Second-Quarter 2014 Financial Supplement - Apache Corporation
2014 2nd Quarter
EARNINGS RELEASE FINANCIAL SUPPLEMENT & Non-GAAP Reconciliations
Apache Corporation Table of Contents NOTICE TO INVESTORS .................................................................................................................
1
FINANCIALS AND SCHEDULES Statement of Consolidated Operations ........................................................................................... Production Information .................................................................................................................. Pro Forma Production Information ................................................................................................ Price Information ............................................................................................................................ Supplemental Financial Information .............................................................................................. Summary of Oil and Gas Investments ........................................................................................... Summary Balance Sheet Information ............................................................................................
2 3 6 7 8 10 11
NON-GAAP RECONCILIATIONS Adjusted Earnings ........................................................................................................................... Cash From Operations .....................................................................................................................
12 13
NOTICE TO INVESTORS This earnings report 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 other factors discussed in our most recently filed Annual Report on Form 10-K, recent Quarterly Reports on Form 10-Q and recent Current Reports on Form 8-K, 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 actual results may differ materially from those expressed in the forward-looking statements. 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 release, such as resources, potential resources, 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, 2013, 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 adjusted earnings 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 CORPORATION STATEMENT OF CONSOLIDATED OPERATIONS (in millions, except per share data) 2Q14 REVENUES AND OTHER: Oil revenues ..................................................................................... Gas revenues .................................................................................... NGL revenues .................................................................................. Oil and gas production revenues............................................................ Derivative instrument gains (losses), net ............................................... Other .......................................................................................................
$
2,950 589 169 3,708 (174) (50) 3,484
OPERATING EXPENSES: Depreciation, depletion and amortization Oil and gas property and equipment Recurring ................................................................................... Additional .................................................................................. Other assets ...................................................................................... Asset retirement obligation accretion .................................................... Lease operating expenses....................................................................... Gathering and transportation ................................................................. Taxes other than income ........................................................................ General and administrative .................................................................... Acquisition, divestiture & separation costs ........................................... Financing costs, net................................................................................
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES ........................................................................................... Current income tax provision ................................................................ Deferred income tax provision .............................................................. INCOME FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST ................................................................ Income (loss) from discontinued operations, net of tax ........................ INCOME INCLUDING NONCONTROLLING INTEREST ....................... Net income attributable to noncontrolling interest ................................ Preferred stock dividends....................................................................... INCOME ATTRIBUTABLE TO COMMON STOCK..................................
$
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS Net income from continuing operations attributable to common shareholders ........................................................................................... Net income (loss) from discontinued operations ................................... Net income attributable to common shareholders ................................. BASIC NET INCOME PER COMMON SHARE: Basic net income from continuing operations per share ....................... Basic net income (loss) from discontinued operations per share .......... Basic net income per share .................................................................... DILUTED NET INCOME PER COMMON SHARE: Diluted net income from continuing operations per share .................... Diluted net income (loss) from discontinued operations per share ....... Diluted net income per share .................................................................
$
2,815 646 186 3,647 (20) 48 3,675
2Q13
$
3,130 721 150 4,001 247 20 4,268
YTD 2014
YTD 2013
$
$
5,765 1,235 355 7,355 (194) (2) 7,159
6,322 1,402 298 8,022 147 45 8,214
1,155 203 99 45 613 66 181 94 14 35
1,109 97 44 597 70 181 105 16 27
1,258 92 64 781 77 170 126 52
2,264 203 196 89 1,210 136 362 199 30 62
2,468 194 127 1,503 150 399 238 107
2,505
2,246
2,620
4,751
5,186
979 325 41
1,429 416 162
1,648 284 327
2,408 741 203
3,028 781 432
613 613 108 505
851 (517) 334 98 236
1,037 (2) 1,035 19 1,016
1,464 (517) 947 206 741
1,815 (63) 1,752 38 1,714
$
505 -
$
753 (517)
$
1,018 (2)
$
1,258 (517)
1,777 (63)
$
505
$
236
$
1,016
$
741
$
1,714
$
1.31 1.31
$
1.92 (1.32) 0.60
$
2.60 (0.01) 2.59
$
$
$
3.23 (1.33) 1.90
4.53 (0.16) 4.37
1.31 1.31
$
1.90 (1.30) 0.60
$
2.54 2.54
$ $ $
3.21 (1.32) 1.89
$
$
$ $
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic ....................................................................................................... Diluted .................................................................................................... DIVIDENDS DECLARED PER COMMON SHARE ..................................
1Q14
$
$
385 387 $
0.25
2
$
$
394 396 $
0.25
392 408 $
0.20
$
$
390 392 $
0.50
4.45 (0.15) 4.30
392 408 $
0.40
APACHE CORPORATION PRODUCTION INFORMATION CURRENT QUARTER VS PRIOR QUARTER
Oil Volume - Barrels/day 2Q14
1Q14
Inc (Dec)
Total Liquids Volume - Barrels/day %
2Q14
1Q14
Inc (Dec)
Natural Gas Volume - Mcf/day %
2Q14
1Q14
Inc (Dec)
BOE per day %
2Q14
1Q14
Inc (Dec)
%
Permian ............................................................... Central ................................................................. Gulf Coast ........................................................... Canada ................................................................. N.A. Onshore ................................................
90,536 21,987 10,977 17,981 141,481
88,327 21,686 10,975 17,589 138,577
2,209 301 2 392 2,904
3% 1% 0% 2% 2%
119,712 45,725 13,522 23,902 202,861
113,587 46,141 13,398 25,358 198,484
6,125 (416) 124 (1,456) 4,377
5% -1% 1% -6% 2%
213,192 264,948 95,765 316,740 890,645
215,860 260,298 99,242 377,712 953,112
(2,668) 4,650 (3,477) (60,972) (62,467)
-1% 2% -4% -16% -7%
155,244 89,883 29,483 76,692 351,302
149,564 89,524 29,939 88,310 357,337
5,680 359 (456) (11,618) (6,035)
4% 0% -2% -13% -2%
Gulf of Mexico .................................................... GOM Shelf .......................................................... North America ........................................
6,896 2 148,379
6,284 679 145,540
612 (677) 2,839
10% NM 2%
8,062 2 210,925
7,114 769 206,367
948 (767) 4,558
13% NM 2%
22,804 261 913,710
16,193 1,092 970,397
6,611 (831) (56,687)
41% NM -6%
11,862 46 363,210
9,813 950 368,100
2,049 (904) (4,890)
21% NM -1%
North Sea............................................................. Australia .............................................................. Egypt ................................................................... International .................................................. Total .......................................................
61,610 14,555 88,643 164,808 313,187
59,092 16,825 88,093 164,010 309,550
2,518 (2,270) 550 798 3,637
4% -13% 1% 0% 1%
62,977 14,555 89,527 167,059 377,984
60,183 16,825 88,326 165,334 371,701
2,794 (2,270) 1,201 1,725 6,283
5% -13% 1% 1% 2%
54,848 210,470 367,950 633,268 1,546,978
45,071 215,792 377,357 638,220 1,608,617
9,777 (5,322) (9,407) (4,952) (61,639)
22% -2% -2% -1% -4%
72,118 49,633 150,853 272,604 635,814
67,695 52,790 151,219 271,704 639,804
4,423 (3,157) (366) 900 (3,990)
7% -6% 0% 0% -1%
Egypt - Noncontrolling Interest .......................... Total Excluding Noncontrolling Interest ......
29,508 283,679
29,066 280,484
442 3,195
2% 1%
29,803 348,181
29,144 342,557
659 5,624
2% 2%
122,665 1,424,313
124,799 1,483,818
(2,134) (59,505)
-2% -4%
50,247 585,567
49,944 589,860
303 (4,293)
1% -1%
Discontinued Operations Argentina ......................................................
-
6,885
(6,885)
NM
-
8,172
(8,172)
NM
-
141,352
(141,352)
NM
-
31,731
(31,731)
NM
197,069 88,643 45.0% 64,661 32.8%
198,619 88,093 44.4% 65,510 33.0%
(1,550) 550
-1% 1%
0% 1%
-5%
352,841 151,219 42.9% 113,621 32.2%
-1% 0%
(14,717)
351,059 150,853 43.0% 110,817 31.6%
(1,782) (366)
-1%
921,440 377,357 41.0% 287,552 31.2%
-1% -2%
(352)
907,752 367,950 40.5% 272,835 30.1%
(13,688) (9,407)
-1%
199,268 88,326 44.3% 65,696 33.0%
499 1,201
(849)
199,767 89,527 44.8% 65,344 32.7%
(2,804)
-2%
Egypt Daily Production Breakdown Egypt Gross Production ...................................... Egypt Net Production With Tax ......................... % of Gross .................................................... Egypt Net Production Without Tax .................... % of Gross ....................................................
3
APACHE CORPORATION PRODUCTION INFORMATION CURRENT QUARTER VS PRIOR YEAR QUARTER
Oil Volume - Barrels/day 2Q14
2Q13
Inc (Dec)
Total Liquids Volume - Barrels/day %
2Q14
2Q13
Inc (Dec)
Natural Gas Volume - Mcf/day %
2Q14
2Q13
Inc (Dec)
BOE per day %
2Q14
2Q13
Inc (Dec)
%
Permian ............................................................... Central ................................................................. Gulf Coast ........................................................... Canada ................................................................. N.A. Onshore ................................................
