☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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41-0747868
|
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
|
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Trading Symbol(s)
|
|
Name of each exchange on which registered
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Common Stock, $0.625 par value
|
|
APA
|
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New York Stock Exchange
|
Common Stock, $0.625 par value
|
|
APA
|
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Chicago Stock Exchange
|
Common Stock, $0.625 par value
|
|
APA
|
|
NASDAQ Global Select Market
|
7.75% Notes Due 2029
|
|
APA/29
|
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New York Stock Exchange
|
Large accelerated filer
|
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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|
☐
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|
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Emerging growth company
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☐
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Number of shares of registrant’s common stock outstanding as of July 31, 2019
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375,958,977
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|
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TABLE OF CONTENTS
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DESCRIPTION
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Item
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Page
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PART I - FINANCIAL INFORMATION
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1.
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2.
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3.
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4.
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PART II - OTHER INFORMATION
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1.
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1A.
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2.
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5.
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6.
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•
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the market prices of oil, natural gas, natural gas liquids (NGLs), and other products or services;
|
•
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our commodity hedging arrangements;
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•
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the supply and demand for oil, natural gas, NGLs, and other products or services;
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•
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production and reserve levels;
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•
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drilling risks;
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•
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economic and competitive conditions;
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•
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the availability of capital resources;
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•
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capital expenditure and other contractual obligations;
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•
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currency exchange rates;
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•
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weather conditions;
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•
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inflation rates;
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•
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the availability of goods and services;
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•
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legislative, regulatory, or policy changes;
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•
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terrorism or cyber attacks;
|
•
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occurrence of property acquisitions or divestitures;
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•
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the integration of acquisitions;
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•
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the securities or capital markets and related risks such as general credit, liquidity, market, and interest-rate risks; and
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•
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other factors disclosed under Items 1 and 2—Business and Properties—Estimated Proved Reserves and Future Net Cash Flows, Item 1A—Risk Factors, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 7A—Quantitative and Qualitative Disclosures About Market Risk and elsewhere in our most recently filed Annual Report on Form 10-K, other risks and uncertainties in our second-quarter 2019 earnings release, other factors disclosed under Part II, Item 1A—Risk Factors of this Quarterly Report on Form 10-Q, and other filings that we make with the Securities and Exchange Commission.
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For the Quarter Ended June 30,
|
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For the Six Months Ended June 30,
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||||||||||||
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2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(In millions, except per common share data)
|
||||||||||||||
REVENUES AND OTHER:
|
|
|
|
|
|
|
|
|
||||||||
Oil and gas production revenues
|
|
|
|
|
|
|
|
|
||||||||
Oil revenues
|
|
$
|
1,397
|
|
|
$
|
1,576
|
|
|
$
|
2,707
|
|
|
$
|
2,969
|
|
Natural gas revenues
|
|
118
|
|
|
212
|
|
|
354
|
|
|
434
|
|
||||
Natural gas liquids revenues
|
|
83
|
|
|
148
|
|
|
191
|
|
|
266
|
|
||||
|
|
1,598
|
|
|
1,936
|
|
|
3,252
|
|
|
3,669
|
|
||||
Derivative instrument losses, net
|
|
(8
|
)
|
|
(25
|
)
|
|
(38
|
)
|
|
(23
|
)
|
||||
Gain on divestitures
|
|
17
|
|
|
2
|
|
|
20
|
|
|
9
|
|
||||
Other
|
|
(4
|
)
|
|
16
|
|
|
4
|
|
|
21
|
|
||||
|
|
1,603
|
|
|
1,929
|
|
|
3,238
|
|
|
3,676
|
|
||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses
|
|
389
|
|
|
356
|
|
|
754
|
|
|
705
|
|
||||
Gathering, processing, and transmission
|
|
76
|
|
|
82
|
|
|
164
|
|
|
168
|
|
||||
Taxes other than income
|
|
46
|
|
|
49
|
|
|
97
|
|
|
104
|
|
||||
Exploration
|
|
95
|
|
|
76
|
|
|
164
|
|
|
152
|
|
||||
General and administrative
|
|
102
|
|
|
117
|
|
|
225
|
|
|
231
|
|
||||
Transaction, reorganization, and separation
|
|
6
|
|
|
12
|
|
|
10
|
|
|
12
|
|
||||
Depreciation, depletion, and amortization
|
|
602
|
|
|
608
|
|
|
1,248
|
|
|
1,161
|
|
||||
Asset retirement obligation accretion
|
|
26
|
|
|
27
|
|
|
53
|
|
|
54
|
|
||||
Impairments
|
|
240
|
|
|
—
|
|
|
240
|
|
|
—
|
|
||||
Financing costs, net
|
|
173
|
|
|
94
|
|
|
270
|
|
|
193
|
|
||||
|
|
1,755
|
|
|
1,421
|
|
|
3,225
|
|
|
2,780
|
|
||||
NET INCOME (LOSS) BEFORE INCOME TAXES
|
|
(152
|
)
|
|
508
|
|
|
13
|
|
|
896
|
|
||||
Current income tax provision
|
|
187
|
|
|
249
|
|
|
373
|
|
|
447
|
|
||||
Deferred income tax benefit
|
|
(23
|
)
|
|
(10
|
)
|
|
(42
|
)
|
|
(26
|
)
|
||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST
|
|
(316
|
)
|
|
269
|
|
|
(318
|
)
|
|
475
|
|
||||
Net income attributable to noncontrolling interest - Egypt
|
|
43
|
|
|
74
|
|
|
87
|
|
|
135
|
|
||||
Net loss attributable to noncontrolling interest - Altus
|
|
(3
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Net income attributable to Altus Preferred Unit limited partners
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK
|
|
$
|
(360
|
)
|
|
$
|
195
|
|
|
$
|
(407
|
)
|
|
$
|
340
|
|
