gains (losses), net															(194	)															79
Other															9																(4	)
General and administrative															(221	)															(332	)
Transaction, reorganization, and separation costs															(32	)
Transaction, reorganization, and separation																															(66	)
Financing costs, net															(97	)															(157	)

Income Before Income Taxes														$	2,191															$	1,874


Total Assets	$	31,547		$	6,842		$	7,264	$	6,713		$	534	$	52,900		$	30,613		$	7,100		$	7,246	$	6,824		$	557	$	52,340

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 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	$	799		$	—		$	2,791		$	—	$	3,590		$	344		$	—		$	1,228		$	—	$	1,572
Equity in net income (loss) of affiliates		(3,072	)		(1,047	)		—			4,119		—
Equity in net income of affiliates																(1,759	)		(520	)		—			2,279		—
Other		(50	)		26			22			19		17			(63	)		14			(27	)		—		(76	)

		(2,323	)		(1,021	)		2,813			4,138		3,607			(1,478	)		(506	)		1,201			2,279		1,496

OPERATING EXPENSES:
Depreciation, depletion, and amortization		9,845			—			5,279			—		15,124			4,195			—			2,434			—		6,629
Asset retirement obligation accretion		7			—			65			—		72			4			—			33			—		37
Lease operating expenses		232			—			716			—		948			97			—			353			—		450
Gathering and transportation		16			—			89			—		105			9			—			49			—		58
Taxes other than income		67			—			61			—		128			30			—			74			—		104
Impairments																110			—			257			—		367
General and administrative		138			—			36			19		193			76			—			10			—		86
Transaction, reorganization, and separation costs		120			—			—			—		120
Financing costs, net		123			21			(11	)		—		133			112			10			(15	)		—		107

		10,548			21			6,235			19		16,823			4,633			10			3,195			—		7,838

NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(12,871	)		(1,042	)		(3,422	)		4,119		(13,216	)		(6,111	)		(516	)		(1,994	)		2,279		(6,342	)
Provision (benefit) for income taxes		(2,792	)		5			(1,093	)		—		(3,880	)		(463	)		4			(332	)		—		(791	)

NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		(10,079	)		(1,047	)		(2,329	)		4,119		(9,336	)		(5,648	)		(520	)		(1,662	)		2,279		(5,551	)
Net loss from discontinued operations, net of tax		(172	)		—			(692	)		—		(864	)
Net income (loss) from discontinued operations, net of tax																(7	)		—			(88	)		—		(95	)

NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		(10,251	)		(1,047	)		(3,021	)		4,119		(10,200	)		(5,655	)		(520	)		(1,750	)		2,279		(5,646	)
Net income attributable to noncontrolling interest		—			—			51			—		51			—			—			9			—		9

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	(10,251	)	$	(1,047	)	$	(3,072	)	$	4,119	$	(10,251	)	$	(5,655	)	$	(520	)	$	(1,759	)	$	2,279	$	(5,655	)

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	(10,251	)	$	(1,047	)	$	(3,072	)	$	4,119	$	(10,251	)


						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		$	—	$	5,075		$	—		$	6,862		$	882		$	—	$	2,299		$	—		$	3,181
Equity in net income (loss) of affiliates		744			53		4			(801	)		—			491			5		1			(497	)		—
Derivative instrument gains (losses), net		(145	)		—		(49	)		—			(194	)		320			—		(47	)		—			273
Other		(73	)		27		52			3			9			(34	)		14		5			2			(13	)

		2,313			80		5,082			(798	)		6,677			1,659			19		2,258			(495	)		3,441

OPERATING EXPENSES:
Depreciation, depletion, and amortization		684			—		1,774			—			2,458			1,914			—		821			—			2,735
Asset retirement obligation accretion		15			—		61			—			76			8			—		31			—			39
Lease operating expenses		249			—		859			—			1,108			137			—		451			—			588
Gathering and transportation		28			—		108			—			136			15			—		52			—			67
Taxes other than income		126			—		232			—			358			67			—		57			—			124
General and administrative		189			—		29			3			221			89			—		20			2			111
Transaction, reorganization, and separation costs		30			—		2			—			32
Transaction, reorganization, and separation																34			—		—			—			34
Financing costs, net		73			20		4			—			97			45			11		4			—			60

		1,394			20		3,069			3			4,486			2,309			11		1,436			2			3,758

NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		919			60		2,013			(801	)		2,191			(650	)		8		822			(497	)		(317	)
Provision for income taxes		52			2		830			—			884
Provision (benefit) for income taxes																678			2		88			—			768

NET INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST		867			58		1,183			(801	)		1,307			(1,328	)		6		734			(497	)		(1,085	)
Net loss from discontinued operations, net of tax		(127	)		—		(233	)		—			(360	)
Net income from discontinued operations, net of tax																—			—		(156	)		—			(156	)

NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		740			58		950			(801	)		947			(1,328	)		6		578			(497	)		(1,241	)
Net income attributable to noncontrolling interest		—			—		206			—			206			—			—		89			—			89

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	740		$	58	$	744		$	(801	)	$	741		$	(1,328	)	$	6	$	489		$	(497	)	$	(1,330	)

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


							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)
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	$	192		$	(21	)	$	1,566		$	—		$	1,737		$	77		$	(25	)	$	2,520		$	—		$	2,572
CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			196			—			196			—			—			150			—			150

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		192			(21	)		1,762			—			1,933			77			(25	)		2,670			—			2,722

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(1,222	)		—			(1,765	)		—			(2,987	)		(1,517	)		—			(2,327	)		—			(3,844	)
Leasehold and property acquisitions		(124	)		—			(4	)		—			(128	)		(243	)		—			(11	)		—			(254	)
Additions to gas gathering, transmission, and processing facilities		(24	)		—			(70	)		—			(94	)		(25	)		—			(88	)		—			(113	)
Proceeds from sale of Kitimat LNG		—			—			854			—			854			—			—			854			—			854
Proceeds from sale of other oil and gas properties		4			—			115			—			119			8			—			140			—			148
Investment in subsidiaries, net		82			—			—			(82	)		—			274			—			—			(274	)		—
Other		(16	)		—			(51	)		—			(67	)		(16	)		—			(83	)		—			(99	)

NET CASH USED IN CONTINUING INVESTING ACTIVITIES		(1,300	)		—			(921	)		(82	)		(2,303	)		(1,519	)		—			(1,515	)		(274	)		(3,308	)
NET CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			4,335			—			4,335			—			—			4,335			—			4,335

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(1,300	)		—			3,414			(82	)		2,032			(1,519	)		—			2,820			(274	)		1,027

CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net		(1,570	)		—			—			—			(1,570	)		(1,570	)		—			—			—			(1,570	)
Intercompany borrowings		4,551			(10	)		(4,623	)		82			—			4,416			(10	)		(4,680	)		274			—
Early redemption of fixed-rate debt																	(939	)		—			—			—			(939	)
Distributions to noncontrolling interest		—			—			(40	)		—			(40	)		—			—			(97	)		—			(97	)
Dividends paid		(189	)		—			—			—			(189	)		(283	)		—			—			—			(283	)
Treasury stock activity, net		—			—			—			—			—			—			—			—			—			—
Other		2			31			(18	)		—			15			2			35			(11	)		—			26

NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES		2,794			21			(4,681	)		82			(1,784	)		1,626			25			(4,788	)		274			(2,863	)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		2,794			21			(4,681	)		82			(1,784	)		1,626			25			(4,788	)		274			(2,863	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,686			—			495			—			2,181			184			—			702			—			886

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		267			—			502			—			769			267			—			502			—			769

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,953		$	—		$	997		$	—		$	2,950		$	451		$	—		$	1,204		$	—		$	1,655


							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)
CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES	$	70		$	(33	)	$	3,912		$	—		$	3,949		$	3,574		$	(37	)	$	2,219		$	—		$	5,756
CASH PROVIDED BY DISCONTINUED OPERATIONS		—			—			683			—			683			—			—			772			—			772

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		70			(33	)		4,595			—			4,632			3,574			(37	)		2,991			—			6,528

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(1,625	)		—			(2,744	)		—			(4,369	)		(5,425	)		—			(1,160	)		—			(6,585	)
Leasehold and property acquisitions		(83	)		—			(29	)		—			(112	)		(503	)		—			(135	)		—			(638	)
Additions to gas gathering, transmission, and processing facilities		(2	)		—			(343	)		—			(345	)		(21	)		—			(482	)		—			(503	)
Proceeds from sale of Deepwater Gulf of Mexico assets		1,367			—			—			—			1,367			1,367			—			—			—			1,367
Restricted cash related to divestitures		(1,367	)		—			—			—			(1,367	)		(545	)		—			—			—			(545	)
Proceeds from sale of other oil and gas properties		69			—			312			—			381			35			—			355			—			390
Investment in subsidiaries, net		2,899			—			—			(2,899	)		—			2,303			—			—			(2,303	)		—
Other		(35	)		—			2			—			(33	)		(67	)		—			(29	)		—			(96	)

