Cash from operations before changes in operating assets and liabilities totaled $1.2 billion, up from $1 billion in the year-earlier period. (This is a non-GAAP measure; see reconciliation below.)
Natural gas production of 1.4 billion cubic feet per day was 8 percent above that of the prior-year period, fueled by increased output from Apache's Egyptian, Australian, Canadian and U.S. Central Region operations. Gas production was up 10 percent from the fourth quarter of 2005.
Liquid hydrocarbon production was approximately 9 percent below the year-earlier period, primarily due to continuing Gulf of Mexico production shut-ins caused by hurricanes Katrina and Rita. Although worldwide liquids production was even with the fourth quarter, U.S. liquids production was up 23 percent.
Total production, on a barrel-of-oil-equivalent basis, averaged 457,000 barrels per day in the first quarter, down 1 percent from the prior-year period. Production was up 5 percent from the fourth quarter.
Apache received $57.41 per barrel of oil in the quarter, up 25 percent from the prior-year period; $36.43 per barrel of natural gas liquids, up 32 percent; and $6.37 per thousand cubic feet of gas, up 20 percent. However, Apache's realized gas price was down 19 percent from the fourth quarter to the first quarter.
"Apache got off to a strong start in the first quarter, and, barring some unforeseen world-changing event, the coming quarters should be even stronger," said G. Steven Farris, Apache's president, chief executive officer and chief operating officer. "We are well into a very active drilling campaign for the year, we have closed on the Pioneer acquisition in Argentina, and we plan to close the BP Gulf of Mexico transaction by the end of the second quarter.
"We expect our production growth will continue to build over the remainder of the year," Farris said. "We believe Apache is on track to achieve 12 percent to 17 percent production growth in 2006."
"It's disappointing to hear the rhetoric beginning to come out of Washington, threatening to impose new taxes on the energy industry," he said. "If taxes are increased, companies will be forced to reduce their investments accordingly.
"With only 13 percent of the world's known hydrocarbon reserves available to private enterprise, government policies should not discourage private investment in the upstream sector," Farris said.
Operational highlights include:
Apache's Central Region had an outstanding quarter, with production rising 9 percent from the fourth quarter. The increase was the result of drilling 112 wells (with a 99 percent success rate), completing 145 fracture stimulations, and the acquisition of eight fields from Amerada Hess.
In the Gulf Coast Region, oil production increased 23 percent from the fourth quarter level. Apache drilled 13 wells offshore and five wells onshore during the first quarter. Apache operated an average of seven jackup rigs, two platform rigs and one barge rig.
In Canada, gas production averaged 386 million cubic feet (MMcf) per day, even with the fourth quarter and up 11 percent from the first quarter of 2005. Apache drilled 344 wells during the quarter, with 187 still to be connected to gathering and processing infrastructure. Apache also obtained regulatory approval to co-mingle production from different zones in 357 wells, and the company has a major recompletion program during the second quarter to access the behind-pipe zones.
In the North Sea, Apache continued to commission new equipment to improve the efficiency of the Forties Field, including turbines, export pumps and platform cranes. The 4 percent drop in production from the fourth quarter was the result of downtime associated with commissioning new equipment.
In Australia, gas production increased 17 percent from the fourth quarter on rising output from the John Brookes field.
In Egypt, Apache achieved record gross gas production of 501 MMcf per day on March 5 and record gross oil production of 119,550 barrels per day on March 8. Net gas production increased 8 percent from the fourth quarter as output from the Qasr field continues to ramp up. Although gross operated oil production was higher, net oil production was down slightly from the fourth quarter because of the impact of higher oil prices on the dynamics of production-sharing arrangements.
With the completion of Apache's acquisition of Pioneer Resources' assets in Argentina, the company plans to drill more than 100 wells there during 2006.
Most Popular Articles
From the Career Center
Jobs that may interest you