Apache Posts Financial Results, Optimistic about 2009 Projects
Apache Corporation reported net income of $706 million or $2.09 per diluted common share for the year ended Dec. 31, 2008. Apache's results include a $3.6-billion non-cash, after-tax reduction in the carrying value of its oil and gas properties stemming from significantly lower commodity prices at year-end 2008.
Apache's 2008 adjusted earnings,* which exclude the write-down and certain other items that impact the comparability of operating results, totaled $3.8 billion, or $11.22 per share. In 2007, Apache reported net income of $2.8 billion or $8.39 per share and adjusted earnings of $2.9 billion or $8.66 per share.
In the fourth quarter, Apache reported a net loss of $2.9 billion, or $8.80 per common share, also reflecting the $3.6-billion non-cash, after-tax charge. Apache's fourth-quarter adjusted earnings totaled $276 million, or 82 cents per share. In the prior-year period, Apache reported net income of $1.07 billion, or $3.19 per share and adjusted earnings of $1 billion or $2.92 per share.
Cash from operations before changes in operating assets and liabilities* totaled $7.4 billion, up from $6.2 billion in 2007. Fourth-quarter cash from operations totaled $1.1 billion, down from $1.9 billion from the year-earlier period.
"Certainly, the magnitude of the write-down is large; however, considering oil prices have collapsed from a peak of more than $140 per barrel for West Texas Intermediate at mid-year to less than $45 per barrel at year-end, it was not unexpected," said G. Steven Farris, chairman and chief executive officer. "This is a non-cash event that we expect will have no impact on our operations or financial flexibility."
"The important news going forward is that Apache exited 2008 with a debt- to-capitalization ratio of 23 percent, more than $1.5 billion in available cash and short-term investments, and $2.3 billion in available credit facilities," Farris said. "With a number of development projects coming on line in the first half of 2009, we are projecting production growth of 6 to 14 percent in 2009, depending on capital availability. We are striving to keep our discretionary spending in line with 2009 cash flow to retain our financial flexibility.
"Apache entered this downturn with a low debt-to-capitalization ratio and nearly $4 billion in financial resources, providing us with significant staying power in an uncertain environment," Farris said. "Right now, the most important thing is to protect our balance sheet by not outspending our operating cash flow.
"We've been through 'down' cycles before. Although these periods are painful, they ultimately present excellent acquisition opportunities," Farris said. "We are well-positioned entering 2009, with projected production growth and ample liquidity to pursue transactions. I expect Apache will emerge an even stronger company when the cycle turns."
Operates 4 Offshore Rigs
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