Supplemental Oil and Gas Disclosures (Unaudited) | SUPPLEMENTAL OIL AND GAS DISCLOSURES (Unaudited) Oil and Gas Operations The following table sets forth revenue and direct cost information relating to the Company’s oil and gas exploration and production activities. Apache has no long-term agreements to purchase oil or gas production from foreign governments or authorities. United States Canada (3) Egypt (4) North Sea Other International Total (4) (In millions, except per boe) 2019 Oil and gas production revenues $ 2,763 $ — $ 2,276 $ 1,276 $ — $ 6,315 Operating cost: Depreciation, depletion, and amortization (1) 1,508 — 641 363 — 2,512 Asset retirement obligation accretion 29 — — 76 — 105 Lease operating expenses 645 — 484 320 — 1,449 Gathering, processing, and transmission 299 — 40 45 — 384 Exploration expenses 688 — 100 2 15 805 Impairments related to oil and gas properties 1,633 — — — — 1,633 Production taxes (2) 191 — — — — 191 Income tax (468 ) — 455 188 — 175 4,525 — 1,720 994 15 7,254 Results of operations $ (1,762 ) $ — $ 556 $ 282 $ (15 ) $ (939 ) 2018 Oil and gas production revenues $ 3,279 $ — $ 2,748 $ 1,321 $ — $ 7,348 Operating cost: Depreciation, depletion, and amortization (1) 1,206 — 688 371 — 2,265 Asset retirement obligation accretion 32 — — 75 — 107 Lease operating expenses 670 — 428 341 — 1,439 Gathering, processing, and transmission 282 — 47 42 — 371 Exploration expenses 219 — 88 192 4 503 Impairments related to oil and gas properties 265 — 63 10 — 338 Production taxes (2) 203 — — — — 203 Income tax 87 — 645 116 — 848 2,964 — 1,959 1,147 4 6,074 Results of operations $ 315 $ — $ 789 $ 174 $ (4 ) $ 1,274 2017 Oil and gas production revenues $ 2,271 $ 231 $ 2,307 $ 1,078 $ — $ 5,887 Operating cost: Depreciation, depletion, and amortization (1) 924 72 707 433 — 2,136 Asset retirement obligation accretion 31 27 — 72 — 130 Lease operating expenses 584 103 362 335 — 1,384 Gathering, processing, and transmission 86 34 44 30 — 194 Exploration expenses 363 11 62 86 27 549 Production taxes (2) 153 11 — (14 ) — 150 Income tax 45 (7 ) 509 54 — 601 2,186 251 1,684 996 27 5,144 Results of operations $ 85 $ (20 ) $ 623 $ 82 $ (27 ) $ 743 (1) This amount only reflects DD&A of capitalized costs of oil and gas properties and, therefore, does not agree with DD&A reflected on Note 17—Business Segment Information. (2) Only reflects amounts directly related to oil and gas producing properties and, therefore, does not agree with taxes other than income reflected on Note 17—Business Segment Information. (3) During the third quarter of 2017, Apache completed the sale of its Canadian operations. For more information regarding this divestiture, please refer to Note 2—Acquisitions and Divestitures (4) Includes noncontrolling interest in Egypt. Costs Incurred in Oil and Gas Property Acquisitions, Exploration, and Development Activities United States Canada Egypt (2) North Sea Other International Total (2) (In millions) 2019 Acquisitions: Proved $ 3 $ — $ 5 $ — $ — $ 8 Unproved 47 — 10 — — 57 Exploration 162 — 139 62 105 468 Development 1,500 — 374 119 3 1,996 Costs incurred (1) $ 1,712 $ — $ 528 $ 181 $ 108 $ 2,529 (1) Includes capitalized interest and asset retirement costs as follows: Capitalized interest $ 23 $ — $ — $ 5 $ 4 $ 32 Asset retirement costs 14 — — (111 ) — (97 ) 2018 Acquisitions: Proved $ — $ — $ 6 $ — $ — $ 6 Unproved 111 — 16 — — 127 Exploration 640 — 175 113 12 940 Development 1,791 — 457 133 — 2,381 Costs incurred (1) $ 2,542 $ — $ 654 $ 246 $ 12 $ 3,454 (1) Includes capitalized interest and asset retirement costs as follows: Capitalized interest $ 23 $ — $ — $ 11 $ 2 $ 36 Asset retirement costs 93 — — (62 ) — 31 2017 Acquisitions: Proved $ 3 $ — $ 4 $ — $ — $ 7 Unproved 