Apco Oil and Gas International Inc. (NASDAQ:APAGF) today
announced net income attributable to Apco of $39.1 million in 2012,
or $1.33 per share, compared with net income of $31.7 million, or
$1.08 per share in 2011.
The increase in net income for 2012 was primarily due to the
favorable impacts of higher average sales prices and increased
volumes on operating income and equity income from Argentine
investment. These benefits were partially offset by greater costs
and operating expenses.
Initial sales revenues from Apco’s Colombian operations also
contributed to the increase in net income for 2012.
Total operating revenues increased by $28.5 million compared
with 2011. Higher average oil and natural gas sales prices drove a
$19.5 million increase due to prices in operating revenues for
2012. A 4 percent growth in sales volumes – which resulted in 2.7
million barrels of oil equivalent (BOE) for the year applicable to
Apco’s consolidated interests – contributed $11 million to the
increase in operating revenues. A decrease in other operating
revenues partially offset these favorable variances.
Total costs and operating expenses for the year increased by
$23.6 million, primarily the result of higher production and
lifting costs, selling and administrative expense, depreciation
expense, and higher exploration expense.
Exploration expense increased by $8 million due to greater
exploration activity in 2012 compared with 2011. During 2012, Apco
incurred significant 3D seismic costs in its Sur Río Deseado
property in Argentina and in the Llanos 40 block in Colombia.
Apco also experienced higher equity income from its 40.72
percent interest in Petrolera Entre Lomas S.A. (Petrolera). For
2012, the favorable impacts of higher average oil and natural gas
sales prices and greater sales volumes contributed to an increase
of $5.9 million in equity income from Argentine investment compared
with 2011.
Total sales volumes applicable to Apco’s equity interest in
Petrolera were 2.2 million BOE in 2012 – an increase of 3
percent.
“Once again, our steady capital development program in our core
properties in Argentina produced meaningful results. For the tenth
consecutive year, we achieved higher sales volumes,” said Ralph
Hill, Apco’s chief executive officer.
“Although 2012 was a challenging year in Argentina, our
operations were not significantly impacted and we were able to
increase earnings. We are hopeful that the business and political
climate will improve to provide the conditions necessary to
encourage further growth in Argentina,” Hill added.
2012 and 2013 Capital Program and Operational Update
For 2012, capital expenditures of $54.4 million attributable to
Apco’s consolidated interests were invested primarily in
development and exploration drilling in Neuquén basin properties
and exploration drilling in Colombia. During 2012, Apco
participated in the drilling of 37 gross wells.
Apco’s 2013 oil and gas capital expenditure budget is
approximately $66 million. The 2013 capital program will focus on
development and exploration drilling in Neuquén basin properties,
unconventional exploration drilling in the Neuquén basin, and
continued exploration drilling and field development in Colombia.
Apco plans to participate in the drilling of 48 gross wells in
2013.
“We are pleased to see the results of our exploration activities
in Colombia with our first two wells resulting in discoveries in
2012. We hope to continue that success in 2013 and beyond to
further expand our diversification into Colombia,” said Thomas
Bueno, Apco’s chief operating officer.
“In Argentina, where progress was made in 2012 toward exploring
the productive potential of the Vaca Muerta shale, our results to
date have yielded positive but modest results that demonstrate this
formation is capable of production.
“We plan to make further investments targeting Vaca Muerta
during 2013 in our Coirón Amargo block. Understanding the potential
of this resource will take persistence and perseverance by all
companies currently exploring this unconventional formation,” Bueno
added.
Apco Oil and Gas International Inc. Summary of
Earnings (In Thousands of Dollars Except Per Share Amounts)
2012
2011 Three months ended December 31
Operating revenue
35,254 30,951 Costs and operating expenses
31,365 25,065 Investment income
4,244 7,289 Net income attributable to Apco
6,082 9,829 Per share 0.21
0.33
2012
2011 Twelve months ended December 31
Operating revenue 133,263
104,780 Costs and operating expenses
107,192 83,556 Investment income 26,108
20,626 Net income attributable to Apco
39,061 31,746 Per share 1.33
1.08
About Apco Oil and Gas International Inc. (NASDAQ:
APAGF)
Apco Oil and Gas International Inc. is an
international oil and gas exploration and production company with
interests in nine oil and gas concessions and two exploration
permits in Argentina, and three exploration and production
contracts in Colombia. More information is available at
www.apcooilandgas.com. Go to
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Our reports, filings, and other public announcements may 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 Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. We make these forward
looking statements in reliance on the safe harbor protections
provided under the Private Securities Litigation Reform Act of
1995. You typically can identify forward-looking statements by
various forms of words such as "anticipates," "believes," "seeks,"
"could," "may," "should," "continues," "estimates," "expects,"
"forecasts," "intends," "might," "goals," "objectives," "targets,"
"planned," "potential," "projects," "scheduled," "will" or other
similar expressions. These forward-looking statements are based on
management's beliefs and assumptions and on information currently
available to management and include, among others, statements
regarding:
- Amounts and nature of future capital
expenditures;
- Volumes of future oil, natural gas, and
LPG production;
- Expansion and growth of our business
and operations;
- Financial condition and liquidity;
- Business strategy;
- Estimates of proved gas and oil
reserves;
- Reserve potential;
- Development drilling potential;
- Cash flow from operations or results of
operations;
- Seasonality of natural gas demand;
and
- Oil and natural gas prices and
demand.
Forward-looking statements are based on numerous assumptions,
uncertainties and risks that could cause future events or results
to be materially different from those stated or implied in this
announcement. Many of the factors that will determine these results
are beyond our ability to control or predict. Specific factors that
could cause actual results to differ from results contemplated by
the forward-looking statements include, among others, the
following:
- Availability of supplies (including the
uncertainties inherent in assessing, estimating, acquiring and
developing future oil and natural gas reserves), market demand,
volatility of prices, and the availability and cost of
capital;
- Inflation, interest rates, fluctuation
in foreign currency exchange rates, and general economic conditions
(including future disruptions and volatility in the global credit
markets and the impact of these events on our customers and
suppliers);
- The strength and financial resources of
our competitors;
- Development of alternative energy
sources;
- The impact of operational and
development hazards;
- Costs of, changes in, or the results of
laws, government regulations (including climate change regulation
and/or potential additional regulation of drilling and completion
of wells), environmental liabilities and litigation;
- Political conditions in Argentina,
Colombia and other parts of the world;
- The failure to renew participation in
hydrocarbon concessions granted by the Argentine government on
reasonable terms;
- Risks related to strategy and
financing, including restrictions stemming from our loan agreement
and the availability and cost of credit;
- Risks associated with future weather
conditions, volcanic activity and earthquakes;
- Acts of terrorism; and
- Additional risks described in our
filings with the Securities and Exchange Commission ("SEC").
Given the uncertainties and risk factors that could cause our
actual results to differ materially from those contained in any
forward-looking statement, we caution investors not to unduly rely
on our forward-looking statements. We disclaim any obligations to
and do not intend to update the above list or to announce publicly
the result of any revisions to any of the forward-looking
statements to reflect future events or developments.
In addition to causing our actual results to differ, the factors
listed above may cause our intentions to change from those
statements of intention set forth in this announcement. Such
changes in our intentions may also cause our results to differ. We
may change our intentions, at any time and without notice, based
upon changes in such factors, our assumptions, or otherwise.
Investors are urged to closely consider the disclosures and risk
factors in our most recent annual report on Form 10-K filed with
the SEC and our quarterly reports on Form 10-Q available from our
offices or from our website at www.apcooilandgas.com.