90,536 21,987 10,977 17,981 141,481
68,811 21,950 10,593 18,573 119,927
21,725 37 384 (592) 21,554
32% 0% 4% -3% 18%
119,712 45,725 13,522 23,902 202,861
91,503 44,971 13,095 25,259 174,828
28,209 754 427 (1,357) 28,033
31% 2% 3% -5% 16%
213,192 264,948 95,765 316,740 890,645
190,455 275,507 107,424 520,797 1,094,183
22,737 (10,559) (11,659) (204,057) (203,538)
12% -4% -11% -39% -19%
155,244 89,883 29,483 76,692 351,302
123,246 90,888 30,998 112,059 357,191
31,998 (1,005) (1,515) (35,367) (5,889)
26% -1% -5% -32% -2%
Gulf of Mexico .................................................... GOM Shelf .......................................................... North America ........................................
6,896 2 148,379
8,223 47,721 175,871
(1,327) (47,719) (27,492)
-16% NM -16%
8,062 2 210,925
9,385 55,362 239,575
(1,323) (55,360) (28,650)
-14% NM -12%
22,804 261 913,710
24,957 262,318 1,381,458
(2,153) (262,057) (467,748)
-9% NM -34%
11,862 46 363,210
13,545 99,082 469,818
(1,683) (99,036) (106,608)
-12% NM -23%
North Sea............................................................. Australia .............................................................. Egypt ................................................................... International .................................................. Total .......................................................
61,610 14,555 88,643 164,808 313,187
63,667 21,810 88,002 173,479 349,350
(2,057) (7,255) 641 (8,671) (36,163)
-3% -33% 1% -5% -10%
62,977 14,555 89,527 167,059 377,984
64,868 21,810 88,002 174,680 414,255
(1,891) (7,255) 1,525 (7,621) (36,271)
-3% -33% 2% -4% -9%
54,848 210,470 367,950 633,268 1,546,978
48,411 212,022 357,291 617,724 1,999,182
6,437 (1,552) 10,659 15,544 (452,204)
13% -1% 3% 3% -23%
72,118 49,633 150,853 272,604 635,814
72,936 57,147 147,551 277,634 747,452
(818) (7,514) 3,302 (5,030) (111,638)
-1% -13% 2% -2% -15%
Egypt - Noncontrolling Interest .......................... Total Excluding Noncontrolling Interest ......
29,508 283,679
349,350
29,508 (65,671)
NM -19%
29,803 348,181
414,255
29,803 (66,074)
NM -16%
122,665 1,424,313
1,999,182
122,665 (574,869)
NM -29%
50,247 585,567
747,452
50,247 (161,885)
NM -22%
Discontinued Operations Argentina ......................................................
-
9,365
(9,365)
NM
-
11,604
(11,604)
NM
-
184,528
(184,528)
NM
-
42,359
(42,359)
NM
197,069 88,643 45.0% 64,661 32.8%
193,341 88,002 45.5% 64,608 33.4%
3,728 641
2% 1%
3% 2%
3%
343,538 147,551 43.0% 108,918 31.7%
2% 2%
6,973
351,059 150,853 43.0% 110,817 31.6%
7,521 3,302
1%
901,181 357,291 39.6% 265,862 29.5%
1% 3%
736
907,752 367,950 40.5% 272,835 30.1%
6,571 10,659
0%
193,341 88,002 45.5% 64,608 33.4%
6,426 1,525
53
199,767 89,527 44.8% 65,344 32.7%
1,899
2%
Egypt Daily Production Breakdown Egypt Gross Production ...................................... Egypt Net Production With Tax ......................... % of Gross .................................................... Egypt Net Production Without Tax .................... % of Gross ....................................................
4
APACHE CORPORATION PRODUCTION INFORMATION YEAR TO DATE VS PRIOR YEAR TO DATE
Oil Volume - Barrels/day YTD 2014
YTD 2013
Inc (Dec)
Permian ............................................................... Central ................................................................. Gulf Coast ........................................................... Canada ................................................................. N.A. Onshore ................................................
89,437 21,837 10,976 17,786 140,036
68,358 21,242 10,287 17,878 117,765
21,079 595 689 (92) 22,271
Gulf of Mexico .................................................... GOM Shelf .......................................................... North America ........................................
6,592 339 146,967
7,732 45,684 171,181
North Sea............................................................. Australia .............................................................. Egypt ................................................................... International .................................................. Total .......................................................
60,358 15,683 88,370 164,411 311,378
Egypt - Noncontrolling Interest .......................... Total Excluding Noncontrolling Interest ...... Discontinued Operations Argentina ......................................................
Total Liquids Volume - Barrels/day %
YTD 2014
YTD 2013
Inc (Dec)
31% 3% 7% -1% 19%
116,666 45,931 13,460 24,626 200,683
90,002 42,521 12,695 24,553 169,771
26,664 3,410 765 73 30,912
(1,140) (45,345) (24,214)
-15% NM -14%
7,591 384 208,658
8,757 52,508 231,036
66,051 20,911 89,649 176,611 347,792
(5,693) (5,228) (1,279) (12,200) (36,414)
-9% -25% -1% -7% -10%
61,588 15,683 88,930 166,201 374,859
29,288 282,090
347,792
29,288 (65,702)
NM -19%
3,424
9,331
(5,907)
197,839 88,370 44.7% 65,083 32.9%
196,242 89,649 45.7% 64,265 32.7%
Natural Gas Volume - Mcf/day %
YTD 2014
YTD 2013
Inc (Dec)
30% 8% 6% 0% 18%
214,519 262,636 97,494 347,057 921,706
188,097 276,262 106,423 519,991 1,090,773
26,422 (13,626) (8,929) (172,934) (169,067)
(1,166) (52,124) (22,378)
-13% NM -10%
19,517 674 941,897
28,030 258,383 1,377,186
67,397 20,911 89,649 177,957 408,993
(5,809) (5,228) (719) (11,756) (34,134)
-9% -25% -1% -7% -8%
49,986 213,116 372,628 635,730 1,577,627
29,475 345,384
408,993
29,475 (63,609)
NM -16%
-63%
4,064
11,860
(7,796)
1,597 (1,279)
1% -1%
818
1%
199,518 88,930 44.6% 65,519 32.8%
196,242 89,649 45.7% 64,265 32.7%
BOE per day %
YTD 2014
YTD 2013
Inc (Dec)
%
14% -5% -8% -33% -15%
152,420 89,704 29,710 82,469 354,303
121,351 88,565 30,432 111,218 351,566
31,069 1,139 (722) (28,749) 2,737
26% 1% -2% -26% 1%
(8,513) (257,709) (435,289)
-30% NM -32%
10,843 496 365,642
13,428 95,573 460,567
(2,585) (95,077) (94,925)
-19% NM -21%
51,704 213,202 361,428 626,334 2,003,520
(1,718) (86) 11,200 9,396 (425,893)
-3% 0% 3% 2% -21%
69,918 51,203 151,035 272,156 637,798
76,015 56,444 149,887 282,346 742,913
(6,097) (5,241) 1,148 (10,190) (105,115)
-8% -9% 1% -4% -14%
123,726 1,453,901
2,003,520
123,726 (549,619)
NM -27%
50,096 587,702
742,913
50,096 (155,211)
NM -21%
-66%
70,286
186,383
(116,097)
-62%
15,778
42,924
(27,146)
-63%
3,276 (719)
2% -1%
1% 3% 6%
347,554 149,887 43.1% 108,269 31.2%
1% 1%
16,127
351,944 151,035 42.9% 112,211 31.9%
4,390 1,148
2%
907,871 361,428 39.8% 264,026 29.1%
6,687 11,200
1,254
914,558 372,628 40.7% 280,153 30.6%
3,942
4%
Egypt Daily Production Breakdown Egypt Gross Production ...................................... Egypt Net Production With Tax ......................... % of Gross .................................................... Egypt Net Production Without Tax .................... % of Gross ....................................................
5
APACHE CORPORATION PRO FORMA PRODUCTION INFORMATION
Pro forma production excludes certain items that management believes affect the comparability of operating results for the periods presented. Pro forma production excludes production attributable to assets that have been divested (in the Gulf of Mexico shelf, Argentina, Canada, and South Texas), production attributable to a noncontrolling interest in our Egypt oil and gas business, and Egypt tax barrels. Management uses pro forma production to evaluate the company's operational trends and performance and believes it is useful to investors and other third parties.
2Q14 Oil Volume – b/d: Permian ......................................................................... Central ........................................................................... Gulf Coast ..................................................................... Canada........................................................................... N.A Onshore ........................................................... Gulf of Mexico.............................................................. GOM Shelf .................................................................... North America ........................................................ Egypt ............................................................................. Australia ........................................................................ North Sea ...................................................................... International............................................................ Total ................................................................. Natural Gas Volume – Mcf/d: Permian ......................................................................... Central ........................................................................... Gulf Coast ..................................................................... Canada........................................................................... N.A Onshore ........................................................... Gulf of Mexico.............................................................. GOM Shelf .................................................................... North America ........................................................ Egypt ............................................................................. Australia ........................................................................ North Sea ...................................................................... International............................................................ Total ................................................................. Natural Gas Liquids (NGL) Volume – b/d: Permian ......................................................................... Central ........................................................................... Gulf Coast ..................................................................... Canada........................................................................... N.A Onshore ........................................................... Gulf of Mexico.............................................................. GOM Shelf .................................................................... North America ........................................................ Egypt ............................................................................. North Sea ...................................................................... International............................................................ Total ................................................................. BOE per day Permian ......................................................................... Central ........................................................................... Gulf Coast ..................................................................... Canada........................................................................... N.A Onshore ........................................................... Gulf of Mexico.............................................................. GOM Shelf .................................................................... North America ........................................................ Egypt ............................................................................. Australia ........................................................................ North Sea ...................................................................... International............................................................ Total .................................................................