136 5 40 — — 181 Exploration 602 11 122 131 25 891 Development 1,118 52 387 250 — 1,807 Costs incurred (1) $ 1,859 $ 68 $ 553 $ 381 $ 25 $ 2,886 (1) Includes capitalized interest and asset retirement costs as follows: Capitalized interest $ 23 $ 2 $ — $ 17 $ 2 $ 44 Asset retirement costs 15 — — 55 — 70 (2) Includes a noncontrolling interest in Egypt. Capitalized Costs The following table sets forth the capitalized costs and associated accumulated depreciation, depletion, and amortization relating to the Company’s oil and gas acquisition, exploration, and development activities: United States Egypt (1) North Sea Other International Total (1) (In millions) 2019 Proved properties $ 20,291 $ 11,614 $ 8,635 $ — $ 40,540 Unproved properties 509 109 10 38 666 20,800 11,723 8,645 38 41,206 Accumulated DD&A (11,783 ) (9,377 ) (6,700 ) — (27,860 ) $ 9,017 $ 2,346 $ 1,945 $ 38 $ 13,346 2018 Proved properties $ 22,699 $ 11,184 $ 8,462 $ — $ 42,345 Unproved properties 1,275 110 5 45 1,435 23,974 11,294 8,467 45 43,780 Accumulated DD&A (12,217 ) (8,736 ) (6,332 ) — (27,285 ) $ 11,757 $ 2,558 $ 2,135 $ 45 $ 16,495 (1) Includes a noncontrolling interest in Egypt. Oil and Gas Reserve Information Proved oil and gas reserves are those quantities of natural gas, crude oil, condensate, and NGLs, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations. Estimated proved developed oil and gas reserves can be expected to be recovered through existing wells with existing equipment and operating methods. The Company reports all estimated proved reserves held under production-sharing arrangements utilizing the “economic interest” method, which excludes the host country’s share of reserves. Estimated reserves that can be produced economically through application of improved recovery techniques are included in the “proved” classification when successful testing by a pilot project or the operation of an active, improved recovery program using reliable technology establishes the reasonable certainty for the engineering analysis on which the project or program is based. Economically producible means a resource that generates revenue that exceeds, or is reasonably expected to exceed, the costs of the operation. Reasonable certainty means a high degree of confidence that the quantities will be recovered. Reliable technology is a grouping of one or more technologies (including computational methods) that has been field-tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation. In estimating its proved reserves, Apache uses several different traditional methods that can be classified in three general categories: (1) performance-based methods; (2) volumetric-based methods; and (3) analogy with similar properties. Apache will, at times, utilize additional technical analysis such as computer reservoir models, petrophysical techniques, and proprietary 3-D seismic interpretation methods to provide additional support for more complex reservoirs. Information from this additional analysis is combined with traditional methods outlined above to enhance the certainty of the Company’s reserve estimates. There are numerous uncertainties inherent in estimating quantities of proved reserves and projecting future rates of production and timing of development expenditures. The reserve data in the following tables only represent estimates and should not be construed as being exact. Crude Oil and Condensate (Thousands of barrels) United States Canada Egypt (1) North Sea Total (1) Proved developed reserves: December 31, 2016 300,900 51,508 138,771 91,138 582,317 December 31, 2017 304,279 — 124,568 92,598 521,445 December 31, 2018 300,484 — 110,014 104,491 514,989 December 31, 2019 278,145 — 103,573 101,712 483,430 Proved undeveloped