HOUSTON, May 5, 2016 /PRNewswire/ -- Apache
Corporation (NYSE, Nasdaq: APA) today announced its financial and
operational results for the first quarter of 2016.
Apache reported a net loss of $489
million, or $1.29 per diluted
common share, which included noncash, after-tax ceiling test
write-downs of $325 million driven
primarily by low commodity prices. When adjusted for these and
certain additional items that impact the comparability of results,
Apache's first-quarter net loss totaled $152
million, or $0.40 per share.
Net cash provided by continuing operating activities was
approximately $276 million. Cash flow
from continuing operations, before changes in operating assets and
liabilities, was $435 million, and
adjusted EBITDA was $541 million.
John J. Christmann IV, Apache's
chief executive officer and president, said, "Apache's
first-quarter performance was characterized by notable achievements
in operations, drilling and further cost reductions. Despite a
continued decline in our drilling activities, we delivered strong
production results in North America Onshore. Results in the Permian
Basin were particularly strong with solid performance from our base
production and very good results from maintenance projects and new
drilling. Our relentless focus on costs continues to yield
significant results. In our North American Onshore key plays,
drilling and completion costs are now down approximately 45 percent
from 2014 levels.
"Our substantial well-cost reductions, coupled with the recent
improvement in oil prices, have created a better investment
environment. As we become more confident in the sustainability of
higher oil prices and the resulting increase in cash flow relative
to our $35-per-barrel plan, we will
increase our capital investment program accordingly. The majority
of any additional investment would most likely go to the Permian
Basin."
First-quarter operational highlights
During the first quarter, Apache averaged 24 operated
rigs and drilled and completed 79 gross-operated wells
worldwide. Highlights from Apache's three principal areas
include:
- North America Onshore – The company averaged 10 rigs in
North America Onshore and drilled and completed 47 gross-operated
wells during the first quarter.
In the Permian Basin, production averaged 171,000 Boe per day, down
2 percent from the fourth quarter of 2015. Apache averaged six
operated rigs and drilled and completed 32 gross-operated wells.
This is down from 57 drilled and completed wells in the fourth
quarter of 2015.
In the Delaware Basin, the company
successfully drilled and completed five gross-operated wells
primarily targeting the Bone Spring formations in the Pecos Bend
area. During the quarter, Apache drilled its best well in the basin
to date, the Seagull 103-HR, which delivered an impressive average
30-day, initial-production rate of nearly 2,800 Boe per day.
The company also drilled and completed 25 gross-operated wells
during the quarter in the Midland Basin, Northwest Shelf and
Central Basin Platform, achieving strong results from both the
Wolfcamp and Yeso formations.
- North Sea – Apache averaged four operated rigs and
generated production of 70,000 Boe per day, a 2-percent decline
from the fourth quarter of 2015. During the second half of the
quarter, Apache brought four successful development wells online,
which resulted in a strong production rebound in the month of
April.
- Egypt – Apache averaged
10 rigs during the quarter and maintained gross production of
353,000 Boe per day, which was essentially flat with the fourth
quarter of 2015. Excluding noncontrolling interest and tax barrels,
net production was up slightly from the fourth quarter to 103,000
Boe per day. Apache placed 23 wells on production and achieved a
drilling success rate of 88 percent during the quarter.
2016 outlook
Following strong first-quarter results, the company is raising
full-year 2016 North American Onshore production guidance to
268,000 to 278,000 Boe per day, up from initial guidance of 263,000
to 273,000 Boe per day set at the beginning of the year.
Accordingly, Apache is also raising full-year 2016 total pro forma
production guidance (excluding Egypt noncontrolling interest and tax barrels)
by 5,000 Boe per day to 438,000 to 458,000 Boe per day.
Total capital investment during the quarter, excluding
Egypt noncontrolling interest, was
$466 million, which was below the
company's guidance of $500 to $550
million. Apache is reiterating full-year 2016 capital
guidance of $1.4 billion to $1.8
billion.
As expected, the company ran a cash-flow deficit for the first
quarter but anticipates a cash-flow surplus for the balance of the
year. The company remains committed to cash-flow neutrality and
ending the year with unchanged or lower net debt.
