Apache 8-K Apache Corporation Announces Fourth-Quarter and Full-Year 2020

Exhibit 99.1

NEWS RELEASE

Apache Corporation Announces Fourth-Quarter and Full-Year 2020

Financial and Operational Results

Fourth-Quarter Highlights

• Reported production of 411,000 barrels of oil equivalent (BOE) per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 365,000 BOE per day;

• Delivered net cash from operating activities of $498 million and adjusted EBITDAX of $630 million;

• Exceeded fourth quarter adjusted production guidance; delivered upstream capital investment and LOE below guidance; and

• Continued exploration success with three oil discoveries in Suriname, Egypt and North Sea at Keskesi, Tayim-North and Losgann prospects, respectively.

Full-Year 2020 Highlights

• Responded quickly and decisively to the COVID-19 pandemic, successfully protected employees, minimized operational disruptions and preserved the balance sheet;

• Decreased upstream capital investment by 58% year over year; achieved annual run-rate cost savings associated with organizational redesign in excess of $400 million;

• Achieved a 100% success rate on Block 58 exploration drilling campaign offshore Suriname;

• Significantly improved short-term debt profile by reducing Apache bond maturities to only $337 million prior to November 2025; and

• Increased ESG short-term incentive compensation weighting from 10% to 20% and refined our focus areas to air, water, communities and people.

2021 Outlook

• Planning 2021 upstream capital investment budget of $1.1 billion, representing a measured increase of 11% from 2020 actuals; program expected to deliver substantial free cash flow at current strip prices;

• Projecting a modest 4Q 2020 to 4Q 2021 decline in adjusted oil production of approximately 1%; and

• Established compensation-linked ESG goals tied to emissions and water-use targets, including a goal to eliminate routine U.S. onshore flaring by the end of 2021.

HOUSTON, Feb. 24, 2021 – Apache Corporation (Nasdaq: APA) today announced its financial and operational results for the fourth-quarter and full-year 2020.

Apache reported net income attributable to common stock of $10 million, or on a fully diluted basis, a loss of $16 million or $0.04 per share during the fourth-quarter 2020. When adjusted for certain items that impact the comparability of results, Apache’s fourth-quarter loss totaled $20 million or $0.05 on a diluted share basis. Net cash provided by operating activities in the fourth quarter was $498 million, and adjusted EBITDAX was $630 million.

APACHE CORPORATION ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2020

FINANCIAL AND OPERATIONAL RESULTS

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For the full-year 2020, Apache reported a loss of $4.9 billion, or $12.86 per diluted common share. On an adjusted basis, Apache’s 2020 loss totaled $407 million or $1.08 per diluted common share. Net cash provided by operating activities was $1.4 billion, and adjusted EBITDAX was $2.2 billion.

“Apache’s fourth quarter was a positive conclusion to a challenging year. Commodity prices held firm, and we executed well on our production, capital spending and costs objectives while also delivering promising exploration results internationally,” said John J. Christmann IV, Apache’s chief executive officer and president.

“Apache acted quickly and decisively in the face of the extreme market conditions early in 2020. Within three days of the March 9 oil price crash, we took aggressive and necessary measures to protect our financial position. As a result, we were able to absorb significant revenue losses relative to our original plan without further leveraging our balance sheet,” continued Christmann. “We exceeded our cost reduction goals while continuing to deliver excellent employee health, safety and environmental performance. I’m especially proud of our team’s swift response to the pandemic. To date, we have had no known cases of a COVID-19 transmission from one Apache employee or contractor to another.

“It was also a banner year on the exploration front, as we announced three discoveries offshore Suriname, followed by a fourth discovery announced in January 2021, achieving a 100% success rate on Block 58 to date. We look forward to a continuation of the exploration program, as well as an appraisal program, which is now underway.”

ESG Focus

During the year, Apache developed and implemented robust COVID-19 employee safety protocols, provided pandemic assistance to the communities in which it operates and advanced diversity and inclusion programs. The company also enhanced its greenhouse gas data collection processes, expanded disclosures to more closely align with the Task Force on Climate-related Financial Disclosures (TCFD), and increased ESG-related short-term incentive compensation weighting from 10% to 20%.