NET CASH PROVIDED BY (USED IN) CONTINUING INVESTING ACTIVITIES		1,223			—			(2,802	)		(2,899	)		(4,478	)
NET CASH USED IN CONTINUING INVESTING ACTIVITIES																	(2,856	)		—			(1,451	)		(2,303	)		(6,610	)
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(13	)		—			(13	)		—			—			(331	)		—			(331	)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		1,223			—			(2,815	)		(2,899	)		(4,491	)
NET CASH USED IN INVESTING ACTIVITIES																	(2,856	)		—			(1,782	)		(2,303	)		(6,941	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and bank credit facilities, net		—			—			(1	)		—			(1	)		1,248			—			(2	)		—			1,246
Intercompany borrowings		—			11			(2,909	)		2,898			—			—			10			(2,322	)		2,312			—
Distributions to noncontrolling interest		—			—			(66	)		—			(66	)		—			—			(124	)		—			(124	)
Dividends paid		(176	)		—			—			—			(176	)		(271	)		—			—			—			(271	)
Treasury stock activity, net		(1,263	)		—			—			—			(1,263	)		(1,830	)		—			—			—			(1,830	)
Other		—			19			5			1			25			—			24			23			(9	)		38

NET CASH PROVIDED BY (USED IN) CONTINUING FINANCING ACTIVITIES		(1,439	)		30			(2,971	)		2,899			(1,481	)		(853	)		34			(2,425	)		2,303			(941	)
NET CASH USED IN DISCONTINUED OPERATIONS		—			—			(42	)		—			(42	)		—			—			(42	)		—			(42	)


NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(1,439	)		30			(3,013	)		2,899			(1,523	)		(853	)		34			(2,467	)		2,303			(983	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(146	)		(3	)		(1,233	)		—			(1,382	)		(135	)		(3	)		(1,258	)		—			(1,396	)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		155			3			1,748			—			1,906			155			3			1,748			—			1,906

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	9		$	—		$	515		$	—		$	524		$	20		$	—		$	490		$	—		$	510


					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)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,953	$	—	$	997		$	—		$	2,950	$	451	$	—		$	1,204		$	—		$	1,655
Receivables, net of allowance		470		—		1,119			—			1,589		392		—			940			—			1,332
Inventories		38		—		591			—			629		35		—			632			—			667
Drilling advances		17		1		175			—			193		17		—			169			—			186
Assets held for sale														79		—			—			—			79
Deferred tax asset		72		—		12			—			84		72		—			12			—			84
Prepaid assets and other		22		—		26			—			48		19		—			57			—			76
Intercompany receivable		5,420		—		—			(5,420	)		—		5,580		—			—			(5,580	)		—

		7,992		1		2,920			(5,420	)		5,493		6,645		—			3,014			(5,580	)		4,079

PROPERTY AND EQUIPMENT, NET		5,096		—		23,219			—			28,315		1,156		—			21,221			—			22,377

OTHER ASSETS:
Intercompany receivable		—		—		691			(691	)		—		—		—			882			(882	)		—
Equity in affiliates		21,663		149		452			(22,264	)		—		19,993		(702	)		442			(19,733	)		—
Deferred charges and other		176		1,000		1,328			(1,000	)		1,504		157		998			1,201			(1,000	)		1,356

	$	34,927	$	1,150	$	28,610		$	(29,375	)	$	35,312	$	27,951	$	296		$	26,760		$	(27,195	)	$	27,812

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	449	$	—	$	261		$	—		$	710	$	416	$	—		$	243		$	—		$	659
Other current liabilities		838		1		834			—			1,673		851		8			649			—			1,508
Intercompany payable		—		—		5,420			(5,420	)		—		—		—			5,580			(5,580	)		—

		1,287		1		6,515			(5,420	)		2,383		1,267		8			6,472			(5,580	)		2,167

LONG-TERM DEBT		9,378		298		0			—			9,676		8,480		298			(1	)		—			8,777

DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable		691		—		—			(691	)		—		882		—			—			(882	)		—
Income taxes		502		—		2,142			—			2,644		109		—			1,888			—			1,997
Asset retirement obligation		220		—		2,314			—			2,534		225		—			2,342			—			2,567
Other		7,305		250		(6,235	)		(1,000	)		320		7,179		250			(6,097	)		(1,000	)		332

		8,718		250		(1,779	)		(1,691	)		5,498		8,395		250			(1,867	)		(1,882	)		4,896

COMMITMENTS AND CONTINGENCIES APACHE SHAREHOLDERS’ EQUITY		15,544		601		21,663			(22,264	)		15,544
COMMITMENTS AND CONTINGENCIES
APACHE SHAREHOLDERS’ EQUITY														9,809		(260	)		19,993			(19,733	)		9,809
Noncontrolling interest		—		—		2,211			—			2,211		—		—			2,163			—			2,163

TOTAL EQUITY		15,544		601		23,874			(22,264	)		17,755		9,809		(260	)		22,156			(19,733	)		11,972

	$	34,927	$	1,150	$	28,610		$	(29,375	)	$	35,312	$	27,951	$	296		$	26,760		$	(27,195	)	$	27,812


					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)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	267	$	—	$	502		$	—		$	769	$	267	$	—	$	502		$	—		$	769
Receivables, net of allowance		837		—		1,187			—			2,024		837		—		1,187			—			2,024
Inventories		24		—		684			—			708		24		—		684			—			708
Drilling advances		34		1		353			—			388		34		1		353			—			388
Assets held for sale		—		—		1,628			—			1,628		—		—		1,628			—			1,628
Deferred tax asset		612		—		157			—			769		612		—		157			—			769
Prepaid assets and other		32		—		97			—			129		32		—		97			—			129
Intercompany receivable		4,939		—		—			(4,939	)		—		4,939		—		—			(4,939	)		—

		6,745		1		4,608			(4,939	)		6,415		6,745		1		4,608			(4,939	)		6,415

PROPERTY AND EQUIPMENT, NET		13,940		—		34,136			—			48,076		13,940		—		34,136			—			48,076

OTHER ASSETS:
Intercompany receivable		—		—		608			(608	)		—		—		—		608			(608	)		—
Equity in affiliates		25,791		869		444			(27,104	)		—		25,791		869		444			(27,104	)		—
Goodwill		—		—		87			—			87		—		—		87			—			87
Deferred charges and other		175		1,002		1,197			(1,000	)		1,374		175		1,002		1,197			(1,000	)		1,374

	$	46,651	$	1,872	$	41,080		$	(33,651	)	$	55,952	$	46,651	$	1,872	$	41,080		$	(33,651	)	$	55,952

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	748	$	10	$	452		$	—		$	1,210	$	748	$	10	$	452		$	—		$	1,210
Asset retirement obligation		28		—		9			—			37		28		—		9			—			37
Other current liabilities		1,014		1		1,402			—			2,417		1,014		1		1,402			—			2,417
Intercompany payable		—		—		4,939			(4,939	)		—		—		—		4,939			(4,939	)		—

		1,790		11		6,802			(4,939	)		3,664		1,790		11		6,802			(4,939	)		3,664

LONG-TERM DEBT		10,947		298		—			—			11,245		10,947		298		—			—			11,245

DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Intercompany payable		608		—		—			(608	)		—		608		—		—			(608	)		—
Income taxes		5,076		—		4,423			—			9,499		5,076		—		4,423			—			9,499
Asset retirement obligation		211		—		2,837			—			3,048		211		—		2,837			—			3,048
Other		2,082		250		(973	)		(1,000	)		359		2,082		250		(973	)		(1,000	)		359

		7,977		250		6,287			(1,608	)		12,906		7,977		250		6,287			(1,608	)		12,906

COMMITMENTS AND CONTINGENCIES APACHE SHAREHOLDERS’ EQUITY		25,937		1,313		25,791			(27,104	)		25,937
COMMITMENTS AND CONTINGENCIES
APACHE SHAREHOLDERS’ EQUITY														25,937		1,313		25,791			(27,104	)		25,937
Noncontrolling interest		—		—		2,200			—			2,200		—		—		2,200			—			2,200

TOTAL EQUITY		25,937		1,313		27,991			(27,104	)		28,137		25,937		1,313		27,991			(27,104	)		28,137

	$	46,651	$	1,872	$	41,080		$	(33,651	)	$	55,952	$	46,651	$	1,872	$	41,080		$	(33,651	)	$	55,952

~~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 four countries: the United States (U.S.), Canada, Egypt, 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~~following 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 Annual Report on Form 10-K for our 2014 fiscal year. Results of operations and consolidated cash flows for our divested Australia assets and Argentina operations are reflected as discontinued operations in all periods presented in this Quarterly Report on Form 10-Q.

