Exhibit 99.1
[APACHE LETTERHEAD]
CONTACTS:
(MEDIA): BILL MINTZ (713) 296-7276
TONY LENTINI (713) 296-6227
DAVID HIGGINS (713) 296-6690
(INVESTOR): ROBERT DYE (713) 296-6662
(WEB SITE): WWW.APACHECORP.COM
FOR RELEASE AT 8 A.M. CENTRAL TIME
APACHE THIRD-QUARTER EARNINGS OF $1.69 PER SHARE
FUELED BY RECORD OIL AND GAS PRODUCTION, STRONG PRICES
Houston, Oct. 23, 2003 - Apache Corporation (NYSE: APA) today reported
that record production and continued strong commodity prices fueled
third-quarter earnings of $276 million, or $1.69 per diluted common share,
compared with $145 million, or 95 cents per diluted share, in the prior-year
period.
Absent the impact of non-cash foreign currency fluctuations on deferred
taxes, Apache would have earned $1.81 per share.
Apache produced 449,034 barrels of oil equivalent (boe) per day in the
third quarter, up 34 percent from the year-earlier period and a 5 percent
increase from the second quarter of 2003. Cash from operations was a record $730
million, up 81 percent from the year-earlier period and a 14 percent increase
from the second quarter of 2003. (Please see below for Apache's calculations of
cash from operations and earnings excluding the impact of non-cash foreign
currency fluctuations, which are non-GAAP measures.)
Oil production rose 51 percent to 228,698 barrels per day in the third
quarter, compared with 151,143 barrels per day in the year-earlier period.
Natural gas production averaged 1.26 billion cubic feet (Bcf) per day, up 19
percent from 1.06 Bcf per day in the prior-year period. Natural gas liquids
production averaged 9,686 barrels per day, up from 8,081 barrels per day in the
prior-year period.
-more-
APACHE THIRD-QUARTER EARNINGS OF $1.69 PER SHARE - ADD ONE
In the first nine months of 2003, Apache earned $856 million, or $5.27
per diluted share, surpassing the full-year record of $704 million set in 2001.
Apache's cash from operations for the nine months exceeded $2 billion, more than
the previous full-year record of $1.9 billion set in 2001.
"Since the beginning of the year, Apache's production has increased by
one-third, largely as a result of strategic acquisitions in the North Sea and
the Gulf of Mexico but also as a result of our very successful drilling
program," said G. Steven Farris, president and chief executive officer.
"Exploration success in Egypt and Australia has added future production
potential in both of those core areas.
"During the third quarter, we increased production, completed a $200
million acquisition and still ended the period with a debt-to-capitalization
ratio of 28.5 percent," Farris said.
Apache marked additional significant progress on the operational and
financial fronts during the third quarter:
o Production commenced in China. The Zhao Dong field is currently
producing approximately 16,000 barrels per day. Apache has a 24.5 percent
interest in the field but its share of production is approximately 60 percent
until capital and carried funds are recovered.
o Apache made two oil discoveries in Western Australia's offshore
Exmouth Sub-Basin. Apache has a 28.57 percent working interest in Crosby-1
discovery and a 31.501 percent interest in the Ravensworth-1 discovery.
o Apache completed its acquisition of fields in the Gulf of Mexico from
Shell Exploration and Production Company. Thus far in 2003, Apache has completed
$1.5 billion in acquisitions.
Apache Corporation is an independent oil and gas exploration and
production company with core operations in the United States, Canada, Egypt, the
United Kingdom North Sea and Western Australia.
-more-
APACHE THIRD-QUARTER EARNINGS OF $1.69 PER SHARE - ADD TWO
NOTE: Apache will conduct its quarterly conference call to discuss
third quarter results on Thursday, Oct. 23, at 1 p.m. Central Time. The call
will be webcast live on Apache's Web site, www.apachecorp.com. The conference
call will be available for delayed playback by telephone for one week beginning
at approximately 5 p.m. on Oct. 23. To access the telephone playback, dial (719)
457-0820 and provide Apache's confirmation code, 540371.
This news release contains certain "forward-looking statements" as
defined by the Private Securities Litigation Reform Act of 1995, including,
without limitation, expectations, beliefs, plans and objectives regarding
Apache's future production. Among the important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements are delays and difficulties in completing acquisitions and developing
currently owned properties, the failure of exploratory drilling to result in
commercial wells, delays due to the limited availability of drilling equipment
and personnel, fluctuations in oil and gas prices, general economic conditions
and the risk factors detailed from time to time in Apache's periodic reports and
registration statements filed with the Securities and Exchange Commission.