APACHE CORPORATION ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2020

FINANCIAL AND OPERATIONAL RESULTS

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2021 Capital Budget and Outlook

In 2021, Apache plans to invest $1.1 billion in upstream oil and gas capital, approximately $200 million for exploration and $900 million for production and development activities. This capital program will be more than fully funded by internally generated cash flow under an assumed price deck of $45 WTI oil and $3.00 Henry Hub natural gas.

“Our strategic approach remains centered around capital discipline and flexibility. We have established a 2021 capital plan that prioritizes generating free cash flow for debt reduction,” Christmann said. “We will continue to aggressively manage our cost structure, focus on long-term returns over short-term growth, continuously progress our ESG efforts, and advance our global exploration activities, most notably offshore Suriname.”

Year-End 2020 Proved Reserves

Worldwide estimated proved reserves totaled 874 million BOE at year-end 2020. More than 91% of Apache’s estimated proved reserves at year-end 2020 were classified as proved developed. During the year, Apache added approximately 78 million BOE in field extensions and discoveries. Production and divestitures reduced proved reserves by 161 million and 9.6 million BOE, respectively. Negative price revisions, partially offset by positive performance revisions, further reduced proved reserves by 45 million BOE.

Conference Call

Apache will host a conference call to discuss its fourth-quarter and full-year 2020 results at 10 a.m. Central time, Thursday, Feb. 25. The conference call will be webcast from Apache’s website at www.apachecorp.com and investor.apachecorp.com, and the webcast replay will be archived there as well. The conference call will also be available for playback by telephone for one week beginning at approximately 4 p.m. Central time Feb. 25. The number for the replay is 855-859-2056 or 404-537-3406 for international calls. The conference access code is 7773126. Sign up for email alerts to be reminded of the webcast at investor.apachecorp.com/alerts/email-alerts-subscription.

APACHE CORPORATION ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2020

FINANCIAL AND OPERATIONAL RESULTS

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About Apache

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Egypt and the United Kingdom and exploration activities offshore Suriname. Apache posts announcements, operational updates, investor information and all press releases on its website, www.apachecorp.com. Specific information concerning Suriname, ESG performance and other investor-related topics are posted at investor.apachecorp.com.

Additional Information

Additional information follows, including reconciliations of adjusted earnings, adjusted EBITDAX, upstream capital investment and net debt (non-GAAP financial measures) to GAAP measures and information regarding adjusted production. Apache’s quarterly supplement is available at www.apachecorp.com/financialdata.

Non-GAAP Financial Measures

Apache’s financial information includes information prepared in conformity with generally accepted accounting principles (GAAP) as well as non-GAAP financial 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 EBITDAX, upstream capital investment 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,” “continues,” “could,” “estimates,” “expects,” “guidance,” “may,” “might,” “outlook,” “possibly,” “potential,” “projects,” “prospects,” “should,” “will,” “would,” and similar references to future periods, but the absence of these words does not mean that a statement is not forward-looking. 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. While forward-looking statements are

APACHE CORPORATION ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2020

FINANCIAL AND OPERATIONAL RESULTS

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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 2019 Form 10-K and in our quarterly reports on Form 10-Q filed, and 2020 Form 10-K when filed, with the Securities and Exchange Commission (“SEC”) for a discussion of risk factors that affect our business. Any forward-looking statement made by Apache 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. Apache undertakes 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.

Cautionary Note to Investors

The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SEC’s definitions for such terms. Apache may use certain terms in this news release, such as “resources,” “potential resources,” “resource potential,” “estimated net reserves,” “recoverable reserves,” and other similar terms that the SEC guidelines strictly prohibit Apache from including in filings with the SEC. Such terms do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality and other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in Apache’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2019 (and Apache’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2020, when filed) available from Apache at www.apachecorp.com or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, TX 77056 (Attn: Corporate Secretary). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC’s website at www.sec.gov.

