Apache Corporation Announces First-Quarter 2018 Financial and Operational Results

  • Reported first-quarter production of 440,000 barrels of oil equivalent (BOE) per day and adjusted production of 367,000 BOE per day, which excludes Egypt noncontrolling interest and tax barrels;
  • Achieved U.S. production of 232,000 BOE per day, exceeding guidance by 9,000 BOE per day;
  • Delivered record Permian Basin production of 183,000 BOE per day, with oil up 14 percent and total production up 24 percent year over year;
  • Reduced average Alpine High well costs by 20 percent from 2017 average;
  • Announced oil discovery at Garten prospect in U.K. North Sea with reserve potential in excess of 10 million barrels of oil (APA has a 100-percent working interest); and
  • Raising U.S. production guidance range to 250,000 to 258,000 BOE per day, from 245,000 to 255,000 BOE per day.

HOUSTON, May 2, 2018 – Apache Corporation (NYSE: APA) (Nasdaq: APA) today announced its financial and operational results for the first quarter of 2018.

Apache reported earnings of $145 million or $0.38 per diluted common share for the first quarter of 2018. These results include a number of items outside of core earnings that are typically excluded by the investment community in their published earnings estimates. When adjusted for these and certain additional items that impact the comparability of results, Apache’s first-quarter earnings were $124 million or $0.32 per share. Net cash provided by operating activities in the quarter was $615 million. Before working capital changes, Apache generated $799 million in operating cash flow. Adjusted earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses (adjusted EBITDAX) was $1.1 billion.

John J. Christmann IV, Apache's chief executive officer and president, said, “During the first quarter, Apache delivered strong operational results and U.S. production significantly above guidance. Outperformance in the United States was driven by a combination of shorter completion cycle times, improving efficiencies and excellent performance from new wells. 

“Internationally, production was in line with our guidance, and our exposure to Brent oil pricing contributed to high margins, high cash returns and strong free cash flow. The first quarter was very good from an execution and cost-control standpoint, and we are seeing continued momentum into the second quarter,” said Christmann.

First-quarter operational summary

Highlights from the company’s three principal areas include:

  • United States – U.S. production averaged 232,000 BOE per day. The company averaged 17 rigs and drilled and completed 60 gross-operated wells.
    • Permian Basin – First-quarter production in the Permian Basin averaged 183,000 BOE per day, with oil up 14 percent and total production up 24 percent year over year.
      • Midland Basin – Apache has transitioned primarily to multiwell pad development utilizing optimized pattern and spacing configurations. Across three pads, the company placed 12 wells on production in the Wolfcamp formation with an average peak 30-day initial production (IP) rate of 173 BOE per day per 1,000 lateral feet and consisting of 75 percent oil. Notably, Apache tested its first Wolfcamp C producer, which achieved a 30-day IP of 196 BOE per day per 1,000 lateral feet and consisting of 70 percent oil. Based on conservative early-stage assessments, this result could lead to the addition of several hundred Wolfcamp C locations.

        Apache has implemented a new completion design with more optimal stage and cluster spacing, which is contributing to improved early-time well performance. The company is fracture stimulating more lateral feet per day, completing wells faster and more efficiently, and realizing significant cost savings.
      • Delaware Basin – The company averaged 10 rigs and drilled and completed 29 gross-operated wells in the Delaware.

        At Alpine High, production averaged 26,000 BOE per day, a 33-percent increase over fourth-quarter 2017. Apache has begun the transition to pattern and spacing testing as well as development drilling on multiwell pads. Pad operations and well design changes are driving increased efficiencies and lower well costs. The company made significant progress toward its cost reduction target during the first quarter, with well costs down 20 percent over 2017 average well costs.

