earnings release operations supplement - Apache Corporation
2013 1st quarter
EARNINGS RELEASE OPERATIONS SUPPLEMENT
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
TABLE OF CONTENTS Overview ............................................................................................................................................................................... 2 NORTH AMERICA .............................................................................................................................................................. 5 Permian......................................................................................................................................................................... 5 Central .......................................................................................................................................................................... 8 Gulf Coast Onshore ..................................................................................................................................................... 11 Gulf of Mexico Shelf.................................................................................................................................................... 12 Gulf of Mexico Deepwater .......................................................................................................................................... 13 Canada ........................................................................................................................................................................ 14 INTERNATIONAL ............................................................................................................................................................. 18 Egypt ........................................................................................................................................................................... 18 Australia ...................................................................................................................................................................... 20 North Sea .................................................................................................................................................................... 22 Argentina .................................................................................................................................................................... 24
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
NOTICE TO INVESTORS This operations supplement contains certain "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 and, whenever possible, are identified by use of the words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions, risks and uncertainties, including, without limitation, our assumptions about the market prices of oil, natural gas, NGLs and other products or services, our commodity hedging arrangements, the supply and demand for oil, natural gas, NGLs and other products or services, production and reserve levels, drilling risks, economic and competitive conditions, the availability of capital resources, capital expenditure and other contractual obligations, and our ability to complete, test and produce the wells identified in this supplement. Because such statements involve risks and uncertainties, Apache’s actual results and performance may differ materially from the results expressed or implied by the forward-looking statements contained in this Supplement. Other important factors that could cause actual results to differ materially from expected results are described in “Risk Factors” in our most recently filed Annual Report on Form 10-K, recent Quarterly Reports on Form 10-Q and amendments thereto, available on our Web site and in our other public filings and press releases. There is no assurance that Apache's expectations will be realized, and readers are cautioned not to place undue reliance on forward looking statements, which speak only as of the date hereof. Unless otherwise required by law, we assume no duty to update these statements as of any future date. 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 operational update supplement, such as “resources,” “potential resources,” “resource potential,” “reserves potential,” 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 December 31, 2012, available from Apache at www.apachecorp.com or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, Texas 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. Certain information provided in this supplement includes financial measurements that are not required by, or presented in accordance with, generally accepted accounting principles (GAAP), including these measures: adjusted earnings, pre-tax margin, and cash from operations. These non-GAAP measures should not be considered as alternatives to GAAP measures, such as net income or cash from operating activities, and may be calculated differently from, and therefore may not be comparable to, similarly titled measures used at other companies. Reconciliation to the most directly comparable GAAP financial measure has been provided. None of the information contained in this document has been audited by any independent auditor. This supplemental document is prepared as a convenience for securities analysts and investors and may be useful as a reference tool. Apache intends to continue to publish this supplement in conjunction with our quarterly earnings release, but may elect to modify the format or discontinue publication at any time, without notice to securities analysts or investors.
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APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Overview North America onshore drilling drives liquids production growth 6 percent over the fourth quarter 2012 and 45 percent over the first quarter 2012
Apache averaged 119 rigs world-wide during the first quarter, with 79 onshore North American rigs. The company drilled 402 gross development wells with 355, or nearly 90 percent, located onshore North America, at a 99 percent success rate. North American onshore regions, which include Permian, Central, Gulf Coast Onshore and Canada, collectively drove liquids production growth 6 percent over the fourth quarter of 2012 (24 percent on an annualized basis). The Permian and Central regions were main drivers of North America onshore liquids growth. These two regions drilled 263 gross development wells, or 65 percent of the total. Permian and Central combined to grow liquids production 10,000 barrels per day over the fourth quarter of 2012, or 9 percent, to 129 Mbbls per day, which represented nearly 31 percent of total world-wide liquids production. Combined production from the Permian and Central regions was nearly 206 Mboe per day, or over 26 percent of total company production. Total world-wide net daily production of oil, natural gas, and natural gas liquids averaged 781.8 Mboe per day in the first quarter with liquids production comprising 53 percent of the total.