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME (LOSS) PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.96
|
)
|
|
$
|
0.51
|
|
|
$
|
(1.08
|
)
|
|
$
|
0.89
|
|
Diluted
|
|
$
|
(0.96
|
)
|
|
$
|
0.51
|
|
|
$
|
(1.08
|
)
|
|
$
|
0.88
|
|
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
377
|
|
|
382
|
|
|
376
|
|
|
382
|
|
||||
Diluted
|
|
377
|
|
|
385
|
|
|
376
|
|
|
384
|
|
|
|
For the Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In millions)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income (loss) including noncontrolling interest
|
|
$
|
(318
|
)
|
|
$
|
475
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
||||
Unrealized derivative instrument losses (gains), net
|
|
66
|
|
|
(104
|
)
|
||
Gain on divestitures
|
|
(20
|
)
|
|
(9
|
)
|
||
Exploratory dry hole expense and unproved leasehold impairments
|
|
90
|
|
|
73
|
|
||
Depreciation, depletion, and amortization
|
|
1,248
|
|
|
1,161
|
|
||
Asset retirement obligation accretion
|
|
53
|
|
|
54
|
|
||
Impairments
|
|
240
|
|
|
—
|
|
||
Deferred income tax benefit
|
|
(42
|
)
|
|
(26
|
)
|
||
Loss on extinguishment of debt
|
|
75
|
|
|
—
|
|
||
Other
|
|
22
|
|
|
82
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Receivables
|
|
96
|
|
|
(101
|
)
|
||
Inventories
|
|
(16
|
)
|
|
(9
|
)
|
||
Drilling advances
|
|
(8
|
)
|
|
30
|
|
||
Deferred charges and other
|
|
(3
|
)
|
|
69
|
|
||
Accounts payable
|
|
(66
|
)
|
|
46
|
|
||
Accrued expenses
|
|
21
|
|
|
(20
|
)
|
||
Deferred credits and noncurrent liabilities
|
|
16
|
|
|
7
|
|
||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
|
1,454
|
|
|
1,728
|
|
||
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
Additions to oil and gas property
|
|
(1,386
|
)
|
|
(1,572
|
)
|
||
Leasehold and property acquisitions
|
|
(34
|
)
|
|
(38
|
)
|
||
Additions to Altus gathering, processing, and transmission facilities
|
|
(246
|
)
|
|
(284
|
)
|
||
Altus equity method interests
|
|
(438
|
)
|
|
—
|
|
||
Proceeds from sale of oil and gas properties
|
|
247
|
|
|
13
|
|
||
Other, net
|
|
25
|
|
|
(33
|
)
|
||
NET CASH USED IN INVESTING ACTIVITIES
|
|
(1,832
|
)
|
|
(1,914
|
)
|
||
|
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
Fixed-rate debt borrowings
|
|
989
|
|
|
—
|
|
||
Payments on fixed-rate debt
|
|
(1,000
|
)
|
|
(150
|
)
|
||
Distributions to noncontrolling interest - Egypt
|
|
(164
|
)
|
|
(155
|
)
|
||
Redeemable noncontrolling interest - Altus Preferred Unit limited partners
|
|
611
|
|
|
—
|
|
||
Dividends paid
|
|
(188
|
)
|
|
(191
|
)
|
||
Other
|
|
(35
|
)
|
|
(14
|
)
|
||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
|
213
|
|
|
(510
|
)
|
||
|
|
|
|
|
||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
|
(165
|
)
|
|
(696
|
)
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
|
714
|
|
|
1,668
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
|
$
|
549
|
|
|
$
|
972
|
|
|
|
|
|
|
||||
SUPPLEMENTARY CASH FLOW DATA:
|
|
|
|
|
||||
Interest paid, net of capitalized interest
|
|
$
|
219
|
|
|
$
|
200
|
|
Income taxes paid, net of refunds
|
|
285
|
|
|
374
|
|
In millions except share and per-share amounts
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
|
||||
Cash and cash equivalents ($377 and $450 related to Altus VIE)
|
|
$
|
549
|
|
|
$
|
714
|
|
Receivables (net of allowance of $102 and $92)
|
|
1,098
|
|
|
1,194
|
|
||
Other current assets (Note 5) ($8 and $7 related to Altus VIE)
|
|
1,144
|
|
|
779
|
|
||
|
|
2,791
|
|
|
2,687
|
|
||
PROPERTY AND EQUIPMENT:
|
|
|
|
|
||||
Oil and gas, on the basis of successful efforts accounting:
|
|
|
|
|
||||
Proved properties
|
|
39,573
|
|
|
42,345
|
|
||
Unproved properties and properties under development
|
|
1,206
|
|
|
1,435
|
|
||
Gathering, processing, and transmission facilities ($1,452 and $1,251 related to Altus VIE)
|
|
2,057
|
|
|
1,856
|
|
||
Other ($38 and nil related to Altus VIE)
|
|
1,156
|
|
|
1,120
|
|
||
|
|
43,992
|
|
|
46,756
|
|
||
Less: Accumulated depreciation, depletion, and amortization ($40 and $24 related to Altus VIE)
|
|
(26,236
|
)
|
|
(28,335
|
)
|
||
|
|
17,756
|
|
|
18,421
|
|
||
OTHER ASSETS:
|
|
|
|
|
||||
Equity method interests ($527 and $91 related to Altus VIE)
|
|
527
|
|
|
121
|
|
||
Deferred charges and other ($72 and $71 related to Altus VIE)
|
|
732
|
|
|
353
|
|
||
|
|
$
|
21,806
|
|
|
$
|
21,582
|
|
LIABILITIES, NONCONTROLLING INTEREST, AND EQUITY
|
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
644
|
|
|
$
|
709
|
|
Current debt ($23 and nil related to Altus VIE)
|
|
175
|
|
|
151
|
|
||
Other current liabilities (Note 7) ($44 and $85 related to Altus VIE)
|
|
1,443
|
|
|
1,341
|
|
||
|
|
2,262
|
|
|
2,201
|
|
||
LONG-TERM DEBT
|
|
8,157
|
|
|
8,093
|
|
||
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
|
|
|
|
|
||||
Income taxes
|
|
348
|
|
|
391
|
|
||
Asset retirement obligation ($33 and $29 related to Altus VIE)
|
|
1,850
|
|
|
1,866
|
|
||
Other ($94 and nil related to Altus VIE)
|
|
514
|
|
|
219
|
|
||
|
|
2,712
|
|
|
2,476
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 11)
|
|
|
|
|
||||
|
|
|
|
|
||||
REDEEMABLE NONCONTROLLING INTEREST - ALTUS PREFERRED UNIT LIMITED PARTNERS (Note 12)
|
|
521
|
|
|
—
|
|
||
|
|
|
|
|
||||
EQUITY:
|
|
|
|
|
||||
Common stock, $0.625 par, 860,000,000 shares authorized, 416,920,316 and 415,692,116 shares issued, respectively
|
|
261
|
|
|
260
|
|
||
Paid-in capital
|
|
11,931
|
|
|
12,106
|
|
||
Accumulated deficit
|
|
(2,455
|
)
|
|
(2,048
|
)
|
||
Treasury stock, at cost, 40,964,193 and 40,995,894 shares, respectively
|
|
(3,190
|
)
|
|
(3,192
|
)
|
||
Accumulated other comprehensive income
|
|
4
|
|
|
4
|
|
||
APACHE SHAREHOLDERS’ EQUITY
|
|
6,551
|
|
|
7,130
|
|
||
Noncontrolling interest - Egypt
|
|
1,198
|
|
|
1,275
|
|
||
Noncontrolling interest - Altus
|
|
405
|
|
|
407
|
|
||
TOTAL EQUITY
|
|
8,154
|
|
|
8,812
|
|
||
|
|
$
|
21,806
|
|
|
$
|
21,582
|
|
|
|
Redeemable Noncontrolling Interest — Altus Preferred Unit Limited Partners
|
|
|
Common
Stock
|
|
Paid-In
Capital
|
|
Accumulated Deficit
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Income
|
|
APACHE
SHAREHOLDERS’
EQUITY
|
|
Noncontrolling
Interest
|
|
TOTAL
EQUITY
|
||||||||||||||||||
|
|
|
|
|
(In millions)
|
||||||||||||||||||||||||||||||||
For the Quarter Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
BALANCE AT MARCH 31, 2018
|
|
$
|
—
|
|
|
|
$
|
259
|
|
|
$
|
12,069
|
|
|
$
|
(1,943
|
)
|
|
$
|
(2,887
|
)
|
|
$
|
4
|
|
|
$
|
7,502
|
|
|
$
|
1,367
|
|
|
$
|
8,869
|
|
Net income attributable to common stock
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
195
|
|
|
—
|
|
|
—
|
|
|
195
|
|
|
—
|
|
|
195
|
|
|||||||||
Net income attributable to noncontrolling interest - Egypt
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|
74
|
|
|||||||||
Distributions to noncontrolling interest - Egypt
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(86
|
)
|
|
(86
|
)
|
|||||||||
Common dividends ($0.25 per share)
|
|
—
|
|
|
|
—
|
|
|
(95
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(95
|
)
|
|
—
|
|
|
(95
|
)
|
|||||||||
Other
|
|
—
|
|
|
|
1
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
38
|
|
|||||||||
BALANCE AT JUNE 30, 2018
|
|
$
|
—
|
|
|
|
$
|
260
|
|
|
$
|
12,011
|
|
|
$
|
(1,748
|
)
|
|
$
|
(2,887
|
)
|
|
$
|
4
|
|
|
$
|
7,640
|
|
|
$
|
1,355
|
|
|
$
|
8,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
For the Quarter Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
BALANCE AT MARCH 31, 2019
|
|
$
|
—
|
|
|
|
$
|
261
|
|
|
$
|
12,009
|
|
|
$
|
(2,095
|
)
|
|
$
|
(3,190
|
)
|
|
$
|
4
|
|
|
$
|
6,989
|
|
|
$
|
1,620
|
|
|
$
|
8,609
|
|
Net loss attributable to common stock
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(360
|
)
|
|
—
|
|
|
—
|
|
|
(360
|
)
|
|
—
|
|
|
(360
|
)
|
|||||||||
Net income attributable to noncontrolling interest - Egypt
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
43
|
|
|||||||||
Net loss attributable to noncontrolling interest - Altus
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||||||||
Issuance of Altus Preferred Units
|
|
517
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Net income attributable to Altus Preferred Unit holders
