Exhibit 99.1
CONTACTS:
(Media): | Bill Mintz | (713) 296-7276 | ||
(Investor): | Robert Dye David Higgins | (713) 296-6662 (713) 296-6690 | ||
(Web site): | www.apachecorp.com |
FOR RELEASE AT 7:45 A.M. CENTRAL TIME
APACHE’S FIRST-QUARTER NET INCOME DOUBLES TO $1.02 BILLION
Houston, May 1, 2008 — Apache Corporation (NYSE, Nasdaq: APA) today reported first-quarter net income of $1.02 billion, or $3.03 per diluted common share, the company’s second consecutive quarter with earnings over $1 billion and a 108-percent increase from earnings of $492 million or $1.47 per share in the prior-year period. Excluding the non-cash impact of foreign currency fluctuations on deferred tax balances, Apache’s first-quarter adjusted earnings* were a record $2.99 per share, up from $1.48 per share in the prior-year period.
First-quarter production increased 4 percent from the year-earlier period to 557,631 barrels of oil equivalent (boe) per day, driven by higher oil output in the United States, the North Sea and Egypt.
Cash from operations before changes in operating assets and liabilities* totaled $1.8 billion, compared with $1.2 billion in the prior-year period.
“Apache delivered strong financial results for the first quarter and — just as important — significant exploration results in each of our ‘ACE’ core growth areas of Australia, Canada and Egypt,” said G. Steven Farris, Apache’s president and chief executive officer. “These successes — and the substantial inventory of wells we plan to drill in each area during 2008 — will fuel the long-term reserve and production growth of the company.
“We expect production to accelerate into the second half of 2008 with increased activity in the United States, Argentina and Canada along with first production through the Salam gas plant expansion project in Egypt,” Farris said.
Apache’s discoveries included the Brulimar-1, Julimar Southeast-1 and the Halyard-1 in Australia; the Hydra-1X in Egypt, and three wells in the Muskwa Shale in the Ootla area of British Columbia.
The three horizontal wells in the Ootla area test-flowed at rates of 8.8 million cubic feet (MMcf), 6.1 MMcf and 5.3 MMcf of gas per day; the wells are on production and flowing through Apache’s Missile gas plant. Apache and its partner EnCana have amassed 417,000 gross acres — the largest acreage position in the emerging play.
In Egypt, Apache received approval to build a third gas processing train with capacity of 100 MMcf per day. “We now project that our inventory of development projects will add 135,000 boe per day net to Apache’s interests by the end of 2012,” Farris said.
-end-
* | Adjusted earnings and cash from operations before changes in operating assets and liabilities are non-GAAP measures. Please see reconciliations below. |
NOTE: Apache will conduct a conference call to discuss its first-quarter results at 1 p.m. Central time on May 1, 2008. The call will be webcast from Apache’s Web site, http://www.apachecorp.com. The webcast replay and podcast will be archived on Apache’s Web site. The conference call will be available for delayed playback by telephone for one week beginning at approximately 3 p.m. on May 1. To access the telephone playback, dial (719) 457-0820 and provide Apache’s confirmation code, 8602447.
This news release contains certain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 including, without limitation, expectations, beliefs, plans and objectives regarding production and exploration activities. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions, risks and uncertainties, including, without limitation, risks, uncertainties and other factors discussed in our 2007Form 10-K and on our Web site. 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. We assume no duty to update these statements as of any future date.