-end-
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
FOR THE QUARTER FOR THE NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------------------ ------------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
REVENUES AND OTHER:
Oil and gas production revenues $ 1,110,015 $ 655,917 $ 3,129,507 $ 1,837,570
Other (5,474) (10,728) (4,001) (8,070)
----------- ----------- ----------- -----------
Total revenues and other 1,104,541 645,189 3,125,506 1,829,500
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Depreciation, depletion and amortization 292,885 208,788 779,590 630,617
Asset retirement obligation accretion 11,342 -- 27,100 --
International impairments -- -- -- 4,600
Lease operating costs 194,574 116,314 514,995 339,544
Gathering and transportation costs 16,948 9,869 43,940 29,214
Severance and other taxes 41,587 16,064 98,883 48,769
General and administrative 34,692 25,463 93,097 78,830
----------- ----------- ----------- -----------
Total operating expenses 592,028 376,498 1,557,605 1,131,574
----------- ----------- ----------- -----------
OPERATING INCOME 512,513 268,691 1,567,901 697,926
FINANCING COSTS:
Interest expense 48,784 38,787 127,908 117,120
Amortization of deferred loan costs 557 530 1,624 1,330
Capitalized interest (14,222) (10,029) (38,072) (30,493)
Interest income (1,247) (1,215) (2,749) (3,427)
----------- ----------- ----------- -----------
Net financing costs 33,872 28,073 88,711 84,530
----------- ----------- ----------- -----------
Preferred interests of subsidiaries 1,976 3,922 8,668 12,584
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 476,665 236,696 1,470,522 600,812
Provision for income taxes 199,704 90,168 636,883 227,302
----------- ----------- ----------- -----------
INCOME BEFORE CHANGE IN ACCOUNTING PRINCIPLE 276,961 146,528 833,639 373,510
Cumulative effect of change in accounting
principle, net of tax -- -- 26,632 --
----------- ----------- ----------- -----------
NET INCOME 276,961 146,528 860,271 373,510
Preferred stock dividends 1,420 1,406 4,260 9,395
----------- ----------- ----------- -----------
INCOME ATTRIBUTABLE TO COMMON STOCK $ 275,541 $ 145,122 $ 856,011 $ 364,115
=========== =========== =========== ===========
INCOME ATTRIBUTABLE TO COMMON STOCK
BEFORE CHANGE IN ACCOUNTING PRINCIPLE $ 275,541 $ 145,122 $ 829,379 $ 364,115
=========== =========== =========== ===========
BASIC NET INCOME PER COMMON SHARE
Before change in accounting principle $ 1.70 $ .96 $ 5.15 $ 2.46
=========== =========== =========== ===========
After change in accounting principle $ 1.70 $ .96 $ 5.32 $ 2.46
=========== =========== =========== ===========
DILUTED NET INCOME PER COMMON SHARE
Before change in accounting principle $ 1.69 $ .95 $ 5.11 $ 2.42
=========== =========== =========== ===========
After change in accounting principle $ 1.69 $ .95 $ 5.27 $ 2.42
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 161,875 151,097 160,954 147,716
=========== =========== =========== ===========
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
---------------------------- ----------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
CAPITALIZED COSTS INCURRED:
North America exploration and development $ 239,623 $ 171,355 $ 738,126 $ 424,588
International exploration and development 128,797 81,763 326,829 200,342
----------- ----------- ----------- -----------
$ 368,420 $ 253,118 $ 1,064,955 $ 624,930
=========== =========== =========== ===========
Acquisitions:
Oil and gas properties $ 270,498 $ 25,602 $ 1,501,312 $ 29,855
Gas gathering, transmission and
processing facilities -- -- 5,484 --
----------- ----------- ----------- -----------
Total Acquisitions $ 270,498 $ 25,602 $ 1,506,796 $ 29,855
=========== =========== =========== ===========
Capitalized interest $ 14,222 $ 10,029 $ 38,072 $ 30,493
Property sales $ (15,916) $ -- $ (16,202) $ --
September 30, December 31,
2003 2002
------------- -----------
BALANCE SHEET DATA:
Preferred interests of subsidiaries $ -- $ 436,626
Total debt $ 2,514,118 $ 2,158,815
Shareholders' equity $ 6,297,085 $ 4,924,280
Common shares outstanding at end of period 161,931 151,253
NON-GAAP FINANCIAL MEASURES:
Cash from operations represents net cash provided by operating activities before
changes in operating assets and liabilities. Cash from operations is presented
because management believes it is a useful adjunct to net cash provided by
operating activities under accounting principles generally accepted in the
United States (GAAP). Cash from operations is widely accepted as a financial
indicator of an oil and gas company's ability to generate cash which is used to
internally fund exploration and development activities and to service debt. Cash
from operations 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, as an indicator of cash flows, or as a measure of
liquidity. The following table reconciles net cash provided by operating
activities to cash from operations.