        During the quarter, Apache brought online its first multiwell test in the wet gas window of the play, the four-well Chinook pad, which contains 1,350 British thermal units wet gas and oil. The average 30-day IP rates for these wells was 1,366 BOE per day.
  • Egypt – Apache averaged 14 rigs during the quarter and drilled and completed 28 gross-operated wells with an 86-percent success rate. Adjusted production in Egypt, which excludes minority interest and the impact of tax barrels, averaged 80,000 BOE per day. During the quarter, Apache completed seven wells with 24-hour IP rates exceeding 1,000 BOE per day. The company has completed approximately 20 percent of its 2.6-million-acre, high-resolution, high-density 3D seismic survey in the Western Desert, which it believes will uncover impactful oil growth opportunities on its newly awarded concessions and legacy acreage.
  • North Sea – Apache averaged three rigs during the quarter and produced 54,000 BOE per day. The company announced a significant discovery at the Garten prospect in the Beryl area, which encountered more than 700 feet of net oil pay in stacked, high-quality, Jurassic-aged sandstone reservoirs. The recoverable resource is expected to exceed 10 million barrels of light oil, which is at the high end of predrill estimates. Apache has a 100-percent working interest in the Garten discovery. The company will revisit its 2019 and 2020 international production guidance as well tieback and development activities progress. 

Capital investment and financial position 

Oil-and-gas capital investment was $857 million during the quarter, with $115 million for Alpine High midstream. More than two-thirds of the capital spend in the quarter was focused on the Permian Basin. 

In March 2018, the company entered into a new five-year revolving credit facility with commitments totaling $4 billion. Apache retired $150 million of notes that matured in February and ended the quarter with $1.1 billion of cash and net debt of $7.3 billion. 

2018 outlook and guidance update 

Solid operational execution and strong well performance in the first quarter is prompting Apache to raise its 2018 U.S. production guidance range to 250,000 BOE to 258,000 BOE per day from a previous range of 245,000 BOE to 255,000 BOE per day and expects a slight increase in its U.S. oil mix for the year. Capital guidance of $3 billion remains unchanged for the year. 

Further details on other financial and operational guidance items for the second quarter and full year 2018 can be found in the First-Quarter 2018 Financial and Operational Supplement.

“We are very pleased with our results year to date, as our methodical approach to delineation and development is generating improved capital efficiency, higher returns and attractive production growth. I believe 2018 will be a year in which Apache differentiates itself operationally, particularly in the Permian Basin, where our measured pace is enabling the timely integration of key learnings and the ability to more effectively manage the inflationary service cost environment,” Christmann concluded. 

Conference call

Apache will host a conference call to discuss its first-quarter 2018 results at 10 a.m. Central time, Thursday, May 3. The conference call will be webcast from Apache's website at and, and the webcast replay will be archived there as well. A replay of the conference call will be available for seven days following the call. The number for the replay is (855) 859-2056 or (404) 537-3406 for international calls. The conference access code is 3758236. Sign up for email alerts to be reminded of the webcast at

Additional information

Additional information follows, including reconciliations of adjusted earnings, cash flow from operations before changes in operating assets and liabilities, adjusted EBITDAX, oil and gas capital investment and net debt (non-GAAP financial measures) to GAAP measures and information regarding adjusted production. Apache’s quarterly supplement is available at

About Apache

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Egypt and the United Kingdom. Apache posts announcements, operational updates, investor information and copies of all press releases on its website,, and on its Media and Investor Center mobile application, which is available for free download from the Apple App Store and the Google’s Play store.

 Non-GAAP financial measures

Apache’s financial information includes information prepared in conformity with generally accepted accounting principles (GAAP) as well as non-GAAP information. It is management’s intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted earnings, cash flow from operations before changes in operating assets and liabilities, oil and gas capital investment, adjusted EBITDAX and net debt are non- GAAP measures. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure.

Forward-looking statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “guidance,” “outlook,” and similar references to future periods. These statements include, but are not limited to, statements about future plans, expectations and objectives for Apache’s operations, including statements about our capital plans, drilling plans, production expectations, asset sales, and monetizations. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See "Risk Factors" in our 2017 Form 10-K filed with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development or otherwise, except as may be required by law.

Cautionary note to investors

The United States Securities and Exchange Commission ("SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SEC's definitions for such terms. Apache may use certain terms in this earnings release, such as "resources," "potential resources," "resource potential," "estimated net reserves," "recoverable reserves," and other similar terms that the SEC guidelines strictly prohibit Apache from including in filings with the SEC. Such terms do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality and other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in Apache's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2017, available from Apache at or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, TX 77056 (Attn: Corporate Secretary). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC's website at


Investor: (281) 302-2286 Gary Clark

Media: (713) 296-7276 Castlen Kennedy


Click here for the full release with quarterly financial statements.

Click here for the First-Quarter 2018 Financial and Operational Supplement.