Analyst Note| Dave Meats, CFA |
Apache’s reported production was 382 mboe/d in the first quarter (7% lower sequentially and 18% lower year over year). Adjusted production, which excludes tax barrels and noncontrolling interests, was 326 mboe/d. This was slightly better than guidance of 324, which already incorporated the impact of Winter Storm Uri. The ultimate impact of the storm was about 14 mboe/d, which is less than management originally anticipated, but the benefit to production was offset by North Sea downtime and the impact of higher crude prices on cost recovery volumes (as fewer barrels are required to offset costs when prices are higher, reported production decreases, though higher prices are still positive for revenue).