|
|
4
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Distributions to noncontrolling interest - Egypt
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
(57
|
)
|
|||||||||
Common dividends ($0.25 per share)
|
|
—
|
|
|
|
—
|
|
|
(94
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(94
|
)
|
|
—
|
|
|
(94
|
)
|
|||||||||
Other
|
|
—
|
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||||||
BALANCE AT JUNE 30, 2019
|
|
$
|
521
|
|
|
|
$
|
261
|
|
|
$
|
11,931
|
|
|
$
|
(2,455
|
)
|
|
$
|
(3,190
|
)
|
|
$
|
4
|
|
|
$
|
6,551
|
|
|
$
|
1,603
|
|
|
$
|
8,154
|
|
|
|
Redeemable Noncontrolling Interest — Altus Preferred Unit Limited Partners
|
|
|
Common
Stock
|
|
Paid-In
Capital
|
|
Accumulated Deficit
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Income
|
|
APACHE
SHAREHOLDERS’
EQUITY
|
|
Noncontrolling
Interest
|
|
TOTAL
EQUITY
|
||||||||||||||||||
|
|
|
|
|
(In millions)
|
||||||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
BALANCE AT DECEMBER 31, 2017
|
|
$
|
—
|
|
|
|
$
|
259
|
|
|
$
|
12,128
|
|
|
$
|
(2,088
|
)
|
|
$
|
(2,887
|
)
|
|
$
|
4
|
|
|
$
|
7,416
|
|
|
$
|
1,375
|
|
|
$
|
8,791
|
|
Net income attributable to common stock
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
340
|
|
|
—
|
|
|
—
|
|
|
340
|
|
|
—
|
|
|
340
|
|
|||||||||
Net income attributable to noncontrolling interest - Egypt
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
135
|
|
|
135
|
|
|||||||||
Distributions to noncontrolling interest - Egypt
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(155
|
)
|
|
(155
|
)
|
|||||||||
Common dividends ($0.50 per share)
|
|
—
|
|
|
|
—
|
|
|
(191
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(191
|
)
|
|
—
|
|
|
(191
|
)
|
|||||||||
Other
|
|
—
|
|
|
|
1
|
|
|
74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
75
|
|
|||||||||
BALANCE AT JUNE 30, 2018
|
|
$
|
—
|
|
|
|
$
|
260
|
|
|
$
|
12,011
|
|
|
$
|
(1,748
|
)
|
|
$
|
(2,887
|
)
|
|
$
|
4
|
|
|
$
|
7,640
|
|
|
$
|
1,355
|
|
|
$
|
8,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
For the Six Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
BALANCE AT DECEMBER 31, 2018
|
|
$
|
—
|
|
|
|
$
|
260
|
|
|
$
|
12,106
|
|
|
$
|
(2,048
|
)
|
|
$
|
(3,192
|
)
|
|
$
|
4
|
|
|
$
|
7,130
|
|
|
$
|
1,682
|
|
|
$
|
8,812
|
|
Net loss attributable to common stock
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(407
|
)
|
|
—
|
|
|
—
|
|
|
(407
|
)
|
|
—
|
|
|
(407
|
)
|
|||||||||
Net income attributable to noncontrolling interest - Egypt
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87
|
|
|
87
|
|
|||||||||
Net loss attributable to noncontrolling interest - Altus
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||||||||
Issuance of Altus Preferred Units
|
|
517
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Net income attributable to Altus Preferred Unit holders
|
|
4
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Distributions to noncontrolling interest - Egypt
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(164
|
)
|
|
(164
|
)
|
|||||||||
Common dividends ($0.50 per share)
|
|
—
|
|
|
|
—
|
|
|
(188
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(188
|
)
|
|
—
|
|
|
(188
|
)
|
|||||||||
Other
|
|
—
|
|
|
|
1
|
|
|
13
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||||||
BALANCE AT JUNE 30, 2019
|
|
$
|
521
|
|
|
|
$
|
261
|
|
|
$
|
11,931
|
|
|
$
|
(2,455
|
)
|
|
$
|
(3,190
|
)
|
|
$
|
4
|
|
|
$
|
6,551
|
|
|
$
|
1,603
|
|
|
$
|
8,154
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(In millions)
|
||||||||||||||
Oil and Gas Property:
|
|
|
|
|
|
|
|
|
||||||||
Proved
|
|
$
|
86
|
|
|
$
|
—
|
|
|
$
|
86
|
|
|
$
|
—
|
|
Unproved
|
|
188
|
|
|
21
|
|
|
211
|
|
|
37
|
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(In millions)
|
||||||||||||||
Revenues from customers
|
|
$
|
1,496
|
|
|
$
|
1,853
|
|
|
$
|
3,054
|
|
|
$
|
3,535
|
|
Revenues from non-customers
|
|
120
|
|
|
181
|
|
|
240
|
|
|
336
|
|
|
|
Operating Leases
|
|
Finance Leases
|
||
Weighted average remaining lease term
|
|
3.4 years
|
|
|
9.1 years
|
|
Weighted average discount rate
|
|
4.3
|
%
|
|
4.2
|
%
|
Net Minimum Commitments
|
|
Operating Leases(1)
|
|
Finance Leases(2)
|
||||
|
|
(In millions)
|
||||||
2019
|
|
$
|
101
|
|
|
$
|
16
|
|
2020
|
|
121
|
|
|
13
|
|
||
2021
|
|
47
|
|
|
3
|
|
||
2022
|
|
41
|
|
|
3
|
|
||
2023
|
|
24
|
|
|
3
|
|
||
Thereafter
|
|
41
|
|
|
40
|
|
||
Total future minimum lease payments
|
|
375
|
|
|
78
|
|
||
Less: imputed interest
|
|
(29
|
)
|
|
(15
|
)
|
||
Total lease liabilities
|
|
346
|
|
|
63
|
|
||
Current portion
|
|
(172
|
)
|
|
(25
|
)
|
||
Non-current portion
|
|
$
|
174
|
|
|
$
|
38
|
|
(1)
|
Amounts included for drilling rig and related operational equipment obligations represent future payments associated with oil and gas operations inclusive of amounts billable to partners and other working interest owners. Such payments may be capitalized as a component of oil and gas properties and subsequently depreciated, impaired, or written off as exploration expense.
|
(2)
|
Amounts represent the Company’s finance lease obligation related to physical power generators being leased on a one-year term with the right to purchase and a separate lease for the Company’s Midland, Texas regional office building.
|
2.
|
ACQUISITIONS AND DIVESTITURES
|
Production Period
|
|
Settlement Index
|
|
Mbbls
|
|
Weighted Average Price Differential
|
|
July—September 2019
|
|
Midland-WTI/Cushing-WTI
|
|
2,484
|
|
|
$(8.60)
|
October—December 2019
|
|
Midland-WTI/Cushing-WTI
|
|
1,380
|
|
|
$(3.72)
|
Production Period
|
|
Settlement Index
|
|
MMBtu
(in 000’s)
|
|
Weighted Average Price Differential
|
|
July—December 2019
|
|
NYMEX Henry Hub/Waha
|
|
7,360
|
|
|
$(0.45)
|
|
|
Fair Value Measurements Using
|
|
|
|
|
|
|
||||||||||||||||
|
|
Quoted Price in Active Markets (Level 1)
|
|
Significant Other Inputs (Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total Fair Value
|
|
Netting(1)
|
|
Carrying Amount
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity Derivative Instruments
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
(4
|
)
|
|
$
|
1
|
|
Foreign Currency Derivative Instruments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity Derivative Instruments
|
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
|
(4
|
)
|
|
23
|
|
||||||
Preferred Units Embedded Derivative
|
|
—
|
|
|
—
|
|
|
94
|
|
|
94
|
|
|
—
|
|
|
94
|
|
||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity Derivative Instruments
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
(14
|
)
|
|
$
|
55
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity Derivative Instruments
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
|
(14
|
)
|
|
11
|
|
(1)
|
The derivative fair values are based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties.
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
|
(In millions)
|
||||||
Current Assets: Other current assets
|
|
$
|
1
|
|
|
$
|
55
|
|
Total Assets
|
|
$
|
1
|
|
|
$
|
55
|
|
|
|
|
|
|
||||
Current Liabilities: Other current liabilities
|
|
$
|
23
|
|
|
$
|
11
|
|
Deferred Credits and Other Noncurrent Liabilities: Other
|
|
94
|
|
|
—
|
|
||
Total Liabilities
|
|
$
|
117
|
|
|
$
|
11
|
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||
|
|
(In millions)
|
||||||||||||||
Realized gain (loss):
|
|
|
|
|
|
|
|
|
||||||||
Derivative settlements, realized gain (loss)
|
|
$
|
13
|
|
|
$
|
(75
|
)
|
|
$
|
28
|
|
|
$
|
(117
|
)
|
Amortization of put premium, realized loss
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Unrealized gain (loss)
|
|
(21
|
)
|
|
55
|
|
|
(66
|
)
|
|
104
|
|
||||
Derivative instrument losses, net
|
|
$
|
(8
|
)
|
|
$
|
(25
|
)
|
|
$
|
(38
|
)
|
|
$
|
(23
|
)
|
5.
|
OTHER CURRENT ASSETS
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
|
(In millions)
|
||||||
Inventories
|
|
$
|
453
|
|
|
$
|
401
|
|
Drilling advances
|
|
226
|
|
|
218
|
|
||
Assets held for sale
|
|
379
|
|
|
—
|
|
||
Prepaid assets and other
|
|
86
|
|
|
160
|
|
||
Total other current assets
|
|
$
|
1,144
|
|
|
$
|
779
|
|
6.