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’s strategic outlook~~Company has exploration and foundation for growth are based on our core producing asset base and large undeveloped acreage positions. We believe our holdings provide for growth through sustainable lower-risk drilling opportunities onshoreproduction interests in ~~North America, balanced by higher-risk, higher-reward exploration in~~four countries: the United States (U.S.), Canada, Egypt, the North Sea, and other offshore areas. We closely monitor drilling and acquisition cost trends in each of our core areas relative to product prices and, when appropriate, adjust our capital budgets accordingly and allocate funds to projects based on expected value. We do this through a disciplined and focused process that includes analyzing current economic conditions, projected rate of return on internally generated drilling inventories, and opportunities for tactical acquisitions or leasehold purchases that add substantial drilling prospects or, occasionally, provide access to new core areas that could enhance our portfolio.

~~Over the last five years, Apache has increasingly focused on its North American onshore resource base. Recent drilling success~~ and the ~~acquisition of acreage positions across~~United Kingdom (U.K.) North ~~America add to our robust drilling inventory~~Sea. Apache also pursues exploration interests in ~~the Permian Basin~~other countries that may over time result in reportable discoveries and ~~other key onshore operating areas. As part of our strategy, this quarter we completed the sales of our Kitimat and Wheatstone LNG projects and our upstream assets in Australia.~~ development opportunities.

The Company believes our current portfolio, which includes a significant onshore North America resource base coupled with Brent-linked, free cash flow generating assets in the North Sea and Egypt, provides flexibility in capital allocation and a platform for sustainable growth in a volatile commodity price environment.

~~In response to the significant drop in commodity~~downward pressure on oil prices that began in late 2014 wecontinues to impact 2015 results. As compared to third quarter and nine months of 2014, Apache’s average realized oil prices decreased 51 percent and 49 percent, respectively. Additionally, natural gas and natural gas liquids pricing remain significantly lower than 2014.

When prices began to soften late last year, Apache moved ~~quickly~~swiftly and decisively onto address matters within our control: capital spending, overhead, and lease operating costs.

In addition, we have reduced total debt by 22 percent during the ~~first half of 2015 was dramatic; however,~~current year to $8.8 billion, and we ~~believe this low price environment will provide future growth opportunities for companies that move aggressively to reduce spending~~exited the quarter with $1.7 billion in cash and ~~maintain a strong balance sheet position.~~$3.5 billion in available committed borrowing capacity.

~~Results~~Significant operating activities for the quarter ~~and six months ended June 30, 2015, include:~~include the following:

~~Our internally generated exploration and drilling opportunities provide the foundation for our growth. Highlights of our 2015 drilling successes and other operational developments are discussed below.~~

The table below presents revenues by geographic region and each region’s percent contribution to revenues for 2015 and 2014.


	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,
	2015					2014					2015					2014					2015					2014					2015					2014
	$		%			$		%			$		%			$		%			$		%			$		%			$		%			$		%
	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	$	627		39	%	$	1,145		41	%	$	1,137		39	%	$	2,237		41	%	$	492		41	%	$	1,121		44	%	$	1,629		40	%	$	3,358		42	%
Canada		75		5	%		154		5	%		135		5	%		294		6	%		55		4	%		140		5	%		190		4	%		434		5	%

North America		702		44	%		1,299		46	%		1,272		44	%		2,531		47	%		547		45	%		1,261		49	%		1,819		44	%		3,792		47	%

Egypt⁽¹⁾		553		35	%		885		32	%		986		34	%		1,731		32	%		401		33	%		805		32	%		1,387		34	%		2,536		32	%
North Sea		344		22	%		613		22	%		621		22	%		1,180		21	%		265		22	%		487		19	%		886		22	%		1,667		21	%

International⁽¹⁾		897		56	%		1,498		54	%		1,607		56	%		2,911		53	%		666		55	%		1,292		51	%		2,273		56	%		4,203		53	%

Total⁽¹⁾	$	1,599		100	%	$	2,797		100	%	$	2,879		100	%	$	5,442		100	%	$	1,213		100	%	$	2,553		100	%	$	4,092		100	%	$	7,995		100	%

Total Gas Revenues:
United States	$	90		31	%	$	245		49	%	$	193		32	%	$	511		48	%	$	105		34	%	$	210		46	%	$	298		33	%	$	721		48	%
Canada		61		20	%		122		24	%		128		22	%		270		25	%		59		19	%		112		25	%		187		21	%		382		25	%

North America		151		51	%		367		73	%		321		54	%		781		73	%		164		53	%		322		71	%		485		54	%		1,103		73	%

Egypt⁽¹⁾		107		36	%		99		19	%		203		34	%		202		19	%		97		31	%		101		23	%		300		33	%		303		20	%
North Sea		37		13	%		39		8	%		71		12	%		82		8	%		48		16	%		28		6	%		119		13	%		110		7	%

International⁽¹⁾		144		49	%		138		27	%		274		46	%		284		27	%		145		47	%		129		29	%		419		46	%		413		27	%

Total⁽¹⁾	$	295		100	%	$	505		100	%	$	595		100	%	$	1,065		100	%	$	309		100	%	$	451		100	%	$	904		100	%	$	1,516		100	%

Natural Gas Liquids (NGL)
Revenues:
United States	$	50		86	%	$	139		82	%	$	97		84	%	$	286		81	%	$	42		84	%	$	150		85	%	$	139		84	%	$	436		82	%
Canada		2		3	%		17		10	%		8		7	%		47		13	%		2		4	%		16		9	%		10		6	%		63		12	%

North America		52		90	%		156		92	%		105		91	%		333		94	%		44		88	%		166		94	%		149		90	%		499		94	%

Egypt⁽¹⁾		4		7	%		5		3	%		7		6	%		6		2	%		2		4	%		4		2	%		9		5	%		10		2	%
North Sea		2		3	%		8		5	%		4		3	%		16		4	%		4		8	%		7		4	%		8		5	%		23		4	%

International⁽¹⁾		6		10	%		13		8	%		11		9	%		22		6	%		6		12	%		11		6	%		17		10	%		33		6	%

Total⁽¹⁾	$	58		100	%	$	169		100	%	$	116		100	%	$	355		100	%	$	50		100	%	$	177		100	%	$	166		100	%	$	532		100	%

Total Oil and Gas Revenues:
United States	$	767		39	%	$	1,529		44	%	$	1,427		40	%	$	3,034		44	%	$	639		41	%	$	1,481		47	%	$	2,066		40	%	$	4,515		45	%
Canada		138		7	%		293		8	%		271		7	%		611		9	%		116		7	%		268		8	%		387		8	%		879		9	%

North America		905		46	%		1,822		52	%		1,698		47	%		3,645		53	%		755		48	%		1,749		55	%		2,453		48	%		5,394		54	%

Egypt⁽¹⁾		664		34	%		989		29	%		1,196		33	%		1,939		28	%		500		32	%		910		29	%		1,696		33	%		2,849		28	%
North Sea		383		20	%		660		19	%		696		20	%		1,278		19	%		317		20	%		522		16	%		1,013		19	%		1,800		18	%

International⁽¹⁾		1,047		54	%		1,649		48	%		1,892		53	%		3,217		47	%		817		52	%		1,432		45	%		2,709		52	%		4,649		46	%

Total⁽¹⁾	$	1,952		100	%	$	3,471		100	%	$	3,590		100	%	$	6,862		100	%	$	1,572		100	%	$	3,181		100	%	$	5,162		100	%	$	10,043		100	%

Discontinued Operations—Argentina and Australia

Discontinued Operations - Argentina and Australia
Oil Revenues	$	57				$	153				$	138				$	368				$	—				$	200				$	138				$	568
Gas Revenues		53					84					140					209					—					87					140					296
NGL Revenues		—					—					—					3					—					—					—					3

Total	$	110				$	237				$	278				$	580				$	—				$	287				$	278				$	867

The table below presents the ~~second-quarter~~third-quarter and year-to-date 2015 and 2014 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
	2015		2014		(Decrease)			2015		2014		(Decrease)			2015		2014		(Decrease)			2015		2014		(Decrease)
Oil Volume – b/d
United States		127,698		130,398		(2	%)		127,171		129,181		(2	%)		120,412		133,613		(10	%)		124,894		130,675		(4	%)
Canada		15,791		17,981		(12	%)		16,330		17,786		(8	%)		14,795		17,672		(16	%)		15,812		17,748		(11	%)