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
FINANCIAL INFORMATION
(In thousands, except per share data)
For the Quarter | ||||||||
Ended March 31, | ||||||||
2008 | 2007 | |||||||
REVENUES AND OTHER: | ||||||||
Oil and gas production revenues | $ | 3,177,949 | $ | 2,023,067 | ||||
Other | 9,792 | (20,192 | ) | |||||
3,187,741 | 2,002,875 | |||||||
COSTS AND EXPENSES: | ||||||||
Depreciation, depletion and amortization | 620,489 | 530,913 | ||||||
Asset retirement obligation accretion | 26,497 | 24,064 | ||||||
Lease operating expenses | 454,638 | 382,107 | ||||||
Gathering and transportation | 40,976 | 31,263 | ||||||
Taxes other than income | 242,578 | 109,970 | ||||||
General and administrative | 82,423 | 67,862 | ||||||
Financing costs, net | 44,253 | 42,063 | ||||||
1,511,854 | 1,188,242 | |||||||
INCOME BEFORE INCOME TAXES | 1,675,887 | 814,633 | ||||||
Current income tax provision | 487,800 | 186,522 | ||||||
Deferred income tax provision | 166,574 | 135,162 | ||||||
NET INCOME | 1,021,513 | 492,949 | ||||||
Preferred stock dividends | 1,420 | 1,420 | ||||||
INCOME ATTRIBUTABLE TO COMMON STOCK | $ | 1,020,093 | $ | 491,529 | ||||
NET INCOME PER COMMON SHARE: | ||||||||
Basic | $ | 3.06 | $ | 1.48 | ||||
Diluted | $ | 3.03 | $ | 1.47 | ||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 333,393 | 331,213 | ||||||
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands)
FINANCIAL INFORMATION
(In thousands)
For the Quarter | ||||||||
Ended March 31, | ||||||||
2008 | 2007 | |||||||
COSTS INCURRED: (1) | ||||||||
North America exploration and development | $ | 743,356 | $ | 740,775 | ||||
International exploration and development | 608,463 | 426,369 | ||||||
$ | 1,351,819 | $ | 1,167,144 | |||||
Oil and gas property acquisitions | $ | 7,947 | $ | 1,026,896 | ||||
(1) Includes noncash asset retirement costs and capitalized interest as follows: | ||||||||
Capitalized interest | $ | 17,178 | $ | 21,776 | ||||
Asset retirement costs | $ | 85,072 | $ | 74,821 |
March 31, | December 31, | |||||||
2008 | 2007 | |||||||
BALANCE SHEET DATA: | ||||||||
Cash and Cash Equivalents | $ | 383,040 | $ | 125,823 | ||||
Other Current Assets | 2,670,063 | 2,626,428 | ||||||
Property and Equipment, net | 25,865,386 | 25,231,593 | ||||||
Restricted Cash | 228,134 | — | ||||||
Goodwill | 189,252 | 189,252 | ||||||
Other Assets | 480,200 | 461,555 | ||||||
Total Assets | $ | 29,816,075 | $ | 28,634,651 | ||||
Current Liabilities | $ | 3,000,482 | $ | 2,665,016 | ||||
Long-Term Debt | 3,911,924 | 4,011,605 | ||||||
Deferred Credits and Other Noncurrent Liabilities | 6,823,662 | 6,580,051 | ||||||
Shareholders’ Equity | 16,080,007 | 15,377,979 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 29,816,075 | $ | 28,634,651 | ||||
Common shares outstanding at end of period | 333,589 | 332,927 |
APACHE CORPORATION
FINANCIAL INFORMATION
FINANCIAL INFORMATION
For the Quarter | ||||||||
Ended March 31, | ||||||||
2008 | 2007 | |||||||
FINANCIAL DATA(In thousands, except per share data): | ||||||||
Revenues and other | $ | 3,187,741 | $ | 2,002,875 | ||||
Income Attributable to Common Stock | $ | 1,020,093 | $ | 491,529 | ||||
Basic Net Income Per Common Share | $ | 3.06 | $ | 1.48 | ||||
Diluted Net Income Per Common Share | $ | 3.03 | $ | 1.47 | ||||
Weighted Average Common Shares Outstanding | 333,393 | 331,213 | ||||||
Diluted Shares Outstanding | 336,549 | 333,302 | ||||||
PRODUCTION AND PRICING DATA: | ||||||||
OIL VOLUME — Barrels per day | ||||||||
United States | 100,679 | 74,652 | ||||||
