Exhibit 99.1
| | |
 | | NEWS RELEASE |
Apache Corporation announces second-quarter financial and operational results
| • | | Increased onshore North American production 3 percent sequentially to approximately 317,000 barrels of oil equivalent (boe) per day, driven by a 13,500-boe-per-day increase in Permian Basin production. |
| • | | Delivered International and Offshore production (adjusted for divestitures, Egypt tax barrels and minority interest) of 172,000 boe per day, with strong contributions from recent Egyptian oil discoveries. |
| • | | Exited the second quarter with total debt of $9.7 billion and $3.0 billion of cash, a significant improvement from $12.3 billion of total debt and $200 million of cash at March 31, 2015. |
| • | | Raising 2015 onshore North American production guidance from flat year over year to up 1 to 2 percent, which brings full-year guidance to 305,000 to 308,000 boe per day. |
| • | | Updating 2015 International and Offshore production guidance (adjusted for divestitures, Egypt tax barrels and minority interest) to 164,000 to 168,000 boe per day, a 5 to 8 percent increase over 2014 pro forma production, and up from the previous guidance of a ‘slight increase’. |
HOUSTON, Aug. 6, 2015 – Apache Corporation (NYSE, Nasdaq: APA) today announced a second-quarter 2015 net loss of $5.6 billion, or $14.83 per diluted common share, which includes an after-tax ceiling-test write down of $3.7 billion resulting from current low commodity-price levels and $1.9 billion of other items, mostly after-tax losses and tax expense associated with the company’s assets sold during the quarter. When adjusted for certain items that impact the comparability of results, Apache’ssecond-quarter net income totaled $82 million, or $0.22 per share. Adjusted EBITDA from continuing operations was $1.3 billion. Worldwide reported production for the second quarter was 564,000 boe per day. Including 35,000 boe per day of production associated with discontinued operations in Australia, Apache’s total production was 599,000 boe per day.
“I am pleased to report that Apache made excellent progress toward achieving the ambitious 2015 goals we laid out earlier this year,” said John J. Christmann, IV, Apache’s chief executive officer and president. “In February, we established a plan to maintain relatively flat pro forma production in 2015, despite an aggressive 60 percent reduction in budgeted capital expenditures from 2014 levels. Year to
date, our capital spending remains on track, but we have exceeded our production plan in the first half of 2015 and delivered correspondingly strong cash flow from continuing operations. As a result, we are raising our 2015 production guidance.”
During the quarter, Apache closed the sales of its LNG business and its remaining oil and gas assets in Australia, which served to more strategically align the company’s portfolio with its core competencies. “Exiting these businesses eliminated our exposure to projects with large capital-spending commitments and uncertain project timing,” Christmann said. “We deployed a portion of the proceeds from these sales to pay down debt, leaving our balance sheet in excellent shape and positioning us for success in this low-commodity-price environment. Importantly, during the first half of 2015, we quickly and cost effectively reduced our drilling and completion activity, commensurate with the deteriorating oil-and-gas price environment. We have also restructured our operational organization to better align with and support our more focused asset base.”
Apache has made significant progress on its cost structure through widespread efforts across the organization. In North America, the company is now realizing a 25 percent reduction in average per-well drilling and completion costs year over year. Lease-operating costs per barrel of oil equivalent during the quarter were down approximately 13 percent year over year, and we have taken steps to significantly reduce G&A from the beginning of the year that will be fully realized in 2016.
Asset-sale proceeds and liquidity
Apache received $5.7 billion in proceeds during the second quarter from the sales of its LNG interests and oil and gas properties in Australia and Canada, of which a portion was used to repay $2.7 billion of outstanding commercial paper and short-term credit facilities. At June 30, Apache’s long-term debt was $9.7 billion, and cash was approximately $3 billion. The company has excellent liquidity with low-cost, short-term borrowing capacity of $3.5 billion under its commercial paper program, which is supported by a senior credit facility that now extends through June 2020.
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Overhead-cost reductions and organizational restructuring
Management has taken a proactive and disciplined approach toward improving Apache’s organizational structure and efficiency. During the quarter, the company announced and implemented key organizational changes to better align its operational and technical teams with its refocused asset base. These changes include transitioning to an operating structure that will enable the allocation of resources and personnel quickly and efficiently in response to changing industry conditions. In addition, Apache has consolidated its technical expertise into centers of excellence, which will support the operating regions and strengthen the ability to share best practices around the globe.
Christmann noted, “We are implementing multiple overhead-reduction initiatives throughout the year and are on track to achieve a 25 to 30 percent reduction in cash G&A costs by year-end. We continue to work to identify further savings.” Following asset divestments and other initiatives to streamline the organization, headcount has been reduced by approximately 20 percent since the end of 2014.
Second-quarter capital spending and activity
Total capital expenditures (before leasehold acquisitions, capitalized interest, noncontrolling interest, LNG and Australia discontinued operations) in the second quarter were $857 million, down 28 percent from the first quarter. Apache operated an average of 34 rigs, drilled 78 wells and completed 108 wells during the second quarter, down from 61, 119 and 175, respectively, during the first quarter.