APACHE WORLDWIDE OPERATIONS Canada
North Sea
Central Gulf Coast Onshore
Egypt
Permian GOM Shelf GOM Deepwater
Australia
Argentina
2
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
FIRST-QUARTER PRODUCTION BY REGION 782 Mboe/d Australia North Sea
7%
Argentina
6%
Central
10%
11%
Egypt
19%
4%
2% GOM DW
GC Onshore
12%
14%
GOM Shelf
Canada
FIRST-QUARTER PRODUCTION BY PRODUCT 782 Mboe/d
FIRST-QUARTER REVENUE BY PRODUCT $4.2 Billion International Liquids $1.9 Bn
North American Liquids
International Liquids
25%
N.A. Onshore 44%
Permian
15%
North American Liquids $1.5 Bn
28%
45% 37%
18% 29% International Gas
7% International Gas $0.3 Bn
North American Gas
North America
International
Liquids
3
11% North American Gas $0.5 Bn
Natural Gas
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
1Q 2012 VERSUS 1Q 2013 PRODUCTION COMPARSION MBOE/D
1Q 2012
900
800
769 713
1.6% 3.3%
Inc (Dec)
% Inc (Dec)
769
782
13
1.6%
714
737
23
3.3%
Total Excluding Egypt
607
630
23
3.7%
Other International Regions
116
99
-17
-14.2%
79
79
0
0.0%
GOM Offshore
119
105
-14
-11.8%
Canada Gas
106
87
-19
-18.4%
73
95
22
29.6%
114
165
51
44.6%
49%
53%
Total Company
782 737
1Q 2013
Total Company - Egypt Without Tax
700
607
3.7%
630
600
500
North Sea
400
300
200
293 187 114
18.4%
346 259
38.7% U.S. Onshore Gas
165 44.6%
100
N.A. Onshore Liquids
0 1Q 2012
% Liquids
1Q 2013
CENTRAL AND PERMIAN PRODUCTION MBOE/D 220 200
% Increase Permian 20% Central 129% Total 50%
180
MBBLS/D 220
205
200
50%
180
160 140
160
119
137
Permian
20%
120 100 80
% Increase Oil 40% NGLs 148% Total Liquids 62%
140
128
120
62%
100
148%
Liquids
40
NGLs
88
Oil
79
99
80
16 60
60
40 20
129%
86
Central
63 20
38
0
% Liquids
40%
40
0 1Q 2012
1Q 2013
58%
62%
1Q 2012
4
1Q 2013
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
NORTH AMERICA Permian
First-quarter 2013 production in the Permian Region averaged 119,435 Boe/d (74 percent liquids), increasing 20 percent over the first quarter of PERMIAN KEY STATS First-Quarter 2013 2012. Production was affected by unplanned facility downtime resulting in Q1 Production: 119,435 Boe/d Q1 Wells: 187 wells, 149 net deferred production of approximately 3,000 Boe/d, triple that of the same Q1 Rigs: Avg 37 rigs quarter in 2012. For the quarter, the Permian Region averaged 37 drilling rigs and drilled 187 gross (149 net) wells. Drilling at Deadwood continued to lead the region in production growth with horizontal drilling programs in the Wolfcamp (Irion County), Wichita Albany (Andrews County) and Yeso (New Mexico) plays ramping up with higher growth rates.
APACHE PERMIAN REGION ACREAGE AND KEY PLAYS
Central Basin Platform North & North West Shelf Midland Basin
Cline Shale Yeso
Wolfcamp Shale
Delaware Basin
Apache Acreage 50
Miles
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APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Permian (Continued) MIDLAND BASIN VERTICAL
Apache has an estimated 1.1 million gross acres (625,000 net) in the Midland Basin Vertical play area with an estimated 1.7 Bboe of resource potential from over 17,800 identified drilling locations. During the first quarter, Apache continued its vertical program targeting Wolfwood and Fusselman in its Deadwood area, averaging 10 drilling rigs. The Wolfwood program is expanding to the north and south with 20-acre spacing being evaluated. The new Deadwood plant was processing 57 million cubic feet per day (MMcf/d) and gas deliveries will be expanded to accommodate projected growth from our 2013 drilling program.
NORTHWEST SHELF - YESO
Apache has approximately 105,000 gross acres (70,000 net) in the Yeso play with 1,800 identified locations and an estimated 108 MMboe of resource potential. During the first quarter of 2013 approximately 24 wells were completed and producing. The Yeso drilling program, which included late 2012 wells that were brought on line in the first quarter, resulted in 1,200 Bo/d and 1.8 MMcf/d gross production for March.
PERMIAN WELL HIGHLIGHTS First-Quarter 2013
PLAY/TARGET Midland Basin Vertical - Fusselman Midland Basin Vertical – Wolfberry Midland Basin – Wolfcamp/Strawn Midland Basin – Wolfcamp Shale Midland Basin – Cline Shale
Central Basin Platform – Clearfork
Central Basin Platform – Wichita Albany / ABO Northwest Shelf – Yeso nd
Delaware Basin – 2 Bone Springs *Less than 30-day IP
WELL NAME
TVD
LATERAL
IP
Barracuda 45 #5
10,125’
N/A
338 Boe/d*
Weaver 23 #2
10,544’
N/A
253 Boe/d
Augusta Barrow 1401
11,500’
N/A
230 Bo/d
Cleveland 5 #2
10,842’
N/A
339 Boe/d
Redtail 48 #1
10,420’
N/A
326 Boe/d*
Bennie 4342 H81M
7,000’
4,300’
600 Boe/d*
Barracuda 45 #3H
9,320’
4,450’
457 Boe/d
Barracuda 45 #4H
9,250’
4,560’
511 Boe/d
Seth Campbell 70
5,429’
N/A
384 Boe/d
Seth Campbell 71
5,396’
N/A
467 Boe/d
Three Bar SU 107HR
7,050’
4,002’
814 Boe/d
Three Bar SU 109H
7,040’
5,189’
1,110 Boe/d
A State #56
5,965’
N/A
210 Boe/d
Chaparrel 89-1H
9,400’
5,078’
617 Boe/d
6
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Permian (Continued) WOLFCAMP SHALE
Apache has an estimated 450,000 gross acres (345,000 net) prospective for Wolfcamp Shale development with an estimated 347 MMboe of resource potential from 971 identified drilling locations. First-quarter 2013 activity was focused on the Barnhart area (Irion County) where horizontal rigs drilled Upper and Middle Wolfcamp laterals and a single vertical rig drilled delineation and test wells. Early test results encouragingly show that shorter one-mile laterals targeting the Wolfcamp shale can be drilled and completed more quickly and at lower well costs than previous laterals. The shorter lateral was used to complete the Bennie H81M well, which tested at 577 Bo/d and 925 Mcf/d.
