XNYS:APA Apache Corporation Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

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Form 10-Q

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 

Commission File Number 1-4300

 

 

APACHE CORPORATION

(exact name of registrant as specified in its charter)

 

 

 

Delaware   41-0747868

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

One Post Oak Central, 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400

(Address of principal executive offices)

Registrant’s Telephone Number, Including Area Code: (713) 296-6000

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   x    Accelerated filer   ¨
Non-accelerated filer   ¨  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

 

Number of shares of registrant’s common stock outstanding as of July 31, 2012

     391,215,367   

 

 

 


PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED OPERATIONS

(Unaudited)

 

     For the Quarter
Ended June 30,
    For the Six Months
Ended June 30,
 
     2012     2011     2012      2011  
     (In millions, except per common share data)  

REVENUES AND OTHER:

         

Oil and gas production revenues

   $ 3,956      $ 4,355      $ 8,413       $ 8,233   

Other

     16        (17     95         30   
  

 

 

   

 

 

   

 

 

    

 

 

 
     3,972        4,338        8,508         8,263   
  

 

 

   

 

 

   

 

 

    

 

 

 

OPERATING EXPENSES:

         

Depreciation, depletion and amortization

         

Recurring

     1,284        1,003        2,503         1,939   

Additional

     648        26        1,169         26   

Asset retirement obligation accretion

     57        38        112         75   

Lease operating expenses

     704        662        1,377         1,285   

Gathering and transportation

     72        73        149         149   

Taxes other than income

     203        255        460         419   

General and administrative

     132        103        260         215   

Merger, acquisitions & transition

     16        6        22         11   

Financing costs, net

     45        41        85         86   
  

 

 

   

 

 

   

 

 

    

 

 

 
     3,161        2,207        6,137         4,205   
  

 

 

   

 

 

   

 

 

    

 

 

 

INCOME BEFORE INCOME TAXES

     811        2,131        2,371         4,058   

Current income tax provision

     460        576        1,185         1,219   

Deferred income tax provision (benefit)

     (5     296        33         446   
  

 

 

   

 

 

   

 

 

    

 

 

 

NET INCOME

     356        1,259        1,153         2,393   

Preferred stock dividends

     19        19        38         38   
  

 

 

   

 

 

   

 

 

    

 

 

 

INCOME ATTRIBUTABLE TO COMMON STOCK

   $ 337      $ 1,240      $ 1,115       $ 2,355   
  

 

 

   

 

 

   

 

 

    

 

 

 

NET INCOME PER COMMON SHARE:

         

Basic

   $ 0.87      $ 3.23      $ 2.88       $ 6.14   

Diluted

   $ 0.86      $ 3.17      $ 2.86       $ 6.03   

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:

         

Basic

     389        384        387         383   

Diluted

     390        397        403         397   

DIVIDENDS DECLARED PER COMMON SHARE

   $ 0.17      $ 0.15      $ 0.34       $ 0.30   

The accompanying notes to consolidated financial statements

are an integral part of this statement.

 

1


APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME

(Unaudited)

 

     For the Quarter
Ended June 30,
    For the Six Months
Ended June 30,
 
     2012     2011     2012     2011  
     (In millions)  

NET INCOME

   $  356      $  1,259      $  1,153      $  2,393   

OTHER COMPREHENSIVE INCOME (LOSS):

        

Commodity cash flow hedge activity, net of tax:

        

Reclassification of (gain) loss on settled derivative instruments

     (58     40        (92     36   

Change in fair value of derivative instruments

     111        208        112        (94

Derivative hedge ineffectiveness reclassified into earnings

     —          (3     —          (1
  

 

 

   

 

 

   

 

 

   

 

 

 
     53        245        20        (59
  

 

 

   

 

 

   

 

 

   

 

 

 

COMPREHENSIVE INCOME

     409        1,504        1,173        2,334   

Preferred stock dividends

     19        19        38        38   
  

 

 

   

 

 

   

 

 

   

 

 

 

COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCK

   $ 390      $ 1,485      $ 1,135      $ 2,296   
  

 

 

   

 

 

   

 

 

   

 

 

 

The accompanying notes to consolidated financial statements

are an integral part of this statement.

 

2


APACHE CORPORATION AND SUBSIDIARIES

STATEMENT OF CONSOLIDATED CASH FLOWS

(Unaudited)

 

     For the Six Months Ended
June 30,
 
     2012     2011  
     (In millions)  

CASH FLOWS FROM OPERATING ACTIVITIES:

  

Net income

   $ 1,153      $ 2,393   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation, depletion and amortization

     3,672        1,965   

Asset retirement obligation accretion

     112        75   

Provision for deferred income taxes

     33        446   

Other

     56        3   

Changes in operating assets and liabilities:

    

Receivables

     490        (355

Inventories

     24        (97

Drilling advances

     (125     4   

Deferred charges and other

     (53     (14

Accounts payable

     (113     206   

Accrued expenses

     (472     78   

Deferred credits and noncurrent liabilities

     22        20   
  

 

 

   

 

 

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

     4,799        4,724   
  

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Additions to oil and gas property

     (3,756     (3,170

Additions to gas gathering, transmission and processing facilities

     (442     (269

Acquisition of Cordillera Energy Partners III, LLC

     (2,607     —     

Equity investment in Yara Pilbara Holdings Pty Limited

     (439     —     

Acquisitions, other

     (65     (78

Proceeds from sale of oil and gas properties

     9        192   

Other, net

     (286     (52
  

 

 

   

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

     (7,586     (3,377
  

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Commercial paper, credit facility and bank notes, net

     431        (289

Fixed rate debt borrowings

     2,991        —     

Payments on fixed rate debt

     (400     —     

Dividends paid

    

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