Apache Corp.'s third-quarter profit plunged 82% as the oil exploration and production company recorded a one-time write-down on properties in Canada, while revenue declined as natural gas prices fell.
Apache has been acquisitive in recent years, adding mature fields from larger rivals. Earlier this year, Apache agreed to a $2.85 billion deal for privately held Cordillera Energy Partners III LLC, giving it 254,000 acres atop a property known as the Granite Wash, doubling its acreage in the energy field.
On Thursday, the company noted that production from the Permian Basin and Central regions totaled 183,961 barrels of oil equivalent per day for the most recent period, which includes a full three-month contribution from the Cordillera assets acquired--versus 141,020 boepd a year ago.
Chief Executive G. Steven Farris noted the company is continuing to add drilling rigs and accelerate activity in the Permian and Anadarko basins. He said Apache is currently running 56 rigs in these regions with plans to expand throughout next year.
For the quarter, Apache reported a profit of $180 million, down from a year-earlier's $1 billion. Per-share earnings, which include the impact of preferred stock dividends, slid to 41 cents a share from $2.50. The latest period included a $539 million non-cash, after-tax write-down in the carrying value of its properties in Canada resulting from lower natural gas prices. Stripping out one-time items, Apache posted per-share earnings of $2.16 versus $2.95 a year earlier.
Revenue declined 3.4% to $4.18 billion.
Analysts surveyed by Thomson Reuters recently expected per-share earnings of $2.26 on revenue on $4.06 billion.
Costs and expenses jumped 48%, driven by a surge in additional depreciation, depletion and amortization expenses.
The average price of natural gas per Mcf--which is the volume of 1,000 cubic feet of natural gas--fell 15%.
Shares closed Wednesday at $82.72 and were inactive in recent premarket trading. The stock is off 12% in the past 12 months.
Copyright (c) 2012 Dow Jones & Company, Inc.
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