CLINE SHALE
Apache has an estimated 650,000 gross acres (520,000 net) prospective for Cline Shale development with an estimated 642 MMboe of resource potential from 2,300 identified drilling locations. Using one of the largest Cline Shale petrophysical databases in the industry, Apache has increased its Lower Cline Shale inventory and continues to improve drilling results and well performance. Apache completed an additional 11 horizontal wells during the first quarter targeting the Lower Cline in the Deadwood area and 28 additional wells are planned for the remainder of the year. Currently, a total of 13 wells are producing at a combined rate of 1,540 Bo/d and 2.3 MMcf/d.
CENTRAL BASIN PLATFORM (CBP)
Apache has an estimated 1.7 million gross acres (780,000 net) in the CBP with an estimated 690 MMboe of resource potential from nearly 9,800 identified drilling locations. Horizontal activity targeting the Wichita Albany / ABO interval at the Three Bar field in Andrews County resulted in two more successful well tests during the first quarter. By the end of the first quarter, the Three Bar Shallow Unit has produced 327 MBbls of oil from six completed wells. Production facility construction gained momentum and now 12 additional wells are planned for 2013.
DELAWARE BASIN
Apache has an estimated 609,000 gross acres (287,000 net), which are prospective for the Wolfbone and Avalon/Bone Springs formations with an estimated 284 MMboe of resource potential from over 1,800 identified drilling locations. Apache drilled four vertical Wolfbone exploratory wells in Pecos County and is currently testing three of the four wells in various Bone Spring and Wolfcamp zones across the leasehold. Several exploratory and development wells are planned for this area in 2013 and a horizontal program is planned for the second half of the year.
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APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Central
First-quarter 2013 production in the Central Region was 86,215 Boe/d, up CENTRAL KEY STATS 9 percent over the fourth quarter of 2012 and up 129 percent over the First-Quarter 2013 first quarter of 2012. Q1 Production: 86,215 Boe/d Total liquids production increased 28 percent to 40 Mbbl/d (46 percent of Q1 Wells: 78 wells, 43 net total production) over the fourth quarter of 2012 and up 301 percent over Q1 Rigs: Avg 25 rigs first quarter of 2012. For the quarter, the Central Region averaged 25 drilling rigs and drilled 78 gross (43 net) wells. Apache continues to work numerous plays across its 1.9 million gross acreage position focusing on the liquids-rich Granite Wash and the oily Tonkawa, Marmaton, Cottage Grove, Cleveland and Canyon Wash plays.
CENTRAL WELL HIGHLIGHTS First-Quarter 2013
PLAY/TARGET Cottage Grove
Tonkawa
Granite Wash
Cleveland Canyon Granite Wash *Less than 30-day IP
WELL NAME
COUNTY
TVD
IP
Simmons 3-30H
Beckham
10,400’
1,915 Bo/d, 1,747 Mcf/d*
Stiles #17-4H
Wheeler
10,660’
1,222 Bo/d, 1,536 Mcf/d
Oak 2-16HD
Ellis
8,519’
719 Bo/d, 1,800 Mcf/d
Inselman 3-10H
Ellis
8,595’
610 Bo/d, 1,575 Mcf/d
CR 2-17H
Ellis
8,338’
555 Bo/d, 2,450 Mcf/d
Jill 43 #4-54H
Wheeler
13,500’
506 Bo/d, 10,739 Mcf/d
Jill 54 #6-54H
Wheeler
13,525’
416 Bo/d, 7,989 Mcf/d
Abraham 3206H
Hemphill
11,200’
150 Bo/d, 5,500 Mcf/d*
MeKeel 226 #4H
Ochiltree
7,963’
417 Bo/d, 415 Mcf/d
Alexander 66 #1HC
Hemphill
9,113’
458 Bo/d, 496 Mcf/d
Boys Ranch 116 #3
Oldham
9,700’
395 Bo/d, 332 Mcf/d
8
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Central (Continued) GRANITE WASH
Apache holds approximately 720,000 gross (350,000 net) acres prospective for the Granite Wash with an estimated resource potential of 4.5 Bboe from 22,800 drilling locations. First-quarter 2013 production in the Granite Wash was 28,129 Boe/d (44 percent liquids). During the quarter, Apache drilled and completed 25 gross (19 net) Granite Wash wells, for a total of 495 gross (217 net) wells now on production in the play.
APACHE CENTRAL REGION ACREAGE AND KEY PLAYS
Cleveland
Marmaton
Canyon Wash
Granite Wash
Tonkawa
APA Acreage
TONKAWA
Apache holds an estimated 634,000 gross (310,000 net) acres prospective for the Tonkawa with an estimated resource potential of 202 MMboe from 2,800 drilling locations. First-quarter 2013 production in the Tonkawa was 8,330 Boe/d (74 percent liquids). During the quarter, Apache drilled and completed 22 gross (9 net) Tonkawa wells, for a total of 380 gross (156 net) wells now on production in the play.