North America		143,489		148,379		(3	%)		143,501		146,967		(2	%)		135,207		151,285		(11	%)		140,706		148,423		(5	%)

Egypt⁽¹⁾⁽²⁾		99,975		88,643		13	%		95,995		88,370		9	%		91,132		87,499		4	%		94,356		88,076		7	%
North Sea		58,873		61,610		(4	%)		60,279		60,358		0	%		58,330		55,247		6	%		59,622		58,636		2	%

International		158,848		150,253		6	%		156,274		148,728		5	%		149,462		142,746		5	%		153,978		146,712		5	%

Total		302,337		298,632		1	%		299,775		295,695		1	%		284,669		294,031		(3	%)		294,684		295,135		0	%

Natural Gas Volume – Mcf/d
United States		446,788		596,970		(25	%)		441,333		594,840		(26	%)		445,239		579,188		(23	%)		442,650		589,565		(25	%)
Canada		282,971		316,740		(11	%)		285,251		347,057		(18	%)		270,027		300,803		(10	%)		280,120		331,470		(15	%)

North America		729,759		913,710		(20	%)		726,584		941,897		(23	%)		715,266		879,991		(19	%)		722,770		921,035		(22	%)

Egypt⁽¹⁾⁽²⁾		405,544		367,950		10	%		384,881		372,628		(23	%)		365,552		377,838		(3	%)		378,367		374,384		1	%
North Sea		56,367		54,848		3	%		53,423		49,986		7	%		81,392		50,647		61	%		62,848		50,209		25	%

International		461,911		422,798		9	%		438,304		422,614		4	%		446,944		428,485		4	%		441,215		424,593		4	%

Total		1,191,670		1,336,508		(11	%)		1,164,888		1,364,511		(15	%)		1,162,210		1,308,476		(11	%)		1,163,985		1,345,628		(13	%)

NGL Volume – b/d
United States		54,944		56,625		(3	%)		51,104		54,851		(7	%)		54,951		61,712		(11	%)		52,401		57,163		(8	%)
Canada		5,825		5,921		(2	%)		5,839		6,840		(15	%)		6,440		5,381		20	%		6,041		6,349		(5	%)

North America		60,769		62,546		0	%		56,943		61,691		(8	%)		61,391		67,093		(8	%)		58,442		63,512		(8	%)

Egypt⁽¹⁾⁽²⁾		1,214		884		37	%		1,123		560		101	%		996		726		37	%		1,080		616		75	%
North Sea		826		1,367		(40	%)		856		1,230		(30	%)		1,440		1,294		11	%		1,053		1,251		(16	%)

International		2,040		2,251		(9	%)		1,979		1,790		11	%		2,436		2,020		21	%		2,133		1,867		14	%

Total		62,809		64,797		(3	%)		58,922		63,481		(7	%)		63,827		69,113		(8	%)		60,575		65,379		(7	%)

BOE per day⁽³⁾
United States		257,107		286,518		(10	%)		251,831		283,173		(11	%)		249,569		291,857		(14	%)		251,069		286,099		(12	%)
Canada		68,778		76,692		(10	%)		69,711		82,469		(15	%)		66,239		73,187		(9	%)		68,541		79,341		(14	%)

North America		325,885		363,210		(10	%)		321,542		365,642		(12	%)		315,808		365,044		(13	%)		319,610		365,440		(13	%)

Egypt⁽²⁾		168,779		150,853		12	%		161,264		151,035		7	%		153,054		151,198		1	%		158,498		151,090		5	%
North Sea		69,094		72,118		(4	%)		70,038		69,918		0	%		73,335		64,982		13	%		71,149		68,255		4	%

International		237,873		222,971		7	%		231,302		220,953		5	%		226,389		216,180		5	%		229,647		219,345		5	%

Total		563,758		586,181		(4	%)		552,844		586,595		(6	%)		542,197		581,224		(7	%)		549,257		584,785		(6	%)


Discontinued Operations — Argentina and Australia
Oil (b/d)		9,849		14,555					15,346		19,107					—		22,014					10,175		20,086
Gas (Mcf/d)		149,336		210,470					189,789		283,402					—		201,386					125,831		255,762
NGL (b/d)		—		—					—		640					—		—					—		424
BOE/d		34,738		49,633					46,978		66,981					—		55,578					31,146		63,138
(1) Gross oil, natural gas, and NGL production in Egypt for the second quarter and six-month period of 2015 and 2014 were as follows:


									For the Quarter				For the Nine Months
	For the Quarter Ended June 30,				For the Six Months Ended June 30,				Ended September 30,				Ended September 30,
	2015		2014		2015		2014		2015		2014		2015		2014
Oil (b/d)		33,247		29,508		31,966		29,288		30,671		29,201		31,530		29,259
Gas (Mcf/d)		134,445		122,665		127,963		123,726		125,657		127,020		127,186		124,836
NGL (b/d)		404		295		374		187		334		242		360		205

The table below presents ~~second-quarter~~third-quarter and year-to-date 2015 and 2014 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,
					Increase							Increase							Increase							Increase
	2015		2014		(Decrease)			2015		2014		(Decrease)			2015		2014		(Decrease)			2015		2014		(Decrease)
Average Oil Price—Per barrel
Average Oil Price - Per barrel
United States	$	53.94	$	96.46		(44	%)	$	49.38	$	95.66		(48	%)	$	44.47	$	91.26		(51	%)	$	47.78	$	94.14		(49	%)
Canada		52.22		94.66		(45	%)		45.81		91.47		(50	%)		40.07		85.43		(53	%)		44.00		89.45		(51	%)
North America		53.75		96.24		(44	%)		48.97		95.15		(49	%)		43.99		90.58		(51	%)		47.36		93.58		(49	%)
Egypt		60.83		109.74		(45	%)		56.76		108.24		(48	%)		47.84		100.06		(52	%)		53.86		105.50		(49	%)
North Sea		64.03		109.33		(41	%)		56.86		108.00		(47	%)		49.46		95.80		(48	%)		54.42		104.13		(48	%)
International		62.02		109.57		(43	%)		56.80		108.14		(47	%)		48.47		98.41		(51	%)		54.08		104.95		(48	%)
Total⁽¹⁾		58.09		102.95		(44	%)		53.05		101.69		(48	%)		46.34		94.38		(51	%)		50.87		99.23		(49	%)
Average Natural Gas Price—Per Mcf
Average Natural Gas Price - Per Mcf
United States	$	2.21	$	4.51		(51	%)	$	2.42	$	4.75		(49	%)	$	2.57	$	3.94		(35	%)	$	2.47	$	4.48		(45	%)
Canada		2.34		4.21		(44	%)		2.46		4.30		(43	%)		2.39		4.04		(41	%)		2.44		4.22		(42	%)
North America		2.26		4.41		(49	%)		2.44		4.58		(47	%)		2.50		3.97		(37	%)		2.46		4.39		(44	%)
Egypt		2.91		2.96		(2	%)		2.92		2.99		(2	%)		2.87		2.91		(1	%)		2.90		2.96		(2	%)
North Sea		7.35		7.75		(5	%)		7.37		9.07		(19	%)		6.41		6.10		5	%		6.95		8.06		(14	%)
International		3.45		3.58		(4	%)		3.46		3.71		(7	%)		3.51		3.29		7	%		3.48		3.57		(2	%)
Total⁽²⁾		2.73		4.15		(34	%)		2.82		4.31		(35	%)		2.89		3.75		(23	%)		2.84		4.13		(31	%)
Average NGL Price—Per barrel
Average NGL Price - Per barrel
United States	$	10.11	$	27.06		(63	%)	$	10.52	$	28.86		(64	%)	$	8.20	$	26.39		(69	%)	$	9.70	$	27.96		(65	%)
Canada		4.41		31.67		(86	%)		7.74		37.56		(79	%)		3.23		33.50		(90	%)		6.12		36.40		(83	%)
North America		9.56		27.50		(65	%)		10.23		29.83		(66	%)		7.68		26.96		(72	%)		9.33		28.81		(68	%)
Egypt		28.82		57.67		(50	%)		32.23		59.05		(45	%)		27.04		52.80		(49	%)		30.62		56.57		(46	%)
North Sea		30.94		61.81		(50	%)		27.75		69.77		(60	%)		25.61		59.47		(57	%)		26.76		66.18		(60	%)
International		29.68		60.19		(51	%)		30.29		66.41		(54	%)		26.19		57.07		(54	%)		28.71		63.01		(54	%)
Total		10.21		28.64		(64	%)		10.91		30.86		(65	%)		8.38		27.84		(70	%)		10.01		29.78		(66	%)

Discontinued Operations — Argentina and Australia
Oil price ($/Bbl)	$	63.60	$	115.34				$	49.76	$	106.35				$	—	$	98.82				$	49.76	$	103.57
Gas price ($/Mcf)		3.88		4.40					4.07		4.07					—		4.70					4.07		4.24
NGL price ($/Bbl)		—		—					—		24.57					—		—					—		24.57

~~Second-Quarter~~Third-Quarter 2015 compared to ~~Second-Quarter~~Third-Quarter 2014

Crude Oil Revenues Crude oil revenues for the ~~second~~third quarter of 2015 totaled ~~$1.6~~$1.2 billion, a ~~$1.2~~$1.3 billion decrease from the comparative 2014 quarter. A ~~one~~3 percent ~~increase~~decrease in average daily production ~~increased second-quarter~~reduced third-quarter 2015 revenues by ~~$20~~$40 million compared to the prior-year quarter, while 4451 percent lower realized prices decreased revenues by ~~$1.2~~$1.3 billion. Crude oil prices realized in the ~~second~~third quarter of 2015 averaged ~~$58.09~~$46.34 per barrel, compared with ~~$102.95~~$94.38 in the comparative prior-year quarter. Crude oil accounted for 8277 percent of oil and gas production revenues and 5453 percent of worldwide production in the ~~second~~third quarter of 2015.

