Apache Earnings Beat With Record Permian Production

Independent energy company Apache Corp reported better than expected third quarter earnings after the close Wednesday. $APA also raised it’s production outlook with record Permian production.

Independent energy company Apache Corp reported better than expected third quarter earnings after the close Wednesday. $APA also raised it’s production outlook with record Permian production. 

Apache Portfolio

Apache Corp (NYSE: $APA) Reported Earnings After Close Wednesday

$0.63 Beat $0.43 EPS and $1.98 billion Beat $1.91 billion forecast in revenue 

Earnings

Apache (APA) reported third-quarter earnings with net income of 21 cents per share. Earnings, adjusted to extinguish debt and for non-recurring costs was 63 cents per share ahead of consensus expectations of 43 cents per share. Revenue was $1.98 billion also topping  forecasts of $1.91 billion. 

Apache Corporation NYSE: $APA

Market Reaction After hours 38.72 +0.89 (+2.35%)

Highlights

  • Third-quarter production of 476,000 barrels of oil equivalent (BOE) per day.
  • Adjusted production, which excludes Egypt noncontrolling interest and tax barrels and 2017 divestitures, was 401,000 BOE per day, up 13 percent over third-quarter 2017
  • Achieved U.S. production of 272,000 BOE per day and record Permian Basin production of 222,000 BOE per day, up 31 percent and 38 percent over third-quarter 2017, respectively;
  • Delivered strong cash flow from operations of $1 billion, with nearly 70 percent of reported oil production receiving Brent or Gulf Coast-linked pricing; 
  • Expecting strong fourth-quarter adjusted production volume growth of 20,000 BOE per day, approximately half of which will come from oil; raising full-year 2018 U.S. production guidance to 262,000 BOE per day
  • Altus Midstream Company transaction to close in November 2018, which is expected to fund fourth quarter 2018 and future Alpine High midstream expenditures;
  • Anticipate 2019 production at the high-end of previously announced guidance of 410,000 to 440,000 BOE per day on an annual upstream capital program of $3 billion; and 
  • Resumed share buyback program during the third quarter; announced additional share repurchase authorization of 40 million shares.

Apache Q3 Global Production

Apache Corp  Q2 Earnings Recap

$0.50 Beat $0.35 EPS and $1.9 billion Beat $1.8 billion forecast in revenue 

Earnings

Reported second-quarter earnings per share, excluding one-time items of 50 cents, beating the consensus 35 cents and up from from year-ago adjusted loss of 21 cents. Revenues of $1.9 billion were above the Zacks consensus of $1.8 billion and  39.4% above the second-quarter 2017 sales of $1.4 billion.

Apache Corporation NYSE: $APA

Market Reaction  > Close 44.41 −0.53 (-1.18%)

Production

  • Production of oil and natural gas (excluding divested assets and non-controlling interests) averaged 389,734 oil-equivalent barrels per day (BOE/d) (67% liquids), up 16% from last year.
  • Apache’s production for oil and natural gas liquids (NGLs) was 259,887 barrels per day (Bbl/d),
  • Natural gas output was 779,085 thousand cubic feet per day (Mcf/d).
  • In the company’s Permian Basin acreage, average production volumes improved to a record 201,832 BOE/d from 145,533 in the second quarter.
  • For 2018, the company forecasts its Permian resources to continue the high-return growth. 

Prices Received

  • The average realized crude oil price during the second quarter was $69.35 per barrel, representing an increase of 47.9% from the year-ago realization of $46.89.
  • The average realized natural gas price during the June quarter of 2018 was $2.50 per thousand cubic feet (Mcf), down 3.8% from the year-ago period.

Guidance

  • Apache increased its 2018 annual production guidance in the United States to 260,000 BOE/dfrom 250,000-258,000BOE/d, representing year over year volume growth of 26%.
  • The expected improvement in this year’s volume was prompted by robust execution and well performance in the second quarter.

Balance Sheet

  • As of Jun 30, 2018, the oil giant, with a market capitalization of around $18 billion, had approximately $972 million in cash and cash equivalents.
  • The company had long-term debt of $7.9 billion, representing a debt-to-capitalization ratio of 51.0%.

CapEx

  • Apache spent $3.1 billion in 2017, representing a 75% increase over its 2016 spending. Apache projects 2018 oil and gas investments of $3.4 billion, up from the prior guidance of $3 billion.
  • Majorityof its capital investments (or 70%) will be allocated toward the Permian Basin.

Operating Expenses

  • Apache’s second-quarter lease operating expenses totaled $356 million, down 4.3% from the year-ago quarter.
  • Ttotal operating expenses increased 3.3% from the corresponding period of 2017 to $1.4 billion.

Source: Apache

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