Apache Reports 74% Increase in 3Q Earnings
Apache reported net income of $765 million, up 74 percent from $441 million in the prior-year period. Apache earned $2.12 per diluted common share in the third quarter compared with $1.30 per share in the year-earlier quarter.
Worldwide production increased 10 percent from the year-earlier quarter to 667,460 barrels of oil equivalent (boe) per day.
Cash from operations before changes in operating assets and liabilities totaled $2 billion in the third quarter, up from $1.3 billion in the prior-year period. Apache's third-quarter adjusted earnings, which exclude certain items that impact the comparability of operating results, totaled $791 million or $2.19 per share, up from $534 million or $1.58 per share in the year-earlier period.
Third-quarter production averaged 358,475 barrels of liquid hydrocarbons and 1.85 billion cubic feet of natural gas per day, both up 3 percent from the second quarter of 2010. Apache's operations outside North America accounted for 54 percent of worldwide production. Liquids sales – crude oil and natural gas liquids – were 54 percent of worldwide production and 78 percent of revenue. Including the impact of hedging activities, Apache realized an average of $74.14 per barrel of oil, down slightly from the second quarter, and $4.01 per thousand cubic feet (Mcf) of natural gas, unchanged from the second quarter.
"Apache's portfolio balance again contributed to strong operational and financial results in the third quarter," said G. Steven Farris, chairman and chief executive officer. "In Australia, the Pyrenees and Van Gogh developments of Apache's Exmouth Basin oil discoveries continued to make significant contributions. We also had higher production in the Permian Basin and Gulf of Mexico as a result of recent acquisitions that will continue to fuel Apache's growth.
"Apache's focus is on integrating operations and building additional value from the assets acquired this year in the Gulf of Mexico, Permian Basin and western Canada as well as our previously announced acquisition in Egypt, which we expect will close during the fourth quarter," Farris said. "We also are continuing our high-impact exploration programs in Australia and Egypt.
"In December, after the acquisition activity is expected to be completed, we forecast production to exceed 775,000 boe per day, or 35 percent above the December 2009 level," Farris said.
Apache's third-quarter results include production from Gulf Shelf assets acquired from Devon Energy Corp. in the second quarter as well as the partial-quarter impact of the acquisition of BP's oil and gas operations, acreage and infrastructure in the Permian Basin of West Texas and New Mexico on Aug. 10.
Apache's subsidiary, Apache Canada Ltd., completed its acquisition of substantially all of BP's upstream natural gas business in western Alberta and British Columbia on Oct. 8.
Apache also expects to close the previously announced merger with Mariner Energy upon approval of Mariner's shareholders at a special meeting scheduled Nov. 10. Mariner is an independent producer with operations in the Gulf of Mexico, the Gulf Coast and the Permian Basin.
Operates 4 Offshore Rigs
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