Worldwide oil production ~~remained essentially flat~~dropped slightly from the ~~second~~third quarter of 2014, as production growth from our North American onshore area and higher net production in Egypt, as a function of our production sharing contracts, was offset by production related to divested properties. Exclusive of production from divested assets during 2014 and 2015, oil production increased ~~18.7~~5.7 Mb/d.

Natural Gas RevenuesGas revenues for the ~~second~~third quarter of 2015 totaled ~~$295~~$309 million, down 4231 percent from the ~~second~~third quarter of 2014. An 11 percent decrease in average production reduced natural gas revenues by ~~$36~~$39 million as compared to the prior-year quarter, while a 3423 percent decrease in average realized prices decreased revenues by ~~$174~~$103 million. Natural gas accounted for 1520 percent of our oil and gas production revenues and 3536 percent of our equivalent production.

Worldwide natural gas production was ~~145 million cubic feet per day (MMcf/d)~~146 MMcf/d lower than the ~~second~~third quarter of 2014, primarily the result of divestitures during 2014. Exclusive of production from these divested assets, our worldwide gas production increased by ~~64.5~~14.7 MMcf/dd. North Sea production was up on a full quarter of production ~~growth from our~~in 2015, as maintenance performed in the third quarter of 2014 impacted prior year results. Our North American ~~onshore~~Permian area ~~and higher net~~ production ~~in Egypt~~increased 14 percent as a ~~function~~result of ~~our production sharing contracts.~~drilling activity in the region.

NGL RevenuesNGL revenues for the ~~second~~third quarter of 2015 totaled ~~$58~~$50 million, down ~~$111~~$127 million from the ~~second~~third quarter of 2014. A decrease in average NGL production by 38 percent compared to the prior-year quarter reduced NGL revenues by $2$4 million, while a 6470 percent decrease in average realized prices decreased revenues by ~~$109~~$123 million. NGLs accounted for ~~nearly~~ 3 percent of our oil and gas production revenues and 1112 percent of our equivalent production during the ~~second~~third quarter of 2015.

Worldwide production of NGLs decreased ~~1.7~~5.3 Mb/d to ~~63.0~~63.8 Mb/d in the ~~second~~third quarter of 2015, primarily the result of 2014 divestitures and natural declines in our midcontinent area. Exclusive of production from divested assets, our worldwide NGL production increased ~~8.2~~4.3 Mb/d on production growth from our North American onshore ~~area.~~area and international regions.

Crude Oil Revenues Crude oil revenues for the first ~~six~~nine months of 2015 totaled ~~$2.9~~$4.1 billion, ~~$2.6~~$3.9 billion lower than the comparative 2014 period, ~~the result of~~primarily driven by a ~~1 percent increase in worldwide production and a 48~~49 percent decrease in average realized prices. Crude oil accounted for 8079 percent of oil and gas production revenues and 54 percent of worldwide production for the first ~~six~~nine months of 2015, and 7980 percent of production revenues and 50 percent of worldwide production for the 2014 comparative period. ~~Lower~~Slightly lower production volumes reduced revenues by ~~$39~~$6 million compared to the first ~~six~~nine months of 2014, while lower realized prices reduced revenues by ~~$2.6~~$3.9 billion. Crude oil prices realized in the first ~~six~~nine months of 2015 averaged ~~$53.05~~$50.87 per barrel, compared with ~~$101.69~~$99.23 in the comparative prior-year period.

Worldwide production remained essentially flat in the first ~~six~~nine months of 2015 from the same period last year, ~~primarily~~ as ~~a result of~~ production growth in our North American onshore areas and Egypt region was completely offset by ~~divestitures during 2014.~~2014 divestitures. Exclusive of production from these divested assets, worldwide production increased ~~20.0~~15.2 Mb/~~d. Production increased 11 Mb/~~d, primarily the result of growth in our North American ~~onshore~~Onshore areas ~~on drilling~~ and ~~recompletion activity. Net~~higher net production in our Egypt region, ~~was 7.6 Mb/d higher primarily as~~ a function of our production sharing contracts.

Natural Gas RevenuesGas revenues for the first ~~six~~nine months of 2015 totaled ~~$0.6~~$0.9 billion, down 4440 percent from the comparative 2014 period. A 1513 percent decline in average production reduced natural gas revenues by ~~$102~~$141 million, while a 3531 percent decrease in average realized prices reduced revenues by ~~$368~~$471 million. Natural gas accounted for 1718 percent of our oil and gas production revenues and 35 percent of our equivalent production, compared to 1615 percent and 3938 percent, respectively, for the 2014 period.

Our worldwide natural gas production was ~~199~~182 MMcf/d lower than the first ~~six~~nine months of 2014, the result of divestitures in 2014. Exclusive of production from divested assets, worldwide production increased ~~43.7~~33.9 MMcf/d on higher production in the North American onshore areas and ~~higher net production~~the Beryl area in ~~Egypt as a function of our production sharing contracts.~~the North Sea.

NGL RevenuesNGL revenues for the first ~~six~~nine months of 2015 totaled ~~$116~~$166 million, down ~~$239~~$366 million from the comparative 2014 period. A 7 percent decrease in average production decreased NGL revenues by $9$13 million as compared to the prior-year period, while a 6566 percent decrease in average realized prices decreased revenues by ~~$230~~$353 million. NGLs accounted for nearly 3 percent of our oil and gas production revenues and 11 percent of our equivalent production during the first ~~six~~nine months of 2015.

Worldwide production of NGLs decreased ~~4.4~~4.8 Mb/d to ~~59.1~~60.6 Mb/d in the first ~~six~~nine months of 2015, primarily from natural declines in the midcontinent area ~~as well as~~and divestitures during 2014 and 2015. Exclusive of production from divested assets, our worldwide NGL production increased ~~6.9~~6.0 Mb/d driven by growth in our North American onshore areas.

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 Australia and 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,
	2015		2014		2015		2014		2015		2014		2015		2014		2015		2014		2015		2014		2015		2014		2015		2014
	(In millions)				(Per boe)				(In millions)				(Per boe)				(In millions)				(Per boe)				(In millions)				(Per boe)
Depreciation, depletion, and amortization:
Oil and gas property and equipment
Recurring	$	923	$	1,074	$	17.98	$	20.14	$	1,922	$	2,096	$	19.20	$	19.74	$	829	$	1,086	$	16.63	$	20.31	$	2,751	$	3,182	$	18.35	$	19.93
Additional		5,816		203		113.37		3.81		13,036		203		130.28		1.91		5,721		1,562		114.69		29.20		18,757		1,765		125.09		11.05
Other assets		83		81		1.61		1.51		166		159		1.66		1.50		79		87		1.58		1.63		245		246		1.63		1.54
Asset retirement obligation accretion		36		38		0.70		0.72		72		76		0.72		0.72		37		39		0.72		0.73		109		115		0.72		0.72
Lease operating costs		467		560		9.11		10.49		948		1,108		9.47		10.44		450		588		9.03		10.99		1,398		1,696		9.33		10.63
Gathering and transportation costs		49		66		0.97		1.24		105		136		1.06		1.27		58		67		1.15		1.28		163		203		1.08		1.28
Taxes other than income		55		177		1.07		3.31		128		358		1.28		3.37		104		124		2.09		2.32		232		482		1.55		3.02
Impairments																		367		—		7.36		—		367		—		2.45		—
General and administrative		111		113		2.16		2.13		193		221		1.93		2.08		86		111		1.74		2.07		279		332		1.86		2.08
Transaction, reorganization, and separation costs		66		14		1.28		0.26		120		32		1.20		0.30
Transaction, reorganization, and separation																		—		34		—		0.64		120		66		0.80		0.41
Financing costs, net		63		52		1.22		0.98		133		97		1.33		0.92		107		60		2.15		1.10		240		157		1.60		0.98