1Q14
2Q13
YTD 2014
YTD 2013
90,536 21,987 10,677 17,817 141,017 6,896 147,913 43,117 14,555 61,610 119,282 267,195
88,327 21,686 10,645 17,409 138,067 6,284 144,351 43,915 16,825 59,092 119,832 264,183
68,811 21,950 10,009 17,357 118,127 8,223 126,350 43,072 21,810 63,667 128,549 254,899
89,437 21,837 10,661 17,615 139,550 6,592 146,142 43,514 15,683 60,358 119,555 265,697
68,358 21,242 9,814 16,659 116,073 7,732 123,805 42,844 20,911 66,051 129,806 253,611
213,192 264,948 80,976 289,744 848,860 22,804 871,664 181,792 210,470 54,848 447,110 1,318,774
215,860 260,298 82,555 292,812 851,525 16,193 867,718 192,890 215,792 45,071 453,753 1,321,471
190,455 275,507 83,156 307,139 856,257 24,957 881,214 177,242 212,022 48,411 437,675 1,318,889
214,519 262,636 81,762 291,270 850,187 19,517 869,704 187,310 213,116 49,986 450,412 1,320,116
188,097 276,262 82,786 308,950 856,095 28,030 884,125 176,018 213,202 51,704 440,924 1,325,049
29,176 23,738 2,024 5,440 60,378 1,166 61,544 455 1,367 1,822 63,366
25,260 24,455 1,914 6,359 57,988 830 58,818 124 1,091 1,215 60,033
22,692 23,021 1,465 5,168 52,346 1,162 53,508 1,201 1,201 54,709
27,229 24,094 1,969 5,897 59,189 999 60,188 290 1,230 1,520 61,708
21,644 21,279 1,482 5,111 49,516 1,025 50,541 1,346 1,346 51,887
155,244 89,883 26,197 71,548 342,872 11,862 354,734 73,871 49,633 72,118 195,622 550,356
149,564 89,524 26,318 72,571 337,977 9,813 347,790 76,187 52,790 67,695 196,672 544,462
123,246 90,888 25,333 73,715 313,182 13,545 326,727 72,612 57,147 72,936 202,695 529,422
152,420 89,704 26,257 72,057 340,438 10,843 351,281 75,022 51,203 69,918 196,143 547,424
121,351 88,565 25,094 73,262 308,272 13,428 321,700 72,180 56,444 76,015 204,639 526,339
6
APACHE CORPORATION PRICE INFORMATION 2Q14
1Q14
2Q13
FY 2014
FY 2013
Avg. Oil $/bbl: Permian ....................................................... $ Central ......................................................... Gulf Coast ................................................... Canada ......................................................... N.A. Onshore .......................................... Gulf of Mexico ............................................ GOM Shelf .................................................. North America (1) ..................................... Egypt ........................................................... Australia ...................................................... North Sea (1) ................................................. International (1) ........................................ Total (1) ...............................................
94.33 $ 100.39 103.81 94.66 96.06 102.63 NM 96.24 109.74 115.34 109.33 110.08 103.53
93.76 $ 93.72 101.87 88.19 93.72 101.42 NM 94.03 106.70 112.26 106.60 107.24 101.03
92.08 $ 89.18 106.22 87.38 92.03 105.54 106.95 96.11 99.36 100.79 102.95 100.86 98.47
94.05 $ 97.10 102.84 91.47 94.91 102.06 NM 95.15 108.24 113.70 108.00 108.67 102.29
87.49 88.69 108.54 84.97 89.16 107.83 109.19 94.70 105.25 106.29 106.85 105.97 100.43
Avg. Gas $/Mcf: Permian ....................................................... $ Central ......................................................... Gulf Coast ................................................... Canada ......................................................... N.A. Onshore .......................................... Gulf of Mexico ............................................ GOM Shelf .................................................. North America (1) ..................................... Egypt ........................................................... Australia ...................................................... North Sea ..................................................... International ............................................ Total (1) ...............................................
4.48 $ 4.49 4.72 4.21 4.41 4.35 NM 4.41 2.96 4.40 7.75 3.85 4.18
4.78 $ 5.20 4.93 4.38 4.82 5.23 NM 4.75 3.02 4.42 10.69 4.03 4.46
3.86 $ 3.91 4.27 3.52 3.76 3.14 4.18 3.86 3.00 4.70 10.86 4.20 3.97
4.63 $ 4.84 4.83 4.30 4.62 4.71 NM 4.58 2.99 4.41 9.07 3.94 4.33
3.81 3.82 3.91 3.37 3.61 3.28 3.87 3.71 2.97 4.82 10.41 4.21 3.87
Avg. NGL $/bbl: Permian ....................................................... $ Central ......................................................... Gulf Coast ................................................... Canada ......................................................... N.A. Onshore .......................................... Gulf of Mexico ............................................ GOM Shelf .................................................. North America ........................................ Egypt ........................................................... North Sea ..................................................... International ............................................ Total ...................................................
28.46 $ 25.03 27.86 31.67 27.42 31.73 NM 27.50 57.67 61.81 60.19 28.64
31.46 $ 30.39 35.90 42.09 32.58 32.00 NM 32.25 64.34 79.84 77.11 33.20
25.53 $ 21.69 28.80 24.60 23.96 31.26 27.21 24.48 70.39 70.39 25.33
29.85 $ 27.74 31.76 37.56 29.96 31.84 NM 29.83 59.05 69.77 66.41 30.86
25.61 23.90 31.14 28.35 25.52 32.73 27.93 25.92 70.81 70.81 26.91
Discontinued Operations - Argentina Oil price($/Bbl) ........................................... $ Gas price ($/Mcf) ........................................ NGL price ($/Bbl) .......................................
- $ -
72.70 $ 3.04 24.57
77.74 $ 2.79 20.94
72.70 $ 3.04 24.57
76.56 2.99 26.12
(1)
Prices reflect the impact of financial derivative hedging activities.
7
APACHE CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION (in millions, except per unit data)
LEASE OPERATING EXPENSE 2Q14 vs. 1Q14 Cost 1Q14 LOE .................................... $ 597 $ Transportation ....................... 10 Repairs and maintenance ....... 10 FX fluctuations ...................... 7 Power and fuel ....................... (12) Divestitures(1)......................... (3) Other ...................................... 4 Other increased production.... 2Q14 LOE .................................... $ 613 $
(1)
2Q14 vs. 2Q13 Boe 10.37 0.17 0.16 0.12 (0.20) (0.06) 0.08 (0.05) 10.59
Cost 2Q13 LOE .................................... $ 781 $ Transportation ....................... 9 Materials ................................ 9 Saltwater disposal .................. 6 Divestitures(1)......................... (198) Power and fuel ....................... (14) Other ...................................... 20 Other increased production.... 2Q14 LOE .................................... $ 613 $
Boe 11.48 0.13 0.13 0.09 (1.28) (0.20) 0.29 (0.05) 10.59
YTD 2014 vs. YTD 2013 Cost YTD 2013 LOE............................. $ 1,503 $ Transportation ........................ 18 Materials ................................. 16 Labor and overhead ................ 14 Saltwater disposal ................... 9 Divestitures(1).......................... (398) Other ....................................... 48 Other decreased production .... YTD 2014 LOE............................. $ 1,210 $
Boe 11.17 0.14 0.12 0.10 0.07 (1.64) 0.36 0.16 10.48
YTD 2014 vs. YTD 2013 Cost YTD 2013 G&A ............................. $ 238 $ Third party reimbursements ..... (25) Other costs ............................... (14) Decreased production .............. YTD 2014 G&A ............................. $ 199 $
Boe 1.77 (0.18) (0.14) 0.27 1.72
Per-unit impact of divestitures is shown net of associated production.
GENERAL AND ADMINISTRATIVE (G&A) EXPENSE 2Q14 vs. 1Q14 Cost 1Q14 G&A ..................................... $ 105 $ Third party reimbursements .... (25) Other costs ............................... 14 Increased production ............... 2Q14 G&A ..................................... $ 94 $
2Q14 vs. 2Q13 Boe 1.81 (0.43) 0.26 (0.01) 1.63
Cost 2Q13 G&A ..................................... $ 126 $ Third party reimbursements..... (25) Other costs ............................... (7) Decreased production .............. 2Q14 G&A ..................................... $ 94 $
Boe 1.85 (0.37) (0.12) 0.27 1.63
Tables above include costs and BOEs attributable to noncontrolling interest in Egypt but excluding Argentina discontinued operations.
