Apache (APA) is another case of an E$P significantly beating expectations and being sold off on the news. Earnings for Q3 = $.59 versus Zack's expected $.49. They even beat expected earnings for Q4 = $.57. We will shortly see some significant earning revisions upward. I bought this am at 38 15/16.
APA positioned itself well to expand for the coming Boom 2000. In particular note the increased cash flow and lower costs. With increased production from the former Shell GOM properties and expected similar results from the recently acquired Shell Western Canada properties APA is IMHO an excellent long term investment.
*******Edit The rumors of possible OPEC cheating have created periodic buying opportunities in the past and IMO now again. Remember the drip, drip, drip... of inventories, most recently reflected in this weeks large drops in product (gas and Distillate) inventories.
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Apache's Third Quarter Earnings Climb to 59 Cents Per Share
October 28, 1999 08:30 AM
HOUSTON, Oct. 28 /PRNewswire/ -- Apache Corporation APA said today that the combination of higher production and stronger oil and gas prices pushed third quarter net income to a record $67.8 million, or 59 cents per share, compared with $2.6 million, or 3 cents per share, in the year-earlier period.
During the third quarter, oil production averaged a record 97,226 barrels per day, up 36 percent from 71,407 barrels per day in the year-earlier quarter. Natural gas production averaged 694 million cubic feet (MMcf) per day, also a record, up 20 percent from 576 MMcf per day in the prior-year period.
Apache's financial results reflected the recovery in oil and gas prices during the third quarter. The company realized an average of $20.52 per barrel of oil, up 64 percent from $12.49 per barrel in the prior-year period. Natural gas prices increased 27 percent, to $2.37 per thousand cubic feet (Mcf), from $1.86 per Mcf in the year-earlier period.
Cash from operations also set a record, reaching $223.9 million in the third quarter, up from $96.9 million in the prior-year period.
"Apache's improved financial performance in the third quarter is not just the result of higher oil and gas prices," said G. Steven Farris, president and chief operating officer. "We significantly increased production while reducing our per-barrel operating costs."
Farris said the production gains were in large part due to Apache's aggressive program of development drilling and workovers on producing properties in the Gulf of Mexico acquired from Shell in the second quarter. When Apache took over operations on July 1, the properties had net production of 128 MMcf of gas per day and 24,355 barrels of oil per day. By the end of the quarter, Apache had increased net gas production by 55 percent to 199 MMcf per day and net oil production by 19 percent to 29,071 barrels per day.
Apache also increased natural gas production in Australia to 86 MMcf per day from 53 MMcf per day in the prior-year period. The company commenced gas sales from the Khalda concession in Egypt.
During the third quarter, Apache announced a definitive agreement to buy oil and gas producing properties in Alberta, Saskatchewan and British Columbia from Shell Canada Ltd. The transaction -- the company's second major Shell- related acquisition of 1999 -- is expected to close by Nov. 30.
"Since we re-established our Canadian position with the 1995 acquisition of DEKALB Energy, we have looked for an appropriate building block of people, prospective exploration acreage, seismic data and a production base with upside potential," said Raymond Plank, chairman and chief executive officer. "We believe we now have all of the elements in place to grow our Canadian portfolio rapidly."
"Because of record production and strong prices, we expect to have cash in the bank approaching $140 million by the closing of the Canada transaction," said Roger Plank, chief financial officer. "We intend to finance the purchase with cash and debt, which will leave our debt-to-capitalization ratio at about 42 percent."
Apache Corporation is a large gas and oil independent with operations in North America, Egypt, Western Australia, Poland and People's Republic of China. Its common shares are traded on the New York and Chicago stock exchanges.
This news release contains certain "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995 including, but without limitation, expectations, beliefs, plans and objectives regarding Apache's consummation of acquisitions, future growth, future cash reserves and future capitalization. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions and uncertainties. There is no assurance that Apache's expectations will be realized, and actual results may differ materially from those expressed in the forward-looking statements.
Listen to a live webcast of Apache's third quarter conference call at 1 PM Houston time on Thursday, Oct. 28, by going to videonewswire.com If you are unable to participate during the live webcast, the call will be archived at the same web site.
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
1999 1998 1999 1998
FINANCIAL DATA:
Revenues $385,391 $211,683 $854,742 $677,756
Income Attributable
to Common Stock $ 67,831 $ 2,617 $ 93,875 $ 29,209
Basic Net Income Per
Common Share $ .59 $ .03 $ .89 $ .30
Diluted Net Income
Per Common Share $ .59 $ .03 $ .88 $ .30
Weighted Average
Common Shares 114,088 98,205 105,874 98,131
PRODUCTION AND PRICING DATA:
NATURAL GAS VOLUME - Mcf per day
United States 495,226 413,818 447,010 443,546
Canada 92,885 107,651 100,115 101,102
Australia 85,603 52,544 71,786 48,988
Egypt 16,615 2,044 8,155 986
Ivory Coast 3,470 --- 3,674 ---
Total 693,799 576,057 630,740 594,622
AVERAGE NATURAL GAS PRICE PER MCF
United States $ 2.58 $ 2.07 $ 2.22 $ 2.14
Canada 1.89 1.28 1.64 1.30
Australia 1.52 1.43 1.51 1.52
Egypt 3.45 1.68 3.10 1.78
Ivory Coast 1.71 --- 1.72 ---
Total 2.37 1.86 2.05 1.95
OIL VOLUME - Barrels per day
United States 51,994 31,691 42,611 35,330
Canada 2,082 2,107 2,110 2,067
Australia 9,936 9,717 9,905 8,359
Egypt 33,163 27,892 30,415 28,801
Ivory Coast 51 --- 49 ---
Total 97,226 71,407 85,090 74,557
AVERAGE OIL PRICE PER BARREL
United States $ 19.80 $ 12.19 $ 16.29 $ 13.14
Canada 19.31 11.70 14.98 13.12
Australia 23.33 13.29 17.57 13.75
Egypt 20.90 12.60 16.47 13.13
Ivory Coast 18.11 --- 15.68 ---
Total 20.52 12.49 16.47 13.20
NGL VOLUME - Barrels per day
United States 3,583 2,025 2,887 2,010
Canada 583 577 605 613
Total 4,166 2,602 3,492 2,623
NGL PRICE PER BARREL
United States $ 9.08 $ 9.09 $ 8.52 $ 8.58
Canada 12.80 6.09 8.59 6.52
Total 9.60 8.43 8.53 8.10
SOURCE Apache Corporation
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