|
EQUITY METHOD INTERESTS
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
|
|
Interest
|
|
Amount
|
|
Interest
|
|
Amount
|
||||||
|
|
($ in millions)
|
||||||||||||
Gulf Coast Express Pipeline LLC
|
|
16.0
|
%
|
|
$
|
251
|
|
|
15.0
|
%
|
|
$
|
91
|
|
EPIC Crude Holdings, LP
|
|
15.0
|
%
|
|
105
|
|
|
—
|
|
|
—
|
|
||
Permian Highway Pipeline LLC
|
|
26.7
|
%
|
|
171
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
$
|
527
|
|
|
|
|
$
|
91
|
|
|
|
Gulf Coast Express Pipeline LLC(1)
|
|
EPIC Crude Holdings, LP
|
|
Permian Highway Pipeline LLC
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
Balance at December 31, 2018
|
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
91
|
|
Acquisitions
|
|
15
|
|
|
52
|
|
|
161
|
|
|
228
|
|
||||
Capital contributions
|
|
144
|
|
|
56
|
|
|
10
|
|
|
210
|
|
||||
Income (loss) from equity method interests
|
|
1
|
|
|
(3
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Balance at June 30, 2019
|
|
$
|
251
|
|
|
$
|
105
|
|
|
$
|
171
|
|
|
$
|
527
|
|
(1)
|
In the second quarter of 2019, Altus Midstream LP exercised its option to acquire an additional 1 percent interest in the Gulf Coast Express Pipeline project, resulting in a total ownership of 16 percent at June 30, 2019.
|
7.
|
OTHER CURRENT LIABILITIES
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
|
(In millions)
|
||||||
Accrued operating expenses
|
|
$
|
78
|
|
|
$
|
65
|
|
Accrued exploration and development
|
|
535
|
|
|
667
|
|
||
Accrued gathering, processing, and transmission - Altus
|
|
34
|
|
|
81
|
|
||
Accrued compensation and benefits
|
|
135
|
|
|
177
|
|
||
Accrued interest
|
|
117
|
|
|
137
|
|
||
Accrued income taxes
|
|
126
|
|
|
58
|
|
||
Current asset retirement obligation
|
|
66
|
|
|
66
|
|
||
Current operating lease liability
|
|
172
|
|
|
—
|
|
||
Liabilities held for sale
|
|
49
|
|
|
—
|
|
||
Other
|
|
131
|
|
|
90
|
|
||
Total other current liabilities
|
|
$
|
1,443
|
|
|
$
|
1,341
|
|
8.
|
ASSET RETIREMENT OBLIGATION
|
|
|
(In millions)
|
||
Asset retirement obligation at December 31, 2018
|
|
$
|
1,932
|
|
Liabilities incurred
|
|
7
|
|
|
Liabilities settled
|
|
(21
|
)
|
|
Liabilities divested
|
|
(6
|
)
|
|
Liabilities held for sale
|
|
(49
|
)
|
|
Accretion expense
|
|
53
|
|
|
Asset retirement obligation at June 30, 2019
|
|
1,916
|
|
|
Less current portion
|
|
(66
|
)
|
|
Asset retirement obligation, long-term
|
|
$
|
1,850
|
|
9.
|
INCOME TAXES
|
10.
|
DEBT AND FINANCING COSTS
|
(1)
|
The fair value of the Company’s notes and debentures was $8.6 billion and $7.8 billion as of June 30, 2019 and December 31, 2018, respectively. Apache uses a market approach to determine the fair value of its notes and debentures using estimates provided by an independent investment financial data services firm (a Level 2 fair value measurement).
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(In millions)
|
||||||||||||||
Interest expense
|
|
$
|
109
|
|
|
$
|
110
|
|
|
$
|
216
|
|
|
$
|
222
|
|
Amortization of deferred loan costs
|
|
1
|
|
|
1
|
|
|
3
|
|
|
6
|
|
||||
Capitalized interest
|
|
(9
|
)
|
|
(13
|
)
|
|
(17
|
)
|
|
(25
|
)
|
||||
Loss on extinguishment of debt
|
|
75
|
|
|
—
|
|
|
75
|
|
|
—
|
|
||||
Interest income
|
|
(3
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|
(10
|
)
|
||||
Financing costs, net
|
|
$
|
173
|
|
|
$
|
94
|
|
|
$
|
270
|
|
|
$
|
193
|
|
11.
|
COMMITMENTS AND CONTINGENCIES
|
12.
|
REEDEMABLE NONCONTROLLING INTEREST - ALTUS
|
•
|
The Preferred Units bear quarterly distributions at a rate of 7 percent per annum, increasing after the fifth anniversary of Closing and upon the occurrence of specified events. Altus Midstream LP may pay distributions in-kind for the first six quarters after the Preferred Units are issued.
|
•
|
The Preferred Units are redeemable at Altus Midstream LP’s option at any time in cash at a redemption price (the Redemption Price) equal to the greater of an 11.5 percent internal rate of return (increasing after the fifth anniversary of Closing to 13.75 percent) and a 1.3x multiple of invested capital. The Preferred Units will be redeemable at the holder’s option upon a change of control or liquidation of Altus Midstream LP and certain other events, including certain asset dispositions.
|
•
|
The Preferred Units will be exchangeable for shares of ALTM’s Class A common stock at the holder’s election after the seventh anniversary of Closing or upon the occurrence of specified events. Each Preferred Unit will be exchangeable for a number of shares of ALTM’s Class A common stock equal to the Redemption Price divided by the volume-weighted average trading price of ALTM’s Class A common stock on the NASDAQ Capital Market for the 20 trading days immediately preceding the second trading day prior to the applicable exchange date, less a 6 percent discount.
|
•
|
Each outstanding Preferred Unit has a liquidation preference equal to the Redemption Price payable before any amounts are paid in respect of Altus Midstream LP’s common units and any other units that rank junior to the Preferred Units with respect to distributions or distributions upon liquidation.
|
•
|
Preferred Units holders have rights to approve certain partnership business, financial, and governance-related matters.
|
•
|
Altus Midstream LP is restricted from declaring or making cash distributions on its common units until all required distributions on the Preferred Units have been paid. In addition, before the fifth anniversary of Closing, aggregate cash distributions on, and redemptions of, Altus Midstream LP’s common units are limited to $650 million of cash from ordinary course operations if permitted under its credit facility. Cash distributions on, and redemptions of, Altus Midstream LP’s common units also are subject to satisfaction of leverage ratio requirements specified in its partnership agreement.
|
|
|
June 12, 2019
|
||
|
|
(In millions)
|
||
Redeemable noncontrolling interest - Altus Preferred Unit Limited Partners
|
|
$
|
517
|
|
Preferred Units embedded derivative
|
|
94
|
|
|
|
|
$
|
611
|
|
|
|
Units Outstanding
|
|
Financial Position(2)
|
|||
|
|
(In millions, except unit data)
|
|||||
Redeemable noncontrolling interest - Altus Preferred Unit Limited Partners: beginning of period
|
|
—
|
|
|
$
|
—
|
|
Issuance of Preferred Units, net
|
|
625,000
|
|
|
517
|
|
|
Allocation of Altus Midstream LP net income(1)
|
|
N/A
|
|
|
3
|
|
|
Accreted value adjustment
|
|
N/A
|
|
|
1
|
|
|
Redeemable noncontrolling interest - Altus Preferred Unit Limited Partners: end of period
|
|
625,000
|
|
|
521
|
|
|
Preferred Units embedded derivative
|
|
|
|
94
|
|
||
|
|
|
|
$
|
615
|
|
(1)
|
Subsequent to the balance sheet date, Altus Midstream LP provided notice to the Preferred Unit holders of record at June 30, 2019 of the amount of the initial distribution on the Preferred Units for the period from Closing to June 30, 2019. The holders also were notified that Altus Midstream LP elected to pay the entire amount of the approximate $2 million distribution in-kind in additional Preferred Units (PIK Units) on August 14, 2019. In total, 2,187.5 PIK Units will be issued in satisfaction of the initial required distribution.
|
(2)
|
As at June 30, 2019, the aggregate Redemption Price was $628 million, based on an internal rate of return of 11.5 percent.
|
13.
|
CAPITAL STOCK
|
|
|
For the Quarter Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||||||||
|
|
Loss
|
|
Shares
|
|
Per Share
|
|
Income
|
|
Shares
|
|
Per Share
|
||||||||||
|
|
(In millions, except per share amounts)
|
||||||||||||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) attributable to common stock
|
|
$
|
(360
|
)
|
|
377
|
|
|
$
|
(0.96
|
)
|
|
$
|
195
|
|
|
382
|
|
|
$
|
0.51
|
|
Effect of Dilutive Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock options and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) attributable to common stock
|
|
$
|
(360
|
)
|
|
377
|
|
|
$
|
(0.96
|
)
|
|
$
|
195
|
|
|
385
|
|
|
$
|
0.51
|
|
|
|
For the Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||||||||
|
|
Loss
|
|
Shares
|
|
Per Share
|
|
Income
|
|
Shares
|
|
Per Share
|
||||||||||
|
|
(In millions, except per share amounts)
|
||||||||||||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) attributable to common stock
|
|
$
|
(407
|
)
|
|
376
|
|
|
$
|
(1.08
|
)
|
|
$
|
340
|
|
|
382
|
|
|
$
|
0.89
|
|
Effect of Dilutive Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock options and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(0.01
|
)
|
||||
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) attributable to common stock
|
|
$
|
(407
|
)
|
|
376
|
|
|
$
|
(1.08
|
)
|
|
$
|
340
|
|
|
384
|
|
|
$
|
0.88
|
|
14.