Contacts

Investor: (281) 302-2286 Gary Clark

Media: (713) 296-7276 Phil West

Website: www.apachecorp.com

APA-F

-end-

APACHE CORPORATION

STATEMENT OF CONSOLIDATED OPERATIONS

(Unaudited)

(In millions, except per share data)

	For the Quarter						For the Year Ended
	Ended December 31,						Ended December 31,
	2020			2019			2020			2019
REVENUES AND OTHER:
Oil, natural gas, and natural gas liquids production revenues
Oil revenues	$	776		$	1,316		$	3,106		$	5,230
Natural gas revenues		181			188			598			678
Natural gas liquids revenues		101			121			333			407
		1,058			1,625			4,037			6,315
Purchased oil and gas sales		161			104			398			176
Total revenues		1,219			1,729			4,435			6,491
Derivative instrument gain (loss), net		39			5			(223	)		(35	)
Gain on divestitures, net		8			23			32			43
Other, net		23			21			64			54
		1,289			1,778			4,308			6,553
OPERATING EXPENSES:
Lease operating expenses		269			343			1,127			1,447
Gathering, processing and transmission		68			76			274			306
Purchased oil and gas costs		150			82			357			142
Taxes other than income		33			66			123			207
Exploration		87			585			274			805
General and administrative		76			83			290			406
Transaction, reorganization and separation		10			33			54			50
Depreciation, depletion and amortization:
Oil and gas property and equipment		359			676			1,643			2,512
Other assets		31			45			129			168
Asset retirement obligation accretion		28			27			109			107
Impairments		9			2,700			4,501			2,949
Financing costs, net		99			97			267			462
		1,219			4,813			9,148			9,561
NET INCOME (LOSS) BEFORE INCOME TAXES		70			(3,035	)		(4,840	)		(3,008	)
Current income tax provision		56			146			176			660
Deferred income tax provision (benefit)		(41	)		66			(112	)		14
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS		55			(3,247	)		(4,904	)		(3,682	)
Net income (loss) attributable to noncontrolling interest—Egypt		17			42			(121	)		167
Net income (loss) attributable to noncontrolling interest—Altus		8			(329	)		1			(334	)
Net income attributable to Altus Preferred Unit limited partners		20			16			76			38
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	10		$	(2,976	)	$	(4,860	)	$	(3,553	)
NET INCOME (LOSS) PER COMMON SHARE:
Basic	$	0.03		$	(7.89	)	$	(12.86	)	$	(9.43	)
Diluted	$	(0.04	)	$	(7.89	)	$	(12.86	)	$	(9.43	)
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic		378			377			378			377
Diluted		378			377			378			377
DIVIDENDS DECLARED PER COMMON SHARE	$	0.025		$	0.25		$	0.10		$	1.00

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APACHE CORPORATION

PRODUCTION INFORMATION

	For the Quarter Ended						% Change						For the Year Ended
	December 31, 2020		September 30, 2020		December 31, 2019		4Q20 to 3Q20			4Q20 to 4Q19			December 31, 2020		December 31, 2019
OIL VOLUME—Barrels per day
United States		73,946		83,178		108,430		-11	%		-32	%		88,249		105,051
Egypt (1, 2)		69,351		79,194		79,119		-12	%		-12	%		75,384		84,617
North Sea		50,525		48,755		50,226		4	%		1	%		50,386		49,746
International (1)		119,876		127,949		129,345		-6	%		-7	%		125,770		134,363
Total (1)		193,822		211,127		237,775		-8	%		-18	%		214,019		239,414
NATURAL GAS VOLUME—Mcf per day
United States		533,158		597,686		658,395		-11	%		-19	%		561,731		639,580
Egypt (1, 2)		275,663		286,744		275,811		-4	%		0	%		274,175		285,972
North Sea		56,883		53,137		63,681		7	%		-11	%		57,464		54,642
International (1)		332,546		339,881		339,492		-2	%		-2	%		331,639		340,614
Total (1)		865,704		937,567		997,887		-8	%		-13	%		893,370		980,194
NGL VOLUME—Barrels per day
United States		70,170		75,266		80,405		-7	%		-13	%		74,136		68,381
Egypt (1, 2)		581		611		788		-5	%		-26	%		754		931
North Sea		1,901		1,976		1,920		-4	%		-1	%		1,936		1,739
International (1)		2,482		2,587		2,708		-4	%		-8	%		2,690		2,670
Total (1)		72,652		77,853		83,113		-7	%		-13	%		76,826		71,051
BOE per day
United States		232,975		258,058		298,567		-10	%		-22	%		256,007		280,029
Egypt (1, 2)		115,876		127,595		125,875		-9	%		-8	%		121,834		133,209
North Sea		61,907		59,588		62,760		4	%		-1	%		61,899		60,592
International (1)		177,783		187,183		188,635		-5	%		-6	%		183,733		193,801
Total (1)		410,758		445,241		487,202		-8	%		-16	%		439,740		473,830
Total excluding noncontrolling interests		372,058		402,615		445,209		-8	%		-16	%		399,026		429,377
(1) Includes net production volumes attributed to our noncontrolling partner in Egypt below:
Oil (b/d)		23,167		26,459		26,384								25,206		28,220
Gas (Mcf/d)		92,036		95,776		92,075								91,540		95,539
NGL (b/d)		194		204		263								251		310
BOE per day		38,700		42,626		41,993		-9	%		-8	%		40,714		44,453
(2) Egypt Gross Production
Oil (b/d)		141,251		159,941		185,704								164,104		193,886
Gas (Mcf/d)		617,465		649,566		677,819								641,069		708,682
NGL (b/d)		1,115		1,175		1,462								1,429		1,722
BOE per day		245,277		269,377		300,136		-9	%		-18	%		272,378		313,722