reserves: December 31, 2016 21,088 7,906 20,187 10,784 59,965 December 31, 2017 31,904 — 16,198 14,013 62,115 December 31, 2018 45,182 — 9,484 11,278 65,944 December 31, 2019 46,716 — 10,831 10,049 67,596 Total proved reserves: Balance December 31, 2016 321,988 59,414 158,958 101,922 642,282 Extensions, discoveries and other additions 48,391 14,025 27,140 16,023 105,579 Purchases of minerals in-place 46 375 — — 421 Revisions of previous estimates 825 1,829 (9,839 ) 6,510 (675 ) Production (33,394 ) (2,425 ) (35,493 ) (17,844 ) (89,156 ) Sales of minerals in-place (1,673 ) (73,218 ) — — (74,891 ) Balance December 31, 2017 336,183 — 140,766 106,611 583,560 Extensions, discoveries and other additions 61,976 — 22,473 15,682 100,131 Purchases of minerals in-place 140 — — — 140 Revisions of previous estimates (14,334 ) — (9,556 ) 10,613 (13,277 ) Production (38,252 ) — (34,185 ) (17,137 ) (89,574 ) Sales of minerals in-place (47 ) — — — (47 ) Balance December 31, 2018 345,666 — 119,498 115,769 580,933 Extensions, discoveries and other additions 52,297 — 21,039 9,017 82,353 Purchases of minerals in-place — — — — — Revisions of previous estimates (16,446 ) — 4,752 5,132 (6,562 ) Production (38,344 ) — (30,885 ) (18,157 ) (87,386 ) Sales of minerals in-place (18,312 ) — — — (18,312 ) Balance December 31, 2019 324,861 — 114,404 111,761 551,026 (1) 2019 , 2018 , 2017 , and 2016 includes proved reserves of 38 MMbbls, 40 MMbbls, 47 MMbbls, and 53 MMbbls, respectively, attributable to a noncontrolling interest in Egypt. Natural Gas Liquids (Thousands of barrels) United States Canada Egypt (1) North Sea Total (1) Proved developed reserves: December 31, 2016 155,124 13,866 1,266 1,627 171,883 December 31, 2017 171,005 — 685 2,025 173,715 December 31, 2018 197,574 — 502 1,938 200,014 December 31, 2019 158,794 — 667 2,317 161,778 Proved undeveloped reserves: December 31, 2016 17,311 2,473 131 646 20,561 December 31, 2017 29,559 — 39 353 29,951 December 31, 2018 33,796 — 60 631 34,487 December 31, 2019 23,569 — 90 660 24,319 Total proved reserves: Balance December 31, 2016 172,435 16,339 1,397 2,273 192,444 Extensions, discoveries and other additions 33,806 1,794 50 845 36,495 Purchases of minerals in-place 206 199 — — 405 Revisions of previous estimates 12,982 (1,060 ) (425 ) (321 ) 11,176 Production (17,766 ) (1,032 ) (298 ) (419 ) (19,515 ) Sales of minerals in-place (1,099 ) (16,240 ) — — (17,339 ) Balance December 31, 2017 200,564 — 724 2,378 203,666 Extensions, discoveries and other additions 60,990 — 144 1,444 62,578 Purchases of minerals in-place 40 — — — 40 Revisions of previous estimates (9,250 ) — 31 (819 ) (10,038 ) Production (20,969 ) — (337 ) (434 ) (21,740 ) Sales of minerals in-place (5 ) — — — (5 ) Balance December 31, 2018 231,370 — 562 2,569 234,501 Extensions, discoveries and other additions 41,343 — 27 697 42,067 Purchases of minerals in-place — — — — — Revisions of previous estimates (32,569 ) — 508 345 (31,716 ) Production (24,959 ) — (340 ) (634 ) (25,933 ) Sales of minerals in-place (32,822 ) — — — (32,822 ) Balance December 31, 2019 182,363 — 757 2,977 186,097 (1) 2019 , 2018 , 2017 , and 2016 includes proved reserves of 252 Mbbls, 187 Mbbls, 241 Mbbls, and 466 Mbbls, respectively, attributable to a noncontrolling interest in Egypt. Natural Gas (Millions of cubic feet) United States Canada Egypt (1) North Sea Total (1) Proved developed reserves: December 31, 2016 1,200,379 553,724 675,559 86,948 2,516,610 December 31, 2017 1,347,009 — 540,667 83,342 1,971,018 December 31, 2018 1,626,403 — 476,132 95,347 2,197,882 December 31, 2019 945,938 — 433,382 106,329 1,485,649 Proved undeveloped reserves: December 31, 2016 231,304 45,312 42,109 23,813 342,538 December 31, 2017 