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
---------------------------- ----------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net cash provided by operating activities $ 854,944 $ 385,184 $ 2,079,109 $ 1,009,269
Changes in operating assets and liabilities (124,915) 17,460 (66,615) 70,793
----------- ----------- ----------- -----------
Cash from operations $ 730,029 $ 402,644 $ 2,012,494 $ 1,080,062
=========== =========== =========== ===========
Earnings per share before non-cash adjustments, a non-GAAP financial measure,
excludes the impact of currency fluctuations (FX) on deferred taxes that
management deems not representative of the Company's financial performance.
Management believes this measure provides a clearer understanding of the
Company's financial results and enables investors to better compare its results
with those of other companies.
For the Periods
Ended September 30, 2003
----------------------------
Three Months Nine Months
------------ -----------
Earnings per share $ 1.69 $ 5.27
Non-cash impact of FX on deferred taxes 0.12 0.48
----------- -----------
Earnings per share excluding non-cash impact
of FX on deferred taxes $ 1.81 $ 5.75
=========== ===========
APACHE CORPORATION
FINANCIAL INFORMATION
FOR THE QUARTER FOR THE NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
---------------------------------- ----------------------------------
2003 2002 2003 2002
------------- ------------- ------------- -------------
FINANCIAL DATA:
(In thousands, except per share data)
Revenues and other $ 1,104,541 $ 645,189 $ 3,125,506 $ 1,829,500
============= ============= ============= =============
Income Attributable to Common Stock $ 275,541 $ 145,122 $ 856,011 $ 364,115
============= ============= ============= =============
Basic Net Income Per Common Share:
Before change in accounting principle $ 1.70 $ .96 $ 5.15 $ 2.46
============= ============= ============= =============
After change in accounting principle $ 1.70 $ .96 $ 5.32 $ 2.46
============= ============= ============= =============
Diluted Net Income Per Common Share:
Before change in accounting principle $ 1.69 $ .95 $ 5.11 $ 2.42
============= ============= ============= =============
After change in accounting principle $ 1.69 $ .95 $ 5.27 $ 2.42
============= ============= ============= =============
Weighted Average Common Shares Outstanding 161,875 151,097 160,954 147,716
============= ============= ============= =============
Diluted Shares Outstanding 163,300 152,335 162,325 152,287
============= ============= ============= =============
PRODUCTION AND PRICING DATA:
NATURAL GAS VOLUME - MCF PER DAY
United States 717,988 492,165 658,231 515,603
Canada 319,522 316,307 315,307 317,542
Egypt 100,965 117,781 112,534 117,803
Australia 114,248 122,922 107,415 123,421
North Sea 3,321 -- 1,820 --
China -- -- -- --
Argentina 7,858 11,250 7,466 7,931
------------- ------------- ------------- -------------
Total 1,263,902 1,060,425 1,202,773 1,082,300
============= ============= ============= =============
AVERAGE NATURAL GAS PRICE PER MCF
United States $ 5.00 $ 3.13 $ 5.40 $ 2.93
Canada 4.47 2.29 4.87 2.53
Egypt 4.31 4.06 4.20 3.58
Australia 1.47 1.34 1.39 1.29
North Sea 1.88 -- 1.95 --
China -- -- -- --
Argentina 0.50 0.40 0.48 0.43
Total 4.45 2.74 4.76 2.68
OIL VOLUME - BARRELS PER DAY
United States 75,593 52,510 68,535 54,255
Canada 25,790 25,231 25,143 25,178
Egypt 48,788 42,319 47,406 43,540
Australia 32,711 30,462 31,949 30,297
North Sea 42,111 -- 25,320 --
China 3,131 -- 1,055 --
Argentina 574 621 586 627
------------- ------------- ------------- -------------
Total 228,698 151,143 199,994 153,897
============= ============= ============= =============
AVERAGE OIL PRICE PER BARREL
United States $ 27.03 $ 27.81 $ 27.52 $ 24.59
Canada 27.90 25.98 29.23 22.80
Egypt 27.16 26.72 27.30 24.14
Australia 29.04 27.55 29.45 24.39
North Sea 26.58 -- 26.10 --
China 25.10 -- 25.10 --
Argentina 28.42 26.67 29.14 23.15
Total 27.34 27.14 27.80 24.13
NGL VOLUME - BARRELS PER DAY
United States 8,241 6,745 7,265 6,836
Canada 1,445 1,336 1,582 1,436
------------- ------------- ------------- -------------
Total 9,686 8,081 8,847 8,272
============= ============= ============= =============
AVERAGE NGL PRICE PER BARREL
United States $ 19.23 $ 14.33 $ 20.99 $ 14.48
Canada 17.62 14.82 18.85 12.58
Total 18.99 14.41 20.60 14.15