8
APACHE CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION (in millions, except per unit data)
TAXES OTHER THAN INCOME 2Q14 91 $ 52 22 16 181 $
1Q14 63 $ 74 40 4 181 $
YTD 2014 YTD 2013 72 $ 154 $ 207 63 125 114 26 62 59 9 21 19 170 $ 362 $ 399
3.12 $
3.15 $
2.51 $
U.K. PRT.............................................................. $ Severance taxes .................................................... Ad valorem taxes.................................................. Other .................................................................... Total Taxes other than income .................... $ Total Taxes other than income per boe ....... $
2Q13
3.14 $
2.97
GATHERING & TRANSPORTATION 2Q14 Canada ................................................................. $ U.S. ...................................................................... Egypt .................................................................... North Sea ............................................................. Total Gathering & Transportation ............... $
1Q14 30 $ 23 11 2 66 $
Total Gathering & Transportation per boe .. $
2Q13 34 $ 22 10 4 70 $
1.15 $
YTD 2014 40 $ 23 11 3 77 $
1.19 $
1.15 $
YTD 2013
64 $ 45 21 6 136 $
80 44 20 6 150
1.18 $
1.12
FINANCING COSTS, NET 2Q14 Interest expense .................................................... $ Amortization of deferred loan costs ..................... Capitalized interest ............................................... Interest income ..................................................... Financing costs, net ..................................... $ Financing costs, net per boe ........................ $
1Q14
2Q13
YTD 2014 YTD 2013 $ 248 $ 287 3 4 (185) (178) (4) (6) $ 62 $ 107
124 $ 1 (90) 35 $
124 $ 2 (95) (4) 27 $
141 2 (88) (3) 52
0.60 $
0.48 $
0.76 $
Tables above include costs and BOEs attributable to noncontrolling interest in Egypt but excluding Argentina discontinued operations.
9
0.54 $
0.79
APACHE CORPORATION OIL & GAS REGION INVESTMENT (in millions)
1Q14(1,2,3)
2Q14(1,2)
YTD 2014
E&P and GTP Region Investment: Permian.......................................................................... $ Central ........................................................................... Gulf Coast ..................................................................... Canada ........................................................................... N.A. Onshore ......................................................... Gulf of Mexico .............................................................. Other .............................................................................. North America ....................................................... Egypt (Apache's interest only)....................................... Australia ........................................................................ North Sea ....................................................................... Other .............................................................................. $
798 $ 358 118 220 1,494 124 8 1,626 218 196 228 1 2,269 $
758 $ 432 202 92 1,484 82 13 1,579 217 188 288 (9) 2,263 $
Wheatstone & Kitimat Investment: Wheatstone .................................................................... $ Kitimat ........................................................................... $
233 $ 183 416 $
322 $ 155 477 $
(1)
First and second quarters of 2014 include: o Capitalized G&A expense of $91 million and $99 million, respectively. o Pacific Trail Pipelines equity method investment of $15 million and $14 million, respectively.
(2)
First and second quarters of 2014 exclude: o Capitalized interest of $95 million and $90 million, respectively. o Acquisitions of $2 million and $3 million, respectively. o Noncontrolling interest share in Egypt of $112 million and $111 million, respectively.
(3)
Excludes Argentina discontinued operations of $16 million.
(4)
This number is comparable to total “E&P Capital” from the February 2014 Analyst Day.
10
1,556 790 320 312 2,978 206 21 3,205 435 384 516 (8) 4,532 (4)
555 339 894
APACHE CORPORATION SUMMARY BALANCE SHEET INFORMATION (in millions)
2Q14
1Q14
4Q13
3Q13
2Q13
Cash and cash equivalents ....................................... $ Short-term restricted cash ........................................ Other current assets .................................................. Property and equipment, net .................................... Long-term restricted cash ........................................ Goodwill .................................................................. Other assets .............................................................. Total assets ....................................................... $
524 $ 778 3,824 52,470 589 1,369 1,617 61,171 $
1,643 $ 3,820 52,752 1,369 1,537 61,121 $
1,906 $ 4,460 52,421 1,369 1,481 61,637 $
1,251 $ 4,765 51,462 1,369 1,392 60,239 $
184 4,574 55,821 1,369 1,402 63,350
Short-term debt ........................................................ $ Other current liabilities ............................................ Long-term debt ........................................................ Deferred credits and other noncurrent liabilities ...... Apache shareholders' equity .................................... Noncontrolling interest ............................................ Total liabilities and equity ................................ $
1 $ 4,569 9,674 12,035 32,755 2,137 61,171 $
- $ 4,356 9,673 11,915 33,082 2,095 61,121 $
53 $ 4,647 9,672 11,872 33,396 1,997 61,637 $
57 $ 4,466 10,868 11,867 32,981 60,239 $
478 4,680 12,297 13,174 32,721 63,350
Common shares outstanding at end of period ..........
382
390
396
404
389
% of total debt-to-capitalization ...............................
22%
22%
22%
25%
28%
11
NON-GAAP RECONCILIATIONS
APACHE CORPORATION ADJUSTED EARNINGS (in millions, except per share data)
Reconciliation of income attributable to common stock to adjusted earnings: Adjusted earnings and adjusted earnings per share are non-GAAP financial measures. Adjusted earnings generally exclude certain items that management believes affect the comparability of operating results or are not related to Apache’s ongoing operations. Management uses adjusted earnings to evaluate the company's operational trends and performance relative to other oil and gas companies. Management believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings for items that may obscure underlying fundamentals and trends.
2Q14 Income Attributable to Common Stock (GAAP) ............................................ $
505
Adjustments: Argentina discontinued operations, net of tax ............................................ Oil & gas property write-downs, net of tax ................................................ Unrealized foreign currency fluctuation impact on deferred tax expense .. Acquisition, divestiture & separation costs, net of tax .............................. Rig stacking costs, net of tax ...................................................................... Deferred tax adjustments ............................................................................ Commodity derivative mark-to-market, net of tax ..................................... Adjusted Earnings (Non-GAAP) .................................................................... $
1Q14
2Q13
$
236
77 13 9 9 31 644
$
517 7 11 (5) (49) 717 $
2 (66) 17 (156) 813 $
Net Income per Common Share – Diluted (GAAP) ....................................... $
1.31
$
0.60
2.54
Adjustments: Argentina discontinued operations, net of tax ............................................ Oil & gas property write-downs, net of tax ................................................ Unrealized foreign currency fluctuation impact on deferred tax expense .. Acquisition, divestiture & separation costs, net of tax .............................. Rig stacking costs, net of tax ...................................................................... Deferred tax adjustments ............................................................................ Commodity derivative mark-to-market, net of tax ..................................... Adjusted Earnings Per Share – Diluted (Non-GAAP) .................................... $
0.20 0.03 0.03 0.02 0.08 1.67
$
1.30 0.02 0.02 (0.01) (0.12) 1.81 $
Total income tax provision (GAAP) ............................................................... $
366 $
578 $
611
$
944 $
1,213
Adjustments: Tax impact on oil & gas property write-downs .......................................... Tax impact on acquisition, divestiture & separation costs ......................... Tax impact on rig stacking costs ................................................................ Deferred tax adjustments ............................................................................ Tax impact on commodity derivative mark-to-market ............................... Foreign currency fluctuation impact on deferred tax expense .................... Adjusted total income tax provision ............................................................... $
126 5 5 18 (13) 507 $
5 5 (27) (7) 554 $
(17) (86) 66 574 $
126 10 5 5 (9) (20) 1,061 $
(28) (69) 70 1,186
40.4%
41.8%
Adjusted Effective Tax Rate (Non-GAAP) ....................................................
12
40.3%
40.5%
$ 1,016
YTD 2014 YTD 2013
$
$
$
(0.16) 0.04 (0.38) 2.04 $
40.8%
741
$
1,714
517 77 20 20 9 (5) (18) 1,361 $
63 (70) 28 (125) 1,610
1.89
$
4.30
1.32 0.20 0.05 0.05 0.02 (0.01) (0.05) 3.47 $
0.15 (0.17) 0.07 (0.31) 4.04
NON-GAAP RECONCILIATIONS
APACHE CORPORATION CASH FROM OPERATIONS (in millions, except per share data)
Reconciliation of net cash provided by operating activities to cash from continuing operations before changes in operating assets and liabilities: Cash from operations before changes in operating assets and liabilities is a non-GAAP financial measure. Apache uses it internally and provides the information because management believes it is useful for investors and widely accepted by those following the oil and gas industry as a financial indicator of a company's ability to generate cash to internally fund exploration and development activities, fund dividend programs, and service debt. It is also used by research analysts to value and compare oil and gas exploration and production companies and is frequently included in published research when providing investment recommendations. Cash from operations before changes in operating assets and liabilities, therefore, is an additional measure of liquidity but is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing, or financing activities. The following table reconciles net cash provided by operating activities to cash from continuing operations before changes in operating assets and liabilities.
2Q14 Net cash provided by operating activities (GAAP) .... Less: Discontinued operations ............................ Net cash provided by operating activities excluding discontinued operations ...................................... Changes in operating assets and liabilities ................. Cash from continuing operations before changes in operating assets & liabilities ...............................
$
$
1Q14
2Q13
YTD 2014
YTD 2013
2,339 $ -
2,293 $ (82)
2,759 $ (40)
4,632 $ (82)
5,380 (104)
2,339 (111)
2,211 11
2,719 (164)
4,550 (100)
5,276 (426)
2,228 $
2,222 $
2,555 $
4,450 $
4,850
13
EARNINGS RELEASE FINANCIAL SUPPLEMENT & Non-GAAP Reconciliations
Apache Corporation Table of Contents NOTICE TO INVESTORS .................................................................................................................