Second-quarter 2015 regional activity
| • | | Permian– Apache operated 10 rigs in the Permian and completed 53 wells during the second quarter, down from 15 operated rigs and 88 well completions in the first quarter. Production averaged 172,000 boe per day, nearly 9 percent higher than the first quarter. |
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| | • | | Delaware Basin – Apache averaged five rigs, unchanged from the prior quarter, and targeted the Bone Spring and Wolfcamp formations in the Pecos Bend and Waha areas. Completions in the Pecos Bend area exhibited very high deliverability and added approximately 4,000 boe per day, which helped drive overall Permian growth in the quarter. |
| | • | | Midland Basin– Apache averaged three rigs during the quarter, all targeting its southern Midland focus areas in Glasscock, Reagan, Upton and Midland counties. The company completed 20 wells during the quarter with notable results coming from the Upper Wolfcamp in the Wildfire area of Midland County and in the SRH area of northern Reagan County. Apache also had strong results from nine well completions in the Barnhart area. |
| | • | | Central Basin Platform/NW Shelf– Apache averaged two rigs during the quarter targeting the Yeso formation in its Cedar Lake play in Eddy County. In addition, the company has several high-rate-of-return, low-capital-cost initiatives underway in its CO2 and waterflood project areas that are helping to mitigate regional production declines. |
| • | | Midcontinent (formerly Central)– During the quarter, Apache ramped down to two rigs in the Midcontinent, where it targeted the Woodford/SCOOP, Canyon Lime and Marmaton plays. Production declined 7 percent, or 4,700 boe per day, sequentially as a result of declining completion activity. |
| • | | Gulf Coast (Eagle Ford)– Apache ramped down from an average of four rigs in the first quarter to zero during the second quarter. Production increased 20 percent, or 2,400 boe per day, sequentially as four new high-volume wells were placed on production. In the Ferguson Crossing area, the company placed on production its two most prolific wells in the play to date. The Walker 1H and 3H wells averaged 1,935 boe per day in their first 30 days of production, significantly exceeding Apache’s “Area A” type curve. The strong well results were the product of optimized frac design, spacing, fluid composition and proppant type. |
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| • | | Canada – Production was down 3 percent, or 1,900 boe per day, sequentially, which was a lower-than-expected decline, resulting primarily from decreased operational downtime and better well performance. |
| • | | Egypt– Gross production was up 2 percent sequentially on strong delineation-drilling results at the Ptah and Berenice oil fields. Apache also made several new field discoveries across multiple concessions during the second quarter, which increases its confidence in Egypt’s oil-production outlook for the remainder of 2015. In the second quarter, Apache drilled nine exploration wells with a success rate of 78 percent, significantly above its historical average exploration-success rate. |
| • | | North Sea – Production decreased modestly from first-quarter levels as the company performed two significant seasonal platform-maintenance turnarounds during the quarter. Absent the maintenance turnaround, which impacted production by approximately 3,300 boe per day, production would have been up sequentially in the second quarter. Apache drilled eight new wells in the North Sea with a 90 percent success rate, including its first-ever subsea-tieback exploration well in the Beryl area. |
“Apache’s second-quarter production performance was very strong both domestically and internationally,” Christmann remarked. “In North America, all of our key operating areas exceeded our expectations, and we delivered these results on a disciplined capital budget. Internationally, our drilling-success rate in Egypt and the North Sea was well above our historical success rate. As a result, we are raising our full-year 2015 North American production guidance to 305,000 to 308,000 boe per day and are updating our International and Offshore production guidance to a range of 164,000 to 168,000 boe per day. We are also tightening our 2015 capital-budget guidance range from $3.4 to $3.9 billion to $3.6 to $3.9 billion.”
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2015 planned activity increase
Greater capital efficiencies and lower costs are enabling the company to increase its onshore North American activity levels in the second half of the year. In North America, the company plans to average approximately 16 rigs in the second half of the year, 13 of which will be in the Permian Basin. Apache expects to reach total depth on an additional 40 to 50 wells and complete an additional 30 to 35 wells beyond its original plan for 2015. The company continues to anticipate that it will have a backlog of 80 to 100 drilled-but-uncompleted wells in North America at the end of 2015.
“This increase in activity during the second half of 2015 is not expected to have a material impact on our full-year 2015 production; however, it will establish a positive production trajectory in the fourth quarter and heading in to 2016,” Christmann concluded.
Conference call
Apache Corporation (NYSE, NASDAQ: APA) will host a conference call Thursday, Aug. 6, 2015, to discuss its second-quarter 2015 financial results. The call will begin at 1 p.m. CT (2 p.m. ET). To access the live audio webcast, please visit Apache’s website atwww.apachecorp.com.
A replay of the conference call will be available for seven days following the call. The number for the replay is 855-859-2056 or 404-537-3406 for international calls. The conference access code is 31405369.
Sign up for email alerts to be reminded of the webcast athttp://investor.apachecorp.com/alerts.cfm.
Additional Information
Additional information follows, including reconciliations of adjusted earnings, adjusted EBITDA and net debt (non-GAAP financial measures) to GAAP measures and information regarding pro forma production. Apache’s quarterly supplement is available atwww.apachecorp.com/financialdata.
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About Apache
Apache Corporation is an oil-and-gas exploration-and-production company with operations in the United States, Canada, Egypt and the United Kingdom. Apache posts announcements, operational updates, investor information and copies of all press releases on its website,www.apachecorp.com, and on its Media and Investor Center mobile application, which is available for free download from theApple App Store and theGoogle Play Store.
Non-GAAP financial measures
Apache’s financial information includes information prepared in conformity with generally accepted accounting standards (GAAP) as well as non-GAAP information. It is management’s intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted earnings, adjusted EBITDA and net debt are non-GAAP measures. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure.
Forward-looking statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “guidance” and similar references to future periods. These statements include, but are not limited to, statements about future plans, expectations and objectives for Apache’s operations, including statements about our capital plans, drilling plans, production expectations, asset sales and monetizations. Whileforward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See “Risk Factors” in our 2014 Form 10-K filed with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development or otherwise, except as may be required by law.
