A 23% increase in daily oil and gas production and strong commodity prices led Houston-based Apache Corp. to another quarter of record earnings. The independent reported first quarter earnings of $348 million ($1.06/share), up from its record earnings in 1Q2003 of $338 million ($1.05/share).

The 2004 quarterly earnings included $27 million (8 cents/share) for a change in accounting methods. Apache’s per-share results also were adjusted to reflect the two-for-one common stock split distributed in January. Cash from operations before changes in operating assets and liabilities totaled $737 million, up from $645 million in 1Q2003. Debt-to-capitalization declined to 24.2% at the end of the quarter, down from 26.3% at the end of 2003.

CEO G. Steven Farris said strong prices for oil and gas were “driving the acquisition market for producing properties continually higher.” Apache is “committed to long-term profitable growth,” and was “always looking for acquisitions,” but in the current environment, “we intend to continue our active drilling program and be patient.”

In the first quarter, Apache completed 422 wells worldwide, up from 156 for the same period of 2003. First quarter production averaged 430,400 boe/d, up from 348,600 boe/d in 1Q2003. Liquid hydrocarbon production averaged 228,300 bbl/d, up 37%, and natural gas production averaged 1.2 Bcf/d, up 11%.

Natural gas volumes in the United States were 644,462 Mcf/d in the quarter, up from 552,783 Mcf/d. In Canada, Apache’s production was 314,064 Mcf/d, up from 309,205 Mcf/d reported a year ago. Natural gas liquids (NGL) volume in the United States totaled 8,128 bbl/d, up from 6,083 bbl/d a year ago.

Apache received $4.77/Mcf of gas, down from $5.29/Mcf in 1Q2003. It received $30.44/bbl in the quarter, down slightly from $30.67 a year ago. It also received $23.83/bbl for NGLs, down from $24.42/bbl in 1Q2003.

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