HOUSTON, Oct. 28 /PRNewswire-FirstCall/ -- Apache Corporation
(NYSE, Nasdaq: APA) today reported record third-quarter earnings of
$432 million, or $1.31 per diluted common share, up 57 percent from
$276 million, or 84 cents per share in the prior-year period. The combination
of continued strong prices for both oil and natural gas and record oil
production fueled Apache's results.
Apache's earnings improved 16 percent over the previous record,
$372 million or $1.13 per share, which was reported in the second quarter of
2004. Cash from operations before changes in operating assets and liabilities
totaled a record $883 million in the third quarter, up from $731 million in
the year-earlier period. (This is a non-GAAP measure; see reconciliation
below.)
Apache's third-quarter earnings were reduced by 6 cents per share because
of the impact of foreign currency swings on deferred taxes and by 4 cents per
share because production was curtailed by Hurricane Ivan.
Apache's worldwide daily production averaged 458,412 barrels of oil
equivalent during the third quarter, up 2 percent from the prior-year period.
Liquid hydrocarbon production averaged 252,800 barrels per day, up 6 percent
from the prior-year period and an 8 percent increase from the second quarter
of 2004. Higher production in Australia, the North Sea and China more than
offset the impact of Hurricane Ivan, which reduced Apache's U.S. oil
production by 4,042 barrels per day during the quarter.
Natural gas production averaged 1.23 billion cubic feet (Bcf) per day,
down about 30 million cubic feet (MMcf) per day from the prior-year period,
and about 20 MMcf below the second quarter level. Gas production would have
been above second-quarter levels had it not been for the impact of Hurricane
Ivan.
In the third quarter, production from the Forties Field in the United
Kingdom sector of the North Sea averaged 58,000 barrels of oil per day, up
from 47,200 barrels per day in the second quarter, while oil production in
Australia averaged 32,200 barrels per day, up 45 percent from the second
quarter. Apache's share of production from the Zhao Dong block in Bohai Bay,
China, rose to 7,900 barrels per day, up 32 percent from the second quarter.
"Apache established a new production record despite the negative effects
of Hurricane Ivan," said G. Steven Farris, president, chief executive officer
and chief operating officer. "What made the difference was growth in other
regions, including a 23 percent increase in production from the North Sea."
Apache has drilled approximately 1,500 wells in the first three quarters
of 2004.
"With the impact of our recently completed acquisitions in the Permian
Basin and the Gulf of Mexico, coupled with our active drilling program, we
have great momentum going into the fourth quarter and into 2005," Farris said.
Commodity prices remained strong in the third quarter. Apache received
$38.04 per barrel of oil during the third quarter, up 39 percent from
$27.34 in the prior-year period; $26.94 per barrel for natural gas liquids,
compared with $18.99 per barrel, and $4.77 per thousand cubic feet (Mcf) of
gas, compared with $4.45 per Mcf.
Apache's debt-to-capitalization ratio rose slightly to 26.3 percent at the
end of the quarter, from 23.2 percent at the end of the second quarter,
because of the cost of assets purchased from ExxonMobil and Anadarko
Petroleum.
Apache Corporation is a large oil and gas independent with core operations
in the United States, Canada, Egypt, the United Kingdom North Sea and Western
Australia.
NOTE: Apache will webcast its conference call live at 1 p.m. Central Time
on Oct. 28, 2004, from its Web site, http://www.apachecorp.com . The replay
will be available on the Web site or by dialing (719) 457-0820 and using pass
code 268728. The telephone replay will be available for one week beginning at
approximately 5 p.m. on Oct. 28.
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 production,
operating costs, exploration and acquisition activities. Any matters that are
not historical facts are forward-looking and, accordingly, involve estimates,
assumptions and uncertainties. There is no assurance that Apache's
expectations will be realized, and actual results may differ materially from
those expressed in the forward-looking statements.