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APACHE CORPORATION

ADJUSTED PRODUCTION INFORMATION

Adjusted production excludes certain items that management believes affect the comparability of operating results for the periods presented. Adjusted production excludes production attributable to 1) noncontrolling interest in Egypt and 2) Egypt tax barrels. Management uses adjusted production to evaluate the company’s operational trends and performance and believes it is useful to investors and other third parties.

	For the Quarter Ended						% Change						For the Year Ended
	December 31,		September 30,		December 31,		4Q20 to 3Q20			4Q20 to 4Q19			December 31,		December 31,
	2020		2020		2019								2020		2019
OIL VOLUME - Barrels per day
United States		73,946		83,178		108,430		-11	%		-32	%		88,249		105,051
Egypt		41,229		46,198		42,120		-11	%		-2	%		46,581		44,773
North Sea		50,525		48,755		50,226		4	%		1	%		50,386		49,746
International		91,754		94,953		92,346		-3	%		-1	%		96,967		94,519
Total		165,700		178,131		200,776		-7	%		-17	%		185,216		199,570
NATURAL GAS VOLUME - Mcf per day
United States		533,158		597,686		658,395		-11	%		-19	%		561,731		639,580
Egypt		171,192		175,667		159,242		-3	%		8	%		173,694		165,159
North Sea		56,883		53,137		63,681		7	%		-11	%		57,464		54,642
International		228,075		228,804		222,923		0	%		2	%		231,158		219,801
Total		761,233		826,490		881,318		-8	%		-14	%		792,889		859,381
NGL VOLUME - Barrels per day
United States		70,170		75,266		80,405		-7	%		-13	%		74,136		68,381
Egypt		387		407		474		-5	%		-18	%		503		550
North Sea		1,901		1,976		1,920		-4	%		-1	%		1,936		1,739
International		2,288		2,383		2,394		-4	%		-4	%		2,439		2,289
Total		72,458		77,649		82,799		-7	%		-12	%		76,575		70,670
BOE per day
United States		232,975		258,058		298,567		-10	%		-22	%		256,007		280,029
Egypt		70,148		75,883		69,134		-8	%		1	%		76,032		72,850
North Sea		61,907		59,588		62,760		4	%		-1	%		61,899		60,592
International		132,055		135,471		131,894		-3	%		0	%		137,931		133,442
Total		365,030		393,529		430,461		-7	%		-15	%		393,938		413,471

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APACHE CORPORATION

PRICE INFORMATION

	For the Quarter Ended						For the Year Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
	2020		2020		2019		2020		2019
AVERAGE OIL PRICE PER BARREL
United States	$	41.05	$	39.60	$	56.26	$	37.42	$	54.71
Egypt		43.82		41.51		63.11		39.95		63.76
North Sea		45.45		42.10		64.07		42.88		65.10
International		44.52		41.73		63.48		41.13		64.25
Total		43.21		40.88		60.19		39.60		60.05
AVERAGE NATURAL GAS PRICE PER MCF
United States	$	1.68	$	1.40	$	1.50	$	1.22	$	1.26
Egypt		2.77		2.82		2.86		2.79		2.83
North Sea		5.40		2.58		4.30		3.19		4.48
International		3.22		2.78		3.13		2.86		3.09
Total		2.27		1.90		2.05		1.83		1.90
AVERAGE NGL PRICE PER BARREL
United States	$	14.45	$	13.06	$	15.00	$	11.21	$	14.95
Egypt		34.46		25.88		36.47		27.83		33.87
North Sea		33.38		27.08		44.22		29.73		36.83
International		33.63		26.80		41.97		29.20		35.80
Total		15.11		13.51		15.88		11.84		15.74