1
FINANCIALS AND SCHEDULES Statement of Consolidated Operations ........................................................................................... Production Information .................................................................................................................. Pro Forma Production Information ................................................................................................ Price Information ............................................................................................................................ Supplemental Financial Information .............................................................................................. Summary of Oil and Gas Investments ........................................................................................... Summary Balance Sheet Information ............................................................................................
2 3 6 7 8 10 11
NON-GAAP RECONCILIATIONS Adjusted Earnings ........................................................................................................................... Cash From Operations .....................................................................................................................
12 13
NOTICE TO INVESTORS This earnings report 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 other factors discussed in our most recently filed Annual Report on Form 10-K, recent Quarterly Reports on Form 10-Q and recent Current Reports on Form 8-K, 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 actual results may differ materially from those expressed in the forward-looking statements. 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 release, such as resources, potential resources, 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, 2013, 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 adjusted earnings 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 CORPORATION STATEMENT OF CONSOLIDATED OPERATIONS (in millions, except per share data) 2Q14 REVENUES AND OTHER: Oil revenues ..................................................................................... Gas revenues .................................................................................... NGL revenues .................................................................................. Oil and gas production revenues............................................................ Derivative instrument gains (losses), net ............................................... Other .......................................................................................................
$
2,950 589 169 3,708 (174) (50) 3,484
OPERATING EXPENSES: Depreciation, depletion and amortization Oil and gas property and equipment Recurring ................................................................................... Additional .................................................................................. Other assets ...................................................................................... Asset retirement obligation accretion .................................................... Lease operating expenses....................................................................... Gathering and transportation ................................................................. Taxes other than income ........................................................................ General and administrative .................................................................... Acquisition, divestiture & separation costs ........................................... Financing costs, net................................................................................
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES ........................................................................................... Current income tax provision ................................................................ Deferred income tax provision .............................................................. INCOME FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTEREST ................................................................ Income (loss) from discontinued operations, net of tax ........................ INCOME INCLUDING NONCONTROLLING INTEREST ....................... Net income attributable to noncontrolling interest ................................ Preferred stock dividends....................................................................... INCOME ATTRIBUTABLE TO COMMON STOCK..................................
$
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS Net income from continuing operations attributable to common shareholders ........................................................................................... Net income (loss) from discontinued operations ................................... Net income attributable to common shareholders ................................. BASIC NET INCOME PER COMMON SHARE: Basic net income from continuing operations per share ....................... Basic net income (loss) from discontinued operations per share .......... Basic net income per share .................................................................... DILUTED NET INCOME PER COMMON SHARE: Diluted net income from continuing operations per share .................... Diluted net income (loss) from discontinued operations per share ....... Diluted net income per share .................................................................
$
2,815 646 186 3,647 (20) 48 3,675
2Q13
$
3,130 721 150 4,001 247 20 4,268
YTD 2014
YTD 2013
$
$
5,765 1,235 355 7,355 (194) (2) 7,159
6,322 1,402 298 8,022 147 45 8,214
1,155 203 99 45 613 66 181 94 14 35
1,109 97 44 597 70 181 105 16 27
1,258 92 64 781 77 170 126 52
2,264 203 196 89 1,210 136 362 199 30 62
2,468 194 127 1,503 150 399 238 107
2,505
2,246
2,620
4,751
5,186
979 325 41
1,429 416 162
1,648 284 327
2,408 741 203
3,028 781 432
613 613 108 505
851 (517) 334 98 236
1,037 (2) 1,035 19 1,016
1,464 (517) 947 206 741
1,815 (63) 1,752 38 1,714
$
505 -
$
753 (517)
$
1,018 (2)
$
1,258 (517)
1,777 (63)
$
505
$
236
$
1,016
$
741
$
1,714
$
1.31 1.31
$
1.92 (1.32) 0.60
$
2.60 (0.01) 2.59
$
$
$
3.23 (1.33) 1.90
4.53 (0.16) 4.37
1.31 1.31
$
1.90 (1.30) 0.60
$
2.54 2.54
$ $ $
3.21 (1.32) 1.89
$
$
$ $
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic ....................................................................................................... Diluted .................................................................................................... DIVIDENDS DECLARED PER COMMON SHARE ..................................
1Q14
$
$
385 387 $
0.25
2
$
$
394 396 $
0.25
392 408 $
0.20
$
$
390 392 $
0.50
4.45 (0.15) 4.30
392 408 $
0.40
APACHE CORPORATION PRODUCTION INFORMATION CURRENT QUARTER VS PRIOR QUARTER
Oil Volume - Barrels/day 2Q14
1Q14
Inc (Dec)
Total Liquids Volume - Barrels/day %
2Q14
1Q14
Inc (Dec)
Natural Gas Volume - Mcf/day %
2Q14
1Q14
Inc (Dec)
BOE per day %
2Q14
1Q14
Inc (Dec)
%
Permian ............................................................... Central ................................................................. Gulf Coast ........................................................... Canada ................................................................. N.A. Onshore ................................................
90,536 21,987 10,977 17,981 141,481
88,327 21,686 10,975 17,589 138,577
2,209 301 2 392 2,904
3% 1% 0% 2% 2%
119,712 45,725 13,522 23,902 202,861
113,587 46,141 13,398 25,358 198,484
6,125 (416) 124 (1,456) 4,377
5% -1% 1% -6% 2%
213,192 264,948 95,765 316,740 890,645
215,860 260,298 99,242 377,712 953,112
(2,668) 4,650 (3,477) (60,972) (62,467)
-1% 2% -4% -16% -7%
155,244 89,883 29,483 76,692 351,302
149,564 89,524 29,939 88,310 357,337
5,680 359 (456) (11,618) (6,035)
4% 0% -2% -13% -2%
Gulf of Mexico .................................................... GOM Shelf .......................................................... North America ........................................
6,896 2 148,379
6,284 679 145,540
612 (677) 2,839
10% NM 2%
8,062 2 210,925
7,114 769 206,367
948 (767) 4,558
13% NM 2%
22,804 261 913,710
16,193 1,092 970,397
6,611 (831) (56,687)
41% NM -6%
11,862 46 363,210
9,813 950 368,100
2,049 (904) (4,890)
21% NM -1%
North Sea............................................................. Australia .............................................................. Egypt ................................................................... International .................................................. Total .......................................................
61,610 14,555 88,643 164,808 313,187
59,092 16,825 88,093 164,010 309,550
2,518 (2,270) 550 798 3,637
4% -13% 1% 0% 1%
62,977 14,555 89,527 167,059 377,984
60,183 16,825 88,326 165,334 371,701
2,794 (2,270) 1,201 1,725 6,283
5% -13% 1% 1% 2%
54,848 210,470 367,950 633,268 1,546,978
45,071 215,792 377,357 638,220 1,608,617
9,777 (5,322) (9,407) (4,952) (61,639)
22% -2% -2% -1% -4%
72,118 49,633 150,853 272,604 635,814
67,695 52,790 151,219 271,704 639,804
4,423 (3,157) (366) 900 (3,990)
7% -6% 0% 0% -1%
Egypt - Noncontrolling Interest .......................... Total Excluding Noncontrolling Interest ......
29,508 283,679
29,066 280,484
442 3,195
2% 1%
29,803 348,181
29,144 342,557
659 5,624
2% 2%
122,665 1,424,313
124,799 1,483,818
(2,134) (59,505)
-2% -4%
50,247 585,567
49,944 589,860
303 (4,293)
1% -1%
Discontinued Operations Argentina ......................................................
-
6,885
(6,885)
NM
-
8,172
(8,172)
NM
-
141,352
(141,352)
NM
-
31,731
(31,731)
NM
197,069 88,643 45.0% 64,661 32.8%
198,619 88,093 44.4% 65,510 33.0%
(1,550) 550
-1% 1%
0% 1%
-5%
352,841 151,219 42.9% 113,621 32.2%
-1% 0%
(14,717)
351,059 150,853 43.0% 110,817 31.6%
(1,782) (366)
-1%
921,440 377,357 41.0% 287,552 31.2%
-1% -2%
(352)
907,752 367,950 40.5% 272,835 30.1%
(13,688) (9,407)
-1%
199,268 88,326 44.3% 65,696 33.0%
499 1,201
(849)
199,767 89,527 44.8% 65,344 32.7%
(2,804)
-2%
Egypt Daily Production Breakdown Egypt Gross Production ...................................... Egypt Net Production With Tax ......................... % of Gross .................................................... Egypt Net Production Without Tax .................... % of Gross ....................................................
3
APACHE CORPORATION PRODUCTION INFORMATION CURRENT QUARTER VS PRIOR YEAR QUARTER
Oil Volume - Barrels/day 2Q14
2Q13
Inc (Dec)
Total Liquids Volume - Barrels/day %
2Q14
2Q13
Inc (Dec)
Natural Gas Volume - Mcf/day %
2Q14
2Q13
Inc (Dec)
BOE per day %
2Q14
2Q13
Inc (Dec)
%
Permian ............................................................... Central ................................................................. Gulf Coast ........................................................... Canada ................................................................. N.A. Onshore ................................................
