The sharp rise in natural gas and oil prices have sent Apache Corp.’s earnings skyrocketing, and the CEO said yesterday the Houston-based independent would easily beat Wall Street estimates. Analysts have predicted earnings per share of $4.86, but CEO Raymond Plank said the company expects to earn $5.50 per share, about 20% higher than predicted.
Plank, appearing at the Lehman Brothers CEO conference in New York City, said that along with the rising energy prices, the company also has “greater production volumes, thanks in large measure to Apache’s acquisition strategy.”
In July, the company announced it was acquiring Occidental Petroleum Corp.’s offshore oil and gas interests in the Gulf of Mexico for $385 million (see Daily GPI, July 21). In June, Apache acquired long-lived producing properties in the Permian Basin and South Texas for more than $300 million in a definitive agreement with Collins & Ware Inc., based in Midland, TX (see Daily GPI, June 15). And last October, Apache made a definitive agreement to acquire producing properties and other assets in Alberta, British Columbia and Saskatchewan with proved reserves of 87.5 MMBoe from Shell Canada Ltd. for C$770 million (see Daily GPI, Oct. 6, 1999).
Plank said cash flow for 2000 may exceed $13 a share, based on commodity strip prices at the end of August. “Given our built-in production growth for next year and indicated prices well above year-2000 levels, Apache’s strong financial outlook puts a $100 share price within reach.”
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