297,226 — 47,255 11,063 355,544 December 31, 2018 267,090 — 33,006 15,804 315,900 December 31, 2019 115,040 — 24,704 16,604 156,348 Total proved reserves: Balance December 31, 2016 1,431,683 599,036 717,668 110,761 2,859,148 Extensions, discoveries and other additions 378,747 49,780 81,245 17,646 527,418 Purchases of minerals in-place 4,434 4,319 — — 8,753 Revisions of previous estimates (5,431 ) 92,207 (70,030 ) (17,387 ) (641 ) Production (143,943 ) (47,990 ) (140,961 ) (16,615 ) (349,509 ) Sales of minerals in-place (21,255 ) (697,352 ) — — (718,607 ) Balance December 31, 2017 1,644,235 — 587,922 94,405 2,326,562 Extensions, discoveries and other additions 704,135 — 79,394 55,274 838,803 Purchases of minerals in-place 906 — — — 906 Revisions of previous estimates (239,204 ) — (38,892 ) (21,933 ) (300,029 ) Production (216,538 ) — (119,286 ) (16,595 ) (352,419 ) Sales of minerals in-place (41 ) — — — (41 ) Balance December 31, 2018 1,893,493 — 509,138 111,151 2,513,782 Extensions, discoveries and other additions 249,205 — 34,758 27,711 311,674 Purchases of minerals in-place — — — — — Revisions of previous estimates (509,753 ) — 18,570 4,015 (487,168 ) Production (233,447 ) — (104,380 ) (19,944 ) (357,771 ) Sales of minerals in-place (338,520 ) — — — (338,520 ) Balance December 31, 2019 1,060,978 — 458,086 122,933 1,641,997 (1) 2019 , 2018 , 2017 , and 2016 include proved reserves of 153 Bcf, 170 Bcf, 196 Bcf, and 239 Bcf, respectively, attributable to a noncontrolling interest in Egypt. Total Equivalent Reserves (Thousands barrels of oil equivalent) United States Canada Egypt (1) North Sea Total (1) Proved developed reserves: December 31, 2016 656,087 157,662 252,630 107,256 1,173,635 December 31, 2017 699,786 — 215,364 108,513 1,023,663 December 31, 2018 769,125 — 189,871 122,320 1,081,316 December 31, 2019 594,595 — 176,470 121,751 892,816 Proved undeveloped reserves: December 31, 2016 76,950 17,931 27,336 15,399 137,616 December 31, 2017 111,001 — 24,112 16,210 151,323 December 31, 2018 123,493 — 15,045 14,543 153,081 December 31, 2019 89,458 — 15,038 13,476 117,972 Total proved reserves: Balance December 31, 2016 733,037 175,593 279,966 122,655 1,311,251 Extensions, discoveries and other additions 145,322 24,115 40,731 19,809 229,977 Purchases of minerals in-place 991 1,294 — — 2,285 Revisions of previous estimates 12,903 16,136 (21,936 ) 3,291 10,394 Production (75,151 ) (11,455 ) (59,285 ) (21,032 ) (166,923 ) Sales of minerals in-place (6,315 ) (205,683 ) — — (211,998 ) Balance December 31, 2017 810,787 — 239,476 124,723 1,174,986 Extensions, discoveries and other additions 240,322 — 35,849 26,338 302,509 Purchases of minerals in-place 331 — — — 331 Revisions of previous estimates (63,451 ) — (16,007 ) 6,139 (73,319 ) Production (95,312 ) — (54,402 ) (20,337 ) (170,051 ) Sales of minerals in-place (59 ) — — — (59 ) Balance December 31, 2018 892,618 — 204,916 136,863 1,234,397 Extensions, discoveries and other additions 135,174 — 26,859 14,333 176,366 Purchases of minerals in-place — — — — — Revisions of previous estimates (133,974 ) — 8,355 6,146 (119,473 ) Production (102,211 ) — (48,622 ) (22,115 ) (172,948 ) Sales of minerals in-place (107,554 ) — — — (107,554 ) Balance December 31, 2019 684,053 — 191,508 135,227 1,010,788 (1) 2019 , 2018 , 2017 , and 2016 include total proved reserves of 64 MMboe, 68 MMboe, 80 MMboe, and 93 MMboe, respectively, attributable to a noncontrolling interest in Egypt. During 2019 , Apache added approximately 176 MMboe from extensions, discoveries, and other additions. The Company recorded 135 MMboe of exploration and development adds in the United States, primarily associated with Woodford, Bone Springs, Spraberry, Barnett, and Wolfcamp drilling