Apache Corp., which has been streamlining its North American operations to concentrate on building output from the Permian and Anadarko basins, reported a huge jump in production, and profits, during the second quarter.

Onshore North American liquids production increased to 175,000 boe/d, constituting 41% of total worldwide liquids output and more than 22% of total overall production, CEO G. Steven Farris said Thursday during a conference call. The onshore gains “represent an increase of over 6% quarter-to-quarter and nearly 42% from second quarter of 2012,” he said.

The Houston-based operator earned $1 billion ($2.54/share) in 2Q2013, almost two-thirds more than in the year-ago period when profits were $337 million (86 cents). Net cash provided by operating activities climbed to almost $2.8 billion from $2.4 billion.

As part of a portfolio review that began late last year, Apache in July sold its once mighty Gulf of Mexico Shelf leasehold, retaining the deep drilling rights, to Fieldwood Energy for $3.5 billion to better focus on onshore opportunities, Farris said. That strategy has paid off handsomely.

“In the Permian, we are currently running 45 rigs,” he said. “In the Anadarko Basin, we are running 35 rigs. And as a result of this drilling activity, we remain on track to achieve our guidance of greater than 25% North American onshore liquids growth during 2013.”

More transactions are expected before year’s end, the CEO said.

COO Rod Eichler highlighted operations in North America, as well as in Egypt, where Apache holds a formidable leasehold.

“During the second quarter we averaged a 116 rigs worldwide and completed 343 total gross wells with a 99% success rate, 248 of these wells or 72% were located onshore at North America. At our Permian and Central Regions alone we completed 215 gross wells or 63% of our total,” he said.

North America onshore liquids output jumped 42% year/year, with combined Permian and Anadarko units growing by 8,000 boe/d from 1Q2013, or 6%, to 136,000 boe/d. “Combined production of these regions was 214,000 boe/d representing 27% of total company production for the quarter,” the COO said.

In the Permian region, where Apache is the most active driller, it averaged a 123,000 boe/d, 74% liquids and 18% higher year/year, constituting nearly 16% of total production. Apache is operated a record 41 rigs between April and June, which helped drill 214 gross wells, including 58 horizontals and 128 wells completed.

In the Permian’s Lower Cline Shale, 11 wells have been sunk since the start of the year and 28 more are planned through December. Apache’s 30 day average initial production rate for the wells online beginning this year through June was 311 b/d, weighted 81% to oil.

The Anadarko Basin operations averaged 91,000 boe/d in the quarter, about 5% (4,700 boe/d) higher than in the year-ago period. “Notably, 100% of the quarterly growth came from oil and natural gas liquids,” said Eichler.

“Liquids now represent nearly half of our total region production versus 29% in the second quarter of 2012,” he said. There were on average 28 rigs running, with 27 horizontals, which completed 87 gross wells.

“We are currently running 35 rigs in that region and remain on track to drill 300 wells during 2013,” Eichler said. ” About a third of our program will target prolific liquids-rich Granite Wash, with another third targeting the oilier Tonkawa. Rigs will also continue to work the Cleveland, Marmaton, Cottage Grove and Canyon Wash plays.”

Apache is ramping up the production activities while at the same time driving down drilling and completion costs, an often-heard story by U.S. operators in quarterly earnings reports to date.

“In May,” said Eichler, “we reported $5 million to drill and complete a Tonkawa well…Thanks to the efforts of a number of Apache engineers, petrophysicists and geologists, we have lowered that number by nearly $1.5 million, with production results equal to or better than before.”

Half of the 25 Tonkawa wells drilled in 2Q2013 “had significant rate of penetration increases, with our last two wells drilled in under two weeks versus four weeks six months ago.” The team that reduced costs in the Tonkawa since has turned its attention to the Granite Wash.