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APACHE CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

(Unaudited)

(In millions)

SUMMARY EXPLORATION EXPENSE INFORMATION

	For the Quarter Ended				For the Year Ended
	December 31,				December 31,
	2020		2019		2020		2019
Unproved leasehold impairments	$	15	$	545	$	101	$	619
Dry hole expense		58		24		110		57
Geological and geophysical expense		6		5		20		59
Exploration overhead and other		8		11		43		70
	$	87	$	585	$	274	$	805

SUMMARY CASH FLOW INFORMATION

	For the Quarter Ended December 31,						For the Year Ended December 31,
	2020			2019			2020			2019
Net cash provided by operating activities	$	498		$	778		$	1,388		$	2,867
Additions to upstream oil and gas property		(196	)		(580	)		(1,274	)		(2,634	)
Additions to Altus gathering, processing, and transmission facilities		(1	)		(33	)		(28	)		(327	)
Contributions to Altus equity method interests		(41	)		(164	)		(327	)		(501	)
Acquisition of Altus equity method interests		—			—			—			(671	)
Proceeds from sale of oil and gas properties		34			128			166			718
Other, net		14			(14	)		(3	)		(31	)
Net cash used in investing activities	$	(190	)	$	(663	)	$	(1,466	)	$	(3,446	)
Apache debt borrowings and payments, net		(200	)		—			145			(161	)
Altus credit facility borrowings		44			161			228			396
Distributions to noncontrolling interest - Egypt		(30	)		(70	)		(91	)		(305	)
Distributions to Altus Preferred Unit limited partners		(12	)		—			(23	)		—
Redeemable noncontrolling interest - Altus Preferred Unit limited partners		—			—			—			611
Dividends paid		(10	)		(94	)		(123	)		(376	)
Other		—			(28	)		(43	)		(53	)
Net cash provided by financing activities	$	(208	)	$	(31	)	$	93		$	112

SUMMARY BALANCE SHEET INFORMATION

	December 31,			December 31,
	2020			2019
Cash and cash equivalents	$	262		$	247
Other current assets		1,584			1,714
Property and equipment, net		8,819			14,158
Other assets		2,081			1,988
Total assets	$	12,746		$	18,107
Current debt- Apache *	$	2		$	1
Current debt - Altus		—			10
Current liabilities		1,306			1,844
Long-term debt - Apache *		8,146			8,159
Long-term debt - Altus		624			396
Deferred credits and other noncurrent liabilities		2,705			2,677
Redeemable noncontrolling interest - Altus Preferred Unit limited partners		608			555
Apache shareholders’ equity (deficit)		(1,639	)		3,255
Noncontrolling interest - Egypt		925			1,137
Noncontrolling interest - Altus		69			73
Total Liabilities and equity	$	12,746		$	18,107
Common shares outstanding at end of period		377			377

* Excludes Altus

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APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(In millions, except per share data)

Reconciliation of Net cash provided by operating activities to Adjusted EBITDAX

Management believes EBITDAX, or earnings before income tax expense, interest expense, depreciation, amortization and exploration expense is a widely accepted financial indicator, and useful for investors, to assess a company’s ability to incur and service debt, fund capital expenditures, and make distributions to shareholders. We define adjusted EBITDAX, a non-GAAP financial measure, as EBITDAX adjusted for certain items presented in the accompanying reconciliation. Management uses adjusted EBITDAX to evaluate our ability to fund our capital expenditures, debt services and other operational requirements and to compare our results from period to period by eliminating the impact of certain items that management does not consider to be representative of the Company’s on-going operations. Management also believes adjusted EBITDAX facilitates investors and analysts in evaluating and comparing EBITDAX from period to period by eliminating differences caused by the existence and timing of certain operating expenses that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted EBITDAX may not be comparable to similar measures of other companies in our industry.