Total	$	7,669	$	2,378	$	149.47	$	44.59	$	16,823	$	4,486	$	168.13	$	42.25	$	7,838	$	3,758	$	157.14	$	70.27	$	24,661	$	8,244	$	164.46	$	51.64

Recurring Depreciation, Depletion, and Amortization (DD&A)Oil and gas property recurring DD&A expense of ~~$0.9 billion~~$829 million in the ~~second~~third quarter of 2015 decreased ~~$151~~$257 million compared to the prior-year quarter. Oil and gas property recurring DD&A expense of ~~$1.9~~$2.8 billion in the first ~~six~~nine months of 2015 decreased ~~$174~~$431 million compared to the prior-year period. The Company’s oil and gas property recurring DD&A rate decreased ~~$2.16~~$3.68 and ~~$0.54~~$1.58 per boe for the ~~second~~third quarter and first ~~six~~nine months of 2015, respectively, compared to the prior-year periods. The primary factor driving both lower absolute dollar expense and lower DD&A per boe rates was the reduction in the Company’s oil and gas property carrying values resulting from significant property write-downs incurred in the first ~~quarter~~and second quarters of 2015.

Additional DD&A Under 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 at 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.

As a result of a significant and sustained drop in commodity prices, Apache recorded non-cash after-tax write-downs of its proved oil and gas properties totaling ~~$4.7~~$3.7 billion and ~~$3.7~~$12.2 billion in the third quarter and first ~~and second quarters~~nine months of 2015, respectively. The following table reflects write-downs by country:


									For the Quarter Ended September 30, 2015				For the Nine Months Ended September 30, 2015
	For the Quarter Ended June 30, 2015				For the Six Months Ended June 30, 2015				Before tax		After tax		Before tax		After tax
	Before tax		After tax		Before tax		After tax		(In millions)
	(In millions)
U.S.	$	4,318	$	2,785	$	9,554	$	6,162	$	4,301	$	2,774	$	13,855	$	8,937
Canada		835		617		2,187		1,628		973		719		3,160		2,347
North Sea		663		331		1,295		647		447		223		1,742		871

Total impairment	$	5,816	$	3,733	$	13,036	$	8,437	$	5,721	$	3,716	$	18,757	$	12,155

If commodity prices do not recover significantly from current levels, the Company expects further write-downs of the carrying value of its oil and gas properties as the full cost ceiling limitation was calculated using a historical 12-month pricing average that included oil prices from the ~~last half~~fourth quarter of 2014. These prices were significantly higher than current commodity futures prices. To estimate the full cost ceiling limitation for the remainder of 2015, had the Company utilized commodity futures prices as of ~~June~~September 30, 2015 for the remaining ~~six~~three months of 2015 in lieu of using historical commodity prices for the last ~~six~~three months of 2014 to calculate the 12 month unweighted arithmetic average price, the write-down as of ~~June~~September 30, 2015 would have been higher by ~~$5.5~~$3.7 billion ($~~3.5~~2.4 billion net of tax).

Lease Operating Expenses (LOE)LOE decreased ~~$93~~$138 million, or 1723 percent, for the quarter, and ~~$160~~$298 million, or 1418 percent, for the ~~six month~~nine-month period, on an absolute dollar basis relative to the comparable periods of 2014. On a ~~per unit~~per-unit basis, LOE decreased 1318 percent to ~~$9.11~~$9.03 per boe for the ~~second~~third quarter of 2015, ~~as compared to the same prior-year period,~~ and ~~decreased 9~~12 percent to ~~$9.47~~$9.33 per boe for the first ~~six~~nine months of 2015, as compared to the prior-year ~~six-month period. The following table identifies changes in Apache’s LOE rate between~~periods. These reductions reflect our continued focus on cost reductions consistent with the ~~second quarters and six-month periods of 2015 and 2014.~~current price environment.

Gathering and TransportationGathering and transportation costs totaled ~~$49~~$58 million and ~~$105~~$163 million in the ~~second~~third quarter and first ~~six~~nine months of 2015, respectively, down ~~$17~~$9 million and ~~$31~~$40 million from the ~~second~~third quarter and first ~~six~~nine months of 2014, respectively. The decrease was driven primarily by North American onshore divestitures, partially offset by an increase in production and rate changes in the Permian Basin and increased export volumes in Egypt.

Taxes other than IncomeTaxes other than income totaled ~~$55~~$104 million and ~~$128~~$232 million for the ~~second~~third quarter and the first ~~six~~nine months of 2015, respectively, a decrease of ~~$122~~$20 million and ~~$230~~$250 million, respectively, from the comparative prior-year periods. The following table presents a comparison of these expenses:


	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,
	2015		2014		2015		2014		2015		2014		2015		2014
	(In millions)								(In millions)

U.K. PRT									$	51	$	16	$	58	$	170
Severance taxes	$	33	$	51	$	63	$	124		31		74		94		198
Ad valorem taxes		18		22		42		62		18		26		60		89
U.K. PRT and Other		4		104		23		172
Other										4		8		20		25

Total Taxes other than income	$	55	$	177	$	128	$	358	$	104	$	124	$	232	$	482

The North Sea Petroleum Revenue Tax (PRT) is assessed on qualifying fields in the U.K. North Sea. For the ~~second~~third quarter of 2015, U.K. PRT was ~~$98~~$35 million ~~lower~~higher than the 2014 period as a result of ~~lower revenues recorded~~changes in capital spending and other adjustments during the second ~~quarter.~~and third quarters of 2015. Severance tax expense and ad valorem tax expense decreased ~~$18~~$43 million and $4$8 million, respectively, on lower oil and gas prices and divestitures made throughout the last year.

U.K. PRT for the first ~~six~~nine months of 2015 was ~~$147~~$112 million lower when compared to the 2014 period as a result of a decrease in production revenue offset by lower capital expenditures. For the first ~~six~~nine months of 2015, lower oil prices and property divestitures lowered severance taxes by ~~$61~~$104 million as compared to the first ~~six~~nine months of 2014. Ad valorem tax decreased ~~$20~~$29 million in the first ~~half~~nine months of 2015 compared to 2014 as a result of property divestitures.

Impairments For the quarter and nine months ended September 30, 2015, the Company recorded asset impairments totaling $367 million in connection with fair value assessments, including $210 million for the impairment of gathering, transmission, and processing (GTP) facilities, $148 million for the impairment of an equity method investment, and $9 million for inventory write-downs.

General and Administrative Expenses General and administrative expenses (G&A) for the ~~second~~third quarter of 2015 decreased $2$25 million, or 23 percent, from the ~~second~~third quarter of 2014 on an absolute basis and ~~was essentially flat~~decreased $0.33 on a per-unit basis. For the first ~~six~~nine months of 2015 G&A decreased ~~$28~~$53 million, or 16 percent, on an absolute basis from the comparable 2014 period and decreased ~~$0.15~~$0.22 per boe on a per-unit basis. These reductions reflect our continued focus on cost reductions consistent with the current price environment.

Transaction, Reorganization, and Separation ~~Costs~~The Company incurred ~~$66 million in the second quarter of 2015 and~~ $120 million for the ~~year~~nine months of 2015 related to our recent divestiture activity and company reorganization. The cost incurred for the year includes approximately $60 million for executive and employee ~~separation costs;~~separation; $25 million associated with the closing of our office in Tulsa, consolidating office space in Houston, and other reorganization efforts; and $35 million related to transaction costs for Australia and other transactions.

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


													For the Quarter Ended September 30,						For the Nine Months Ended September 30,
	For the Quarter Ended June 30,						For the Six Months Ended June 30,						2015			2014			2015			2014
	2015			2014			2015			2014			(In millions)
	(In millions)
Interest expense	$	123		$	124		$	251		$	248		$	120		$	125		$	371		$	373
Amortization of deferred loan costs		2			1			4			3			6			2			10			5
Capitalized interest		(59	)		(72	)		(117	)		(150	)		(56	)		(66	)		(173	)		(216	)
Loss on extinguishment of debt														39			—			39			—
Interest income		(3	)		(1	)		(5	)		(4	)		(2	)		(1	)		(7	)		(5	)

Financing costs, net	$	63		$	52		$	133		$	97		$	107		$	60		$	240		$	157

Net financing costs were up ~~$11~~$47 million and ~~$36~~$83 million in the ~~second~~third quarter and first ~~six~~nine months of 2015, respectively, compared to the same 2014 ~~periods. The primary factor was~~periods, driven by a loss on the ~~decrease in~~early extinguishment of debt during the third quarter of 2015. Apache also had lower capitalized interest of ~~$13~~$10 million and ~~$33~~$43 million in the ~~second~~third quarter and first ~~six~~nine months of 2015, ~~respectively. Lower capitalized interest was~~respectively, compared to the prior-year periods as a result of lower project ~~activities during the quarter and first half of 2015 compared to the prior year periods.~~activities.