"Apache's prudent approach during this downturn has allowed us
to protect our financial position, maintain appropriate debt
levels, preserve our investment-grade credit rating, continue our
dividend and refrain from issuing equity, which dilutes existing
shareholders. Looking ahead, we will be patient, thoughtful and
disciplined with regard to deploying incremental capital such that
we continue to maximize full-cycle returns. Longer term, we have
the financial capacity, high-quality drilling inventory and
organizational infrastructure to deliver competitive growth rates
and returns through the cycle," concluded Christmann.
Conference call
Apache will host a conference call to discuss its first-quarter
2016 results at 1 p.m. Central time,
Thursday, May 5. The conference call
will be webcast from Apache's website, www.apachecorp.com. The
webcast replay will be archived on Apache's website.
A replay of the conference call will be available for seven days
following the call. The number for the replay is 855-859-2056 or
404-537-3406 for international calls. The conference access code is
13729891.
Sign up for email alerts to be reminded of the webcast at
http://investor.apachecorp.com/alerts.cfm.
Additional information
Additional information follows, including reconciliations of
adjusted earnings, adjusted EBITDA, net debt, and cash flow from
continuing operations before changes in operating assets and
liabilities (non-GAAP financial measures) to GAAP measures and
information regarding pro forma production. Apache's quarterly
supplement is available at www.apachecorp.com/financialdata.
About Apache
Apache Corporation is an oil and gas exploration and production
company with operations in the United
States, Canada,
Egypt and the United Kingdom. Apache posts announcements,
operational updates, investor information and press releases on its
website, www.apachecorp.com, and on its Media and Investor Center
mobile application, which is available for free download from the
Apple App Store and the Google Play Store.
Non-GAAP financial measures
Apache's financial information includes information prepared in
conformity with generally accepted accounting standards (GAAP) as
well as non-GAAP information. It is management's intent to provide
non-GAAP financial information to enhance understanding of our
consolidated financial information as prepared in accordance with
GAAP. Adjusted earnings, adjusted EBITDA, net debt, and cash flow
from continuing operations before changes in operating assets and
liabilities are non-GAAP measures. This non-GAAP information should
be considered by the reader in addition to, but not instead of, the
financial statements prepared in accordance with GAAP. Each
non-GAAP financial measure is presented along with the
corresponding GAAP measure so as not to imply that more emphasis
should be placed on the non-GAAP measure.
Forward-looking statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements can be identified by words such as "anticipates,"
"intends," "plans," "seeks," "believes," "estimates," "expects,"
"guidance," and similar references to future periods. These
statements include, but are not limited to, statements about future
plans, expectations and objectives for Apache's operations,
including statements about our capital plans, drilling plans,
production expectations, asset sales, and monetizations. While
forward-looking statements are based on assumptions and analyses
made by us that we believe to be reasonable under the
circumstances, whether actual results and developments will meet
our expectations and predictions depend on a number of risks and
uncertainties which could cause our actual results, performance,
and financial condition to differ materially from our expectations.
See "Risk Factors" in our 2015 Form 10-K filed with the Securities
and Exchange Commission for a discussion of risk factors that
affect our business. Any forward-looking statement made by us in
this news release speaks only as of the date on which it is made.
Factors or events that could cause our actual results to differ may
emerge from time to time, and it is not possible for us to predict
all of them. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future development or otherwise, except as may be required by
law.
Cautionary note to investors
The United States Securities and Exchange Commission ("SEC")
permits oil and gas companies, in their filings with the SEC, to
disclose only proved, probable, and possible reserves that meet the
SEC's definitions for such terms. Apache may use certain terms in
this earnings release, such as "resources," "potential resources,"
"resource potential," "estimated net reserves," "recoverable
reserves," and other similar terms that the SEC guidelines strictly
prohibit Apache from including in filings with the SEC. Such terms
do not take into account the certainty of resource recovery, which
is contingent on exploration success, technical improvements in
drilling access, commerciality and other factors, and are therefore
not indicative of expected future resource recovery and should not
be relied upon. Investors are urged to consider carefully the
disclosure in Apache's Annual Report on Form 10-K for the fiscal
year ended Dec. 31, 2015, available
from Apache at www.apachecorp.com or by writing Apache at: 2000
Post Oak Blvd., Suite 100, Houston,
TX 77056 (Attn: Corporate Secretary). You can also obtain
this report from the SEC by calling 1-800-SEC-0330 or from the
SEC's website at www.sec.gov.
Click here for the full release including the quarterly
financial statements.
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