	For the Quarter Ended									For the Year Ended
	December 31,			September 30,			December 31,			December 31,
	2020			2020			2019			2020			2019
Net cash provided by operating activities	$	498		$	304		$	778		$	1,388		$	2,867
Adjustments:
Exploration expense other than dry hole expense and unproved leasehold impairments		14			17			16			63			129
Current income tax provision		56			58			146			176			660
Other adjustments to reconcile net income to net cash provided by operating activities		(57	)		(31	)		(15	)		(102	)		(50	)
Changes in operating assets and liabilities		2			97			42			186			3
Financing costs, net		107			111			97			427			387
Transaction, reorganization & separation costs		10			7			33			54			50
Adjusted EBITDAX (Non-GAAP)	$	630		$	563		$	1,097		$	2,192		$	4,046

Reconciliation of Income attributable to common stock to Adjusted earnings

Our presentation of adjusted earnings and adjusted earnings per share are non-GAAP measures because they exclude the effect of certain items included in Income Attributable to Common Stock. Management believes that adjusted earnings and adjusted earnings per share provides relevant and useful information, which is widely used by analysts, investors and competitors in our industry as well as by our management in assessing the Company’s operational trends and comparability of results to our peers.

Management uses adjusted earnings and adjusted earnings per share to evaluate our operating and financial performance because it eliminates the impact of certain items that management does not consider to be representative of the Company’s on-going business operations. As a performance measure, adjusted earnings may be useful to investors in facilitating comparisons to others in the Company’s industry because certain items can vary substantially in the oil and gas industry from company to company depending upon accounting methods, book value of assets, capital structure and asset sales and other divestitures, among other factors. Management believes excluding these items facilitates investors and analysts in evaluating and comparing the underlying operating and financial performance of our business from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted earnings and adjusted earnings per share may not be comparable to similar measures of other companies in our industry.

	For the Quarter Ended												For the Quarter Ended
	December 31, 2020												December 31, 2019
	Before			Tax			After			Diluted			Before			Tax			After			Diluted
	Tax			Impact			Tax			EPS			Tax			Impact			Tax			EPS
Net income (loss) including noncontrolling interests (GAAP)	$	70		$	(15	)	$	55		$	0.15		$	(3,035	)	$	(212	)	$	(3,247	)	$	(8.61	)
Income (loss) attributable to noncontrolling interests		37			(12	)		25			0.07			(191	)		(96	)		(287	)		(0.77	)
Income attributable to Altus preferred unit limited partner		20			—			20			0.05			16			—			16			0.05
Net income (loss) attributable to common stock—   Basic		13			(3	)		10			0.03			(2,860	)		(116	)		(2,976	)		(7.89	)
Effect of dilutive securities **		(26	)		—			(26	)		(0.07	)		—			—			—			—
Net income (loss) attributable to common stock—   Diluted		(13	)		(3	)		(16	)		(0.04	)		(2,860	)		(116	)		(2,976	)		(7.89	)
Adjustments: *
Asset and unproved leasehold impairments		24			(5	)		19			0.05			3,245			(682	)		2,563			6.78
Noncontrolling interest impact on Altus impairments		—			—			—			—			(269	)		57			(212	)		(0.56	)
Noncontrolling interest & tax barrel impact on Egypt adjustments		(1	)		—			(1	)		—			—			—			—			—
Valuation allowance and other tax adjustments		—			(7	)		(7	)		(0.01	)		—			655			655			1.74
Gain on extinguishment of debt		(8	)		2			(6	)		(0.02	)		—			—			—			—
Unrealized derivative instrument gain, net		(55	)		11			(44	)		(0.12	)		(8	)		1			(7	)		(0.02	)
Noncontrolling interest on Altus preferred units embedded derivative		8			(1	)		7			0.02			(1	)		—			(1	)		—
Effect of dilutive securities **		26			—			26			0.07			—			—			—			—
Transaction, reorganization & separation costs		10			(2	)		8			0.02			33			(7	)		26			0.07
(Gain)/loss on divestitures, net		(8	)		1			(7	)		(0.02	)		(23	)		5			(18	)		(0.04	)
Drilling contract termination charges		1			—			1			—			—			—			—			—
Adjusted earnings (Non-GAAP)	$	(16	)	$	(4	)	$	(20	)	$	(0.05	)	$	117		$	(87	)	$	30		$	0.08
	For the Year Ended												For the Year Ended
	December 31, 2020												December 31, 2019
	Before			Tax			After			Diluted			Before			Tax			After			Diluted
	Tax			Impact			Tax			EPS			Tax			Impact			Tax			EPS
Net loss including noncontrolling interests (GAAP)	$	(4,840	)	$	(64	)	$	(4,904	)	$	(12.98	)	$	(3,008	)	$	(674	)	$	(3,682	)	$	(9.77	)
Loss attributable to noncontrolling interest		(83	)		(37	)		(120	)		(0.32	)		44			(211	)		(167	)		(0.44	)
Income attributable to Altus preferred unit limited partner		76			—			76			0.20			38			—			38			0.10
Net loss attributable to common stock - Basic		(4,833	)		(27	)		(4,860	)		(12.86	)		(3,090	)		(463	)		(3,553	)		(9.43	)
Effect of dilutive securities **		—			—			—			—			—			—			—			—
Net loss attributable to common stock - Diluted		(4,833	)		(27	)		(4,860	)		(12.86	)		(3,090	)		(463	)		(3,553	)		(9.43	)
Adjustments: *
Asset and unproved leasehold impairments		4,602			(856	)		3,746			9.90			3,568			(750	)		2,818			7.45
Noncontrolling interest impact on Altus impairments		—			—			—			—			(271	)		57			(214	)		(0.56	)
Noncontrolling interest & tax barrel impact on Egypt adjustments		(172	)		(7	)		(179	)		(0.47	)		—			—			—			—
Valuation allowance and other tax adjustments		—			925			925			2.45			—			854			854			2.27
(Gain)/Loss on extinguishment of debt		(160	)		34			(126	)		(0.33	)		75			(16	)		59			0.16
Unrealized derivative instrument losses, net		87			(18	)		69			0.19			44			(11	)		34			0.10
Noncontrolling interest on Altus preferred units embedded derivative		(8	)		2			(6	)		(0.02	)		(1	)		—			(1	)		(0.01	)
Transaction, reorganization & separation costs		54			(12	)		42			0.11			50			(11	)		39			0.11
Gain on divestitures, net		(32	)		9			(23	)		(0.06	)		(43	)		9			(34	)		(0.09	)
Drilling contract termination charges		7			(2	)		5			0.01			—			—			—			—
Adjusted Earnings (Non-GAAP)	$	(455	)	$	48		$	(407	)	$	(1.08	)	$	332		$	(331	)	$	2		$	0.00

