TULSA, Okla., May 9 /PRNewswire-FirstCall/ -- Apco Argentina Inc. today
announced first-quarter 2008 net income of $6.4 million, or $0.22 per
share, compared with first-quarter 2007 net income of $7.7 million, or
$0.26 per share.
The quarter-to-quarter decrease is primarily due to lower equity income
from Argentine investments and higher operating and depreciation costs
which combined to more than offset an increase in operating revenues.
Compared with first-quarter 2007, Apco's operating revenues increased
by $1 million from higher average oil and LPG sales prices and greater oil
and natural gas sales volumes.
Oil, natural gas and liquefied petroleum gas (LPG) sales volumes for
the combined consolidated and equity interests totaled 625 thousand
barrels, 1.7 billion cubic feet and 4.7 thousand tons in first-quarter
2008, compared with 612 thousand barrels, 1.6 billion cubic feet and 4.7
thousand tons in first- quarter 2007.
Crude oil, natural gas and LPG sales prices for the combined
consolidated and equity interests averaged $42.01 per barrel, $1.39 per
thousand cubic feet and $454.37 per ton in first-quarter 2008, compared
with $39.61 per barrel, $1.67 per thousand cubic feet and $394.84 per ton
during first-quarter 2007.
Offsetting these increases was a decrease in equity income from Apco's
equity investee, Petrolera Entre Lomas S.A. ("Petrolera"). Petrolera's net
income was lower as a result of higher costs and expenses attributable to
operations in the Entre Lomas concession.
Additionally, Petrolera had exploration expenses in 2008 for two areas
acquired after the first quarter of 2007, the Agua Amarga exploration
permit and the Bajada del Palo concession, and interest expense on
borrowings from its line of credit established in the second half of 2007.
"Although oil prices in the international market have doubled compared
to last year, we experienced only a modest increase in oil sales prices
compared to the first-quarter of 2007 as governmental policies have, for
now, effectively frozen our oil price net backs at the level we are
realizing at this time," said Ralph Hill, Apco's chairman and chief
executive officer.
"The trend of increasing unit costs, coupled with suppressed oil price
realizations, continues to affect our operating margins in 2008," Hill
added.
2008 Capital Investment Update
Since the beginning of 2008, Apco and its Entre Lomas partners have
drilled 10 of the 35 wells planned for 2008. To date, all wells drilled in
Entre Lomas have come online as oil producers or will be completed and put
into production during the second quarter.
In the Tierra del Fuego concessions, Apco and its partners continue the
second development and exploration drilling campaign that commenced in
Sept. 2007. To date, 11 wells have been drilled with a twelfth well in
progress.
Of these wells in Tierra del Fuego, three have been put into production
as oil producers, a fourth well experienced mechanical problems and could
not be salvaged and two others targeting oil production have been cased but
have not been evaluated. Four gas development wells have been drilled that
will be available to put into production when ongoing investments to
increase treatment, compression and transportation capacity are completed
in the third quarter of 2008. The last two wells targeting oil production
are either drilling or awaiting completion.
In Apco's new Agua Amarga exploration permit, after putting the Charco
del Palenque x-1 discovery well into production during the first quarter of
2008, the company and its partners have drilled a second, as yet, untested
exploration well and have just commenced drilling a third well.
In Apco's new Bajada del Palo concession, the company and its partners
are currently acquiring approximately 200 square kilometers of 3D seismic
images over the northeast sector of the concession and have commenced a
workover campaign with the objective of reactivating previously producing
fields.
"We are pleased with the progress of our drilling campaigns in Entre
Lomas and Tierra del Fuego. These investments in our two largest properties
-- when combined with our exploration, reactivation and development
drilling programs in our new Agua Amarga and Bajada del Palo properties --
represent the largest capital program ever undertaken by Apco," said Thomas
Bueno, Apco's president and chief operating officer.
Apco Argentina Inc.
Summary of Earnings
(In Thousands of Dollars Except Per Share Amounts)
2008 2007
Three months ended March 31
Operating Revenue 15,220 14,194
Investment Income 4,033 5,436
Net income 6,449 7,694
Per share* 0.22 0.26
*All per share amounts have been adjusted to reflect the four-for-one
share split effected in the fourth quarter of 2007.
About Apco (Nasdaq: APAGF)
Apco is an oil and gas exploration and production company with
interests in seven oil and gas concessions and two exploration permits in
Argentina.
Contact: Kelly Swan
Williams (media relations)
(918) 573-4944
Thomas Bueno
Apco Argentina (investor relations)
(918) 573-2570
Apco's reports, filings, and other public announcements might contain
or incorporate by reference statements that do not directly or exclusively
relate to historical facts. Such statements are "forward-looking
statements" within the meaning of Private Securities Litigation Reform Act
of 1995. You typically can identify forward-looking statements by the use
of forward- looking words, such as "anticipate," believe," "could,"
"continue," "estimate," "expect," "forecast," "may," "plan," "potential,"
"project," "schedule," "will," and other similar words. These statements
are based on our intentions, beliefs, and assumptions about future events
and are subject to risks, uncertainties, and other factors. Actual results
could differ materially from those contemplated by the forward-looking
statements. In addition to any assumptions and other factors referred to
specifically in connection with such statements, other factors could cause
our actual results to differ materially from the results expressed or
implied in any forward- looking statements. Those factors include, among
others: our ability to extend the terms of the concessions in which we
participate; the accuracy of estimated hydrocarbon reserves and seismic
data; risks and costs associated with drilling, production, gathering,
processing, and transporting activities; the costs of environmental
liabilities and compliance with existing and future environmental
regulations; our ability to obtain and successfully develop new reserves;
our ability to contract for drilling rigs on reasonable terms; our reliance
on a relatively small group of customers; the competence and financial
resources of the operators of concessions in which we participate; changes
in, and volatility of, supply, demand, and prices for crude oil, natural
gas, and other hydrocarbons; economic, market, currency, and political
instability in Argentina, as well as measures taken by the government in
response to such instability; strikes, work stoppages, and protests in
Argentina; the cost and outcome of legal and administrative proceedings;
changes in Argentine laws and regulations to which Apco is subject,
including tax, environmental and employment laws and regulations; and
weather and other natural phenomena. In light of these risks,
uncertainties, and assumptions, the events described in the forward-looking
statements might not occur or might occur to a different extent or at a
different time than we have described. We undertake no obligation to
publicly update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise. Investors are urged
to closely consider the disclosures and risk factors in our annual report
on Form 10-K and quarterly reports on Form 10-Q filed with the Securities
and Exchange Commission and available from our offices or at
http://www.sec.gov.
SOURCE Apco Argentina Inc.
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CONTACT:
Media, Kelly Swan of Williams,
+1-918-573-4944, for Apco Argentina Inc.; or Investors, Thomas
Bueno of Apco Argentina, +1-918-573-2570
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