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Contacts
Investor: (281) 302-2286 Gary Clark
Media: (713) 296-7189 Castlen Kennedy
(713) 296-7276 Rory Sweeney
Website: www.apachecorp.com
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APACHE CORPORATION
STATEMENT OF CONSOLIDATED OPERATIONS
(Unaudited)
(In millions, except per share data)
| | | | | | | | | | | | | | | | |
| | | For the Quarter
Ended June 30, | | | For the Six Months
Ended June 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
REVENUES AND OTHER: | | | | | | | | | | | | | | | | |
Oil revenues | | $ | 1,599 | | | $ | 2,797 | | | $ | 2,879 | | | $ | 5,442 | |
Gas revenues | | | 295 | | | | 505 | | | | 595 | | | | 1,065 | |
NGL revenues | | | 58 | | | | 169 | | | | 116 | | | | 355 | |
| | | | | | | | | | | | | | | | |
Oil and gas production revenues | | | 1,952 | | | | 3,471 | | | | 3,590 | | | | 6,862 | |
Derivative instrument gains (losses), net | | | — | | | | (174 | ) | | | — | | | | (194 | ) |
Other | | | 25 | | | | (8 | ) | | | 17 | | | | 9 | |
| | | | | | | | | | | | | | | | |
| | | 1,977 | | | | 3,289 | | | | 3,607 | | | | 6,677 | |
| | | | | | | | | | | | | | | | |
COSTS AND EXPENSES: | | | | | | | | | | | | | | | | |
Depreciation, depletion and amortization | | | | | | | | | | | | | | | | |
Oil and gas property and equipment | | | | | | | | | | | | | | | | |
Recurring | | | 923 | | | | 1,074 | | | | 1,922 | | | | 2,096 | |
Additional | | | 5,816 | | | | 203 | | | | 13,036 | | | | 203 | |
Other assets | | | 83 | | | | 81 | | | | 166 | | | | 159 | |
Asset retirement obligation accretion | | | 36 | | | | 38 | | | | 72 | | | | 76 | |
Lease operating expenses | | | 467 | | | | 560 | | | | 948 | | | | 1,108 | |
Gathering and transportation | | | 49 | | | | 66 | | | | 105 | | | | 136 | |
Taxes other than income | | | 55 | | | | 177 | | | | 128 | | | | 358 | |
General and administrative | | | 111 | | | | 113 | | | | 193 | | | | 221 | |
Transaction, reorganization & separation costs | | | 66 | | | | 14 | | | | 120 | | | | 32 | |
Financing costs, net | | | 63 | | | | 52 | | | | 133 | | | | 97 | |
| | | | | | | | | | | | | | | | |
| | | 7,669 | | | | 2,378 | | | | 16,823 | | | | 4,486 | |
| | | | | | | | | | | | | | | | |
INCOME (LOSS) BEFORE INCOME TAXES | | | (5,692 | ) | | | 911 | | | | (13,216 | ) | | | 2,191 | |
Current income tax provision | | | 665 | | | | 373 | | | | 580 | | | | 740 | |
Deferred income tax provision (benefit) | | | (1,525 | ) | | | (19 | ) | | | (4,460 | ) | | | 144 | |
| | | | | | | | | | | | | | | | |
INCOME (LOSS) FROM CONTINUING OPS INCLUDING NONCONTROLLING INTEREST | | | (4,832 | ) | | | 557 | | | | (9,336 | ) | | | 1,307 | |
Income (Loss) from discontinued operations, net of tax | | | (732 | ) | | | 56 | | | | (864 | ) | | | (360 | ) |
| | | | | | | | | | | | | | | | |
INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST | | | (5,564 | ) | | | 613 | | | | (10,200 | ) | | | 947 | |
Net income attributable to noncontrolling interest | | | 36 | | | | 108 | | | | 51 | | | | 206 | |
| | | | | | | | | | | | | | | | |
INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK | | $ | (5,600 | ) | | $ | 505 | | | $ | (10,251 | ) | | $ | 741 | |
| | | | | | | | | | | | | | | | |
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 income (loss) attributable to common shareholders | | $ | (5,600 | ) | | $ | 505 | | | $ | (10,251 | ) | | $ | 741 | |
| | | | | | | | | | | | | | | | |
BASIC 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 | |
| | | | | | | | | | | | | | | | |
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 | ) |
| | | | | | | | | | | | | | | | |
Diluted net income (loss) per share | | $ | (14.83 | ) | | $ | 1.31 | | | $ | (27.17 | ) | | $ | 1.89 | |
| | | | | | | | | | | | | | | | |
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: | | | | | | | | | | | | | | | | |
Basic | | | 378 | | | | 385 | | | | 377 | | | | 390 | |
Diluted | | | 378 | | | | 387 | | | | 377 | | | | 392 | |
| | | | |
DIVIDENDS DECLARED PER COMMON SHARE | | $ | 0.25 | | | $ | 0.25 | | | $ | 0.50 | | | $ | 0.50 | |
APACHE CORPORATION
PRODUCTION INFORMATION
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | % Change | | | | | | | |
| | | 2Q15 | | | 1Q15 | | | 2Q14 | | | 2Q15 to
1Q15 | | | 2Q15 to
2Q14 | | | YTD 2015 | | | YTD 2014 | |
OIL VOLUME - Barrels per day | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Permian | | | 97,814 | | | | 94,461 | | | | 90,536 | | | | 4 | % | | | 8 | % | | | 96,146 | | | | 89,437 | |
Midcontinent (formerly Central) | | | 16,491 | | | | 18,509 | | | | 21,987 | | | | -11 | % | | | -25 | % | | | 17,495 | | | | 21,837 | |
Gulf Coast | | | 7,940 | | | | 7,784 | | | | 10,977 | | | | 2 | % | | | -28 | % | | | 7,862 | | | | 10,976 | |