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APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Central (Continued) MARMATON
Apache holds an estimated 662,000 gross (512,000 net) acres in the Marmaton with an estimated resource potential of 161 MMboe from 1,593 drilling locations. First-quarter 2013 production in the Marmaton was 12,042 Boe/d (47 percent liquids). During the quarter, Apache drilled and completed six gross (two net) Marmaton wells, for a total of 123 gross (56 net) wells now on production in the play.
CLEVELAND
Apache holds an estimated 527,000 gross (268,000 net) acres in the oil-rich Cleveland play with an estimated resource potential of 195 MMboe from 2,302 drilling locations. First-quarter 2013 production in the Cleveland was 3,328 Boe/d (68 percent total liquids / 53 percent oil). During the quarter, Apache drilled and completed 12 gross (6 net) Cleveland wells, for a total of 188 gross (72 net) wells now on production in the play.
COTTAGE GROVE
First-quarter 2013 production in the Cottage Grove was 3,512 Boe/d (83 percent liquids / 71 percent oil). During the quarter, Apache drilled and completed seven gross (four net) Cottage Grove wells, for a total of 36 gross (19 net) wells now on production in the play.
CANYON WASH
Apache holds an estimated 141,000 gross (93,000 net) acres prospective for the Canyon Wash in the Bivins Ranch area (Whittenburg Basin) with an estimated 101 MMboe of resource potential from 1,016 drilling locations. First-quarter 2013 production in the Canyon Wash was 3,846 Boe/d (69 percent liquids / 59 percent oil). During the quarter, Apache drilled and completed six gross (three net) Canyon Wash wells, for a total of 19 gross (11 net) wells now on production in the play.
10
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Gulf Coast Onshore
First-quarter 2013 production in the Gulf Coast Onshore Region was 29,859 Boe/d, essentially flat compared to the fourth quarter of 2012. Gas production increased from the fourth quarter of 2012 due to increasing gross gas sales at Atchafalaya Bay Field from 140 MMcf/d to 155 MMcf/d. This was partially offset by compressor downtime at Main Pass 69 and freezing issues in various fields. During the quarter, Apache averaged three drilling rigs in the Region drilling a total of 10 gross (nine net) wells with a 90 percent success rate.
GULF COAST ONSHORE KEY STATS
First-Quarter 2013 Q1 Production: 29,859 Boe/d Q1 Wells: 10 wells, 9 net Q1 Rigs: Avg 3 rigs
APACHE GULF COAST ONSHORE REGION ACREAGE AND KEY PROJECTS
Golden Meadow
Giddings Atchafalaya Bay Chapman Ranch
Apache Acreage 50
Miles
GULF COAST ONSHORE WELL HIGHLIGHTS First-Quarter 2013
PLAY/TARGET
WELL NAME
TD
IP
Frio
Crook-Chapman
10,965’
890 Bo/d, 10.3 MMcf/d
J-4 Sand
SL 1278 #21
5,357’
260 Bo/d, 150 Mcf/d
11
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Gulf of Mexico Shelf
First-quarter 2013 production in the Gulf of Mexico Shelf was 92,024 Boe/d, a 4-percent decline from the fourth quarter of 2012. GOM SHELF KEY STATS First-Quarter 2013 During the quarter, Apache averaged five rigs and drilled a total of six Q1 Production: 92,024 Boe/d operated wells. Q1 Wells: 9 wells, 6 net Apache and Energy XXI formed a joint venture over approximately 100 Q1 Rigs: Avg 5 rigs blocks in the Main Pass Concession (APA 75-percent working interest) which will target sub-salt exploration / exploitation. Wide Azimuth and Short Cable seismic acquisitions will enhance imaging to aid the exploration / exploitation of the new joint venture sub-salt play.
APACHE GULF OF MEXICO SHELF REGION LEASEHOLDS AND KEY PROJECTS
Eugene Island
Ship Shoal
Main Pass Area
Apache Leasehold 50 Miles
GULF OF MEXICO SHELF HIGHLIGHTS First-Quarter 2013
PLAY/TARGET
WELL NAME
TD
IP
OE Sand
GI 54 A-1ST
15,959’
1,050 Bo/d, 1.4 MMcf/d
NS Sand
GI 47 O-7ST
12,292’
1,225 Bo/d, 1.2 MMcf/d
12
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Gulf of Mexico Deepwater
First-quarter 2013 production in the Gulf of Mexico Deepwater was 13,311 Boe/d, a 26 percent decline from the fourth quarter of 2012. The Apache-operated Staurolite well, targeting the Lower Pleistocene oil objective, spud during mid-March and is expected to reach total depth of 21,000 feet during the second quarter of 2013. Apache was the apparent high bidder on five blocks during the March 2013 OCS Sale – 227.