programs in the Permian Basin ( 129 MMboe) and various offset drilling activity in the Midcontinent region ( 6 MMboe). The international regions contributed 41 MMboe of exploration and development adds during 2019 , with Egypt contributing 27 MMboe from onshore exploration and appraisal activity in the Khalda Extension 2, Khalda, Khalda Extension 3, East Bahariya Extension 3, and West Kanayis concessions. The North Sea contributed 14 MMboe from drilling success in the Beryl and Forties fields. Apache had combined downward revisions of previously estimated reserves of 119 MMboe. Downward revisions related to changes in product prices accounted for 139 MMboe and engineering and performance upward revisions accounted for 20 MMboe. The Company also sold 107 MMboe of proved reserves associated with U.S. divestitures, primarily related to the sale of the Company’s Woodford-SCOOP and STACK plays and western Anadarko Basin assets. During 2018, Apache added approximately 303 MMboe from extensions, discoveries, and other additions. The Company recorded 240 MMboe of exploration and development adds in the United States, primarily associated with Woodford, Bone Springs, Yeso, Barnett, and Wolfcamp drilling programs in the Permian Basin ( 217 MMboe) and Woodford and Austin Chalk drilling activity in the Midcontinent region ( 20 MMboe). The international regions contributed 62 MMboe of exploration and development adds during 2018, with Egypt contributing 36 MMboe from onshore exploration and appraisal activity in the Khalda Extension 2, Khalda, Khalda Extension 3, Matruh, and West Kalabsha concessions. The North Sea contributed 26 MMboe from drilling success in the Beryl and Forties fields. Apache had combined downward revisions of previously estimated reserves of 73 MMboe. Downward revisions related to changes in product prices accounted for 24 MMboe, interest revisions accounted for 5 MMboe, and engineering and performance downward revisions accounted for 44 MMboe. During 2017, Apache sold a combined 212 MMboe primarily through divestiture transactions in Canada. The Company added 2 MMboe of estimated proved reserves through purchases of minerals in-place and 230 MMboe from extensions, discoveries, and other additions. The Company recorded 169 MMboe of exploration and development adds in North America, primarily associated with Woodford, Bone Springs, Yeso, Barnett, and Wolfcamp drilling programs in the Permian Basin ( 128 MMboe), Montney and Duverney drilling in Canada ( 24 MMboe), and Woodford and Austin Chalk drilling activity in the Midcontinent region ( 17 MMboe). The international regions contributed 61 MMboe of exploration and development adds during 2017 with Egypt contributing 41 MMboe from onshore exploration and appraisal activity in the Khalda Extension 2, Khalda, Khalda Extension 3, Matruh, and West Kalabsha concessions. The North Sea offshore region contributed 20 MMboe from drilling success in the Beryl and Forties fields. Apache had combined upward revisions of previously estimated reserves of 10 MMboe. Changes in product prices accounted for 32 MMboe, offset by engineering and performance downward revisions totaling 22 MMboe. Approximately 10 percent of Apache’s year-end 2019 estimated proved developed reserves are classified as proved not producing. These reserves relate to zones that are either behind pipe, or that have been completed but not yet produced, or zones that have been produced in the past, but are not now producing because of mechanical reasons. These reserves are considered to be a lower tier of reserves than producing reserves because they are frequently based on volumetric calculations rather than performance data. Future production associated with behind