90,536 21,987 10,977 17,981 141,481
68,811 21,950 10,593 18,573 119,927
21,725 37 384 (592) 21,554
32% 0% 4% -3% 18%
119,712 45,725 13,522 23,902 202,861
91,503 44,971 13,095 25,259 174,828
28,209 754 427 (1,357) 28,033
31% 2% 3% -5% 16%
213,192 264,948 95,765 316,740 890,645
190,455 275,507 107,424 520,797 1,094,183
22,737 (10,559) (11,659) (204,057) (203,538)
12% -4% -11% -39% -19%
155,244 89,883 29,483 76,692 351,302
123,246 90,888 30,998 112,059 357,191
31,998 (1,005) (1,515) (35,367) (5,889)
26% -1% -5% -32% -2%
Gulf of Mexico .................................................... GOM Shelf .......................................................... North America ........................................
6,896 2 148,379
8,223 47,721 175,871
(1,327) (47,719) (27,492)
-16% NM -16%
8,062 2 210,925
9,385 55,362 239,575
(1,323) (55,360) (28,650)
-14% NM -12%
22,804 261 913,710
24,957 262,318 1,381,458
(2,153) (262,057) (467,748)
-9% NM -34%
11,862 46 363,210
13,545 99,082 469,818
(1,683) (99,036) (106,608)
-12% NM -23%
North Sea............................................................. Australia .............................................................. Egypt ................................................................... International .................................................. Total .......................................................
61,610 14,555 88,643 164,808 313,187
63,667 21,810 88,002 173,479 349,350
(2,057) (7,255) 641 (8,671) (36,163)
-3% -33% 1% -5% -10%
62,977 14,555 89,527 167,059 377,984
64,868 21,810 88,002 174,680 414,255
(1,891) (7,255) 1,525 (7,621) (36,271)
-3% -33% 2% -4% -9%
54,848 210,470 367,950 633,268 1,546,978
48,411 212,022 357,291 617,724 1,999,182
6,437 (1,552) 10,659 15,544 (452,204)
13% -1% 3% 3% -23%
72,118 49,633 150,853 272,604 635,814
72,936 57,147 147,551 277,634 747,452
(818) (7,514) 3,302 (5,030) (111,638)
-1% -13% 2% -2% -15%
Egypt - Noncontrolling Interest .......................... Total Excluding Noncontrolling Interest ......
29,508 283,679
349,350
29,508 (65,671)
NM -19%
29,803 348,181
414,255
29,803 (66,074)
NM -16%
122,665 1,424,313
1,999,182
122,665 (574,869)
NM -29%
50,247 585,567
747,452
50,247 (161,885)
NM -22%
Discontinued Operations Argentina ......................................................
-
9,365
(9,365)
NM
-
11,604
(11,604)
NM
-
184,528
(184,528)
NM
-
42,359
(42,359)
NM
197,069 88,643 45.0% 64,661 32.8%
193,341 88,002 45.5% 64,608 33.4%
3,728 641
2% 1%
3% 2%
3%
343,538 147,551 43.0% 108,918 31.7%
2% 2%
6,973
351,059 150,853 43.0% 110,817 31.6%
7,521 3,302
1%
901,181 357,291 39.6% 265,862 29.5%
1% 3%
736
907,752 367,950 40.5% 272,835 30.1%
6,571 10,659
0%
193,341 88,002 45.5% 64,608 33.4%
6,426 1,525
53
199,767 89,527 44.8% 65,344 32.7%
1,899
2%
Egypt Daily Production Breakdown Egypt Gross Production ...................................... Egypt Net Production With Tax ......................... % of Gross .................................................... Egypt Net Production Without Tax .................... % of Gross ....................................................
4
APACHE CORPORATION PRODUCTION INFORMATION YEAR TO DATE VS PRIOR YEAR TO DATE
Oil Volume - Barrels/day YTD 2014
YTD 2013
Inc (Dec)
Permian ............................................................... Central ................................................................. Gulf Coast ........................................................... Canada ................................................................. N.A. Onshore ................................................
89,437 21,837 10,976 17,786 140,036
68,358 21,242 10,287 17,878 117,765
21,079 595 689 (92) 22,271
Gulf of Mexico .................................................... GOM Shelf .......................................................... North America ........................................
6,592 339 146,967
7,732 45,684 171,181
North Sea............................................................. Australia .............................................................. Egypt ................................................................... International .................................................. Total .......................................................
60,358 15,683 88,370 164,411 311,378
Egypt - Noncontrolling Interest .......................... Total Excluding Noncontrolling Interest ...... Discontinued Operations Argentina ......................................................
Total Liquids Volume - Barrels/day %
YTD 2014
YTD 2013
Inc (Dec)
31% 3% 7% -1% 19%
116,666 45,931 13,460 24,626 200,683
90,002 42,521 12,695 24,553 169,771
26,664 3,410 765 73 30,912
(1,140) (45,345) (24,214)
-15% NM -14%
7,591 384 208,658
8,757 52,508 231,036
66,051 20,911 89,649 176,611 347,792
(5,693) (5,228) (1,279) (12,200) (36,414)
-9% -25% -1% -7% -10%
61,588 15,683 88,930 166,201 374,859
29,288 282,090
347,792
29,288 (65,702)
NM -19%
3,424
9,331
(5,907)
197,839 88,370 44.7% 65,083 32.9%
196,242 89,649 45.7% 64,265 32.7%
Natural Gas Volume - Mcf/day %
YTD 2014
YTD 2013
Inc (Dec)
30% 8% 6% 0% 18%
214,519 262,636 97,494 347,057 921,706
188,097 276,262 106,423 519,991 1,090,773
26,422 (13,626) (8,929) (172,934) (169,067)
(1,166) (52,124) (22,378)
-13% NM -10%
19,517 674 941,897
28,030 258,383 1,377,186
67,397 20,911 89,649 177,957 408,993
(5,809) (5,228) (719) (11,756) (34,134)
-9% -25% -1% -7% -8%
49,986 213,116 372,628 635,730 1,577,627
29,475 345,384
408,993
29,475 (63,609)
NM -16%
-63%
4,064
11,860
(7,796)
1,597 (1,279)
1% -1%
818
1%
199,518 88,930 44.6% 65,519 32.8%
196,242 89,649 45.7% 64,265 32.7%
BOE per day %
YTD 2014
YTD 2013
Inc (Dec)
%
14% -5% -8% -33% -15%
152,420 89,704 29,710 82,469 354,303
121,351 88,565 30,432 111,218 351,566
31,069 1,139 (722) (28,749) 2,737
26% 1% -2% -26% 1%
(8,513) (257,709) (435,289)
-30% NM -32%
10,843 496 365,642
13,428 95,573 460,567
(2,585) (95,077) (94,925)
-19% NM -21%
51,704 213,202 361,428 626,334 2,003,520
(1,718) (86) 11,200 9,396 (425,893)
-3% 0% 3% 2% -21%
69,918 51,203 151,035 272,156 637,798
76,015 56,444 149,887 282,346 742,913
(6,097) (5,241) 1,148 (10,190) (105,115)
-8% -9% 1% -4% -14%
123,726 1,453,901
2,003,520
123,726 (549,619)
NM -27%
50,096 587,702
742,913
50,096 (155,211)
NM -21%
-66%
70,286
186,383
(116,097)
-62%
15,778
42,924
(27,146)
-63%
3,276 (719)
2% -1%
1% 3% 6%
347,554 149,887 43.1% 108,269 31.2%
1% 1%
16,127
351,944 151,035 42.9% 112,211 31.9%
4,390 1,148
2%
907,871 361,428 39.8% 264,026 29.1%
6,687 11,200
1,254
914,558 372,628 40.7% 280,153 30.6%
3,942
4%
Egypt Daily Production Breakdown Egypt Gross Production ...................................... Egypt Net Production With Tax ......................... % of Gross .................................................... Egypt Net Production Without Tax .................... % of Gross ....................................................
5
APACHE CORPORATION PRO FORMA PRODUCTION INFORMATION
Pro forma production excludes certain items that management believes affect the comparability of operating results for the periods presented. Pro forma production excludes production attributable to assets that have been divested (in the Gulf of Mexico shelf, Argentina, Canada, and South Texas), production attributable to a noncontrolling interest in our Egypt oil and gas business, and Egypt tax barrels. Management uses pro forma production to evaluate the company's operational trends and performance and believes it is useful to investors and other third parties.
2Q14 Oil Volume – b/d: Permian ......................................................................... Central ........................................................................... Gulf Coast ..................................................................... Canada........................................................................... N.A Onshore ........................................................... Gulf of Mexico.............................................................. GOM Shelf .................................................................... North America ........................................................ Egypt ............................................................................. Australia ........................................................................ North Sea ...................................................................... International............................................................ Total ................................................................. Natural Gas Volume – Mcf/d: Permian ......................................................................... Central ........................................................................... Gulf Coast ..................................................................... Canada........................................................................... N.A Onshore ........................................................... Gulf of Mexico.............................................................. GOM Shelf .................................................................... North America ........................................................ Egypt ............................................................................. Australia ........................................................................ North Sea ...................................................................... International............................................................ Total ................................................................. Natural Gas Liquids (NGL) Volume – b/d: Permian ......................................................................... Central ........................................................................... Gulf Coast ..................................................................... Canada........................................................................... N.A Onshore ........................................................... Gulf of Mexico.............................................................. GOM Shelf .................................................................... North America ........................................................ Egypt ............................................................................. North Sea ...................................................................... International............................................................ Total ................................................................. BOE per day Permian ......................................................................... Central ........................................................................... Gulf Coast ..................................................................... Canada........................................................................... N.A Onshore ........................................................... Gulf of Mexico.............................................................. GOM Shelf .................................................................... North America ........................................................ Egypt ............................................................................. Australia ........................................................................ North Sea ...................................................................... International............................................................ Total .................................................................
