Apco Oil and Gas International Inc. (NASDAQ:APAGF) today
announced that for the three and six-month periods ended June 30,
2013, it generated unaudited net income attributable to Apco of
$13.5 million and $23.5 million, or $0.46 and $0.80 per share,
compared with net income of $12.7 million and $22.8 million, or
$0.43 and $0.77 per share for the same periods in 2012.
Net income for the quarter and year-to-date periods was higher
than the same periods in 2012 as the benefits of higher operating
revenues were partially offset by the combination of greater costs
and operating expenses, lower equity income from Argentine
investment, and higher income tax expense.
Total operating revenues increased by $8.8 million and $14.0
million during the second quarter and first six months of 2013
compared with the same periods in 2012. Sales revenues from Apco’s
Colombian operations and benefits realized from the Oil Plus
hydrocarbon subsidy program in Argentina were the primary drivers
of higher operating revenues experienced in 2013.
Total sales volumes applicable to Apco’s consolidated interest
on a barrel of oil equivalent (BOE) basis were 4 percent higher
than second-quarter 2012 and 2 percent higher than the first six
months of 2012.
Total costs and operating expenses for the quarter and the six
months increased by $6.6 million and $8.9 million, respectively,
primarily the result of higher production and lifting costs,
depreciation expense, selling and administrative expense, and
higher foreign exchange losses. The year-to-date period also
benefited from lower exploration expense compared with 2012.
The second quarters of 2013 and 2012 benefited from one-time
credits to other income attributable to farm-outs of part of the
company’s working interests in properties in Colombia and
Argentina.
Apco also experienced lower equity income from its 40.72 percent
interest in Petrolera Entre Lomas S.A. (Petrolera). During the
second quarter and first six months of 2013, the impact of lower
operating revenues and higher operating costs contributed to a
decrease of $1.4 million and $4.3 million in equity income from
Argentine investment compared with the comparable periods in
2012.
2013 Capital Program and Operational Update
During the first six months of 2013, capital expenditures of
$27.6 million attributable to Apco’s consolidated interests were
invested primarily in development and exploration drilling in
Neuquén basin properties and exploration drilling in Colombia.
Apco participated in the drilling of 13 development wells and
two exploration wells in the Neuquén basin in the first six months
of the year. An additional four wells were in various stages of
drilling and completion at the end of the second quarter.
In Colombia, Apco participated in the drilling of two wells in
the Llanos 32 block. The Bandola-1 well was put on production in
April and had a favorable impact on revenues in the second quarter.
The second well was determined to be unproductive.
Additional activities in the first six months included the
acquisition of 3D seismic information in the Coirón Amargo block in
Argentina and the Llanos 32 block in Colombia.
In July of 2013, Apco received the remaining governmental
approval of its agreements with the province of Tierra del Fuego to
extend the term of the company’s three concessions by the ten years
provided for by Argentine hydrocarbon law. The ten-year extensions
for all three concessions run through August 17, 2026.
Under the extensions, Apco and its partners agreed to pay a
total bonus of $5 million and spend $49 million for future
exploitation and exploration. In addition, the provincial
production tax increases from the current level of 12 percent to 15
percent and could increase up to a maximum of 17.5 percent
depending on future increases in product price realizations.
“We are pleased to announce approval of our extension agreements
for our properties in the province of Tierra del Fuego,” said
Michael Kyle, Apco’s president and chief operating officer.
“The extension agreements extend the reserve life of our
properties and allow for a continued stream of investments while
supporting future employment for local residents. Negotiations for
the extension of the portion of the Entre Lomas concession in the
province of Río Negro are advancing and we hope to have an approved
agreement this year,” Kyle added.
Apco Oil and Gas International
Inc.
Summary of Earnings (In Thousands of Dollars Except Per
Share Amounts)
2013 2012 Three months ended June 30
Operating revenue
41,790 32,967 Costs and operating expenses
29,855 23,249 Investment income
6,122 7,163 Net income attributable to Apco
13,520 12,680 Per share
0.46 0.43
2013 2012 Six months ended June 30
Operating revenue
77,069 63,043 Costs and operating expenses
57,126 48,275 Investment income
11,587 15,501 Net income attributable to Apco
23,453 22,756 Per share
0.80 0.77
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
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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.
Apco Oil and Gas International Inc.Media Contact:Kelly
Swan, 539-573-4944orInvestor Contact:David Sullivan,
539-573-9360