|
BUSINESS SEGMENT INFORMATION
|
|
|
Egypt(1)
|
|
North Sea
|
|
U.S.
|
|
Altus
|
|
Intersegment Eliminations & Other
|
|
Total(2)
|
||||||||||||
|
|
Upstream
|
|
Midstream
|
|
|
||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
For the Quarter Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Oil revenues
|
|
$
|
523
|
|
|
$
|
337
|
|
|
$
|
537
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,397
|
|
Natural gas revenues
|
|
70
|
|
|
18
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
118
|
|
||||||
Natural gas liquids revenues
|
|
3
|
|
|
5
|
|
|
75
|
|
|
—
|
|
|
—
|
|
|
83
|
|
||||||
Oil and gas production revenues
|
|
596
|
|
|
360
|
|
|
642
|
|
|
—
|
|
|
—
|
|
|
1,598
|
|
||||||
Midstream service affiliate revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
(24
|
)
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease operating expenses
|
|
132
|
|
|
92
|
|
|
166
|
|
|
—
|
|
|
(1
|
)
|
|
389
|
|
||||||
Gathering, processing, and transmission
|
|
10
|
|
|
11
|
|
|
64
|
|
|
14
|
|
|
(23
|
)
|
|
76
|
|
||||||
Taxes other than income
|
|
—
|
|
|
—
|
|
|
42
|
|
|
4
|
|
|
—
|
|
|
46
|
|
||||||
Exploration
|
|
30
|
|
|
1
|
|
|
59
|
|
|
—
|
|
|
5
|
|
|
95
|
|
||||||
Depreciation, depletion, and amortization
|
|
174
|
|
|
99
|
|
|
320
|
|
|
9
|
|
|
—
|
|
|
602
|
|
||||||
Asset retirement obligation accretion
|
|
—
|
|
|
18
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||||
Impairments
|
|
—
|
|
|
—
|
|
|
240
|
|
|
—
|
|
|
—
|
|
|
240
|
|
||||||
|
|
346
|
|
|
221
|
|
|
899
|
|
|
27
|
|
|
(19
|
)
|
|
1,474
|
|
||||||
Operating Income (Loss)(3)
|
|
$
|
250
|
|
|
$
|
139
|
|
|
$
|
(257
|
)
|
|
$
|
(3
|
)
|
|
$
|
(5
|
)
|
|
124
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain on divestitures
|
|
|
|
|
|
|
|
|
|
|
|
17
|
|
|||||||||||
Derivative instrument losses, net
|
|
|
|
|
|
|
|
|
|
|
|
(8
|
)
|
|||||||||||
Other(4)
|
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|||||||||||
General and administrative
|
|
|
|
|
|
|
|
|
|
|
|
(102
|
)
|
|||||||||||
Transaction, reorganization, and separation
|
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|||||||||||
Financing costs, net
|
|
|
|
|
|
|
|
|
|
|
|
(173
|
)
|
|||||||||||
Loss Before Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(152
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Egypt(1)
|
|
North Sea
|
|
U.S.
|
|
Altus
|
|
Intersegment Eliminations & Other
|
|
Total(2)
|
||||||||||||
|
|
Upstream
|
|
Midstream
|
|
|
||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
For the Six Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Oil revenues
|
|
$
|
1,037
|
|
|
$
|
637
|
|
|
$
|
1,033
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,707
|
|
Natural gas revenues
|
|
151
|
|
|
50
|
|
|
153
|
|
|
—
|
|
|
—
|
|
|
354
|
|
||||||
Natural gas liquids revenues
|
|
7
|
|
|
11
|
|
|
173
|
|
|
—
|
|
|
—
|
|
|
191
|
|
||||||
Oil and gas production revenues
|
|
1,195
|
|
|
698
|
|
|
1,359
|
|
|
—
|
|
|
—
|
|
|
3,252
|
|
||||||
Midstream service affiliate revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|
(58
|
)
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease operating expenses
|
|
250
|
|
|
164
|
|
|
342
|
|
|
—
|
|
|
(2
|
)
|
|
754
|
|
||||||
Gathering, processing, and transmission
|
|
22
|
|
|
23
|
|
|
145
|
|
|
30
|
|
|
(56
|
)
|
|
164
|
|
||||||
Taxes other than income
|
|
—
|
|
|
—
|
|
|
91
|
|
|
6
|
|
|
—
|
|
|
97
|
|
||||||
Exploration
|
|
62
|
|
|
2
|
|
|
92
|
|
|
—
|
|
|
8
|
|
|
164
|
|
||||||
Depreciation, depletion, and amortization
|
|
361
|
|
|
198
|
|
|
673
|
|
|
16
|
|
|
—
|
|
|
1,248
|
|
||||||
Asset retirement obligation accretion
|
|
—
|
|
|
37
|
|
|
15
|
|
|
1
|
|
|
—
|
|
|
53
|
|
||||||
Impairments
|
|
—
|
|
|
—
|
|
|
240
|
|
|
—
|
|
|
—
|
|
|
240
|
|
||||||
|
|
695
|
|
|
424
|
|
|
1,598
|
|
|
53
|
|
|
(50
|
)
|
|
2,720
|
|
||||||
Operating Income (Loss)(3)
|
|
$
|
500
|
|
|
$
|
274
|
|
|
$
|
(239
|
)
|
|
$
|
5
|
|
|
$
|
(8
|
)
|
|
532
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain on divestitures
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|||||||||||
Derivative instrument losses, net
|
|
|
|
|
|
|
|
|
|
|
|
(38
|
)
|
|||||||||||
Other(4)
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|||||||||||
General and administrative
|
|
|
|
|
|
|
|
|
|
|
|
(225
|
)
|
|||||||||||
Transaction, reorganization, and separation
|
|
|
|
|
|
|
|
|
|
|
|
(10
|
)
|
|||||||||||
Financing costs, net
|
|
|
|
|
|
|
|
|
|
|
|
(270
|
)
|
|||||||||||
Income Before Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
$
|
13
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Assets(5)
|
|
$
|
4,035
|
|
|
$
|
2,568
|
|
|
$
|
12,710
|
|
|
$
|
2,434
|
|
|
$
|
59
|
|
|
$
|
21,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
For the Quarter Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Oil revenues
|
|
$
|
649
|
|
|
$
|
320
|
|
|
$
|
607
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,576
|
|
Natural gas revenues
|
|
89
|
|
|
27
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
212
|
|
||||||
Natural gas liquids revenues
|
|
4
|
|
|
5
|
|
|
139
|
|
|
—
|
|
|
—
|
|
|
148
|
|
||||||
Oil and gas production revenues
|
|
742
|
|
|
352
|
|
|
842
|
|
|
—
|
|
|
—
|
|
|
1,936
|
|
||||||
Midstream service affiliate revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
(12
|
)
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease operating expenses
|
|
106
|
|
|
78
|
|
|
172
|
|
|
—
|
|
|
—
|
|
|
356
|
|
||||||
Gathering, processing, and transmission
|
|
11
|
|
|
10
|
|
|
62
|
|
|
11
|
|
|
(12
|
)
|
|
82
|
|
||||||
Taxes other than income
|
|
—
|
|
|
—
|
|
|
47
|
|
|
2
|
|
|
—
|
|
|
49
|
|
||||||
Exploration
|
|
32
|
|
|
3
|
|
|
40
|
|
|
—
|
|
|
1
|
|
|
76
|
|
||||||
Depreciation, depletion, and amortization
|
|
192
|
|
|
96
|
|
|
315
|
|
|
5
|
|
|
—
|
|
|
608
|
|
||||||
Asset retirement obligation accretion
|
|
—
|
|
|
19
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||||
Impairments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
341
|
|
|
206
|
|
|
644
|
|
|
18
|
|
|
(11
|
)
|
|
1,198
|
|
||||||
Operating Income (Loss)(3)
|
|
$
|
401
|
|
|
$
|
146
|
|
|
$
|
198
|
|
|
$
|
(6
|
)
|
|
$
|
(1
|
)
|
|
738
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain on divestitures
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|||||||||||
Derivative instrument losses, net
|
|
|
|
|
|
|
|
|
|
|
|
(25
|
)
|
|||||||||||
Other(4)
|
|
|
|
|
|
|
|
|
|
|
|
16
|
|
|||||||||||
General and administrative
|
|
|
|
|
|
|
|
|
|
|
|
(117
|
)
|
|||||||||||
Transaction, reorganization, and separation
|
|
|
|
|
|
|
|
|
|
|
|
(12
|
)
|
|||||||||||
Financing costs, net
|
|
|
|
|
|
|
|
|
|
|
|
(94
|
)
|
|||||||||||
Income Before Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
$
|
508
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Egypt(1)
|
|
North Sea
|
|
U.S.