* The income tax effect of the reconciling items are calculated based on the statutory rate of the jurisdiction in which the discrete item resides.

** The assumed conversion of Altus’ Preferred Unit limited partner is primarily associated with unrealized gains on the Preferred Unit embedded derivative. These amounts are antidilutive for the year ended 2020 and on an adjusted fourth quarter basis.

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APACHE CORPORATION

NON-GAAP FINANCIAL MEASURES

(In millions)

Reconciliation of debt to net debt

Net debt, or outstanding debt obligations less cash and cash equivalents, 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. The Altus Midstream LP credit facility is unsecured and is not guaranteed by Apache or any of Apache’s other subsidiaries.

	December 31, 2020						December 31, 2019
	Apache		Altus		Apache		Apache		Altus		Apache
	Upstream		Midstream		Consolidated		Upstream		Midstream		Consolidated
Current debt	$	2	$	—	$	2	$	1	$	10	$	11
Long-term debt		8,146		624		8,770		8,159		396		8,555
Total debt		8,148		624		8,772		8,160		406		8,566
Cash and cash equivalents		238		24		262		241		6		247
Net debt	$	7,910	$	600	$	8,510	$	7,919	$	400	$	8,319

Reconciliation of Costs incurred to Upstream capital investment

Management believes the presentation of upstream capital investments is useful for investors to assess Apache’s expenditures related to our upstream capital activity. We define capital investments as costs incurred for oil and gas activities, adjusted to exclude asset retirement obligation revisions and liabilities incurred, capitalized interest, and certain exploration expenses, while including amounts paid during the period for abandonment and decommissioning expenditures. Upstream capital expenditures attributable to a one-third noncontrolling interest in Egypt are also excluded. Management believes this provides a more accurate reflection of Apache’s cash expenditures related to upstream capital activity and is consistent with how we plan our capital budget.