Canada | | | 15,791 | | | | 16,875 | | | | 17,981 | | | | -6 | % | | | -12 | % | | | 16,330 | | | | 17,786 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
N.A. Onshore | | | 138,036 | | | | 137,629 | | | | 141,481 | | | | 0 | % | | | -2 | % | | | 137,833 | | | | 140,036 | |
Gulf of Mexico | | | 5,453 | | | | 5,885 | | | | 6,896 | | | | -7 | % | | | -21 | % | | | 5,668 | | | | 6,592 | |
GOM Shelf | | | — | | | | — | | | | 2 | | | | NM | | | | NM | | | | — | | | | 339 | |
Egypt(1) | | | 99,975 | | | | 91,971 | | | | 88,643 | | | | 9 | % | | | 13 | % | | | 95,995 | | | | 88,370 | |
North Sea | | | 58,873 | | | | 61,699 | | | | 61,610 | | | | -5 | % | | | -4 | % | | | 60,279 | | | | 60,358 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
International and Offshore(1) | | | 164,301 | | | | 159,555 | | | | 157,151 | | | | 3 | % | | | 5 | % | | | 161,942 | | | | 155,659 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total(1) | | | 302,337 | | | | 297,184 | | | | 298,632 | | | | 2 | % | | | 1 | % | | | 299,775 | | | | 295,695 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TOTAL LIQUIDS - Barrels per day | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Permian | | | 133,043 | | | | 122,445 | | | | 119,712 | | | | 9 | % | | | 11 | % | | | 127,773 | | | | 116,666 | |
Midcontinent | | | 32,359 | | | | 34,654 | | | | 45,725 | | | | -7 | % | | | -29 | % | | | 33,501 | | | | 45,931 | |
Gulf Coast | | | 11,264 | | | | 10,328 | | | | 13,522 | | | | 9 | % | | | -17 | % | | | 10,798 | | | | 13,460 | |
Canada | | | 21,616 | | | | 22,728 | | | | 23,902 | | | | -5 | % | | | -10 | % | | | 22,169 | | | | 24,626 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
N.A. Onshore | | | 198,282 | | | | 190,155 | | | | 202,861 | | | | 4 | % | | | -2 | % | | | 194,241 | | | | 200,683 | |
Gulf of Mexico | | | 5,976 | | | | 6,433 | | | | 8,062 | | | | -7 | % | | | -26 | % | | | 6,203 | | | | 7,591 | |
GOM Shelf | | | — | | | | — | | | | 2 | | | | NM | | | | NM | | | | — | | | | 384 | |
Egypt(1) | | | 101,189 | | | | 93,002 | | | | 89,527 | | | | 9 | % | | | 13 | % | | | 97,118 | | | | 88,930 | |
North Sea | | | 59,699 | | | | 62,585 | | | | 62,977 | | | | -5 | % | | | -5 | % | | | 61,135 | | | | 61,588 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
International and Offshore(1) | | | 166,864 | | | | 162,020 | | | | 160,568 | | | | 3 | % | | | 4 | % | | | 164,456 | | | | 158,493 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total(1) | | | 365,146 | | | | 352,175 | | | | 363,429 | | | | 4 | % | | | 0 | % | | | 358,697 | | | | 359,176 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NATURAL GAS VOLUME - Mcf per day | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Permian | | | 234,379 | | | | 216,968 | | | | 213,192 | | | | 8 | % | | | 10 | % | | | 225,722 | | | | 214,519 | |
Midcontinent | | | 175,967 | | | | 190,214 | | | | 264,948 | | | | -7 | % | | | -34 | % | | �� | 183,051 | | | | 262,636 | |
Gulf Coast | | | 16,252 | | | | 7,659 | | | | 95,765 | | | | 112 | % | | | -83 | % | | | 11,979 | | | | 97,494 | |
Canada | | | 282,971 | | | | 287,556 | | | | 316,740 | | | | -2 | % | | | -11 | % | | | 285,251 | | | | 347,057 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
N.A. Onshore | | | 709,569 | | | | 702,397 | | | | 890,645 | | | | 1 | % | | | -20 | % | | | 706,003 | | | | 921,706 | |
Gulf of Mexico | | | 20,190 | | | | 20,977 | | | | 22,804 | | | | -4 | % | | | -11 | % | | | 20,581 | | | | 19,517 | |
GOM Shelf | | | — | | | | — | | | | 261 | | | | NM | | | | NM | | | | — | | | | 674 | |
Egypt(1) | | | 405,544 | | | | 363,989 | | | | 367,950 | | | | 11 | % | | | 10 | % | | | 384,881 | | | | 372,628 | |
North Sea | | | 56,367 | | | | 50,445 | | | | 54,848 | | | | 12 | % | | | 3 | % | | | 53,423 | | | | 49,986 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
International and Offshore(1) | | | 482,101 | | | | 435,411 | | | | 445,863 | | | | 11 | % | | | 8 | % | | | 458,885 | | | | 442,805 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total(1) | | | 1,191,670 | | | | 1,137,808 | | | | 1,336,508 | | | | 5 | % | | | -11 | % | | | 1,164,888 | | | | 1,364,511 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
BOE per day | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Permian | | | 172,106 | | | | 158,606 | | | | 155,244 | | | | 9 | % | | | 11 | % | | | 165,394 | | | | 152,420 | |
Midcontinent | | | 61,688 | | | | 66,357 | | | | 89,883 | | | | -7 | % | | | -31 | % | | | 64,009 | | | | 89,704 | |
Gulf Coast | | | 13,973 | | | | 11,604 | | | | 29,483 | | | | 20 | % | | | -53 | % | | | 12,795 | | | | 29,710 | |
Canada | | | 68,778 | | | | 70,653 | | | | 76,692 | | | | -3 | % | | | -10 | % | | | 69,711 | | | | 82,469 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
N.A. Onshore | | | 316,545 | | | | 307,220 | | | | 351,302 | | | | 3 | % | | | -10 | % | | | 311,909 | | | | 354,303 | |
