Apache Corp., which has built its exploration portfolio so far this year with three strategic North American transactions, said Thursday natural gas and oil output worldwide jumped in 1Q2010 from the year-ago period by 8% to 300,557 boe/d.
Adjusted earnings, including one-time items, totaled $712 million ($2.10/share), up 226% from $218 million (65 cents) in 1Q2009. Using generally accepted accounting principles, Apache recorded a net loss in the year ago period of $1.76 billion (minus $5.25/share) following a $1.98 billion reduction in the carrying value of its oil and gas properties.
“Apache is off to a fast start in 2010, with strong operational and financial results and two strategic steps that will add to the company’s future growth,” CEO Steve Farris told financial analysts during a conference call to discuss earnings.
Operationally, 1Q2010 production totaled 585,877 boe/d, up 7% from a year earlier. Natural gas production increased 5% year/year to 1.7 Bcf/d.
“Financially, Apache’s strong results reflect rising production from our balanced portfolio,” Farris said. Liquids sales totaled 51% of production but accounted for 74% of revenue.” Apache is about equally weighted between gas and oil projects.
“We continued to build cash during the quarter, putting us in a strong position for two strategic transactions that are expected to provide near-term production growth on the Gulf Shelf and an extensive inventory of opportunities in the deepwater Gulf of Mexico,” Farris said.
One of the strategic buys Farris talked about is the pending merger with Mariner Energy, a deepwater explorer that has estimated proved reserves of 181 million boe and an unbooked resource potential of 2 billion boe. Apache announced it would acquire the Houston-based explorer in mid-April (see Daily GPI, April 16); the transaction is set to close around September, Farris said.
Just days earlier Apache bought Devon Energy Corp.’s shallow water GOM properties along the Texas, Louisiana and Alabama coasts (see Daily GPI, April 13).
Once the Devon and Mariner transactions are completed, Apache expects to increase its production by 5-10%, Farris said.
The Houston producer looks for oil and gas across the globe, but most of its production still comes from North America. This year the company expects to drill more than 60 wells gross combined in the in the Granite Wash play in the Texas Panhandle and in the Horn River Basin of British Columbia (BC). The two plays together this year are forecast to contribute 175 MMcf/d.
Related to Horn River drilling, Apache completed a third strategic transaction in the quarter, Farris noted. In January Apache’s Canadian subsidiary bought the controlling stake in the proposed liquefied natural gas (LNG) export terminal in Kitimat, BC (see Daily GPI, Jan. 14). The terminal has a planned capacity of 700 MMcf/d.
“As we progress Kitimat, our goal is to give access to international LNG markets,” said Farris. “Like the deepwater [Mariner assets], LNG is a big step forward for Apache. We can monetize very large gas resources at LNG prices, which are linked to crude oil prices, to complement our portfolio.”
©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |