Apache Posts Quarterly Loss, Readying For Rebound

Reuters

May 7 (Reuters) - Apache Corp reported a quarterly loss on Thursday as low commodity prices took a toll, but a recent rally in crude has the U.S. oil and gas company preparing for a rebound.

Crude oil prices fell by more than half from a June peak over $100 a barrel. In response, the Houston-based company slashed spending 60 percent and drastically cut its rig count.

Those actions have left the company in good shape to spring to action as crude prices move higher. Crude is trading in New York around $60 a barrel up from lows of around $42 in recent months.

Apache, which drills in North American shale fields in Texas as well as in the Egyptian desert and the North Sea, plans to monitor oil prices and will reconsider its 2015 drilling plans at mid-year.

"Should oil prices stabilize at these higher levels, and cash flow increase accordingly, we are well-positioned to ramp up the drilling program in an efficient and cost-effective manner," Apache Chief Executive Officer John Christmann said on a conference call.

Crude oil around $65 a barrel is enough to invest in new drilling in the Canyon Lime and Eagle Ford fields in Texas, he said, adding that any new wells would have to compete for capital with other projects.

Harold Hamm, the chief executive officer of Bakken operator Continental Resources Inc, told investors on a Thursday conference call that oil at $70 a barrel "turns it on for us," in response to a question about at what price rigs would go back to work.

Writedown

Earlier, Apache reported a first-quarter loss of $4.7 billion, or $12.34 per share, compared with a profit of $236 million, or 60 cents per share in the same period a year earlier.

Excluding one-time items such as a nearly $5 billion asset impairment writedown, mostly for the United States, Canada and North Sea, Apache had a loss of 37 cents per share.

Analysts, on average, expected a steeper loss of 57 cents per share, according to Thomson Reuters I/B/E/S.

Oil and gas output fell 6 percent from a year ago to 601,000 barrels oil equivalent per day.

Apache left its North American capital spending forecast unchanged at $2.1 billion to $2.3 billion. Oil and gas output for North America is still expected to be flat for the year, while production from the North Sea and Egypt is seen slightly higher.

(Reporting by Anna Driver; Editing by Terry Wade, Jeffrey Benkoe and Christian Plumb)



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