Provision for Income TaxesThe Company estimates its annual effective income tax rate for continuing operations in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Non-cash write-downs of the carrying value of the Company’s proved oil and gas properties, statutory tax rate changes, and other significant or unusual items are recognized as discrete items in the quarter in which they occur.

During the ~~second~~third quarter of 2015 Apache’s effective tax rate was primarily impacted by an increase in the amount of valuation allowances. ~~The~~With the further commodity price declines since the second quarter, management continues to assess the potential realization of its deferred tax assets. In the third quarter, the Company ~~repatriated~~recorded a deferred tax expense of $1.1 billion and $69 million related to an increase in valuation allowances associated with U.S. foreign tax credits and net operating loss carryforwards, respectively. In addition to the allowance recorded during the third quarter, the Company had previously recorded tax expense of $853 million in the second quarter of 2015 related to an increase in valuation allowance associated with management’s assessment on the realizability of U.S. foreign tax credits subsequent to repatriating the majority of net cash proceeds from the Kitimat LNG project and Australia ~~divestitures and~~divestitures. The Company is ~~now~~ positioned to efficiently repatriate future foreign earnings. The Company utilized an existing deferred tax asset related to net operating losses to offset a portion of the taxable income from the repatriated proceeds. In addition, the Company established a deferred tax asset related to the creditable foreign taxes that accompanied the repatriated proceeds. Management has assessed the potential to utilize foreign tax credit carryforwards and has determined that more likely than not a portion of this deferred tax asset will not be realized. Accordingly the Company recorded tax expense of $853 million related to an increase in valuation allowance associated with the foreign tax credit carryforward.

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.

Apache’s operating cash flows, both in the short-term and the long-term, are impacted by highly volatile oil and natural gas prices, as well as costs and sales volumes. Significant changes in commodity prices impact our revenues, earnings, and cash flows. These changes potentially impact our liquidity if costs do not trend with changes in commodity prices. Historically, costs have trended with commodity prices, albeit on a lag. Sales volumes also impact cash flows; however, they have a less volatile impact in the short-term.

Deterioration in commodity prices also impacts estimated quantities of proved reserves. In the first ~~half~~nine months of 2015, we recognized negative reserve revisions of approximately ~~five~~13 percent of our year-end 2014 estimated proved reserves as a result of lower prices. If realized prices for the remainder of 2015 approximate commodity future prices as of ~~June~~September 30, 2015, the Company is reasonably likely to report additional negative revisions, currently estimated at ~~five~~three to ~~seven~~five percent of year-end 2014 estimated proved reserves.

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 economically.

We believe the liquidity and capital resource alternatives available to Apache, combined with proactive measures to adjust our 2015 capital budget to reflect lower oil prices and anticipated operating cash flows, will be adequate to fund short-term and long-term operations, including our capital spending program, repayment of debt maturities, payment of dividends, and any amount that may ultimately be paid in connection with commitments and 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 2014 fiscal year.

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


	For the Six Months Ended June 30,					For the Nine Months Ended September 30,
	2015		2014			2015		2014
	(In millions)					(In millions)
Sources of Cash and Cash Equivalents:
Net cash provided by continuing operating activities	$	1,737	$	3,949		$	2,572	$	5,756
Proceeds from sale of Kitimat LNG		854		—			854		—
Proceeds from sales of Australian assets		4,693		—
Proceeds from Australian divestitures							4,693		—
Net cash provided by Argentina discontinued operations		—		788			—		788
Net cash from sale of Deepwater Gulf of Mexico assets							—		1,367
Proceeds from sale of other oil and gas properties		119		381			148		390
Net commercial paper and bank loan borrowings							—		1,246

							8,267		9,547
		7,403		5,118

Uses of Cash and Cash Equivalents:
Capital expenditures⁽¹⁾	$	3,081	$	4,714		$	3,957	$	7,088
Leasehold and property acquisitions		128		112			254		638
Net cash used by Australia discontinued operations		162		160			208		389
Restricted cash from sale of Deepwater Gulf of Mexico assets							—		545
Net commercial paper and bank loan repayments		1,570		1			1,570		—
Early redemption of fixed-rate debt							939		—
Dividends paid		189		176			283		271
Treasury stock activity, net		—		1,263			—		1,830
Distributions to noncontrolling interest		40		66			97		124
Other		52		8			73		58

		5,222		6,500			7,381		10,943

Increase (decrease) in cash and cash equivalents⁽²⁾	$	2,181	$	(1,382	)
Increase (decrease) in cash and cash equivalents						$	886	$	(1,396	)

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 2015 totaled ~~$1.7~~$2.6 billion, a decrease of ~~$2.2~~$3.2 billion from the first ~~six~~nine months of 2014. The decrease primarily reflects lower commodity prices and divestitures. Since the end of 2014, we have taken steps to reduce drilling, operating, and overhead costs, with a target of spending within cash flow in 2016.

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.

Kitimat LNG DivestitureDuring the second quarter of 2015, Apache completed the sale of its 50 percent interest in the Kitimat LNG project and related upstream acreage in the Horn River and Liard basins to Woodside for total proceeds of $854 million.

Australia Discontinued OperationsIn the second quarter of 2015, Apache completed the sale of its Wheatstone LNG project and associated upstream assets to Woodside for total proceeds of $2.8 billion. During the second quarter of 2015, Apache also completed the sale of its Australian subsidiary AEL to a consortium of private equity funds managed by Macquarie Capital Group Limited and Brookfield Asset Management Inc. for total proceeds of $1.9 billion.

The associated results of operations for the divested Australian assets and the losses on disposal are classified as discontinued operations in all periods presented in this Quarterly Report on Form 10-Q.

For more information regarding our acquisitions and divestitures, please see Note 2—Acquisitions and Divestitures in the notes to consolidated financial statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Capital ExpendituresWorldwide E&D expenditures for the first ~~six~~nine months of 2015 totaled ~~$3.0~~$3.8 billion, compared to ~~$4.4~~$6.6 billion for the first ~~six~~nine months of 2014. Apache’s E&D capital spending was primarily focused on North American onshore assets. In the North America onshore region, Apache operated an average of 1413 drilling rigs during the first ~~six~~nine months of 2015.

Apache also completed leasehold and property acquisitions totaling ~~$36~~$254 million and ~~$64~~$638 million during the ~~second quarters~~first nine months of 2015 and 2014, respectively. ~~For the first six months of 2015 and 2014, Apache had $128 million and $112 million in total leasehold and property acquisitions.~~ Our 2015 acquisition investments continue to focus on adding new leasehold positions to our North American onshore portfolio.

Apache’s investment in gas gathering, transmission, and processing (GTP) facilities totaled ~~$94~~$113 million during the first ~~six~~nine months of 2015 compared to ~~$345~~$503 million in the comparative prior-year period. The Company’s investment in GTP was primarily associated with the Kitimat LNG project, which was divested in the second quarter of 2015.

Dividends For the ~~six-month~~nine-month periods ended ~~June~~September 30, 2015, and 2014, the Company paid ~~$189~~$283 million and ~~$176~~$271 million, respectively, in dividends on its common stock.

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


							September 30, 2015			December 31, 2014
	June 30, 2015			December 31, 2014			(In millions of dollars, except as indicated)
	(In millions of dollars, except as indicated)
Cash and cash equivalents	$	2,950		$	769		$	1,655		$	769
Total debt		9,676			11,245			8,777			11,245
Equity		17,755			28,137			11,972			28,137
Available committed borrowing capacity		3,500			3,730			3,500			3,730
Percent of total debt-to-capitalization		35	%		29	%		42	%		29	%

Cash and cash equivalents The Company had ~~$3.0~~$1.7 billion in cash and cash equivalents as of ~~June~~September 30, 2015, compared to $769 million at December 31, 2014. At ~~June~~September 30, 2015, approximately ~~$1.0~~$1.2 billion 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. The majority of the cash is invested in highly liquid, investment grade securities with maturities of three months or less at the time of purchase.

DebtAs of ~~June~~September 30, 2015, outstanding debt, which consisted of notes and debentures, ~~commercial paper, committed bank facilities,~~totaled $8.8 billion. As of September 30, 2015, Apache had $416,000 of notes due June 2016 classified as short-term debt on the consolidated balance sheet.