|
|
Altus
|
|
Intersegment Eliminations & Other
|
|
Total(2)
|
||||||||||||
|
|
Upstream
|
|
Midstream
|
|
|
||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
For the Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Oil revenues
|
|
$
|
1,218
|
|
|
$
|
591
|
|
|
$
|
1,160
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,969
|
|
Natural gas revenues
|
|
177
|
|
|
51
|
|
|
206
|
|
|
—
|
|
|
—
|
|
|
434
|
|
||||||
Natural gas liquids revenues
|
|
7
|
|
|
9
|
|
|
250
|
|
|
—
|
|
|
—
|
|
|
266
|
|
||||||
Oil and gas production revenues
|
|
1,402
|
|
|
651
|
|
|
1,616
|
|
|
—
|
|
|
—
|
|
|
3,669
|
|
||||||
Midstream service affiliate revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
(24
|
)
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease operating expenses
|
|
204
|
|
|
172
|
|
|
329
|
|
|
—
|
|
|
—
|
|
|
705
|
|
||||||
Gathering, processing, and transmission
|
|
23
|
|
|
20
|
|
|
127
|
|
|
22
|
|
|
(24
|
)
|
|
168
|
|
||||||
Taxes other than income
|
|
—
|
|
|
—
|
|
|
99
|
|
|
5
|
|
|
—
|
|
|
104
|
|
||||||
Exploration
|
|
60
|
|
|
17
|
|
|
73
|
|
|
—
|
|
|
2
|
|
|
152
|
|
||||||
Depreciation, depletion, and amortization
|
|
378
|
|
|
191
|
|
|
584
|
|
|
8
|
|
|
—
|
|
|
1,161
|
|
||||||
Asset retirement obligation accretion
|
|
—
|
|
|
37
|
|
|
16
|
|
|
1
|
|
|
—
|
|
|
54
|
|
||||||
Impairments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
665
|
|
|
437
|
|
|
1,228
|
|
|
36
|
|
|
(22
|
)
|
|
2,344
|
|
||||||
Operating Income (Loss)(3)
|
|
$
|
737
|
|
|
$
|
214
|
|
|
$
|
388
|
|
|
$
|
(12
|
)
|
|
$
|
(2
|
)
|
|
1,325
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain on divestitures
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|||||||||||
Derivative instrument losses, net
|
|
|
|
|
|
|
|
|
|
|
|
(23
|
)
|
|||||||||||
Other(4)
|
|
|
|
|
|
|
|
|
|
|
|
21
|
|
|||||||||||
General and administrative
|
|
|
|
|
|
|
|
|
|
|
|
(231
|
)
|
|||||||||||
Transaction, reorganization, and separation
|
|
|
|
|
|
|
|
|
|
|
|
(12
|
)
|
|||||||||||
Financing costs, net
|
|
|
|
|
|
|
|
|
|
|
|
(193
|
)
|
|||||||||||
Income Before Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
$
|
896
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Assets(5)
|
|
$
|
4,471
|
|
|
$
|
3,148
|
|
|
$
|
13,311
|
|
|
$
|
939
|
|
|
$
|
41
|
|
|
$
|
21,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes revenue from non-customers for the second quarters and six-month periods of 2019 and 2018 of:
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(In millions)
|
||||||||||||||
Oil
|
|
$
|
111
|
|
|
$
|
165
|
|
|
$
|
218
|
|
|
$
|
304
|
|
Natural gas
|
|
9
|
|
|
15
|
|
|
21
|
|
|
30
|
|
||||
Natural gas liquids
|
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
(2)
|
Includes a noncontrolling interest in Egypt for the 2019 and 2018 periods, and Altus for the 2019 period.
|
(3)
|
The operating income of U.S. and Egypt includes leasehold and other asset impairments totaling $277 million and $2 million, respectively, for the second quarter of 2019. The operating income of U.S. and Egypt includes leasehold and other asset impairments totaling $298 million and $4 million, respectively, for the first six months of 2019. The operating income of U.S. includes leasehold impairments totaling $21 million and $37 million for the second quarter and first six months of 2018, respectively.
|
(4)
|
Included in Other are sales proceeds related to U.S. third-party purchased oil and gas which are determined to be revenue from customers. Proceeds for these volumes totaled $18 million and $98 million for the second quarters of 2019 and 2018, respectively, and $42 million and $202 million for the first six months of 2019 and 2018, respectively.
|
(5)
|
Intercompany balances are excluded from total assets.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
U.S. onshore equivalent production increased 3 percent from the second quarter of 2018, a reflection of the success of the Midland Basin drilling program and the commencement and continued production ramp-up at Alpine High.
|
•
|
Second quarter equivalent production from the Permian region, which accounts for 86 percent of Apache’s total U.S. production, increased 12 percent from the second quarter of 2018, which was driven by continued production ramp-up at Alpine High and strong performance in the Midland Basin.
|
•
|
Production increases were negatively impacted by natural gas prices at the Waha hub where Permian Basin production exceeded West Texas takeaway capacity. Gas prices traded at historic lows, and at times were negative, for portions of the second quarter of 2019. This gas pricing prompted the Company to curtail production for a majority of its Alpine High lean gas and a portion of its rich gas volumes. Deferrals will continue until Waha prices improve, which is anticipated when the third-party operated Gulf Coast Express (GCX) pipeline enters service in late September.
|
•
|
Altus Midstream’s first two cryogenic processing plants entered service on-budget and on schedule in May and July, respectively. The first plant has already exceeded nameplate capacity, the second plant is currently ramping inlet volumes, and a third plant under construction is scheduled for start-up around year-end 2019.
|
•
|
The Egypt region’s gross equivalent production decreased 6 percent and net production decreased 15 percent from the second quarter of 2018 primarily a result of natural decline and the lower number of wells brought on-line during the period. The region’s extensive 3 million-acre broadband seismic acquisition program is nearly two-thirds complete, and this initiative should generate significant drilling opportunities on both new and legacy acreage holdings.
|
•
|
The North Sea region averaged 3 rigs and drilled 2 gross wells during the second quarter of 2019. The region’s daily production increased 10 percent from the second quarter 2018, primarily the result of production from the Garten field which came on-line in November 2018. Continued activity in the region is focused on bringing the Storr exploration discovery on-line in the fourth quarter, as well as a second well at Garten.
|
•
|
The Company continues to progress its exploration efforts in Suriname. A drillship has been contracted, and the Company anticipates spudding its first well on the 100 percent-owned Block 58 during the third quarter of 2019.
