Apache Corporation 2Q15 results


Apache Corporation announces second-quarter financial and operational results

Apache Corporation today announced a second-quarter 2015 net loss of US$5.6 billion, or US$14.83 per diluted common share, which includes an after-tax ceiling-test write down of US$3.7 billion resulting from current low commodity-price levels and US$1.9 billion of other items, mostly after-tax losses and tax expense associated with the company's assets sold during the quarter. When adjusted for certain items that impact the comparability of results, Apache's second-quarter net income totaled US$82 million, or US$0.22 per share. Adjusted EBITDA from continuing operations was US$1.3 billion. Worldwide reported production for the second quarter was 564 000 boe/d. Including 35 000 boe/d of production associated with discontinued operations in Australia, Apache's total production was 599 000 boe/d.

During the quarter, Apache closed the sales of its LNG business and its remaining oil and gas assets in Australia, which served to more strategically align the company's portfolio with its core competencies. "Exiting these businesses eliminated our exposure to projects with large capital-spending commitments and uncertain project timing," Christmann said. "We deployed a portion of the proceeds from these sales to pay down debt, leaving our balance sheet in excellent shape and positioning us for success in this low-commodity-price environment. Importantly, during the first half of 2015, we quickly and cost effectively reduced our drilling and completion activity, commensurate with the deteriorating oil-and-gas price environment. We have also restructured our operational organization to better align with and support our more focused asset base."

Apache has made significant progress on its cost structure through widespread efforts across the organization. In North America, the company is now realizing a 25% reduction in average per-well drilling and completion costs year over year. Lease-operating costs per boe during the quarter were down approximately 13 year over year, and we have taken steps to significantly reduce G&A from the beginning of the year that will be fully realised in 2016.

Highlights

  • Increased onshore North American production 3% sequentially to approximately 317 000 boe/d, driven by a 13 500-boe/d increase in Permian Basin production.
  • Delivered International and Offshore production (adjusted for divestitures, Egypt tax barrels and minority interest) of 172 000 boe/d, with strong contributions from recent Egyptian oil discoveries.
  • Exited the second quarter with total debt of US$9.7 billion and US$3.0 billion of cash, a significant improvement from US$12.3 billion of total debt and US$200 million of cash at March 31, 2015.
  • Raising 2015 onshore North American production guidance from flat year over year to up 1 to 2%, which brings full-year guidance to 305 000 to 308 000 boe/d.
  • Updating 2015 International and Offshore production guidance (adjusted for divestitures, Egypt tax barrels and minority interest) to 164 000 to 168 000 boe/d, a 5 to 8% increase over 2014 pro forma production, and up from the previous guidance of a 'slight increase'.

  • Published on 07/08/2015


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