On September 1, 2015, the Company fully redeemed its $500 million 5.625% notes due in 2017 and ~~uncommitted bank lines, totaled $9.7 billion. Current~~its $400 million 1.75% notes due in 2017. The notes were redeemed pursuant to the provisions of each respective note’s indenture. Apache paid the holders an aggregate of $939 million in cash reflecting principal and the premium to par, and an additional $8 million in accrued and unpaid interest.

After redeeming the 2017 notes, the Company had no debt ~~of $416,000 was outstanding as of June 30, 2015.~~maturing within the next two years, with $550 million due in 2018 and $150 million due in 2019.

Available committed borrowing capacity In June 2015, the Company entered into a $3.5 billion five-year revolving credit facility which matures in June 2020. Proceeds from borrowings may be used for general corporate purposes. Apache’s available borrowing capacity under this facility supports its commercial paper program. In connection with entry into the $3.5 billion facility, Apache terminated existing credit facilities totaling $5.3 billion.

The Company has available a $3.5 billion commercial paper program, which generally enables Apache to borrow funds for up to 270 days at competitive interest rates. As of ~~June~~September 30, 2015, the Company had no debt outstanding under commercial paper, committed bank facilities, and uncommitted bank lines.

The Company was in compliance with the terms of all credit facilities as of ~~June~~September 30, 2015.

On July 30, 2015, the Company gave notice to fully redeem its $500 million 5.625% notes due in 2017 and its $400 million 1.75% notes due in 2017 on September 1, 2015. The notes are being redeemed pursuant to the provisions of each respective note’s indenture using cash on hand.

~~Percent of total debt-to-capitalization~~~~The Company’s debt-to-capitalization ratio at June 30, 2015, and December 31, 2014, was 35 percent and 29 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, political climate, and global supply and demand. Our average crude oil realizations have decreased 51 percent to ~~$58.09~~$46.34 per barrel in the ~~second~~third quarter of 2015 from ~~$102.95~~$94.38 per barrel in the comparable period of 2014. Our average natural gas price realizations have ~~also~~ decreased 3423 percent to ~~$2.73~~$2.89 per Mcf in the ~~second~~third quarter of 2015 from ~~$4.15~~$3.75 per Mcf in the comparable period of 2014.

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. Apache periodically uses futures contracts, swaps, and options to mitigate commodity price risk. Apache does not hold or issue derivative instruments for trading purposes. As of ~~June~~September 30, 2015, Apache had no open commodity derivative positions.

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 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 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 ~~$141~~$133 million would result from a 10 percent weakening or strengthening, respectively, in the Canadian dollar and British pound as of ~~June~~September 30, 2015.

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, 2014, 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.

John J. Christmann, the Company’s Chief Executive Officer and President, in his capacity as principal executive officer, and Stephen J. Riney, the Company’s Executive Vice President and Chief Financial Officer, in his capacity as principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~June~~September 30, 2015, 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 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (filed with the SEC on February 27, 2015) and Note 7—Commitments and Contingencies in the notes to the consolidated financial statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q, 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, 2014, and Part I, Item 3—Quantitative and Qualitative Disclosures About Market Risk of this Quarterly Report on Form 10-Q.


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).	–	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	–	Certificate of Amendment of Restated Certificate of Incorporation of Registrant, dated May 14, 2015, as filed with the Secretary of State of Delaware on May 14, 2015 (incorporated by reference to Exhibit 3.2 to Registrant’s Current Report on Form 8-K filed May 20, 2015, SEC File No. 001-4300).	–	Certificate of Amendment of Restated Certificate of Incorporation of Registrant, dated May 14, 2015, as filed with the Secretary of State of Delaware on May 14, 2015 (incorporated by reference to Exhibit 3.2 to Registrant’s Current Report on Form 8-K filed May 20, 2015, SEC File No. 001-4300).

3.3	–	Bylaws of Registrant, as amended May 14, 2015 (incorporated by reference to Exhibit 3.3 to Registrant’s Current Report on Form 8-K filed May 20, 2015, SEC File No. 001-4300).	–	Bylaws of Registrant, as amended May 14, 2015 (incorporated by reference to Exhibit 3.3 to Registrant’s Current Report on Form 8-K filed May 20, 2015, SEC File No. 001-4300).

*10.1	–	2015 Employee Release and Settlement Agreement between Registrant and Michael S. Bahorich, dated April 8, 2015.	–	First Amendment to Credit Agreement, dated as of September 9, 2015, among Apache Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents party thereto, amending Credit Agreement, dated as of June 4, 2015, among Apache Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A. and Citibank, N.A., as Co-Syndication Agents, and Royal Bank of Canada, HSBC Bank USA, National Association, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Wells Fargo Bank, National Association, and Mizuho Bank, Ltd., as Co-Documentation Agents.

*10.2	–	Amendment of 2014 Performance Program (Business Performance) Award Agreement (2011 Omnibus Equity Compensation Plan), effective June 30, 2015, between Registrant and Michael S. Bahorich.	–	Apache Corporation Executive Termination Policy.

*10.3	–	Amendment of Stock Option Grants (2011 Omnibus Equity Compensation Plan), effective June 30, 2015, between Registrant and Michael S. Bahorich.

*10.4	–	Amendment of Restricted Stock Unit Awards (2011 Omnibus Equity Compensation Plan), effective June 30, 2015, between Registrant and Michael S. Bahorich.

*10.5	–	Apache Corporation Non-Employee Directors’ Compensation Plan, as amended and restated May 14, 2015.

*10.6	–	Apache Corporation Non-Employee Directors’ Restricted Stock Units Program, as amended and restated May 14, 2015.

10.7	–	Credit Agreement, dated as of June 4, 2015, among Apache Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A. and Citibank, N.A., as Co-Syndication Agents, and Royal Bank of Canada, HSBC Bank USA, National Association, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Wells Fargo Bank, National Association, and Mizuho Bank, Ltd., as Co-Documentation Agents (incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed June 9, 2015, SEC File No. 001-4300).

*31.1	–	Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act) by Principal Executive Officer.	–	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.	–	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.	–	Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Executive Officer and Principal Financial Officer.

*101.INS	–	XBRL Instance Document.	–	XBRL Instance Document.

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

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

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

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

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

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.


	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2015		2014		2015		2014
Oil (b/d)		203,319		197,069		200,568		197,839
Gas (Mcf/d)		861,181		907,752		861,555		914,558
NGL (b/d)		2,549		2,698		2,436		1,679


	For the Quarter				For the Nine Months
	Ended September 30,				Ended September 30,
	2015		2014		2015		2014
Oil (b/d)		214,097		195,165		205,127		196,938
Gas (Mcf/d)		873,418		891,392		865,553		906,751
NGL (b/d)		2,406		1,978		2,426		1,780


For the Quarter Ended June 30,				For the Six Months Ended June 30,
	Per boe				Per boe
2014 LOE	$	10.49		2014 LOE	$	10.44
Divestitures⁽¹⁾		0.35		Divestitures⁽¹⁾		0.50
Repairs and maintenance		(0.20	)	Repairs and maintenance		(0.14	)
Non-operated property costs		(0.20	)	Non-operated property costs		(0.19	)
FX impact		(0.25	)	FX impact		(0.32	)
Power and fuel costs		(0.26	)	Power and fuel costs		(0.27	)
Labor and overhead costs		(0.27	)	Labor and overhead costs		(0.20	)
Other		(0.07	)	Other		0.12
Increased production		(0.48	)	Increased production		(0.47	)

2015 LOE	$	9.11		2015 LOE	$	9.47


		APACHE CORPORATION

Dated: ~~August 6, 2015~~	November 5, 2015	/s/ STEPHEN J. RINEY
		Stephen J. Riney
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

Dated: ~~August 6, 2015~~	November 5, 2015	/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 October 31, 2015			378,014,176


	For the Quarter Ended September 30, 2015				For the Quarter Ended September 30, 2014
	Before tax		After tax		Before tax		After tax
	(In millions)

U.S.	$	4,301	$	2,774	$	1,545	$	995
Canada		973		719		—		—
North Sea		447		223		17		7

Total impairment	$	5,721	$	3,716	$	1,562	$	1,002


	For the Nine Months Ended September 30, 2015				For the Nine Months Ended September 30, 2014
	Before tax		After tax		Before tax		After tax
	(In millions)

U.S.	$	13,855	$	8,937	$	1,545	$	995
Canada		3,160		2,347		—		—
North Sea		1,742		871		220		84

Total impairment	$	18,757	$	12,155	$	1,765	$	1,079


ITEM 2 –		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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