GOM DW KEY STATS
First-Quarter 2013 Q1 Production: 13,311 Boe/d Q1 Wells: 1 well,
EARNINGS RELEASE OPERATIONS SUPPLEMENT
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
TABLE OF CONTENTS Overview ............................................................................................................................................................................... 2 NORTH AMERICA .............................................................................................................................................................. 5 Permian......................................................................................................................................................................... 5 Central .......................................................................................................................................................................... 8 Gulf Coast Onshore ..................................................................................................................................................... 11 Gulf of Mexico Shelf.................................................................................................................................................... 12 Gulf of Mexico Deepwater .......................................................................................................................................... 13 Canada ........................................................................................................................................................................ 14 INTERNATIONAL ............................................................................................................................................................. 18 Egypt ........................................................................................................................................................................... 18 Australia ...................................................................................................................................................................... 20 North Sea .................................................................................................................................................................... 22 Argentina .................................................................................................................................................................... 24
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
NOTICE TO INVESTORS This operations supplement contains certain "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 and, whenever possible, are identified by use of the words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions, risks and uncertainties, including, without limitation, our assumptions about the market prices of oil, natural gas, NGLs and other products or services, our commodity hedging arrangements, the supply and demand for oil, natural gas, NGLs and other products or services, production and reserve levels, drilling risks, economic and competitive conditions, the availability of capital resources, capital expenditure and other contractual obligations, and our ability to complete, test and produce the wells identified in this supplement. Because such statements involve risks and uncertainties, Apache’s actual results and performance may differ materially from the results expressed or implied by the forward-looking statements contained in this Supplement. Other important factors that could cause actual results to differ materially from expected results are described in “Risk Factors” in our most recently filed Annual Report on Form 10-K, recent Quarterly Reports on Form 10-Q and amendments thereto, available on our Web site and in our other public filings and press releases. There is no assurance that Apache's expectations will be realized, and readers are cautioned not to place undue reliance on forward looking statements, which speak only as of the date hereof. Unless otherwise required by law, we assume no duty to update these statements as of any future date. 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 operational update supplement, such as “resources,” “potential resources,” “resource potential,” “reserves potential,” 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 December 31, 2012, available from Apache at www.apachecorp.com or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, Texas 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. Certain information provided in this supplement includes financial measurements that are not required by, or presented in accordance with, generally accepted accounting principles (GAAP), including these measures: adjusted earnings, pre-tax margin, and cash from operations. These non-GAAP measures should not be considered as alternatives to GAAP measures, such as net income or cash from operating activities, and may be calculated differently from, and therefore may not be comparable to, similarly titled measures used at other companies. Reconciliation to the most directly comparable GAAP financial measure has been provided. None of the information contained in this document has been audited by any independent auditor. This supplemental document is prepared as a convenience for securities analysts and investors and may be useful as a reference tool. Apache intends to continue to publish this supplement in conjunction with our quarterly earnings release, but may elect to modify the format or discontinue publication at any time, without notice to securities analysts or investors.
1
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Overview North America onshore drilling drives liquids production growth 6 percent over the fourth quarter 2012 and 45 percent over the first quarter 2012
Apache averaged 119 rigs world-wide during the first quarter, with 79 onshore North American rigs. The company drilled 402 gross development wells with 355, or nearly 90 percent, located onshore North America, at a 99 percent success rate. North American onshore regions, which include Permian, Central, Gulf Coast Onshore and Canada, collectively drove liquids production growth 6 percent over the fourth quarter of 2012 (24 percent on an annualized basis). The Permian and Central regions were main drivers of North America onshore liquids growth. These two regions drilled 263 gross development wells, or 65 percent of the total. Permian and Central combined to grow liquids production 10,000 barrels per day over the fourth quarter of 2012, or 9 percent, to 129 Mbbls per day, which represented nearly 31 percent of total world-wide liquids production. Combined production from the Permian and Central regions was nearly 206 Mboe per day, or over 26 percent of total company production. Total world-wide net daily production of oil, natural gas, and natural gas liquids averaged 781.8 Mboe per day in the first quarter with liquids production comprising 53 percent of the total.
