UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 4, 2014

 

 

Apco Oil and Gas International Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Cayman Islands		0-8933		98-0199453
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)
One Williams Center, 35th Floor, Tulsa, Oklahoma				74172
(Address of principal executive offices)				(Zip Code)

(539) 573-2164

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.13e-4(c))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02.

Results of Operations and Financial Condition.

On November 4, 2014, Apco Oil and Gas International Inc. (“Apco” or the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2014. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 2.02.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)	Exhibits. The following exhibit is furnished with this Form 8-K:

 

Exhibit No.		Description
99.1		Press Release dated November 4, 2014.

The information contained under Items 2.02 and 9.01 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the Securities Exchange Act of 1934 or the Securities Act of 1933, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

Portions of this report may constitute “forward-looking statements” as defined by federal law. Although the Company believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Additional information about issues that could lead to material changes in the Company’s performance is contained in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances after the date hereof.

 

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Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				APCO OIL AND GAS INTERNATIONAL INC.
Date: November 13, 2014				By:		/s/ Benjamin A. Holman
				Name:		Benjamin A. Holman
				Title:		Chief Financial Officer, Chief Accounting Officer and Controller

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EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press Release dated November 4, 2014.

Exhibit 99.1

News Release		Apco Oil and Gas International Inc. (NASDAQ: APAGF) One Williams Center MD 35-8 Tulsa, OK 74172 800-600-3782 www.apcooilandgas.com

 

DATE: Nov. 4, 2014

 

MEDIA CONTACT:     Kelly Swan (539) 573-4944		INVESTOR CONTACT: David Sullivan (539) 573-9360

Apco Reports Third-Quarter 2014 Results

TULSA, Okla. – Apco Oil and Gas International Inc. (NASDAQ:APAGF) today announced that for the three and nine-month periods ended Sept. 30, 2014, it generated unaudited net income attributable to Apco of $12.6 million and $22.8 million, or $0.43 and $0.77 per share, compared with a net loss of $6.0 million and net income of $17.4 million, or $(0.21) and $0.59 per share for the same periods in 2013.

Net income increased for the quarter and year-to-date periods compared with the same periods of 2013 due primarily to the combination of greater operating revenues and the absence of a $13.7 million non-cash deferred income tax expense recorded in third-quarter 2013 related to new tax legislation enacted by the Argentine government.

Total operating revenues increased by $12.7 million for the quarter and $5.0 million for the first nine months of 2014 compared with the same periods in 2013. Greater oil and natural gas sales volumes and higher prices contributed to the increase in 2014 revenues. In particular, increased oil volumes from recent exploration success in Colombia began to have a significant impact on revenues during third-quarter 2014.

Partially offsetting the benefits of higher oil and natural gas revenues were decreased revenues from the Oil Plus hydrocarbon subsidy program in Argentina compared with 2013.

Total costs and operating expenses were higher for the third quarter and the first nine months of 2014 compared with 2013 primarily due to greater depreciation, depletion and amortization expense, greater taxes other than income and higher other expenses. Declining forward oil prices resulted in a non-cash impairment charge of $1.6 million recorded in other expenses during third-quarter 2014. Results for the year-to-date period also reflect the absence of a $3.6 million gain realized in 2013 on a farm-out agreement.

During third-quarter 2014, Apco also experienced higher equity income from its 40.72 percent interest in Petrolera Entre Lomas S.A. The impact of higher operating revenues during the quarter contributed to a $1.2 million increase in equity income from Argentine investment compared with the comparable period of 2013.

 

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For the year-to-date period, higher operating revenues for Petrolera were more than offset by the combination of higher operating costs including foreign exchange losses, and greater income tax expense which resulted in decreased equity income from Argentine investment compared with 2013.

2014 Capital Program and Operations Update

During the first nine months of 2014, capital expenditures of $60 million attributable to Apco’s consolidated interests were invested primarily in exploration and development drilling in Colombia and development drilling in Neuquén and Austral basin properties.

In Colombia, Apco participated in the drilling of eight exploration wells and four development wells. In Argentina, Apco participated in the drilling and completion of 25 wells, and an additional eight wells were in various stages of drilling or completion at the end of September.

Apco Oil and Gas International Inc.

Summary of Earnings

(In Thousands of Dollars Except Per Share Amounts)

 

		2014				2013
Three months ended Sep 30
Operating revenue			46,336				33,672
Costs and operating expenses			35,045				27,651
Investment income			5,817				4,482
Net income attributable to Apco			12,621				(6,038	)
Per share			0.43				(0.21	)

 

		2014				2013
Nine months ended Sep 30
Operating revenue			115,722				110,741
Costs and operating expenses			95,800				84,777
Investment income			12,297				16,069
Net income attributable to Apco			22,802				17,415
Per share			0.77				0.59

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.

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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

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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:

 

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Amounts and nature of future capital expenditures;

 

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Volumes of future oil, natural gas, and LPG production;

 

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Expansion and growth of our business and operations;

 

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Financial condition and liquidity;

 

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Business strategy;

 

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Estimates of proved gas and oil reserves;

 

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Reserve potential;

 

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Development drilling potential;

 

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Cash flow from operations or results of operations;

 

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Seasonality of natural gas demand; and

 

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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:

 

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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;

 

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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);

 

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The strength and financial resources of our competitors;

 

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Development of alternative energy sources;

 

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The impact of operational and development hazards;

 

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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;

 

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Political conditions in Argentina, Colombia and other parts of the world;

 

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The failure to renew participation in hydrocarbon concessions granted by the Argentine government on reasonable terms;

 

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Risks related to strategy and financing, including restrictions stemming from our loan agreement and the availability and cost of credit;

 

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Risks associated with future weather conditions, volcanic activity and earthquakes;

 

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Acts of terrorism; and

 

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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.