Gulf of Mexico | | | 9,340 | | | | 9,930 | | | | 11,862 | | | | -6 | % | | | -21 | % | | | 9,633 | | | | 10,843 | |
GOM Shelf | | | — | | | | — | | | | 46 | | | | NM | | | | NM | | | | — | | | | 496 | |
Egypt(1, 2) | | | 168,779 | | | | 153,667 | | | | 150,853 | | | | 10 | % | | | 12 | % | | | 161,264 | | | | 151,035 | |
North Sea | | | 69,094 | | | | 70,993 | | | | 72,118 | | | | -3 | % | | | -4 | % | | | 70,038 | | | | 69,918 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
International and Offshore(1) | | | 247,213 | | | | 234,590 | | | | 234,879 | | | | 5 | % | | | 5 | % | | | 240,935 | | | | 232,292 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total(1) | | | 563,758 | | | | 541,810 | | | | 586,181 | | | | 4 | % | | | -4 | % | | | 552,844 | | | | 586,595 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total excluding noncontrolling interests | | | 507,699 | | | | 490,561 | | | | 535,934 | | | | 3 | % | | | -5 | % | | | 499,177 | | | | 536,499 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
(1) Includes net production volumes attributed to our noncontrolling partner in Egypt below: | | | | | | | | | |
Oil (b/d) | | | 33,247 | | | | 30,671 | | | | 29,508 | | | | | | | | | | | | 31,966 | | | | 29,288 | |
Gas (Mcf/d) | | | 134,445 | | | | 121,408 | | | | 122,665 | | | | | | | | | | | | 127,963 | | | | 123,726 | |
NGL (b/d) | | | 404 | | | | 343 | | | | 295 | | | | | | | | | | | | 374 | | | | 187 | |
| | | | | | | |
(2) Egypt Gross Production - BOE per day | | | 349,398 | | | | 343,762 | | | | 351,059 | | | | 2 | % | | | 0 | % | | | 346,597 | | | | 351,944 | |
| | | | | | | |
Discontinued Operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Oil (b/d) | | | 9,849 | | | | 20,905 | | | | 14,555 | | | | | | | | | | | | 15,346 | | | | 19,107 | |
Gas (Mcf/d) | | | 149,336 | | | | 230,691 | | | | 210,470 | | | | | | | | | | | | 189,789 | | | | 283,402 | |
NGL (b/d) | | | — | | | | — | | | | — | | | | | | | | | | | | — | | | | 640 | |
BOE/d | | | 34,738 | | | | 59,353 | | | | 49,633 | | | | | | | | | | | | 46,978 | | | | 66,981 | |
APACHE CORPORATION
PRO FORMA PRODUCTION INFORMATION
Pro forma production excludes certain items that management believes affect the comparability of operating results for the periods presented. Pro forma production excludes production attributable to 1) divested assets, 2) noncontrolling interest in Egypt, and 3) Egypt tax barrels. Management uses pro forma production to evaluate the company’s operational trends and performance and believes it is useful to investors and other third parties.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | % Change | | | | | | | |
| | | 2Q15 | | | 1Q15 | | | 2Q14 | | | 2Q15 to
1Q15 | | | 2Q15 to
2Q14 | | | YTD 2015 | | | YTD 2014 | |
OIL VOLUME - Barrels per day | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Permian | | | 97,814 | | | | 94,461 | | | | 90,536 | | | | 4 | % | | | 8 | % | | | 96,146 | | | | 89,437 | |
Midcontinent (formerly Central) | | | 16,515 | | | | 18,514 | | | | 17,222 | | | | -11 | % | | | -4 | % | | | 17,509 | | | | 16,553 | |
Gulf Coast | | | 7,937 | | | | 7,752 | | | | 2,893 | | | | 2 | % | | | 174 | % | | | 7,845 | | | | 2,873 | |
Canada | | | 15,776 | | | | 16,817 | | | | 17,817 | | | | -6 | % | | | -11 | % | | | 16,294 | | | | 17,614 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
N.A. Onshore | | | 138,042 | | | | 137,544 | | | | 128,468 | | | | 0 | % | | | 7 | % | | | 137,794 | | | | 126,477 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gulf of Mexico | | | 5,453 | | | | 5,885 | | | | 6,896 | | | | -7 | % | | | -21 | % | | | 5,668 | | | | 6,592 | |
Egypt | | | 54,977 | | | | 54,558 | | | | 43,117 | | | | 1 | % | | | 28 | % | | | 54,769 | | | | 43,514 | |
North Sea | | | 58,164 | | | | 59,818 | | | | 58,971 | | | | -3 | % | | | -1 | % | | | 58,986 | | | | 57,039 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
International and Offshore | | | 118,594 | | | | 120,261 | | | | 108,984 | | | | -1 | % | | | 9 | % | | | 119,423 | | | | 107,145 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 256,636 | | | | 257,805 | | | | 237,452 | | | | 0 | % | | | 8 | % | | | 257,217 | | | | 233,622 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TOTAL LIQUIDS - Barrels per day | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Permian | | | 133,043 | | | | 122,445 | | | | 119,712 | | | | 9 | % | | | 11 | % | | | 127,773 | | | | 116,665 | |
Midcontinent | | | 32,265 | | | | 34,773 | | | | 32,990 | | | | -7 | % | | | -2 | % | | | 33,512 | | | | 32,116 | |
Gulf Coast | | | 11,266 | | | | 10,204 | | | | 3,712 | | | | 10 | % | | | 204 | % | | | 10,738 | | | | 3,571 | |