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
|
$
Value
|
|
% Contribution
|
|
$
Value
|
|
% Contribution
|
|
$
Value
|
|
%
Contribution
|
|
$
Value
|
|
%
Contribution
|
||||||||||||
|
|
($ in millions)
|
||||||||||||||||||||||||||
Total Oil Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
|
$
|
537
|
|
|
38
|
%
|
|
$
|
607
|
|
|
39
|
%
|
|
$
|
1,033
|
|
|
38
|
%
|
|
$
|
1,160
|
|
|
39
|
%
|
Egypt (1)
|
|
523
|
|
|
38
|
%
|
|
649
|
|
|
41
|
%
|
|
1,037
|
|
|
38
|
%
|
|
1,218
|
|
|
41
|
%
|
||||
North Sea
|
|
337
|
|
|
24
|
%
|
|
320
|
|
|
20
|
%
|
|
637
|
|
|
24
|
%
|
|
591
|
|
|
20
|
%
|
||||
Total (1)
|
|
$
|
1,397
|
|
|
100
|
%
|
|
$
|
1,576
|
|
|
100
|
%
|
|
$
|
2,707
|
|
|
100
|
%
|
|
$
|
2,969
|
|
|
100
|
%
|
Total Natural Gas Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
|
$
|
30
|
|
|
25
|
%
|
|
$
|
96
|
|
|
45
|
%
|
|
$
|
153
|
|
|
43
|
%
|
|
$
|
206
|
|
|
47
|
%
|
Egypt (1)
|
|
70
|
|
|
60
|
%
|
|
89
|
|
|
42
|
%
|
|
151
|
|
|
43
|
%
|
|
177
|
|
|
41
|
%
|
||||
North Sea
|
|
18
|
|
|
15
|
%
|
|
27
|
|
|
13
|
%
|
|
50
|
|
|
14
|
%
|
|
51
|
|
|
12
|
%
|
||||
Total (1)
|
|
$
|
118
|
|
|
100
|
%
|
|
$
|
212
|
|
|
100
|
%
|
|
$
|
354
|
|
|
100
|
%
|
|
$
|
434
|
|
|
100
|
%
|
Total Natural Gas Liquids (NGL) Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
|
$
|
75
|
|
|
90
|
%
|
|
$
|
139
|
|
|
94
|
%
|
|
$
|
173
|
|
|
91
|
%
|
|
$
|
250
|
|
|
94
|
%
|
Egypt (1)
|
|
3
|
|
|
4
|
%
|
|
4
|
|
|
3
|
%
|
|
7
|
|
|
3
|
%
|
|
7
|
|
|
3
|
%
|
||||
North Sea
|
|
5
|
|
|
6
|
%
|
|
5
|
|
|
3
|
%
|
|
11
|
|
|
6
|
%
|
|
9
|
|
|
3
|
%
|
||||
Total (1)
|
|
$
|
83
|
|
|
100
|
%
|
|
$
|
148
|
|
|
100
|
%
|
|
$
|
191
|
|
|
100
|
%
|
|
$
|
266
|
|
|
100
|
%
|
Total Oil and Gas Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
|
$
|
642
|
|
|
40
|
%
|
|
$
|
842
|
|
|
43
|
%
|
|
$
|
1,359
|
|
|
42
|
%
|
|
$
|
1,616
|
|
|
44
|
%
|
Egypt (1)
|
|
596
|
|
|
37
|
%
|
|
742
|
|
|
39
|
%
|
|
1,195
|
|
|
37
|
%
|
|
1,402
|
|
|
38
|
%
|
||||
North Sea
|
|
360
|
|
|
23
|
%
|
|
352
|
|
|
18
|
%
|
|
698
|
|
|
21
|
%
|
|
651
|
|
|
18
|
%
|
||||
Total (1)
|
|
$
|
1,598
|
|
|
100
|
%
|
|
$
|
1,936
|
|
|
100
|
%
|
|
$
|
3,252
|
|
|
100
|
%
|
|
$
|
3,669
|
|
|
100
|
%
|
(1)
|
Includes revenues attributable to a noncontrolling interest in Egypt.
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||||
|
|
2019
|
|
Increase
(Decrease)
|
|
2018
|
|
2019
|
|
Increase
(Decrease)
|
|
2018
|
||||||
Oil Volume – b/d
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
|
103,010
|
|
|
(2
|
)%
|
|
105,163
|
|
|
105,878
|
|
|
3
|
%
|
|
102,470
|
|
Egypt(1)(2)
|
|
83,761
|
|
|
(13
|
)%
|
|
96,185
|
|
|
87,667
|
|
|
(8
|
)%
|
|
95,730
|
|
North Sea
|
|
50,055
|
|
|
8
|
%
|
|
46,150
|
|
|
52,279
|
|
|
13
|
%
|
|
46,249
|
|
Total
|
|
236,826
|
|
|
(4
|
)%
|
|
247,498
|
|
|
245,824
|
|
|
1
|
%
|
|
244,449
|
|
Natural Gas Volume – Mcf/d
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
|
594,238
|
|
|
8
|
%
|
|
547,777
|
|
|
668,858
|
|
|
29
|
%
|
|
518,324
|
|
Egypt(1)(2)
|
|
277,552
|
|
|
(19
|
)%
|
|
340,991
|
|
|
296,425
|
|
|
(13
|
)%
|
|
342,438
|
|
North Sea
|
|
50,121
|
|
|
16
|
%
|
|
43,297
|
|
|
53,488
|
|
|
27
|
%
|
|
42,174
|
|
Total
|
|
921,911
|
|
|
(1
|
)%
|
|
932,065
|
|
|
1,018,771
|
|
|
13
|
%
|
|
902,936
|
|
NGL Volume – b/d
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
|
61,974
|
|
|
5
|
%
|
|
59,036
|
|
|
60,428
|
|
|
10
|
%
|
|
55,182
|
|
Egypt(1)(2)
|
|
898
|
|
|
(20
|
)%
|
|
1,127
|
|
|
1,023
|
|
|
(1
|
)%
|
|
1,033
|
|
North Sea
|
|
1,673
|
|
|
52
|
%
|
|
1,104
|
|
|
1,748
|
|
|
54
|
%
|
|
1,135
|
|
Total
|
|
64,545
|
|
|
5
|
%
|
|
61,267
|
|
|
63,199
|
|
|
10
|
%
|
|
57,350
|
|
BOE per day(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
|
264,024
|
|
|
3
|
%
|
|
255,495
|
|
|
277,782
|
|
|
14
|
%
|
|
244,039
|
|
Egypt(1)(2)
|
|
130,917
|
|
|
(15
|
)%
|
|
154,144
|
|
|
138,094
|
|
|
(10
|
)%
|
|
153,836
|
|
North Sea(4)
|
|
60,082
|
|
|
10
|
%
|
|
54,470
|
|
|
62,942
|
|
|
16
|
%
|
|
54,413
|
|
Total
|
|
455,023
|
|
|
(2
|
)%
|
|
464,109
|
|
|
478,818
|
|
|
6
|
%
|
|
452,288
|
|
(1)
|
Gross oil, natural gas, and NGL production in Egypt for the second quarter and six-month period of 2019 and 2018 were as follows:
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Oil (b/d)
|
|
198,534
|
|
|
206,296
|
|
|
201,245
|
|
|
204,264
|
|
Natural Gas (Mcf/d)
|
|
729,378
|
|
|
801,727
|
|
|
742,474
|
|
|
780,121
|
|
NGL (b/d)
|
|
1,840
|
|
|
1,719
|
|
|
1,952
|
|
|
1,598
|
|
(2)
|
Includes production volumes per day attributable to a noncontrolling interest in Egypt for the second quarter and six-month period of 2019 and 2018 of:
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Oil (b/d)
|
|
27,939
|
|
|
32,066
|
|
|
29,239
|
|
|
31,921
|
|
Natural Gas (Mcf/d)
|
|
92,639
|
|
|
113,846
|
|
|
98,990
|
|
|
114,377
|
|
NGL (b/d)
|
|
299
|
|
|
376
|
|
|
341
|
|
|
344
|
|
(3)
|
The table shows production on a barrel of oil equivalent basis (boe) in which natural gas is converted to an equivalent barrel of oil based on a 6:1 energy equivalent ratio. This ratio is not reflective of the price ratio between the two products.
|
(4)
|
Average sales volumes from the North Sea for the second quarter of 2019 and 2018 were 64,156 boe/d and 56,516 boe/d, respectively, and 63,669 boe/d and 55,113 boe/d for the first six months of 2019 and 2018, respectively. Sales volumes may vary from production volumes as a result of the timing of liftings in the Beryl field.
