Exhibit 99.1
CONTACTS:
(Media): | Tony Lentini | (713/296-6227) | ||
Bill Mintz | (713/296-7276) | |||
(Investors): | Robert Dye | (713/296-6662) | ||
David Higgins | (713/296-6690) | |||
(Website): | www.apachecorp.com |
FOR RELEASE AT 7:45 A.M. CENTRAL TIME
APACHE EARNS $492 MILLION OR $1.47 PER SHARE IN FIRST QUARTER
ON 17 PERCENT PRODUCTION INCREASE
ON 17 PERCENT PRODUCTION INCREASE
Houston, April 26, 2007 — Apache Corporation (NYSE, Nasdaq: APA) today reported first-quarter earnings of $492 million or $1.47 per diluted common share as record production partially offset the impact of lower oil and gas prices and higher costs. Apache earned $660 million or $1.97 per share in the prior-year period.
Cash from operations before changes in operating assets and liabilities totaled $1.2 billion, flat with the prior-year period. (This is a non-GAAP measure; see reconciliation below.) Apache produced 536,297 barrels of oil equivalent per day in the first quarter, 17 percent above the prior-year period and up 1 percent from the fourth quarter of 2006.
“Apache had a solid first quarter, with substantial earnings and cash flow, increased production, and strong drilling results,” said G. Steven Farris, Apache’s president and chief executive officer. “Production should continue to grow, rising 6 to 10 percent over 2006 levels, excluding the impact of acquisition and divestiture activity.
“In addition to rising production in 2007, Apache is off to a good start drilling our arsenal of maturing exploration prospects in three core growth areas — Australia, Canada and Egypt,” Farris said.
In Australia, the recently announced Julimar-1 discovery test-flowed 85 million cubic feet (MMcf) per day from two zones. “We plan to appraise the discovery later in the year, drill the Brunello prospect — a look-alike east of Julimar — and drill the Rosella gas prospect located southwest of Apache’s
1-trillion-cubic-foot John Brookes Field, which is currently producing 250 MMcf of gas per day from three wells,” Farris said.
The Sedco 703 semi-submersible rig, which drilled the Julimar-1, has moved southwest to the Exmouth Basin and has commenced drilling on the Crosby West prospect, the first of five Exmouth exploration wells planned for 2007.
Apache’s earlier discoveries in the Exmouth Basin — Ravensworth, Crosby, Stickle, Harrison and Van Gogh — resulted in the Apache-operated Van Gogh and BHP-operated Pyrenees developments. Van Gogh is expected to come on line in 2009 and add 20,000 barrels per day of net production for Apache; Pyrenees, which is scheduled to receive a formal go-ahead in the near future, is on a similar schedule and also is expected to add 20,000 barrels of oil per day to Apache’s net production.
In Egypt, Apache’s Jade-1X discovered natural gas on the company’s Matruh Concession. The well tested 25.6 MMcf of gas per day from the Jurassic Upper Safa formation. The discovery also has significant reserve potential in multiple Cretaceous Alam El Bueib (AEB) reservoir objectives. Apache plans five additional Jurassic and two AEB exploratory wells on the Matruh Concession this year.
“In Canada, as a result of rebalancing our program to include more higher-risk, higher-potential-reward prospects, first-quarter production was generally flat despite substantial reductions in capital spending and the number of wells drilled,” Farris said. “Service costs are declining across North America, and the trend is more pronounced in Canada. If costs continue to decline, we may increase activity in shallow gas plays later in the year.”
At the end of the first quarter, Apache completed its $1 billion acquisition in the Permian Basin from Anadarko Petroleum. Net daily production from the fields is 9,000 barrels of oil and 19 MMcf of gas.
“Apache has developed several catalysts for growth,” Farris said. “Stay tuned — we have a quality exploration program that is just beginning to unfold.”
-end-
NOTE: Apache will webcast its quarterly conference call to discuss its results from its Web site,www.apachecorp.com, at 1 p.m. Central Time on Thursday, April 26. The webcast replay and podcast will be archived on Apache’s Web site and will be available for delayed playback by telephone one week beginning at approximately 5 p.m. on April 26. To access the telephone playback, dial (719) 457-0820 and provide Apache’s confirmation code, 3843190.