Canada | | | 21,575 | | | | 22,670 | | | | 23,257 | | | | -5 | % | | | -7 | % | | | 22,120 | | | | 23,511 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
N.A. Onshore | | | 198,149 | | | | 190,092 | | | | 179,671 | | | | 4 | % | | | 10 | % | | | 194,143 | | | | 175,863 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gulf of Mexico | | | 5,976 | | | | 6,433 | | | | 8,062 | | | | -7 | % | | | -26 | % | | | 6,203 | | | | 7,591 | |
Egypt | | | 55,648 | | | | 55,170 | | | | 43,572 | | | | 1 | % | | | 28 | % | | | 55,411 | | | | 43,805 | |
North Sea | | | 58,966 | | | | 60,657 | | | | 60,169 | | | | -3 | % | | | -2 | % | | | 59,807 | | | | 58,057 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
International and Offshore | | | 120,590 | | | | 122,260 | | | | 111,803 | | | | -1 | % | | | 8 | % | | | 121,421 | | | | 109,453 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 318,739 | | | | 312,352 | | | | 291,474 | | | | 2 | % | | | 9 | % | | | 315,564 | | | | 285,316 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NATURAL GAS VOLUME - Mcf per day | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Permian | | | 234,380 | | | | 216,968 | | | | 213,192 | | | | 8 | % | | | 10 | % | | | 225,721 | | | | 214,519 | |
Midcontinent | | | 176,345 | | | | 189,967 | | | | 175,416 | | | | -7 | % | | | 1 | % | | | 183,119 | | | | 170,782 | |
Gulf Coast | | | 16,333 | | | | 9,190 | | | | 8,892 | | | | 78 | % | | | 84 | % | | | 12,781 | | | | 9,107 | |
Canada | | | 282,651 | | | | 285,520 | | | | 287,603 | | | | -1 | % | | | -2 | % | | | 284,078 | | | | 289,169 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
N.A. Onshore | | | 709,709 | | | | 701,645 | | | | 685,103 | | | | 1 | % | | | 4 | % | | | 705,699 | | | | 683,577 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gulf of Mexico | | | 20,190 | | | | 20,977 | | | | 22,817 | | | | -4 | % | | | -12 | % | | | 20,581 | | | | 19,523 | |
Egypt | | | 233,797 | | | | 223,548 | | | | 181,791 | | | | 5 | % | | | 29 | % | | | 228,701 | | | | 187,310 | |
North Sea | | | 55,489 | | | | 49,325 | | | | 50,541 | | | | 12 | % | | | 10 | % | | | 52,424 | | | | 44,130 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
International and Offshore | | | 309,476 | | | | 293,850 | | | | 255,149 | | | | 5 | % | | | 21 | % | | | 301,706 | | | | 250,963 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 1,019,185 | | | | 995,495 | | | | 940,252 | | | | 2 | % | | | 8 | % | | | 1,007,405 | | | | 934,540 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
BOE per day | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Permian | | | 172,106 | | | | 158,606 | | | | 155,244 | | | | 9 | % | | | 11 | % | | | 165,393 | | | | 152,419 | |
Midcontinent | | | 61,655 | | | | 66,435 | | | | 62,225 | | | | -7 | % | | | -1 | % | | | 64,032 | | | | 60,580 | |
Gulf Coast | | | 13,988 | | | | 11,736 | | | | 5,194 | | | | 19 | % | | | 169 | % | | | 12,868 | | | | 5,089 | |
Canada | | | 68,684 | | | | 70,257 | | | | 71,191 | | | | -2 | % | | | -4 | % | | | 69,466 | | | | 71,706 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
N.A. Onshore | | | 316,433 | | | | 307,034 | | | | 293,854 | | | | 3 | % | | | 8 | % | | | 311,759 | | | | 289,794 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gulf of Mexico | | | 9,340 | | | | 9,930 | | | | 11,865 | | | | -6 | % | | | -21 | % | | | 9,633 | | | | 10,845 | |
Egypt | | | 94,615 | | | | 92,428 | | | | 73,871 | | | | 2 | % | | | 28 | % | | | 93,527 | | | | 75,023 | |
North Sea | | | 68,214 | | | | 68,878 | | | | 68,592 | | | | -1 | % | | | -1 | % | | | 68,544 | | | | 65,412 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
International and Offshore | | | 172,169 | | | | 171,236 | | | | 154,328 | | | | 1 | % | | | 12 | % | | | 171,704 | | | | 151,280 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 488,602 | | | | 478,270 | | | | 448,182 | | | | 2 | % | | | 9 | % | | | 483,463 | | | | 441,074 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
APACHE CORPORATION
PRICE INFORMATION
| | | | | | | | | | | | | | | | | | | | |
| | | 2Q15 | | | 1Q15 | | | 2Q14 | | | YTD 2015 | | | YTD 2014 | |
AVERAGE OIL PRICE PER BARREL | | | | | | | | | | | | | | | | | | | | |
Permian | | $ | 53.77 | | | $ | 44.44 | | | $ | 94.33 | | | $ | 49.21 | | | $ | 94.05 | |
Midcontinent (formerly Central) | | | 52.46 | | | | 44.50 | | | | 100.39 | | | | 48.27 | | | | 97.10 | |
Gulf Coast | | | 56.79 | | | | 47.92 | | | | 103.81 | | | | 52.42 | | | | 102.84 | |
Canada | | | 52.22 | | | | 39.76 | | | | 94.66 | | | | 45.81 | | | | 91.47 | |
N.A. Onshore | | | 53.56 | | | | 44.07 | | | | 96.06 | | | | 48.85 | | | | 94.91 | |
Gulf of Mexico | | | 57.69 | | | | 45.87 | | | | 102.63 | | | | 51.59 | | | | 102.06 | |
Egypt | | | 60.83 | | | | 52.29 | | | | 109.74 | | | | 56.76 | | | | 108.24 | |
North Sea | | | 64.03 | | | | 49.95 | | | | 109.33 | | | | 56.86 | | | | 108.00 | |