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||||||||
|
|
2019
|
|
Increase
(Decrease) |
|
2018
|
|
2019
|
|
Increase
(Decrease) |
|
2018
|
||||||||||
Average Oil Price - Per barrel
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
57.25
|
|
|
(10
|
)%
|
|
$
|
63.27
|
|
|
$
|
53.90
|
|
|
(14
|
)%
|
|
$
|
62.54
|
|
Egypt
|
|
68.60
|
|
|
(7
|
)%
|
|
74.14
|
|
|
65.36
|
|
|
(7
|
)%
|
|
70.26
|
|
||||
North Sea
|
|
68.43
|
|
|
(6
|
)%
|
|
73.05
|
|
|
66.35
|
|
|
(5
|
)%
|
|
69.58
|
|
||||
Total
|
|
63.71
|
|
|
(8
|
)%
|
|
69.35
|
|
|
60.65
|
|
|
(9
|
)%
|
|
66.90
|
|
||||
Average Natural Gas Price - Per Mcf
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
0.55
|
|
|
(72
|
)%
|
|
$
|
1.94
|
|
|
$
|
1.26
|
|
|
(43
|
)%
|
|
$
|
2.20
|
|
Egypt
|
|
2.80
|
|
|
(2
|
)%
|
|
2.85
|
|
|
2.82
|
|
|
(1
|
)%
|
|
2.85
|
|
||||
North Sea
|
|
3.99
|
|
|
(41
|
)%
|
|
6.82
|
|
|
5.18
|
|
|
(23
|
)%
|
|
6.71
|
|
||||
Total
|
|
1.41
|
|
|
(44
|
)%
|
|
2.50
|
|
|
1.92
|
|
|
(28
|
)%
|
|
2.65
|
|
||||
Average NGL Price - Per barrel
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
13.57
|
|
|
(48
|
)%
|
|
$
|
26.03
|
|
|
$
|
15.96
|
|
|
(36
|
)%
|
|
$
|
25.10
|
|
Egypt
|
|
32.90
|
|
|
(19
|
)%
|
|
40.80
|
|
|
35.56
|
|
|
(8
|
)%
|
|
38.72
|
|
||||
North Sea
|
|
33.67
|
|
|
(25
|
)%
|
|
44.71
|
|
|
37.27
|
|
|
(15
|
)%
|
|
43.75
|
|
||||
Total
|
|
14.37
|
|
|
(46
|
)%
|
|
26.64
|
|
|
16.87
|
|
|
(34
|
)%
|
|
25.72
|
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(In millions)
|
||||||||||||||
Lease operating expenses
|
|
$
|
389
|
|
|
$
|
356
|
|
|
$
|
754
|
|
|
$
|
705
|
|
Gathering, processing, and transmission
|
|
76
|
|
|
82
|
|
|
164
|
|
|
168
|
|
||||
Taxes other than income
|
|
46
|
|
|
49
|
|
|
97
|
|
|
104
|
|
||||
Exploration
|
|
95
|
|
|
76
|
|
|
164
|
|
|
152
|
|
||||
General and administrative
|
|
102
|
|
|
117
|
|
|
225
|
|
|
231
|
|
||||
Transaction, reorganization, and separation
|
|
6
|
|
|
12
|
|
|
10
|
|
|
12
|
|
||||
Depreciation, depletion, and amortization:
|
|
|
|
|
|
|
|
|
||||||||
Oil and gas property and equipment
|
|
562
|
|
|
573
|
|
|
1,169
|
|
|
1,091
|
|
||||
GPT assets
|
|
25
|
|
|
21
|
|
|
48
|
|
|
41
|
|
||||
Other assets
|
|
15
|
|
|
14
|
|
|
31
|
|
|
29
|
|
||||
Asset retirement obligation accretion
|
|
26
|
|
|
27
|
|
|
53
|
|
|
54
|
|
||||
Impairments
|
|
240
|
|
|
—
|
|
|
240
|
|
|
—
|
|
||||
Financing costs, net
|
|
173
|
|
|
94
|
|
|
270
|
|
|
193
|
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(In millions)
|
||||||||||||||
Third-party processing and transmission costs
|
|
$
|
62
|
|
|
$
|
71
|
|
|
$
|
134
|
|
|
$
|
146
|
|
Midstream service affiliate costs
|
|
23
|
|
|
12
|
|
|
56
|
|
|
24
|
|
||||
Upstream processing and transmission costs
|
|
85
|
|
|
83
|
|
|
190
|
|
|
170
|
|
||||
Midstream operating expenses
|
|
14
|
|
|
11
|
|
|
30
|
|
|
22
|
|
||||
Intersegment eliminations
|
|
(23
|
)
|
|
(12
|
)
|
|
(56
|
)
|
|
(24
|
)
|
||||
Total GPT costs
|
|
$
|
76
|
|
|
$
|
82
|
|
|
$
|
164
|
|
|
$
|
168
|
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(In millions)
|
||||||||||||||
Unproved leasehold impairments
|
|
$
|
39
|
|
|
$
|
21
|
|
|
$
|
62
|
|
|
$
|
37
|
|
Dry hole expense
|
|
18
|
|
|
16
|
|
|
28
|
|
|
36
|
|
||||
Geological and geophysical expense
|
|
18
|
|
|
17
|
|
|
38
|
|
|
35
|
|
||||
Exploration overhead and other
|
|
20
|
|
|
22
|
|
|
36
|
|
|
44
|
|
||||
|
|
$
|
95
|
|
|
$
|
76
|
|
|
$
|
164
|
|
|
$
|
152
|
|
|
|
For the Quarter Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(In millions)
|
||||||||||||||
Interest expense
|
|
$
|
109
|
|
|
$
|
110
|
|
|
$
|
216
|
|
|
$
|
222
|
|
Amortization of debt issuance costs
|
|
1
|
|
|
1
|
|
|
3
|
|
|
6
|
|
||||
Capitalized interest
|
|
(9
|
)
|
|
(13
|
)
|
|
(17
|
)
|
|
(25
|
)
|
||||
Loss on extinguishment of debt
|
|
75
|
|
|
—
|
|
|
75
|
|
|
—
|
|
||||
Interest income
|
|
(3
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|
(10
|
)
|
||||
Financing costs, net
|
|
$
|
173
|
|
|
$
|
94
|
|
|
$
|
270
|
|
|
$
|
193
|
|
|
|
For the Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In millions)
|
||||||
Sources of Cash and Cash Equivalents:
|
|
|
|
|
||||
Net cash provided by operating activities
|
|
$
|
1,454
|
|
|
$
|
1,728
|
|
Proceeds from sale of oil and gas properties
|
|
247
|
|
|
13
|
|
||
Fixed-rate debt borrowings
|
|
989
|
|
|
—
|
|
||
Redeemable noncontrolling interest - Altus Preferred Unit limited partners
|
|
611
|
|
|
—
|
|
||
|
|
3,301
|
|
|
1,741
|
|
||
Uses of Cash and Cash Equivalents:
|
|
|
|
|
||||
Capital expenditures(1)
|
|
$
|
1,632
|
|
|
$
|
1,856
|
|
Leasehold and property acquisitions
|
|
34
|
|
|
38
|
|
||
Altus equity method interests
|
|
438
|
|
|
—
|
|
||
Payments on fixed-rate debt
|
|
1,000
|
|
|
150
|
|
||
Dividends paid
|
|
188
|
|
|
191
|
|
||
Distributions to noncontrolling interest - Egypt
|
|
164
|
|
|
155
|
|
||
Other
|
|
10
|
|
|
47
|
|
||
|
|
3,466
|
|
|
2,437
|
|
||
Decrease in cash and cash equivalents
|
|
$
|
(165
|
)
|
|
$
|
(696
|
)
|
(1)
|
The table presents capital expenditures on a cash basis; therefore, the amounts may differ from those discussed elsewhere in this document, which include accruals.
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
|
(In millions)
|
||||||
Cash and cash equivalents
|
|
$
|
549
|
|
|
$
|
714
|
|
Total debt
|
|
8,332
|
|
|
8,244
|
|
||
Equity
|
|
8,154
|
|
|
8,812
|
|
||
Available committed borrowing capacity
|
|
3,996
|
|
|
3,857
|
|
||
Available committed borrowing capacity - Altus
|
|
650
|
|
|
450
|
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
3.1
|
–
|
|
3.2
|
–
|
|
3.3
|
–
|
|
4.1
|
–
|
|
4.2
|
–
|
|
*10.1
|
–
|
|
*10.2
|
–
|
|
*31.1
|
–
|
|
*31.2
|
–
|
|
*32.1
|
–
|
|
*101.SCH
|
–
|
XBRL Taxonomy Schema Document.
|
*101.CAL
|
–
|
XBRL Calculation Linkbase Document.
|
*101.DEF
|
–
|
XBRL Definition Linkbase Document.
|
*101.LAB
|
–
|
XBRL Label Linkbase Document.
|
*101.PRE
|
–
|
XBRL Presentation Linkbase Document.
|
*
|
Filed herewith
|
|
|
|
APACHE CORPORATION
|
|
|
|
|
Dated:
|
August 1, 2019
|
|
/s/ STEPHEN J. RINEY
|
|
|
|
Stephen J. Riney
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Dated:
|
August 1, 2019
|
|
/s/ REBECCA A. HOYT
|
|
|
|
Rebecca A. Hoyt
|
|
|
|
Senior Vice President, Chief Accounting Officer, and Controller
|
|
|
|
(Principal Accounting Officer)
|
•
|
base salary benefit:
|
•
|
two times base salary for the chief executive officer;
|
•
|
1.75 times base salary for executive vice presidents;
|
•
|
1.5 times base salary for senior vice presidents and regional vice presidents;
|
•
|
one times base salary for vice presidents;
|
•
|
prorated target bonus;
|
•
|
twelve months COBRA subsidy at active rates;
|
•
|
three years’ service credit toward retiree medical;
|
•
|
prorated vesting for restricted stock units and stock options and extension of exercise period to full life of original stock option award; and
|
•
|
prorated vesting based on time in performance period for performance shares provided the executive has participated in the performance program for at least one year of the performance period (calculated at the end of the performance period and, if a payout is warranted, paid in cash according to the performance program’s vesting schedule).
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Apache Corporation;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ John J. Christmann IV
|
|
John J. Christmann IV
|
|
Chief Executive Officer and President
|
|
(principal executive officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Apache Corporation;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Stephen J. Riney
|
|
Stephen J. Riney
|
|
Executive Vice President and Chief Financial Officer
|
|
(principal financial officer)
|
|
/s/ John J. Christmann IV
|
|
||
By:
|
|
John J. Christmann IV
|
|
Title:
|
|
Chief Executive Officer and President
|
|
|
|
(principal executive officer)
|
|
/s/ Stephen J. Riney
|
|
||
By:
|
|
Stephen J. Riney
|
|
Title:
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(principal financial officer)
|
|