Apache Corp.'s fourth-quarter earnings soared 73% as the exploration-and -production company benefited from increased output and strong oil prices.
Chairman and Chief Executive G. Steven Farris said Apache plans to spend $9.5 billion of drilling capital this year, up from $8 billion in 2011.
"We will live within our cash flow, and we will review capital allocations quarterly," Farris said. The company plans to drill up to 20% to 30% more wells this year than 2011's roughly 1,100 gross wells. More than half of the new wells planned this year will be in the Permian and Anadarko Basins, he said.
Apache has been acquisitive in recent years, adding mature fields from larger rivals. High oil prices and new drilling technologies have breathed new life into thoroughly drilled oil fields such as those in the Texas Panhandle and across the Oklahoma border.
In January. Apache agreed to a $2.85 billion deal for privately held Cordillera Energy Partners III LLC, giving it 254,000 acres atop such a property, known as the Granite Wash, doubling its acreage in the energy field.
Apache reported a profit of $1.19 billion, or $2.98 a share, up from $689 million, or $1.77 a share, a year earlier. Excluding merger and acquisition-related costs and other items, earnings were up at $2.94 a share from $2.19.
Revenue increased 25% to $4.3 billion. Analysts polled by Thomson Reuters most recently projected earnings of $2.87 a share on revenue of $4.29 billion.
Total global production was up 4.2% from a year earlier. Average prices, including hedging impacts, climbed 24% for oil and rose nearly 3% for natural gas.
Liquid hydrocarbons represented half of all production and nearly 80% of revenue last year owing to the large gap between global crude and North American natural-gas prices, which have remained around historic lows.
Apache ended the year with proved reserves of 3 billion MMboe, up 1% from a year earlier. The company added 422 MMboe, or 155% of production, through extensions, discoveries and acquisitions.
Apache has spent more than $15 billion in the past two years to acquire a series of assets in Egypt, the North Sea, West Texas and the Gulf of Mexico.
Shares were up 82 cents at $108.49 in premarket trading. Through Wednesday's close, the stock was up roughly 19% this year.
Copyright (c) 2012 Dow Jones & Company, Inc.
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