Apco Oil and Gas International Inc. (NASDAQ:APAGF) today
announced that for the three and six-month periods ended June 30,
2014, it generated unaudited net income attributable to Apco of
$7.1 million and $10.2 million, or $0.24 and $0.35 per share,
compared with net income of $13.5 million and $23.5 million, or
$0.46 and $0.80 per share for the same periods in 2013.
Net income for the quarter and year-to-date periods was lower
than the same periods of 2013 due to the combination of lower
operating revenues, greater operating costs and expenses, and lower
equity income. Results for 2014 reflect lower amounts realized from
the Oil Plus hydrocarbon subsidy program, the absence of a $3.6
million gain realized in 2013 on a farm-out agreement, and the
impact of a 25 percent devaluation of the Argentine peso during the
first six months of 2014.
Total operating revenues decreased by $3.0 million for the
quarter and $7.7 million for the first six months of 2014 compared
with the same periods in 2013. During 2014, the benefits of higher
oil and natural gas sales prices were more than offset by the
impact of decreased revenues from the Oil Plus hydrocarbon subsidy
program in Argentina and lower oil sales volumes compared with
2013.
Total costs and operating expenses were higher for the second
quarter and the first six months of 2014 compared with 2013
primarily due to the absence of a $3.6 million gain related to
recovery of costs from a farm-out agreement a year ago. Absent the
gain from 2013, total costs and operating expenses would have been
slightly lower in the second quarter and flat for the first six
months of 2014 compared with the same periods of 2013.
Devaluation of the Argentine peso during 2014 has impacted oil
price realizations, operating costs including foreign exchange
losses, and equity income from Argentine investment in Petrolera
Entre Lomas S.A. (Petrolera).
Apco also experienced lower equity income from its 40.72 percent
interest in Petrolera. For the second quarter and first six months
of 2014, the impact of lower operating revenues, higher operating
costs and greater foreign exchange losses contributed to a $1.9
million and $5.7 million decrease in equity income from Argentine
investment compared with the comparable periods of 2013.
“Our second-quarter results improved with an increase in oil
price realization in Argentina,” said Bryan Guderian, Apco’s chief
executive officer.
“We do not expect Argentina’s recent debt default to have an
immediate impact on our industry. However, until the situation is
resolved, it could cause further deterioration of the peso,
increase inflation and impede progress toward improving the
country’s economic environment,” Guderian added.
2014 Capital Program and Operations Update
During the first six months of 2014, capital expenditures of
$37.6 million attributable to Apco’s consolidated interests were
invested primarily in exploration and development drilling in
Colombia and development drilling in Neuquén basin properties.
In addition to the previously announced exploration and
development activities in Colombia, Apco participated in the
drilling and completion of 14 development wells and one exploration
well in Neuquén basin properties year-to-date. An additional five
wells were in various stages of drilling or completion at the end
of June.
“Our development drilling in the Neuquén basin is progressing in
line with expectations,” said Michael Kyle, Apco’s president and
chief operating officer.
“Development drilling in Tierra del Fuego and three conventional
horizontal wells in the Neuquén basin planned for the second half
of 2014 should combine with our Colombian success to have a
positive impact on both oil and natural gas volumes in the balance
of the year,” Kyle added.
Apco Oil and Gas International
Inc.
Summary of Earnings (In Thousands of Dollars Except Per
Share Amounts)
2014 2013
Three months ended June 30
Operating revenue 38,800
41,790 Costs and operating expenses
32,480 29,855 Investment income
4,530 6,122 Net income
attributable to Apco 7,127
13,520 Per share 0.24
0. 46
2014
2013 Six months ended June 30
Operating revenue
69,386 77,069 Costs and
operating expenses 60,755
57,126 Investment income 6,480
11,587 Net income attributable to Apco
10,181 23,453 Per share
0.35 0.80
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
http://www.b2i.us/irpass.asp?BzID=1671&to=ea&s=0 to join
our e-mail list.
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.
Apco Oil and Gas International Inc.Media Contact:Kelly
Swan, 539-573-4944orInvestor Contact:David Sullivan,
539-573-9360