	For the Quarter Ended						For the Year Ended
	December 31,						December 31,
	2020			2019			2020			2019
Costs incurred in oil and gas property:
Acquisitions
Proved	$	—		$	1		$	7		$	8
Unproved		1			14			4			57
Exploration and development		256			533			1,200			2,464
Total Costs incurred in oil and gas property	$	257		$	548		$	1,211		$	2,529
Reconciliation of Costs incurred to Upstream capital investment:
Total Costs incurred in oil and gas property	$	257		$	548		$	1,211		$	2,529
Asset retirement obligations settled vs. incurred—oil and gas property		(22	)		110			(5	)		153
Capitalized interest		—			(8	)		—			(32	)
Exploration seismic and administration costs		(14	)		(16	)		(63	)		(129	)
Less noncontrolling interest—Egypt		(32	)		(44	)		(155	)		(155	)
Total Upstream capital investment	$	189		$	590		$	988		$	2,366

Reconciliation of Net cash provided by operating activities to Cash flows from operations before changes in operating assets and liabilities

Cash flows from operations before changes in operating assets and liabilities is a non-GAAP financial measure. Apache uses it internally and provides the information because management believes it is useful for investors 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 flows 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.

	For the Quarter Ended						For the Year Ended
	December 31,		September 30,		December 31,		December 31,
	2020		2020		2019		2020		2019
Net cash provided by operating activities	$	498	$	304	$	778	$	1,388	$	2,867
Changes in operating assets and liabilities		2		97		42		186		3
Cash flows from operations before changes in operating assets and liabilities	$	500	$	401	$	820	$	1,574	$	2,870

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APACHE CORPORATION

OIL & GAS RESERVES INFORMATION

For the Year Ended December 31, 2020

OIL (Mbbl)
	U.S.			Egypt1			North Sea			Total1
Balance - Dec 31, 2019		324,861			114,404			111,761			551,026
Extensions and Discoveries		17,858			17,855			5,275			40,988
Purchases		—			—			—			—
Revisions		(69,247	)		2,541			(4,756	)		(71,462	)
Production		(32,299	)		(27,591	)		(18,441	)		(78,331	)
Sales		(8,721	)		—			—			(8,721	)
Balance - Dec 31, 2020		232,452			107,209			93,839			433,500
NGL’s (Mbbl)
	U.S.			Egypt1			North Sea			Total1
Balance - Dec 31, 2019		182,363			757			2,977			186,097
Extensions and Discoveries		11,435			97			312			11,844
Purchases		—			—			—			—
Revisions		(469	)		264			(207	)		(412	)
Production		(27,133	)		(276	)		(709	)		(28,118	)
Sales		(456	)		—			—			(456	)
Balance - Dec 31, 2020		165,740			842			2,373			168,955
GAS (MMcf)
	U.S.			Egypt1			North Sea			Total1
Balance - Dec 31, 2019		1,060,978			458,086			122,933			1,641,997
Extensions and Discoveries		60,965			83,718			8,140			152,823
Purchases		—			—			—			—
Revisions		215,166			(19,849	)		(33,541	)		161,776
Production		(205,594	)		(100,348	)		(21,032	)		(326,974	)
Sales		(2,255	)		—			—			(2,255	)
Balance - Dec 31, 2020		1,129,260			421,607			76,500			1,627,367
TOTAL BOE (Mboe)
	U.S.			Egypt1			North Sea			Total1
Balance - Dec 31, 2019		684,053			191,508			135,227			1,010,788
Extensions and Discoveries		39,454			31,905			6,944			78,303
Purchases		—			—			—			—
Revisions		(33,854	)		(502	)		(10,554	)		(44,910	)
Production		(93,698	)		(44,592	)		(22,655	)		(160,945	)
Sales		(9,553	)		—			—			(9,553	)
Balance - Dec 31, 2020		586,402			178,319			108,962			873,683
Proved developed reserves:
Oil (Mbbls)		206,936			95,981			86,566			389,483
NGL’s (Mbbls)		150,599			716			2,053			153,368
Gas (Mboe)		175,459			68,173			11,360			254,992
Balance - Dec 31, 2020 (Mboe)		532,994			164,870			99,979			797,843

⁽¹⁾  Includes reserves attributable to noncontrolling interest in Egypt.

Page 8