1Q14
2Q13
YTD 2014
YTD 2013
90,536 21,987 10,677 17,817 141,017 6,896 147,913 43,117 14,555 61,610 119,282 267,195
88,327 21,686 10,645 17,409 138,067 6,284 144,351 43,915 16,825 59,092 119,832 264,183
68,811 21,950 10,009 17,357 118,127 8,223 126,350 43,072 21,810 63,667 128,549 254,899
89,437 21,837 10,661 17,615 139,550 6,592 146,142 43,514 15,683 60,358 119,555 265,697
68,358 21,242 9,814 16,659 116,073 7,732 123,805 42,844 20,911 66,051 129,806 253,611
213,192 264,948 80,976 289,744 848,860 22,804 871,664 181,792 210,470 54,848 447,110 1,318,774
215,860 260,298 82,555 292,812 851,525 16,193 867,718 192,890 215,792 45,071 453,753 1,321,471
190,455 275,507 83,156 307,139 856,257 24,957 881,214 177,242 212,022 48,411 437,675 1,318,889
214,519 262,636 81,762 291,270 850,187 19,517 869,704 187,310 213,116 49,986 450,412 1,320,116
188,097 276,262 82,786 308,950 856,095 28,030 884,125 176,018 213,202 51,704 440,924 1,325,049
29,176 23,738 2,024 5,440 60,378 1,166 61,544 455 1,367 1,822 63,366
25,260 24,455 1,914 6,359 57,988 830 58,818 124 1,091 1,215 60,033
22,692 23,021 1,465 5,168 52,346 1,162 53,508 1,201 1,201 54,709
27,229 24,094 1,969 5,897 59,189 999 60,188 290 1,230 1,520 61,708
21,644 21,279 1,482 5,111 49,516 1,025 50,541 1,346 1,346 51,887
155,244 89,883 26,197 71,548 342,872 11,862 354,734 73,871 49,633 72,118 195,622 550,356
149,564 89,524 26,318 72,571 337,977 9,813 347,790 76,187 52,790 67,695 196,672 544,462
123,246 90,888 25,333 73,715 313,182 13,545 326,727 72,612 57,147 72,936 202,695 529,422
152,420 89,704 26,257 72,057 340,438 10,843 351,281 75,022 51,203 69,918 196,143 547,424
121,351 88,565 25,094 73,262 308,272 13,428 321,700 72,180 56,444 76,015 204,639 526,339
6
APACHE CORPORATION PRICE INFORMATION 2Q14
1Q14
2Q13
FY 2014
FY 2013
Avg. Oil $/bbl: Permian ....................................................... $ Central ......................................................... Gulf Coast ................................................... Canada ......................................................... N.A. Onshore .......................................... Gulf of Mexico ............................................ GOM Shelf .................................................. North America (1) ..................................... Egypt ........................................................... Australia ...................................................... North Sea (1) ................................................. International (1) ........................................ Total (1) ...............................................
94.33 $ 100.39 103.81 94.66 96.06 102.63 NM 96.24 109.74 115.34 109.33 110.08 103.53
93.76 $ 93.72 101.87 88.19 93.72 101.42 NM 94.03 106.70 112.26 106.60 107.24 101.03
92.08 $ 89.18 106.22 87.38 92.03 105.54 106.95 96.11 99.36 100.79 102.95 100.86 98.47
94.05 $ 97.10 102.84 91.47 94.91 102.06 NM 95.15 108.24 113.70 108.00 108.67 102.29
87.49 88.69 108.54 84.97 89.16 107.83 109.19 94.70 105.25 106.29 106.85 105.97 100.43
Avg. Gas $/Mcf: Permian ....................................................... $ Central ......................................................... Gulf Coast ................................................... Canada ......................................................... N.A. Onshore .......................................... Gulf of Mexico ............................................ GOM Shelf .................................................. North America (1) ..................................... Egypt ........................................................... Australia ...................................................... North Sea ..................................................... International ............................................ Total (1) ...............................................
4.48 $ 4.49 4.72 4.21 4.41 4.35 NM 4.41 2.96 4.40 7.75 3.85 4.18
4.78 $ 5.20 4.93 4.38 4.82 5.23 NM 4.75 3.02 4.42 10.69 4.03 4.46
3.86 $ 3.91 4.27 3.52 3.76 3.14 4.18 3.86 3.00 4.70 10.86 4.20 3.97
4.63 $ 4.84 4.83 4.30 4.62 4.71 NM 4.58 2.99 4.41 9.07 3.94 4.33
3.81 3.82 3.91 3.37 3.61 3.28 3.87 3.71 2.97 4.82 10.41 4.21 3.87
Avg. NGL $/bbl: Permian ....................................................... $ Central ......................................................... Gulf Coast ................................................... Canada ......................................................... N.A. Onshore .......................................... Gulf of Mexico ............................................ GOM Shelf .................................................. North America ........................................ Egypt ........................................................... North Sea ..................................................... International ............................................ Total ...................................................
28.46 $ 25.03 27.86 31.67 27.42 31.73 NM 27.50 57.67 61.81 60.19 28.64
31.46 $ 30.39 35.90 42.09 32.58 32.00 NM 32.25 64.34 79.84 77.11 33.20
25.53 $ 21.69 28.80 24.60 23.96 31.26 27.21 24.48 70.39 70.39 25.33
29.85 $ 27.74 31.76 37.56 29.96 31.84 NM 29.83 59.05 69.77 66.41 30.86
25.61 23.90 31.14 28.35 25.52 32.73 27.93 25.92 70.81 70.81 26.91
Discontinued Operations - Argentina Oil price($/Bbl) ........................................... $ Gas price ($/Mcf) ........................................ NGL price ($/Bbl) .......................................
- $ -
72.70 $ 3.04 24.57
77.74 $ 2.79 20.94
72.70 $ 3.04 24.57
76.56 2.99 26.12
(1)
Prices reflect the impact of financial derivative hedging activities.
7
APACHE CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION (in millions, except per unit data)
LEASE OPERATING EXPENSE 2Q14 vs. 1Q14 Cost 1Q14 LOE .................................... $ 597 $ Transportation ....................... 10 Repairs and maintenance ....... 10 FX fluctuations ...................... 7 Power and fuel ....................... (12) Divestitures(1)......................... (3) Other ...................................... 4 Other increased production.... 2Q14 LOE .................................... $ 613 $
(1)
2Q14 vs. 2Q13 Boe 10.37 0.17 0.16 0.12 (0.20) (0.06) 0.08 (0.05) 10.59
Cost 2Q13 LOE .................................... $ 781 $ Transportation ....................... 9 Materials ................................ 9 Saltwater disposal .................. 6 Divestitures(1)......................... (198) Power and fuel ....................... (14) Other ...................................... 20 Other increased production.... 2Q14 LOE .................................... $ 613 $
Boe 11.48 0.13 0.13 0.09 (1.28) (0.20) 0.29 (0.05) 10.59
YTD 2014 vs. YTD 2013 Cost YTD 2013 LOE............................. $ 1,503 $ Transportation ........................ 18 Materials ................................. 16 Labor and overhead ................ 14 Saltwater disposal ................... 9 Divestitures(1).......................... (398) Other ....................................... 48 Other decreased production .... YTD 2014 LOE............................. $ 1,210 $
Boe 11.17 0.14 0.12 0.10 0.07 (1.64) 0.36 0.16 10.48
YTD 2014 vs. YTD 2013 Cost YTD 2013 G&A ............................. $ 238 $ Third party reimbursements ..... (25) Other costs ............................... (14) Decreased production .............. YTD 2014 G&A ............................. $ 199 $
Boe 1.77 (0.18) (0.14) 0.27 1.72
Per-unit impact of divestitures is shown net of associated production.
GENERAL AND ADMINISTRATIVE (G&A) EXPENSE 2Q14 vs. 1Q14 Cost 1Q14 G&A ..................................... $ 105 $ Third party reimbursements .... (25) Other costs ............................... 14 Increased production ............... 2Q14 G&A ..................................... $ 94 $
2Q14 vs. 2Q13 Boe 1.81 (0.43) 0.26 (0.01) 1.63
Cost 2Q13 G&A ..................................... $ 126 $ Third party reimbursements..... (25) Other costs ............................... (7) Decreased production .............. 2Q14 G&A ..................................... $ 94 $
Boe 1.85 (0.37) (0.12) 0.27 1.63
Tables above include costs and BOEs attributable to noncontrolling interest in Egypt but excluding Argentina discontinued operations.