This news release contains certain “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995 including, without limitation, expectations, beliefs, plans and objectives regarding production and exploration and acquisition activities. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions and uncertainties. There is no assurance that Apache’s expectations will be realized, and actual results may differ materially from those expressed in the forward-looking statements.
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
FINANCIAL INFORMATION
(In thousands, except per share data)
For the Quarter | ||||||||
Ended March 31, | ||||||||
2007 | 2006 | |||||||
REVENUES AND OTHER: | ||||||||
Oil and gas production revenues | $ | 2,023,067 | $ | 1,950,298 | ||||
Other | (25,726 | ) | 48,804 | |||||
1,997,341 | 1,999,102 | |||||||
OPERATING EXPENSES: | ||||||||
Depreciation, depletion and amortization | 530,913 | 372,577 | ||||||
Asset retirement obligation accretion | 24,064 | 20,645 | ||||||
Lease operating expenses | 392,509 | 291,614 | ||||||
Gathering and transportation costs | 28,025 | 26,104 | ||||||
Severance and other taxes | 97,272 | 146,414 | ||||||
General and administrative | 67,862 | 45,672 | ||||||
Total operating expenses | 1,140,645 | 903,026 | ||||||
OPERATING INCOME | 856,696 | 1,096,076 | ||||||
FINANCING COSTS: | ||||||||
Interest expense | 65,732 | 42,863 | ||||||
Amortization of deferred loan costs | 694 | 508 | ||||||
Capitalized interest | (21,776 | ) | (14,193 | ) | ||||
Interest income | (2,587 | ) | (6,364 | ) | ||||
Net financing costs | 42,063 | 22,814 | ||||||
INCOME BEFORE INCOME TAXES | 814,633 | 1,073,262 | ||||||
Provision for income taxes | 321,684 | 412,341 | ||||||
NET INCOME | 492,949 | 660,921 | ||||||
Preferred stock dividends | 1,420 | 1,420 | ||||||
INCOME ATTRIBUTABLE TO COMMON STOCK | $ | 491,529 | $ | 659,501 | ||||
BASIC NET INCOME PER COMMON SHARE | $ | 1.48 | $ | 2.00 | ||||
DILUTED NET INCOME PER COMMON SHARE | $ | 1.47 | $ | 1.97 | ||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 331,213 | 330,416 | ||||||
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands)
FINANCIAL INFORMATION
(In thousands)
For the Quarter | ||||||||
Ended March 31, | ||||||||
2007 | 2006 | |||||||
COSTS INCURRED: (1) | ||||||||
North America exploration and development | $ | 740,775 | $ | 712,886 | ||||
International exploration and development | 426,369 | 224,315 | ||||||
$ | 1,167,144 | $ | 937,201 | |||||
Oil and gas property acquisitions | $ | 1,026,896 | $ | 262,646 | ||||
(1)Includes noncash asset retirement costs and capitalized interest as follows: | ||||||||
Capitalized interest | $ | 21,776 | $ | 14,193 | ||||
Asset retirement costs | $ | 74,821 | $ | 11,107 |
March 31, | December 31, | |||||||
2007 | 2006 | |||||||
BALANCE SHEET DATA: | ||||||||
Current Assets | $ | 2,371,771 | $ | 2,490,271 | ||||
Property and Equipment, net | 23,106,507 | 21,346,252 | ||||||
Goodwill | 189,252 | 189,252 | ||||||
Other Assets | 386,277 | 282,400 | ||||||
Total Assets | $ | 26,053,807 | $ | 24,308,175 | ||||
Current Liabilities | $ | 3,592,277 | $ | 3,811,612 | ||||
Long-Term Debt | 3,512,180 | 2,019,831 | ||||||
Deferred Credits and Other Noncurrent Liabilities | 5,501,495 | 5,285,679 | ||||||
Shareholders’ Equity | 13,447,855 | 13,191,053 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 26,053,807 | $ | 24,308,175 | ||||
Common shares outstanding at end of period | 331,160 | 330,737 |
NON-GAAP FINANCIAL MEASURES:
The press release discusses Apache’s cash from operations before changes in operating assets and liabilities. It is presented because management believes the information is useful for investors because it is used internally and widely accepted by those following the oil and gas industry as a financial indicator of a company’s ability to generate cash to internally fund exploration and development activities, fund dividend programs, and service debt. It is also used by research analysts to value and compare oil and gas exploration and production companies, and is frequently included in published research when providing investment recommendations. Cash from operations before changes in operating assets and liabilities, therefore, is an additional measure of liquidity, but is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing, or financing activities. The following table reconciles net cash provided by operating activities to cash from operations before changes in operating assets and liabilities.
