Apache Corp. topped its overall production record for the fourth consecutive year, the company’s management team said Thursday. Average daily production in 2012 increased to 779,000 boe/d, up 5.4% year/year. Despite the impact of substantially lower Canadian natural gas prices, revenues for the year hit a record $16.9 billion.

“Having deepened and strengthened our global portfolio of growth projects since 2010, we are accelerating our operational momentum,” said CEO G. Steven Farris. “Apache exited 2012 producing in excess of 800,000 boe/d, driven primarily by our North American oil production, which increased 12% during the year.”

The Houston-based operator, he said, has “an extensive pipeline of opportunities that will fuel our profitable growth for years to come. This includes more than 67,000 technically evaluated drilling locations in the onshore U.S. It also includes a robust group of world-class development projects throughout our global portfolio,” including two liquefied natural gas export (LNG) projects: Wheatstone in Australia and Kitimat LNG in British Columbia.

Earlier this month, an Apache subsidiary completed a transaction with Chevron Canada Ltd. to jointly build and operate the Kitimat project (see Daily GPI, Feb. 12), “enhancing our efforts to move this project to sanction and monetize natural gas resources we discovered in the Horn River and Liard basins of northern British Columbia,” said the CEO. “The incremental resources targeted for monetization through Kitimat have the potential to triple Apache’s total proved reserves.”

In addition, Apache now is the “leading oil and gas driller in the Permian Basin, operating more rigs than any industry competitor,” and is one of the most active operators in the Anadarko Basin. “Year/year production from these two regions increased 18% and 37%, respectively.”

In the final three months of 2012 Apache earned $649 million ($1.64/share), compared with $1.17 billion ($2.98) a year earlier. Adjusting for one-time charges, Apache earned $907 million ($2.27/share) versus $1.2 billion ($2.94). Production in 4Q2012 reached a new quarterly milestone, averaging 800,000 boe/d. Cash from operations totaled $2.77 billion, compared with $2.66 billion in the same period of 2011.

U.S. natural gas volumes in 4Q2012 totaled 890.55 MMcf/d, up from 862.57 MMcf/d in the year-go period. The biggest gas output gains came from the Central operations, which include the Anadarko Basin, where Apache produced 287.96 MMcf/d, versus 193.72 MMcf/d in 4Q2011. Permian gas output also rose, to 184.78 MMcf/d from 178.77 MMcf/d. Canadian gas production slipped to 550.50 MMcf/d in 4Q2012 from 631.12 MMcf/d a year earlier.

In the Gulf of Mexico, Outer Continental Shelf gas production plunged in 4Q2012 from a year earlier to 265.92 MMcf/d from 335.43 MMcf/d. Deepwater gas output was almost flat at 48.18 MMcf/d from 48.14 MMcf/d year/year.

Oil and natural gas liquids output was half (51%) of total volumes in 2012 and contributed 81% of revenues, “reflecting the wide gap between global crude oil and North American natural gas prices,” Apache said. Last year the operator added 372 million boe of reserves, or 131% of production, through discoveries and extensions, and 73 million boe through acquisitions for a reserve replacement rate of 156%, excluding revisions.

Low prices throughout the year for Canadian natural gas resulted in a ceiling test write-down and were the “primary driver of negative revisions” totaling 299 million boe. Apache ended the year with proved reserves of 2.9 billion boe, after producing 285 million boe. The company also invested $9 billion on exploration and development in 2012.

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