8
APACHE CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION (in millions, except per unit data)
TAXES OTHER THAN INCOME 2Q14 91 $ 52 22 16 181 $
1Q14 63 $ 74 40 4 181 $
YTD 2014 YTD 2013 72 $ 154 $ 207 63 125 114 26 62 59 9 21 19 170 $ 362 $ 399
3.12 $
3.15 $
2.51 $
U.K. PRT.............................................................. $ Severance taxes .................................................... Ad valorem taxes.................................................. Other .................................................................... Total Taxes other than income .................... $ Total Taxes other than income per boe ....... $
2Q13
3.14 $
2.97
GATHERING & TRANSPORTATION 2Q14 Canada ................................................................. $ U.S. ...................................................................... Egypt .................................................................... North Sea ............................................................. Total Gathering & Transportation ............... $
1Q14 30 $ 23 11 2 66 $
Total Gathering & Transportation per boe .. $
2Q13 34 $ 22 10 4 70 $
1.15 $
YTD 2014 40 $ 23 11 3 77 $
1.19 $
1.15 $
YTD 2013
64 $ 45 21 6 136 $
80 44 20 6 150
1.18 $
1.12
FINANCING COSTS, NET 2Q14 Interest expense .................................................... $ Amortization of deferred loan costs ..................... Capitalized interest ............................................... Interest income ..................................................... Financing costs, net ..................................... $ Financing costs, net per boe ........................ $
1Q14
2Q13
YTD 2014 YTD 2013 $ 248 $ 287 3 4 (185) (178) (4) (6) $ 62 $ 107
124 $ 1 (90) 35 $
124 $ 2 (95) (4) 27 $
141 2 (88) (3) 52
0.60 $
0.48 $
0.76 $
Tables above include costs and BOEs attributable to noncontrolling interest in Egypt but excluding Argentina discontinued operations.
9
0.54 $
0.79
APACHE CORPORATION OIL & GAS REGION INVESTMENT (in millions)
1Q14(1,2,3)
2Q14(1,2)
YTD 2014
E&P and GTP Region Investment: Permian.......................................................................... $ Central ........................................................................... Gulf Coast ..................................................................... Canada ........................................................................... N.A. Onshore ......................................................... Gulf of Mexico .............................................................. Other .............................................................................. North America ....................................................... Egypt (Apache's interest only)....................................... Australia ........................................................................ North Sea ....................................................................... Other .............................................................................. $
798 $ 358 118 220 1,494 124 8 1,626 218 196 228 1 2,269 $
758 $ 432 202 92 1,484 82 13 1,579 217 188 288 (9) 2,263 $
Wheatstone & Kitimat Investment: Wheatstone .................................................................... $ Kitimat ........................................................................... $
233 $ 183 416 $
322 $ 155 477 $
(1)
First and second quarters of 2014 include: o Capitalized G&A expense of $91 million and $99 million, respectively. o Pacific Trail Pipelines equity method investment of $15 million and $14 million, respectively.
(2)
First and second quarters of 2014 exclude: o Capitalized interest of $95 million and $90 million, respectively. o Acquisitions of $2 million and $3 million, respectively. o Noncontrolling interest share in Egypt of $112 million and $111 million, respectively.
(3)
Excludes Argentina discontinued operations of $16 million.
(4)
This number is comparable to total “E&P Capital” from the February 2014 Analyst Day.
10
1,556 790 320 312 2,978 206 21 3,205 435 384 516 (8) 4,532 (4)
555 339 894
APACHE CORPORATION SUMMARY BALANCE SHEET INFORMATION (in millions)
2Q14
1Q14
4Q13
3Q13
2Q13
Cash and cash equivalents ....................................... $ Short-term restricted cash ........................................ Other current assets .................................................. Property and equipment, net .................................... Long-term restricted cash ........................................ Goodwill .................................................................. Other assets .............................................................. Total assets ....................................................... $
524 $ 778 3,824 52,470 589 1,369 1,617 61,171 $
1,643 $ 3,820 52,752 1,369 1,537 61,121 $
1,906 $ 4,460 52,421 1,369 1,481 61,637 $
1,251 $ 4,765 51,462 1,369 1,392 60,239 $
184 4,574 55,821 1,369 1,402 63,350
Short-term debt ........................................................ $ Other current liabilities ............................................ Long-term debt ........................................................ Deferred credits and other noncurrent liabilities ...... Apache shareholders' equity .................................... Noncontrolling interest ............................................ Total liabilities and equity ................................ $
1 $ 4,569 9,674 12,035 32,755 2,137 61,171 $
- $ 4,356 9,673 11,915 33,082 2,095 61,121 $
53 $ 4,647 9,672 11,872 33,396 1,997 61,637 $
57 $ 4,466 10,868 11,867 32,981 60,239 $
478 4,680 12,297 13,174 32,721 63,350
Common shares outstanding at end of period ..........
382
390
396
404
389
% of total debt-to-capitalization ...............................
22%
22%
22%
25%
28%
11
NON-GAAP RECONCILIATIONS
APACHE CORPORATION ADJUSTED EARNINGS (in millions, except per share data)
Reconciliation of income attributable to common stock to adjusted earnings: Adjusted earnings and adjusted earnings per share are non-GAAP financial measures. Adjusted earnings generally exclude certain items that management believes affect the comparability of operating results or are not related to Apache’s ongoing operations. Management uses adjusted earnings to evaluate the company's operational trends and performance relative to other oil and gas companies. Management believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings for items that may obscure underlying fundamentals and trends.
2Q14 Income Attributable to Common Stock (GAAP) ............................................ $
505
Adjustments: Argentina discontinued operations, net of tax ............................................ Oil & gas property write-downs, net of tax ................................................ Unrealized foreign currency fluctuation impact on deferred tax expense .. Acquisition, divestiture & separation costs, net of tax .............................. Rig stacking costs, net of tax ...................................................................... Deferred tax adjustments ............................................................................ Commodity derivative mark-to-market, net of tax ..................................... Adjusted Earnings (Non-GAAP) .................................................................... $
1Q14
2Q13
$
236
77 13 9 9 31 644
$
517 7 11 (5) (49) 717 $
2 (66) 17 (156) 813 $
Net Income per Common Share – Diluted (GAAP) ....................................... $
1.31
$
0.60
2.54
Adjustments: Argentina discontinued operations, net of tax ............................................ Oil & gas property write-downs, net of tax ................................................ Unrealized foreign currency fluctuation impact on deferred tax expense .. Acquisition, divestiture & separation costs, net of tax .............................. Rig stacking costs, net of tax ...................................................................... Deferred tax adjustments ............................................................................ Commodity derivative mark-to-market, net of tax ..................................... Adjusted Earnings Per Share – Diluted (Non-GAAP) .................................... $
0.20 0.03 0.03 0.02 0.08 1.67
$
1.30 0.02 0.02 (0.01) (0.12) 1.81 $
Total income tax provision (GAAP) ............................................................... $
366 $
578 $
611
$
944 $
1,213
Adjustments: Tax impact on oil & gas property write-downs .......................................... Tax impact on acquisition, divestiture & separation costs ......................... Tax impact on rig stacking costs ................................................................ Deferred tax adjustments ............................................................................ Tax impact on commodity derivative mark-to-market ............................... Foreign currency fluctuation impact on deferred tax expense .................... Adjusted total income tax provision ............................................................... $
126 5 5 18 (13) 507 $
5 5 (27) (7) 554 $
(17) (86) 66 574 $
126 10 5 5 (9) (20) 1,061 $
(28) (69) 70 1,186
40.4%
41.8%
Adjusted Effective Tax Rate (Non-GAAP) ....................................................
12
40.3%
40.5%
$ 1,016
YTD 2014 YTD 2013
$
$
$
(0.16) 0.04 (0.38) 2.04 $
40.8%
741
$
1,714
517 77 20 20 9 (5) (18) 1,361 $
63 (70) 28 (125) 1,610
1.89
$
4.30
1.32 0.20 0.05 0.05 0.02 (0.01) (0.05) 3.47 $
0.15 (0.17) 0.07 (0.31) 4.04
NON-GAAP RECONCILIATIONS
APACHE CORPORATION CASH FROM OPERATIONS (in millions, except per share data)
Reconciliation of net cash provided by operating activities to cash from continuing operations before changes in operating assets and liabilities: Cash from operations before changes in operating assets and liabilities is a non-GAAP financial measure. Apache uses it internally and provides the information because management believes it is useful for investors and widely accepted by those following the oil and gas industry as a financial indicator of a company's ability to generate cash to internally fund exploration and development activities, fund dividend programs, and service debt. It is also used by research analysts to value and compare oil and gas exploration and production companies and is frequently included in published research when providing investment recommendations. Cash from operations before changes in operating assets and liabilities, therefore, is an additional measure of liquidity but is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing, or financing activities. The following table reconciles net cash provided by operating activities to cash from continuing operations before changes in operating assets and liabilities.
2Q14 Net cash provided by operating activities (GAAP) .... Less: Discontinued operations ............................ Net cash provided by operating activities excluding discontinued operations ...................................... Changes in operating assets and liabilities ................. Cash from continuing operations before changes in operating assets & liabilities ...............................
$
$
1Q14
2Q13
YTD 2014
YTD 2013
2,339 $ -
2,293 $ (82)
2,759 $ (40)
4,632 $ (82)
5,380 (104)
2,339 (111)
2,211 11
2,719 (164)
4,550 (100)
5,276 (426)
2,228 $
2,222 $
2,555 $
4,450 $
4,850
13
