In the fourth quarter, Apache earned $787 million, or $2.35 per share, up 55 percent from the prior-year period, a record, despite the continuing impact of Hurricanes Katrina and Rita on Gulf of Mexico operations.
"Overall, we are pleased with Apache's performance in 2005," said G. Steven Farris, president, chief executive officer and chief operating officer. "Despite losing approximately 5 percent of our production to hurricanes, we were able to increase worldwide production by 1.4 percent. We replaced 216 percent of our 2005 production, adding 352 million barrels of oil equivalent (boe) -- 98 percent through the drill bit, with single-digit finding costs. Our year-end reserves increased 9.3 percent to a record 2.1 billion boe -- the 20th consecutive annual increase."
Apache spent $3.4 billion on acquisitions and exploration and development capital in 2005, excluding a $547 million non-cash accrual for future asset retirement obligations.
"We are positive about the outlook for the year ahead," Farris said. "We started 2006 by completing our $269 million acquisition of Permian Basin assets from Amerada Hess and agreeing to purchase Pioneer's assets in Argentina for $675 million. At year-end, we had restored 85 percent of our gross operated gas production and 67 of gross operated oil production in the Gulf Coast Region.
"We see potential for production growth in every one of our core areas," Farris said. "We anticipate 2006 production will grow 6 percent to 10 percent above 2005 levels, excluding the Pioneer transaction in Argentina.
"Our Gulf Coast Region has been a key core area for Apache," Farris said. "It had the highest gross margin of any of our regions in 2005 and generates exceptional rates of return on capital invested. It continues to be an integral part of our overall portfolio."
In 2005, Apache drilled 2,383 wells with a 91 percent success rate, Farris said. "Barring a major political or economic event, such as the counterproductive adoption of a windfall profits tax, we should be more active in 2006."
Apache is planning wildcat wells in the North Sea outside the Forties Field, the Exmouth Basin in Australia, Northeast British Columbia in Canada and the Western Desert of Egypt, as well as possible wells targeting deep gas formations on Apache's acreage in the Gulf of Mexico, Farris said.
Apache's liquid hydrocarbon production increased 1 percent to 243,900 barrels per day during 2005 and natural gas production rose 2 percent, to 1.26 billion cubic feet (Bcf) per day, marking the 26th time that Apache has increased production in the last 27 years.
Apache's fourth-quarter worldwide production was below prior-year levels as a result of hurricane-related shut-ins, which peaked during the period. Apache's liquids production averaged 227,100 barrels per day during the quarter, 10 percent below the prior-year period, and 1.23 Bcf of gas per day, 1 percent below the year-earlier quarter.
Cash from operations before changes in operating assets and liabilities totaled $4.7 billion, up 39 percent from 2004. In the fourth quarter, cash from operations totaled $1.4 billion, up from $1.1 billion in the year-earlier period.
Apache's fourth-quarter financial results included $79 million in claims for business interruption insurance for production lost because of the hurricanes. Apache incurred $12 million of storm-related expenses including insurance premiums and additional lease operating expenses.
At year-end, Apache's debt was 17 percent of total capitalization.
Apache was established in 1954 committed to profitable growth for the benefit of our shareholders; the same goal motivates our people today.
Most Popular Articles
From the Career Center
Jobs that may interest you