APACHE WORLDWIDE OPERATIONS Canada
North Sea
Central Gulf Coast Onshore
Egypt
Permian GOM Shelf GOM Deepwater
Australia
Argentina
2
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
FIRST-QUARTER PRODUCTION BY REGION 782 Mboe/d Australia North Sea
7%
Argentina
6%
Central
10%
11%
Egypt
19%
4%
2% GOM DW
GC Onshore
12%
14%
GOM Shelf
Canada
FIRST-QUARTER PRODUCTION BY PRODUCT 782 Mboe/d
FIRST-QUARTER REVENUE BY PRODUCT $4.2 Billion International Liquids $1.9 Bn
North American Liquids
International Liquids
25%
N.A. Onshore 44%
Permian
15%
North American Liquids $1.5 Bn
28%
45% 37%
18% 29% International Gas
7% International Gas $0.3 Bn
North American Gas
North America
International
Liquids
3
11% North American Gas $0.5 Bn
Natural Gas
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
1Q 2012 VERSUS 1Q 2013 PRODUCTION COMPARSION MBOE/D
1Q 2012
900
800
769 713
1.6% 3.3%
Inc (Dec)
% Inc (Dec)
769
782
13
1.6%
714
737
23
3.3%
Total Excluding Egypt
607
630
23
3.7%
Other International Regions
116
99
-17
-14.2%
79
79
0
0.0%
GOM Offshore
119
105
-14
-11.8%
Canada Gas
106
87
-19
-18.4%
73
95
22
29.6%
114
165
51
44.6%
49%
53%
Total Company
782 737
1Q 2013
Total Company - Egypt Without Tax
700
607
3.7%
630
600
500
North Sea
400
300
200
293 187 114
18.4%
346 259
38.7% U.S. Onshore Gas
165 44.6%
100
N.A. Onshore Liquids
0 1Q 2012
% Liquids
1Q 2013
CENTRAL AND PERMIAN PRODUCTION MBOE/D 220 200
% Increase Permian 20% Central 129% Total 50%
180
MBBLS/D 220
205
200
50%
180
160 140
160
119
137
Permian
20%
120 100 80
% Increase Oil 40% NGLs 148% Total Liquids 62%
140
128
120
62%
100
148%
Liquids
40
NGLs
88
Oil
79
99
80
16 60
60
40 20
129%
86
Central
63 20
38
0
% Liquids
40%
40
0 1Q 2012
1Q 2013
58%
62%
1Q 2012
4
1Q 2013
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
NORTH AMERICA Permian
First-quarter 2013 production in the Permian Region averaged 119,435 Boe/d (74 percent liquids), increasing 20 percent over the first quarter of PERMIAN KEY STATS First-Quarter 2013 2012. Production was affected by unplanned facility downtime resulting in Q1 Production: 119,435 Boe/d Q1 Wells: 187 wells, 149 net deferred production of approximately 3,000 Boe/d, triple that of the same Q1 Rigs: Avg 37 rigs quarter in 2012. For the quarter, the Permian Region averaged 37 drilling rigs and drilled 187 gross (149 net) wells. Drilling at Deadwood continued to lead the region in production growth with horizontal drilling programs in the Wolfcamp (Irion County), Wichita Albany (Andrews County) and Yeso (New Mexico) plays ramping up with higher growth rates.
APACHE PERMIAN REGION ACREAGE AND KEY PLAYS
Central Basin Platform North & North West Shelf Midland Basin
Cline Shale Yeso
Wolfcamp Shale
Delaware Basin
Apache Acreage 50
Miles
5
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Permian (Continued) MIDLAND BASIN VERTICAL
Apache has an estimated 1.1 million gross acres (625,000 net) in the Midland Basin Vertical play area with an estimated 1.7 Bboe of resource potential from over 17,800 identified drilling locations. During the first quarter, Apache continued its vertical program targeting Wolfwood and Fusselman in its Deadwood area, averaging 10 drilling rigs. The Wolfwood program is expanding to the north and south with 20-acre spacing being evaluated. The new Deadwood plant was processing 57 million cubic feet per day (MMcf/d) and gas deliveries will be expanded to accommodate projected growth from our 2013 drilling program.
NORTHWEST SHELF - YESO
Apache has approximately 105,000 gross acres (70,000 net) in the Yeso play with 1,800 identified locations and an estimated 108 MMboe of resource potential. During the first quarter of 2013 approximately 24 wells were completed and producing. The Yeso drilling program, which included late 2012 wells that were brought on line in the first quarter, resulted in 1,200 Bo/d and 1.8 MMcf/d gross production for March.
PERMIAN WELL HIGHLIGHTS First-Quarter 2013
PLAY/TARGET Midland Basin Vertical - Fusselman Midland Basin Vertical – Wolfberry Midland Basin – Wolfcamp/Strawn Midland Basin – Wolfcamp Shale Midland Basin – Cline Shale
Central Basin Platform – Clearfork
Central Basin Platform – Wichita Albany / ABO Northwest Shelf – Yeso nd
Delaware Basin – 2 Bone Springs *Less than 30-day IP
WELL NAME
TVD
LATERAL
IP
Barracuda 45 #5
10,125’
N/A
338 Boe/d*
Weaver 23 #2
10,544’
N/A
253 Boe/d
Augusta Barrow 1401
11,500’
N/A
230 Bo/d
Cleveland 5 #2
10,842’
N/A
339 Boe/d
Redtail 48 #1
10,420’
N/A
326 Boe/d*
Bennie 4342 H81M
7,000’
4,300’
600 Boe/d*
Barracuda 45 #3H
9,320’
4,450’
457 Boe/d
Barracuda 45 #4H
9,250’
4,560’
511 Boe/d
Seth Campbell 70
5,429’
N/A
384 Boe/d
Seth Campbell 71
5,396’
N/A
467 Boe/d
Three Bar SU 107HR
7,050’
4,002’
814 Boe/d
Three Bar SU 109H
7,040’
5,189’
1,110 Boe/d
A State #56
5,965’
N/A
210 Boe/d
Chaparrel 89-1H
9,400’
5,078’
617 Boe/d
6
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Permian (Continued) WOLFCAMP SHALE
Apache has an estimated 450,000 gross acres (345,000 net) prospective for Wolfcamp Shale development with an estimated 347 MMboe of resource potential from 971 identified drilling locations. First-quarter 2013 activity was focused on the Barnhart area (Irion County) where horizontal rigs drilled Upper and Middle Wolfcamp laterals and a single vertical rig drilled delineation and test wells. Early test results encouragingly show that shorter one-mile laterals targeting the Wolfcamp shale can be drilled and completed more quickly and at lower well costs than previous laterals. The shorter lateral was used to complete the Bennie H81M well, which tested at 577 Bo/d and 925 Mcf/d.