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
REVENUES AND OTHER:
Oil and gas production
revenues $1,414,128 $1,110,015 $3,814,294 $3,129,507
Other (7,126) (5,474) (16,620) (4,001)
1,407,002 1,104,541 3,797,674 3,125,506
OPERATING EXPENSES:
Depreciation, depletion
and amortization 313,520 292,885 895,485 779,590
Asset retirement
obligation accretion 11,071 11,342 32,723 27,100
Lease operating costs 204,890 194,574 608,016 514,995
Share appreciation plan
- lease operating
costs 874 --- 11,866 ---
Gathering and
transportation costs 20,902 16,948 60,698 43,940
Severance and other
taxes 47,148 41,587 77,691 98,883
General and
administrative 35,121 34,692 115,450 93,097
Share appreciation plan
- general and
administrative 854 --- 11,866 ---
China litigation
provision --- --- 71,216 ---
Total operating
expenses 634,380 592,028 1,885,011 1,557,605
OPERATING INCOME 772,622 512,513 1,912,663 1,567,901
FINANCING COSTS:
Interest expense 41,753 48,784 122,495 127,908
Amortization of
deferred loan costs 652 557 1,814 1,624
Capitalized interest (12,593) (14,222) (38,951) (38,072)
Interest income (962) (1,247) (1,795) (2,749)
Net financing costs 28,850 33,872 83,563 88,711
Preferred interests of
subsidiaries --- 1,976 --- 8,668
INCOME BEFORE INCOME
TAXES 743,772 476,665 1,829,100 1,470,522
Provision for income
taxes 310,037 199,704 673,143 636,883
INCOME BEFORE CHANGE IN
ACCOUNTING PRINCIPLE 433,735 276,961 1,155,957 833,639
Cumulative effect of
change in accounting
principle, net of tax --- --- --- 26,632
NET INCOME 433,735 276,961 1,155,957 860,271
Preferred stock
dividends 1,420 1,420 4,260 4,260
INCOME ATTRIBUTABLE TO
COMMON STOCK $432,315 $275,541 $1,151,697 $856,011
INCOME ATTRIBUTABLE TO
COMMON STOCK
BEFORE CHANGE IN
ACCOUNTING PRINCIPLE $432,315 $275,541 $1,151,697 $829,379
BASIC NET INCOME PER
COMMON SHARE
Before change in
accounting principle $1.32 $0.85 $3.54 $2.58
After change in
accounting principle $1.32 $0.85 $3.54 $2.66
DILUTED NET INCOME PER
COMMON SHARE
Before change in
accounting principle $1.31 $0.84 $3.50 $2.56
After change in
accounting principle $1.31 $0.84 $3.50 $2.64
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 326,294 323,751 325,657 321,908
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands)
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
CAPITALIZED COSTS
INCURRED:
North America
exploration and
development $379,908 $239,623 $1,097,718 $738,126
International
exploration and
development 207,597 128,797 551,294 326,829
$587,505 $368,420 $1,649,012 $1,064,955
Acquisitions:
Oil and gas
properties $490,832 $270,498 $490,832 $1,501,312
Gas gathering,
transmission
and processing
facilities --- --- --- 5,484
$490,832 $270,498 $490,832 $1,506,796
Capitalized
interest $12,593 $14,222 $38,951 $38,072
Asset retirement
obligation
costs $116,944 $63,426 $130,125 $402,053
Actual
retirement
expenditures (17,854) (7,500) (32,846) (19,017)
$99,090 $55,926 $97,279 $383,036
Property sales $--- $(15,916) $--- $(16,202)
September 30, December 31,
2004 2003
BALANCE SHEET DATA:
Current Assets $1,587,190 $899,072
Property and
Equipment, net 12,737,292 11,260,085
Goodwill 189,252 189,252
Other Assets 108,981 67,717
Total Assets $14,622,715 $12,416,126
Current
Liabilities $1,144,828 $820,378
Long-Term Debt 2,735,032 2,326,966
Deferred Credits
and Other
Noncurrent
Liabilities 3,071,238 2,735,984
Shareholders'
Equity 7,671,617 6,532,798
Total
Liabilities and
Shareholders'
Equity $14,622,715 $12,416,126
Common shares
outstanding at
end of period 326,471 324,497
NON-GAAP FINANCIAL MEASURES:
The press release discusses Apache's cash from operations before changes
in operating assets and liabilities. It is presented because management
believes the information is useful for investors because it is used internally
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 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.