Canada | 17,347 | 19,032 | ||||||
Egypt | 62,551 | 60,371 | ||||||
Australia | 9,420 | 12,141 | ||||||
North Sea | 58,771 | 53,671 | ||||||
Argentina | 12,225 | 10,797 | ||||||
Total | 260,993 | 230,664 | ||||||
AVERAGE OIL PRICE PER BARREL | ||||||||
United States | $ | 83.58 | $ | 55.89 | ||||
Canada | 93.21 | 53.62 | ||||||
Egypt | 97.85 | 56.64 | ||||||
Australia | 101.67 | 66.96 | ||||||
North Sea | 95.83 | 56.35 | ||||||
Argentina | 45.13 | 40.61 | ||||||
Total | 89.25 | 55.87 | ||||||
NATURAL GAS VOLUME — Mcf per day | ||||||||
United States | 744,014 | 739,828 | ||||||
Canada | 360,750 | 383,020 | ||||||
Egypt | 242,977 | 243,485 | ||||||
Australia | 191,180 | 194,961 | ||||||
North Sea | 2,605 | 1,889 | ||||||
Argentina | 165,133 | 198,239 | ||||||
Total | 1,706,659 | 1,761,422 | ||||||
AVERAGE NATURAL GAS PRICE PER MCF | ||||||||
United States | $ | 8.36 | $ | 6.96 | ||||
Canada | 7.56 | 6.44 | ||||||
Egypt | 5.20 | 4.06 | ||||||
Australia | 2.12 | 1.77 | ||||||
North Sea | 16.31 | 8.30 | ||||||
Argentina | 1.84 | 1.14 | ||||||
Total | 6.42 | 5.22 | ||||||
NGL VOLUME — Barrels per day | ||||||||
United States | 7,240 | 7,195 | ||||||
Canada | 2,235 | 2,232 | ||||||
Argentina | 2,720 | 2,635 | ||||||
Total | 12,195 | 12,062 | ||||||
AVERAGE NGL PRICE PER BARREL | ||||||||
United States | $ | 57.37 | $ | 35.02 | ||||
Canada | 53.35 | 31.47 | ||||||
Argentina | 48.18 | 31.10 | ||||||
Total | 54.58 | 33.51 |
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
FINANCIAL INFORMATION
(In thousands, except per share data)
NON-GAAP FINANCIAL MEASURES:
Reconciliation of income attributable to common stock to adjusted earnings:
The press release discusses Apache’s adjusted earnings. Adjusted earnings excludes certain items that management believes affect the comparability of operating results. The following provides the reasons adjusted earnings is a meaningful measure:
• | Management uses adjusted earnings to evaluate the company’s operational trends and performance relative to other oil and gas producing companies. | ||
• | Management believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings for items that may obscure underlying fundamentals and trends. | ||
• | The reconciling items below are the types of items management believes are frequently excluded by analysts when evaluating the operating trends and comparability of the company’s results. |
For the Quarter | ||||||||
Ended March 31, | ||||||||
2008 | 2007 | |||||||
Income Attributable to Common Stock (GAAP) | $ | 1,020,093 | $ | 491,529 | ||||
Adjustments: | ||||||||
Foreign currency fluctuation impact on deferred tax expense | (12,360 | ) | 2,396 | |||||
Adjusted Earnings (Non-GAAP) | $ | 1,007,733 | $ | 493,925 | ||||
Adjusted Earnings Per Share (Non-GAAP) | ||||||||
Basic | $ | 3.02 | $ | 1.49 | ||||
Diluted | $ | 2.99 | $ | 1.48 | ||||
Average Number of Common Shares | ||||||||
Basic | 333,393 | 331,213 | ||||||
Diluted | 336,549 | 333,302 | ||||||
Reconciliation of net cash provided by operating activities to
cash from operations before changes in operating assets and liabilities:
cash from operations before changes in operating assets and liabilities:
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, | ||||||||
2008 | 2007 | |||||||
Net cash provided by operating activities | $ | 1,808,404 | $ | 1,063,559 | ||||
Changes in operating assets and liabilities | 36,280 | 128,901 | ||||||
Cash from operations before changes in operating assets and liabilities | $ | 1,844,684 | $ | 1,192,460 | ||||