Total | | | 58.09 | | | | 47.87 | | | | 102.95 | | | | 53.05 | | | | 101.69 | |
| | | | | |
AVERAGE NATURAL GAS PRICE PER MCF | | | | | | | | | | | | | | | | | | | | |
Permian | | $ | 2.24 | | | $ | 2.44 | | | $ | 4.48 | | | $ | 2.33 | | | $ | 4.63 | |
Midcontinent | | | 2.41 | | | | 2.93 | | | | 4.49 | | | | 2.68 | | | | 4.84 | |
Gulf Coast | | | 1.93 | | | | 1.42 | | | | 4.72 | | | | 1.77 | | | | 4.83 | |
Canada | | | 2.34 | | | | 2.58 | | | | 4.21 | | | | 2.46 | | | | 4.30 | |
N.A. Onshore | | | 2.31 | | | | 2.60 | | | | 4.41 | | | | 2.45 | | | | 4.62 | |
Gulf of Mexico | | | 2.61 | | | | 2.92 | | | | 4.35 | | | | 2.77 | | | | 4.71 | |
Egypt | | | 2.91 | | | | 2.92 | | | | 2.96 | | | | 2.92 | | | | 2.99 | |
North Sea | | | 7.35 | | | | 7.40 | | | | 7.75 | | | | 7.37 | | | | 9.07 | |
Total | | | 2.73 | | | | 2.93 | | | | 4.15 | | | | 2.82 | | | | 4.31 | |
| | | | | |
AVERAGE NGL PRICE PER BARREL | | | | | | | | | | | | | | | | | | | | |
Permian | | $ | 10.28 | | | $ | 11.62 | | | $ | 28.46 | | | $ | 10.87 | | | $ | 29.85 | |
Midcontinent | | | 8.82 | | | | 9.65 | | | | 25.03 | | | | 9.23 | | | | 27.74 | |
Gulf Coast | | | 13.75 | | | | 12.17 | | | | 27.86 | | | | 13.07 | | | | 31.76 | |
Canada | | | 4.41 | | | | 11.09 | | | | 31.67 | | | | 7.74 | | | | 37.56 | |
N.A. Onshore | | | 9.52 | | | | 10.98 | | | | 27.42 | | | | 10.20 | | | | 29.96 | |
Gulf of Mexico | | | 14.72 | | | | 13.77 | | | | 31.73 | | | | 14.24 | | | | 31.84 | |
Egypt | | | 28.82 | | | | 36.29 | | | | 57.67 | | | | 32.23 | | | | 59.05 | |
North Sea | | | 30.94 | | | | 24.74 | | | | 61.81 | | | | 27.75 | | | | 69.77 | |
Total | | | 10.21 | | | | 11.71 | | | | 28.64 | | | | 10.91 | | | | 30.86 | |
| | | | | |
Discontinued Operations: | | | | | | | | | | | | | | | | | | | | |
Oil price ($/Bbl) | | $ | 63.60 | | | $ | 43.17 | | | $ | 115.34 | | | $ | 49.76 | | | $ | 106.35 | |
Gas price ($/Mcf) | | | 3.88 | | | | 4.19 | | | | 4.40 | | | | 4.07 | | | | 4.07 | |
NGL price ($/Bbl) | | | — | | | | — | | | | — | | | | — | | | | 24.57 | |
APACHE CORPORATION
SUMMARY BALANCE SHEET INFORMATION
(Unaudited)
(In millions)
| | | | | | | | |
| | | June 30,
2015 | | | December 31,
2014 | |
Cash and Cash Equivalents | | $ | 2,950 | | | $ | 769 | |
Assets Held for Sale | | | — | | | | 1,628 | |
Other Current Assets | | | 2,543 | | | | 4,018 | |
Property and Equipment, net | | | 28,315 | | | | 48,076 | |
Goodwill | | | 87 | | | | 87 | |
Other Assets | | | 1,417 | | | | 1,374 | |
| | | | | | | | |
Total Assets | | $ | 35,312 | | | $ | 55,952 | |
| | | | | | | | |
Other Current Liabilities | | $ | 2,383 | | | $ | 3,664 | |
Long-Term Debt | | | 9,676 | | | | 11,245 | |
Deferred Credits and Other Noncurrent Liabilities | | | 5,498 | | | | 12,906 | |
Apache Shareholders’ Equity | | | 15,544 | | | | 25,937 | |
Noncontrolling interest | | | 2,211 | | | | 2,200 | |
| | | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 35,312 | | | $ | 55,952 | |
| | | | | | | | |
Common shares outstanding at end of period | | | 377 | | | | 377 | |
| | |
% of total debt-to-capitalization | | | 35 | % | | | 29 | % |
APACHE CORPORATION
SUMMARY OF COSTS INCURRED AND GTP CAPITAL INVESTMENTS
(Unaudited)
(In millions)
| | | | | | | | | | | | | | | | |
| | | For the Quarter
Ended June 30, | | | For the Six
Months
Ended June 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Costs Incurred in Oil and Gas Property: | | | | | | | | | | | | | | | | |
Acquisitions | | | | | | | | | | | | | | | | |
Proved | | $ | — | | | $ | 3 | | | $ | — | | | $ | 5 | |
Unproved | | | 36 | | | | 79 | | | | 128 | | | | 123 | |
Exploration and Development | | | 1,023 | | | | 2,475 | | | | 2,441 | | | | 4,984 | |
| | | | | | | | | | | | | | | | |
| | | 1,059 | | | | 2,557 | | | | 2,569 | | | | 5,112 | |
| | | | |
GTP Capital Investments: | | | | | | | | | | | | | | | | |
GTP Facilities | | | 36 | | | | 378 | | | | 260 | | | | 723 | |
| | | | | | | | | | | | | | | | |
Total Costs Incurred and GTP Capital Investments | | $ | 1,095 | | | $ | 2,935 | | | $ | 2,829 | | | $ | 5,835 | |
| | | | | | | | | | | | | | | | |
APACHE CORPORATION
NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
Reconciliation of income attributable to common stock to adjusted earnings
Adjusted earnings and adjusted earnings per share are non-GAAP financial measures. Adjusted earnings generally exclude certain items that management believes affect the comparability of operating results or are not related to Apache’s ongoing operations. Management uses adjusted earnings to evaluate the company’s operational trends and performance relative to other oil and gas companies. Management believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings for items that may obscure underlying fundamentals and trends.