The following table reconciles net cash provided by operating activities
to cash from operations before changes in operating assets and liabilities.
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
Net cash provided by
operating activities $1,021,486 $854,944 $2,320,538 $2,079,109
Changes in operating
assets and liabilities (138,582) (124,308) 20,062 (64,651)
Cash from operations
before changes in
operating assets and
liabilities $882,904 $730,636 $2,340,600 $2,014,458
APACHE CORPORATION
FINANCIAL INFORMATION
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
FINANCIAL DATA (In
thousands, except per
share data):
Revenues and other $1,407,002 $1,104,541 $3,797,674 $3,125,506
Income Attributable to
Common Stock $432,315 $275,541 $1,151,697 $856,011
Basic Net Income Per
Common Share:
Before change in
accounting principle $1.32 $0.85 $3.54 $2.58
After change in
accounting principle $1.32 $0.85 $3.54 $2.66
Diluted Net Income Per
Common Share:
Before change in
accounting principle $1.31 $0.84 $3.50 $2.56
After change in
accounting principle $1.31 $0.84 $3.50 $2.64
Weighted Average Common
Shares Outstanding 326,294 323,751 325,657 321,908
Diluted Shares
Outstanding 330,193 326,601 329,458 324,650
PRODUCTION AND PRICING
DATA:
NATURAL GAS VOLUME - Mcf
per day
United States 640,467 717,988 649,997 658,231
Canada 325,535 319,522 322,390 315,307
Egypt 141,072 100,965 135,709 112,534
Australia 121,088 114,248 118,587 107,415
North Sea 2,043 3,321 1,769 1,820
Argentina 3,467 7,858 3,985 7,466
Total 1,233,672 1,263,902 1,232,437 1,202,773
AVERAGE NATURAL GAS
PRICE PER MCF
United States $5.30 $5.00 $5.32 $5.40
Canada 5.10 4.47 5.10 4.87
Egypt 4.45 4.31 4.41 4.20
Australia 1.58 1.47 1.64 1.39
North Sea 4.36 1.88 4.57 1.95
Argentina 0.78 0.50 0.62 0.48
Total 4.77 4.45 4.79 4.76
OIL VOLUME - Barrels per day
United States 65,017 75,593 67,110 68,535
Canada 24,743 25,790 25,409 25,143
Egypt 52,602 48,788 51,706 47,406
Australia 32,199 32,711 26,041 31,949
North Sea 58,031 42,111 49,866 25,320
China 7,948 3,131 7,121 1,055
Argentina 532 574 542 586
Total 241,072 228,698 227,795 199,994
AVERAGE OIL PRICE PER
BARREL
United States $41.45 $27.03 $36.90 $27.52
Canada 41.34 27.90 36.72 29.23
Egypt 41.51 27.16 35.81 27.30
Australia 46.72 29.04 40.96 29.45
North Sea 25.18 26.58 23.36 26.10
China 35.99 25.10 32.77 25.10
Argentina 31.28 28.42 33.28 29.14
Total 38.04 27.34 34.00 27.80
NGL VOLUME - Barrels per day
United States 8,934 8,241 8,218 7,265
Canada 2,794 1,445 2,665 1,582
Total 11,728 9,686 10,883 8,847
AVERAGE NGL PRICE PER
BARREL
United States $27.56 $19.23 $25.25 $20.99
Canada 24.94 17.62 22.90 18.85
Total 26.94 18.99 24.67 20.60
SOURCE Apache Corporation
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