CLINE SHALE
Apache has an estimated 650,000 gross acres (520,000 net) prospective for Cline Shale development with an estimated 642 MMboe of resource potential from 2,300 identified drilling locations. Using one of the largest Cline Shale petrophysical databases in the industry, Apache has increased its Lower Cline Shale inventory and continues to improve drilling results and well performance. Apache completed an additional 11 horizontal wells during the first quarter targeting the Lower Cline in the Deadwood area and 28 additional wells are planned for the remainder of the year. Currently, a total of 13 wells are producing at a combined rate of 1,540 Bo/d and 2.3 MMcf/d.
CENTRAL BASIN PLATFORM (CBP)
Apache has an estimated 1.7 million gross acres (780,000 net) in the CBP with an estimated 690 MMboe of resource potential from nearly 9,800 identified drilling locations. Horizontal activity targeting the Wichita Albany / ABO interval at the Three Bar field in Andrews County resulted in two more successful well tests during the first quarter. By the end of the first quarter, the Three Bar Shallow Unit has produced 327 MBbls of oil from six completed wells. Production facility construction gained momentum and now 12 additional wells are planned for 2013.
DELAWARE BASIN
Apache has an estimated 609,000 gross acres (287,000 net), which are prospective for the Wolfbone and Avalon/Bone Springs formations with an estimated 284 MMboe of resource potential from over 1,800 identified drilling locations. Apache drilled four vertical Wolfbone exploratory wells in Pecos County and is currently testing three of the four wells in various Bone Spring and Wolfcamp zones across the leasehold. Several exploratory and development wells are planned for this area in 2013 and a horizontal program is planned for the second half of the year.
7
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Central
First-quarter 2013 production in the Central Region was 86,215 Boe/d, up CENTRAL KEY STATS 9 percent over the fourth quarter of 2012 and up 129 percent over the First-Quarter 2013 first quarter of 2012. Q1 Production: 86,215 Boe/d Total liquids production increased 28 percent to 40 Mbbl/d (46 percent of Q1 Wells: 78 wells, 43 net total production) over the fourth quarter of 2012 and up 301 percent over Q1 Rigs: Avg 25 rigs first quarter of 2012. For the quarter, the Central Region averaged 25 drilling rigs and drilled 78 gross (43 net) wells. Apache continues to work numerous plays across its 1.9 million gross acreage position focusing on the liquids-rich Granite Wash and the oily Tonkawa, Marmaton, Cottage Grove, Cleveland and Canyon Wash plays.
CENTRAL WELL HIGHLIGHTS First-Quarter 2013
PLAY/TARGET Cottage Grove
Tonkawa
Granite Wash
Cleveland Canyon Granite Wash *Less than 30-day IP
WELL NAME
COUNTY
TVD
IP
Simmons 3-30H
Beckham
10,400’
1,915 Bo/d, 1,747 Mcf/d*
Stiles #17-4H
Wheeler
10,660’
1,222 Bo/d, 1,536 Mcf/d
Oak 2-16HD
Ellis
8,519’
719 Bo/d, 1,800 Mcf/d
Inselman 3-10H
Ellis
8,595’
610 Bo/d, 1,575 Mcf/d
CR 2-17H
Ellis
8,338’
555 Bo/d, 2,450 Mcf/d
Jill 43 #4-54H
Wheeler
13,500’
506 Bo/d, 10,739 Mcf/d
Jill 54 #6-54H
Wheeler
13,525’
416 Bo/d, 7,989 Mcf/d
Abraham 3206H
Hemphill
11,200’
150 Bo/d, 5,500 Mcf/d*
MeKeel 226 #4H
Ochiltree
7,963’
417 Bo/d, 415 Mcf/d
Alexander 66 #1HC
Hemphill
9,113’
458 Bo/d, 496 Mcf/d
Boys Ranch 116 #3
Oldham
9,700’
395 Bo/d, 332 Mcf/d
8
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Central (Continued) GRANITE WASH
Apache holds approximately 720,000 gross (350,000 net) acres prospective for the Granite Wash with an estimated resource potential of 4.5 Bboe from 22,800 drilling locations. First-quarter 2013 production in the Granite Wash was 28,129 Boe/d (44 percent liquids). During the quarter, Apache drilled and completed 25 gross (19 net) Granite Wash wells, for a total of 495 gross (217 net) wells now on production in the play.
APACHE CENTRAL REGION ACREAGE AND KEY PLAYS
Cleveland
Marmaton
Canyon Wash
Granite Wash
Tonkawa
APA Acreage
TONKAWA
Apache holds an estimated 634,000 gross (310,000 net) acres prospective for the Tonkawa with an estimated resource potential of 202 MMboe from 2,800 drilling locations. First-quarter 2013 production in the Tonkawa was 8,330 Boe/d (74 percent liquids). During the quarter, Apache drilled and completed 22 gross (9 net) Tonkawa wells, for a total of 380 gross (156 net) wells now on production in the play.