For the Quarter | ||||||||
Ended March 31, | ||||||||
2007 | 2006 | |||||||
Net cash provided by operating activities | $ | 1,063,559 | $ | 1,043,284 | ||||
Changes in operating assets and liabilities | 128,901 | 180,916 | ||||||
Cash from operations before changes in operating assets and liabilities | $ | 1,192,460 | $ | 1,224,200 | ||||
APACHE CORPORATION
FINANCIAL INFORMATION
FINANCIAL INFORMATION
For the Quarter | ||||||||
Ended March 31, | ||||||||
2007 | 2006 | |||||||
FINANCIAL DATA(In thousands, except per share data): | ||||||||
Revenues and other | $ | 1,997,341 | $ | 1,999,102 | ||||
Income Attributable to Common Stock | $ | 491,529 | $ | 659,501 | ||||
Basic Net Income Per Common Share | $ | 1.48 | $ | 2.00 | ||||
Diluted Net Income Per Common Share | $ | 1.47 | $ | 1.97 | ||||
Weighted Average Common Shares Outstanding | 331,213 | 330,416 | ||||||
Diluted Shares Outstanding | 333,302 | 334,469 | ||||||
PRODUCTION AND PRICING DATA: | ||||||||
OIL VOLUME — Barrels per day | ||||||||
United States | 74,652 | 59,290 | ||||||
Canada | 19,032 | 21,691 | ||||||
Egypt | 60,371 | 57,292 | ||||||
Australia | 12,141 | 11,911 | ||||||
North Sea | 53,671 | 64,445 | ||||||
Argentina | 10,797 | 1,272 | ||||||
China | — | 4,559 | ||||||
Total | 230,664 | 220,460 | ||||||
AVERAGE OIL PRICE PER BARREL | ||||||||
United States | $ | 55.89 | $ | 50.22 | ||||
Canada | 53.62 | 54.17 | ||||||
Egypt | 56.64 | 60.89 | ||||||
Australia | 66.96 | 66.39 | ||||||
North Sea | 56.35 | 60.66 | ||||||
Argentina | 40.61 | 39.30 | ||||||
China | — | 58.12 | ||||||
Total | 55.87 | 57.41 | ||||||
NATURAL GAS VOLUME — Mcf per day | ||||||||
United States | 739,828 | 601,045 | ||||||
Canada | 383,020 | 385,982 | ||||||
Egypt | 243,485 | 212,874 | ||||||
Australia | 194,961 | 153,659 | ||||||
North Sea | 1,889 | 2,269 | ||||||
Argentina | 198,239 | 3,143 | ||||||
Total | 1,761,422 | 1,358,972 | ||||||
AVERAGE NATURAL GAS PRICE PER MCF | ||||||||
United States | $ | 6.96 | $ | 7.41 | ||||
Canada | 6.44 | 7.73 | ||||||
Egypt | 4.06 | 4.41 | ||||||
Australia | 1.77 | 1.67 | ||||||
North Sea | 8.30 | 9.98 | ||||||
Argentina | 1.14 | 1.19 | ||||||
Total | 5.22 | 6.37 | ||||||
NGL VOLUME — Barrels per day | ||||||||
United States | 7,195 | 7,553 | ||||||
Canada | 2,232 | 2,178 | ||||||
Argentina | 2,635 | — | ||||||
Total | 12,062 | 9,731 | ||||||
AVERAGE NGL PRICE PER BARREL | ||||||||
United States | $ | 35.02 | $ | 36.52 | ||||
Canada | 31.47 | 36.10 | ||||||
Argentina | 31.10 | — | ||||||
Total | 33.51 | 36.43 |