pipe reserves is scheduled to follow depletion of the currently producing zones in the same wellbores. Additional capital may have to be spent to access these reserves. The capital and economic impact of production timing are reflected in this Note 18, under “Future Net Cash Flows.” Future Net Cash Flows Future cash inflows as of December 31, 2019 , 2018 , and 2017 were calculated using an unweighted arithmetic average of oil and gas prices in effect on the first day of each month in the respective year, except where prices are defined by contractual arrangements. Operating costs, production and ad valorem taxes and future development costs are based on current costs with no escalation. Future development costs include abandonment and dismantlement costs. The following table sets forth unaudited information concerning future net cash flows for proved oil and gas reserves, net of income tax expense. Income tax expense has been computed using expected future tax rates and giving effect to tax deductions and credits available, under current laws, and which relate to oil and gas producing activities. This information does not purport to present the fair market value of the Company’s oil and gas assets, but does present a standardized disclosure concerning possible future net cash flows that would result under the assumptions used. United States Egypt (2) North Sea Total (2) (In millions) 2019 Cash inflows $ 21,694 $ 8,306 $ 7,454 $ 37,454 Production costs (10,642 ) (1,847 ) (2,730 ) (15,219 ) Development costs (1,740 ) (707 ) (2,651 ) (5,098 ) Income tax expense (27 ) (1,930 ) (784 ) (2,741 ) Net cash flows 9,285 3,822 1,289 14,396 10 percent discount rate (4,003 ) (808 ) 297 (4,514 ) Discounted future net cash flows (1) $ 5,282 $ 3,014 $ 1,586 $ 9,882 2018 Cash inflows $ 29,906 $ 9,866 $ 9,206 $ 48,978 Production costs (13,699 ) (1,799 ) (2,588 ) (18,086 ) Development costs (2,150 ) (792 ) (2,714 ) (5,656 ) Income tax expense (19 ) (2,455 ) (1,352 ) (3,826 ) Net cash flows 14,038 4,820 2,552 21,410 10 percent discount rate (6,516 ) (1,066 ) (107 ) (7,689 ) Discounted future net cash flows (1) $ 7,522 $ 3,754 $ 2,445 $ 13,721 2017 Cash inflows $ 24,271 $ 9,254 $ 6,230 $ 39,755 Production costs (10,618 ) (1,749 ) (2,459 ) (14,826 ) Development costs (1,659 ) (1,052 ) (2,795 ) (5,506 ) Income tax expense (42 ) (2,078 ) (353 ) (2,473 ) Net cash flows 11,952 4,375 623 16,950 10 percent discount rate (6,080 ) (1,034 ) 247 (6,867 ) Discounted future net cash flows (1) $ 5,872 $ 3,341 $ 870 $ 10,083 (1) Estimated future net cash flows before income tax expense, discounted at 10 percent per annum, totaled approximately $12.4 billion , $16.9 billion , and $12.2 billion as of December 31, 2019 , 2018 , and 2017 , respectively. (2) Includes discounted future net cash flows of approximately $1.0 billion , $1.3 billion , and $1.1 billion in 2019 , 2018 , and 2017 , respectively, attributable to a noncontrolling interest in Egypt. The following table sets forth the principal sources of change in the discounted future net cash flows: For the Year Ended December 31, 2019 2018 2017 (In millions) Sales, net of production costs $ (4,291 ) $ (5,335 ) $ (4,158 ) Net change in prices and production costs (3,034 ) 3,902 3,651 Discoveries and improved recovery, net of related costs 2,042 3,889 2,273 Change in future development costs (75 ) 47 (279 ) Previously estimated development costs incurred during the period 983 910 719 Revision of quantities (741 ) (648 ) (344 ) Purchases of minerals in-place — 6 9 Accretion of discount 1,693 1,216 952 Change in income taxes 720 (1,125 ) (617 ) Sales of minerals in-place (817 ) (1 ) (809 ) Change in production rates and other (319 ) 777 626 $ (3,839 ) $ 3,638 $ 2,023 |