9
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Central (Continued) MARMATON
Apache holds an estimated 662,000 gross (512,000 net) acres in the Marmaton with an estimated resource potential of 161 MMboe from 1,593 drilling locations. First-quarter 2013 production in the Marmaton was 12,042 Boe/d (47 percent liquids). During the quarter, Apache drilled and completed six gross (two net) Marmaton wells, for a total of 123 gross (56 net) wells now on production in the play.
CLEVELAND
Apache holds an estimated 527,000 gross (268,000 net) acres in the oil-rich Cleveland play with an estimated resource potential of 195 MMboe from 2,302 drilling locations. First-quarter 2013 production in the Cleveland was 3,328 Boe/d (68 percent total liquids / 53 percent oil). During the quarter, Apache drilled and completed 12 gross (6 net) Cleveland wells, for a total of 188 gross (72 net) wells now on production in the play.
COTTAGE GROVE
First-quarter 2013 production in the Cottage Grove was 3,512 Boe/d (83 percent liquids / 71 percent oil). During the quarter, Apache drilled and completed seven gross (four net) Cottage Grove wells, for a total of 36 gross (19 net) wells now on production in the play.
CANYON WASH
Apache holds an estimated 141,000 gross (93,000 net) acres prospective for the Canyon Wash in the Bivins Ranch area (Whittenburg Basin) with an estimated 101 MMboe of resource potential from 1,016 drilling locations. First-quarter 2013 production in the Canyon Wash was 3,846 Boe/d (69 percent liquids / 59 percent oil). During the quarter, Apache drilled and completed six gross (three net) Canyon Wash wells, for a total of 19 gross (11 net) wells now on production in the play.
10
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Gulf Coast Onshore
First-quarter 2013 production in the Gulf Coast Onshore Region was 29,859 Boe/d, essentially flat compared to the fourth quarter of 2012. Gas production increased from the fourth quarter of 2012 due to increasing gross gas sales at Atchafalaya Bay Field from 140 MMcf/d to 155 MMcf/d. This was partially offset by compressor downtime at Main Pass 69 and freezing issues in various fields. During the quarter, Apache averaged three drilling rigs in the Region drilling a total of 10 gross (nine net) wells with a 90 percent success rate.
GULF COAST ONSHORE KEY STATS
First-Quarter 2013 Q1 Production: 29,859 Boe/d Q1 Wells: 10 wells, 9 net Q1 Rigs: Avg 3 rigs
APACHE GULF COAST ONSHORE REGION ACREAGE AND KEY PROJECTS
Golden Meadow
Giddings Atchafalaya Bay Chapman Ranch
Apache Acreage 50
Miles
GULF COAST ONSHORE WELL HIGHLIGHTS First-Quarter 2013
PLAY/TARGET
WELL NAME
TD
IP
Frio
Crook-Chapman
10,965’
890 Bo/d, 10.3 MMcf/d
J-4 Sand
SL 1278 #21
5,357’
260 Bo/d, 150 Mcf/d
11
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Gulf of Mexico Shelf
First-quarter 2013 production in the Gulf of Mexico Shelf was 92,024 Boe/d, a 4-percent decline from the fourth quarter of 2012. GOM SHELF KEY STATS First-Quarter 2013 During the quarter, Apache averaged five rigs and drilled a total of six Q1 Production: 92,024 Boe/d operated wells. Q1 Wells: 9 wells, 6 net Apache and Energy XXI formed a joint venture over approximately 100 Q1 Rigs: Avg 5 rigs blocks in the Main Pass Concession (APA 75-percent working interest) which will target sub-salt exploration / exploitation. Wide Azimuth and Short Cable seismic acquisitions will enhance imaging to aid the exploration / exploitation of the new joint venture sub-salt play.
APACHE GULF OF MEXICO SHELF REGION LEASEHOLDS AND KEY PROJECTS
Eugene Island
Ship Shoal
Main Pass Area
Apache Leasehold 50 Miles
GULF OF MEXICO SHELF HIGHLIGHTS First-Quarter 2013
PLAY/TARGET
WELL NAME
TD
IP
OE Sand
GI 54 A-1ST
15,959’
1,050 Bo/d, 1.4 MMcf/d
NS Sand
GI 47 O-7ST
12,292’
1,225 Bo/d, 1.2 MMcf/d
12
APACHE FIRST-QUARTER 2013 EARNINGS RELEASE OPERATIONS SUPPLEMENT
Gulf of Mexico Deepwater
First-quarter 2013 production in the Gulf of Mexico Deepwater was 13,311 Boe/d, a 26 percent decline from the fourth quarter of 2012. The Apache-operated Staurolite well, targeting the Lower Pleistocene oil objective, spud during mid-March and is expected to reach total depth of 21,000 feet during the second quarter of 2013. Apache was the apparent high bidder on five blocks during the March 2013 OCS Sale – 227.
GOM DW KEY STATS
First-Quarter 2013 Q1 Production: 13,311 Boe/d Q1 Wells: 1 well,