| | | | | | | | | | | | | | | | |
| | | For the Quarter
Ended June 30, | | | For the Six Months
Ended June 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Income (Loss) Attributable to Common Stock (GAAP) | | $ | (5,600 | ) | | $ | 505 | | | $ | (10,251 | ) | | $ | 741 | |
| | | | |
Adjustments: | | | | | | | | | | | | | | | | |
Oil & gas property write-downs, net of tax | | | 3,734 | | | | 77 | | | | 8,438 | | | | 77 | |
Discontinued operations, net of tax | | | 732 | | | | (56 | ) | | | 864 | | | | 360 | |
Tax adjustments(1) | | | 1,173 | | | | — | | | | 758 | | | | (5 | ) |
Transaction, reorganization & separation costs, net of tax | | | 43 | | | | 9 | | | | 78 | | | | 21 | |
Rig stacking costs, net of tax | | | — | | | | 10 | | | | 28 | | | | 10 | |
Unrealized commodity derivative mark-to-market, net of tax | | | — | | | | 31 | | | | — | | | | (18 | ) |
| | | | | | | | | | | | | | | | |
Adjusted Earnings (Non-GAAP) | | $ | 82 | | | $ | 576 | | | $ | (85 | ) | | $ | 1,186 | |
| | | | | | | | | | | | | | | | |
Net Income (Loss) per Common Share - Diluted (GAAP) | | $ | (14.83 | ) | | $ | 1.31 | | | $ | (27.17 | ) | | $ | 1.89 | |
| | | | |
Adjustments: | | | | | | | | | | | | | | | | |
Oil & gas property write-downs, net of tax | | | 9.87 | | | | 0.20 | | | | 22.37 | | | | 0.20 | |
Discontinued operations, net of tax | | | 1.94 | | | | (0.14 | ) | | | 2.29 | | | | 0.92 | |
Tax adjustments(1) | | | 3.12 | | | | — | | | | 2.00 | | | | (0.01 | ) |
Transaction, reorganization & separation costs, net of tax | | | 0.12 | | | | 0.02 | | | | 0.21 | | | | 0.05 | |
Rig stacking costs, net of tax | | | — | | | | 0.02 | | | | 0.07 | | | | 0.02 | |
Unrealized commodity derivative mark-to-market, net of tax | | | — | | | | 0.08 | | | | — | | | | (0.04 | ) |
| | | | | | | | | | | | | | | | |
Adjusted Earnings Per Share - Diluted (Non-GAAP) | | $ | 0.22 | | | $ | 1.49 | | | $ | (0.23 | ) | | $ | 3.03 | |
| | | | | | | | | | | | | | | | |
Total income tax provision (GAAP) | | $ | (860 | ) | | $ | 354 | | | $ | (3,880 | ) | | $ | 884 | |
| | | | |
Adjustments: | | | | | | | | | | | | | | | | |
Tax impact on oil & gas property write-downs | | | 2,081 | | | | 126 | | | | 4,597 | | | | 126 | |
Tax impact on transaction, reorganization & separation costs | | | 23 | | | | 5 | | | | 41 | | | | 11 | |
Tax impact on rig stacking costs | | | — | | | | 5 | | | | 15 | | | | 5 | |
Tax impact on unrealized commodity derivative mark-to-market | | | — | | | | 18 | | | | — | | | | (9 | ) |
Tax adjustments(1) | | | (1,173 | ) | | | — | | | | (758 | ) | | | 5 | |
| | | | | | | | | | | | | | | | |
Adjusted total income tax provision | | $ | 71 | | | $ | 508 | | | $ | 15 | | | $ | 1,022 | |
| | | | | | | | | | | | | | | | |
Adjusted Effective Tax Rate (Non-GAAP) | | | 37.6 | % | | | 42.7 | % | | | NM | | | | 42.3 | % |
| (1) | Tax adjustments are primarily related to a Canada valuation allowance and valuation allowances associated with projected utilization of the Company’s foreign tax credit carryforward. The valuation allowances were partially offset by $619 million in benefits for the North Sea tax rate change in the first quarter of 2015. |
APACHE CORPORATION
NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
Reconciliation of income (loss) before taxes to adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure. EBITDA is a widely accepted financial indicator of a company’s ability to incur and service debt, fund capital expenditures, and make distributions to shareholders. Adjusted EBITDA generally excludes certain items that management believes affect the comparability of operating results or are not related to Apache’s ongoing operations. Management uses adjusted EBITDA to evaluate the company’s operational trends and performance relative to other oil and gas companies.
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| | | For the Quarter
Ended June 30, | | | For the Six Months
Ended June 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Income (loss) before income taxes | | $ | (5,692 | ) | | $ | 911 | | | $ | (13,216 | ) | | $ | 2,191 | |
| | | | |
Adjustments: | | | | | | | | | | | | | | | | |
Depreciation, depletion and amortization | | | | | | | | | | | | | | | | |
Oil and gas property and equipment | | | | | | | | | | | | | | | | |
Recurring | | | 923 | | | | 1,074 | | | | 1,922 | | | | 2,096 | |
Additional | | | 5,816 | | | | 203 | | | | 13,036 | | | | 203 | |
Other assets | | | 83 | | | | 81 | | | | 166 | | | | 159 | |
Asset retirement obligation accretion | | | 36 | | | | 38 | | | | 72 | | | | 76 | |
Transaction, reorganization & separation costs | | | 66 | | | | 14 | | | | 120 | | | | 32 | |
Financing costs, net | | | 63 | | | | 52 | | | | 133 | | | | 97 | |
Rig stacking costs | | | — | | | | 15 | | | | 43 | | | | 15 | |
Unrealized commodity derivative mark-to-market | | | — | | | | 48 | | | | — | | | | (27 | ) |
Less: net income attributable to noncontrolling interests | | | (36 | ) | | | (108 | ) | | | (51 | ) | | | (206 | ) |
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Adjusted EBITDA (Non-GAAP) | | $ | 1,259 | | | $ | 2,328 | | | $ | 2,225 | | | $ | 4,636 | |
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Reconciliation of debt to net debt
Net debt is a non-GAAP financial measure. Management uses net debt as a measure of the Company’s outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand.
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| | | June 30,
2015 | | | March 31,
2015 | | | December 31,
2014 | |
Current debt | | $ | — | | | $ | 2,598 | | | $ | — | |
Long-term debt | | | 9,676 | | | | 9,675 | | | | 11,245 | |
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Total debt | | | 9,676 | | | | 12,273 | | | | 11,245 | |
Cash | | | 2,950 | | | | 229 | | | | 769 | |
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Net debt | | $ | 6,726 | | | $ | 12,044 | | | $ | 10,476 | |
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