Apache Posts Q2 Loss On Hefty Write-down

(RTTNews) - Oil and gas producer Apache Corp. (APA) Thursday reported a loss for the second quarter, compared to a profit last year, weighed down by a hefty write-down due to low commodity prices. However, the company said it exceeded its production plan in the first half and raised its full-year North American production guidance for the year.

Net loss attributable to common shareholders was $5.60 billion or $14.83 per share, compared to net income of $505 million or $1.31 per share in the same quarter last year.

The latest results included a ceiling-test write down of $3.7 billion resulting from low commodity-price levels and $1.9 billion of other items, mostly losses and tax expense associated with the company's assets sold during the quarter.

Adjusted net income totaled $0.22 per share, while it amounted to $1.49 per share last year.

On average, 32 analysts polled by Thomson Reuters expected the company to report a loss of $0.26 per share. Analysts' estimates typically exclude special items.

Revenues and other fell to $1.977 billion from $3.289 billion in the prior year. Analysts expected revenues of $1.86 billion.

North American production rose 3 percent sequentially to 317,000 barrels of oil equivalent or boe per day, driven by a 13,500-boe-per-day increase in Permian Basin production.

Total capital expenditures declined 28 percent in the quarter to $857 million. Apache operated an average of 34 rigs, drilled 78 wells and completed 108 wells during the second quarter, down from 61 rigs, 119 drilled wells and 175 completed wells, in the first quarter.

Apache said greater capital efficiencies and lower costs are enabling it to increase its onshore North American activity levels in the second half of the year. In North America, the company plans to average approximately 16 rigs in the second half of the year, 13 of which will be in the Permian Basin.

Apache expects to reach total depth on an additional 40 to 50 wells and complete an additional 30 to 35 wells beyond its original plan for 2015.

The company continues to expect that it will have a backlog of 80 to 100 drilled-but-uncompleted wells in North America at the end of 2015.

However, Apache said this increase in activity during the second half is not expected to have a material impact on full-year 2015 production. But, it will establish a positive production trajectory in the fourth quarter and heading into 2016.

John Christmann, IV, Apache's chief executive officer and president, said, "Year to date, our capital spending remains on track, but we have exceeded our production plan in the first half of 2015 and delivered correspondingly strong cash flow from continuing operations. As a result, we are raising our 2015 production guidance."

The company raised its full-year North American production guidance to 305,000 to 308,000 boe per day from the previous forecast of about 302,000 per day.

The firm updated its International and Offshore production guidance to a range of 164,000 to 168,000 boe per day.

Apache also lifted its 2015 capital-budget guidance range from $3.4 billion to $3.9 billion to $3.6 billion to $3.9 billion.

APA closed down 2 percent on Wednesday at $44.44, and slipped 1.2 percent in pre-market activity.