Apache Q3 Profit Up 86%, Beats View

(RTTNews) - Oil and gas company Apache Corp. (APA) on Thursday reported an 86 percent increase in profit for the third quarter from last year, reflecting higher production from the company's North American onshore assets, higher oil prices and a tax benefit. Adjusted earnings per share beat analysts' expectations, while revenues missed their estimates.

Steven Farris, chairman and chief executive officer of Apache said, "Apache's focused drilling program in North America is yielding significant production growth. Our Permian and Central regions are the main drivers of this higher production, adding nearly 13,000 barrels per day of oil and natural gas liquids from the second quarter."

Apache's worldwide net daily production of oil, natural gas, and natural gas liquids averaged 784,000 barrels of oil equivalent or boe per day in the quarter, with liquids production comprising 54 percent of the total. This compares to an average net daily production of 770,000 boe per day in the year-ago period.

The Permian Region achieved record production of 132,000 boe per day, up 18 percent from the same period last year. Apache's Central Region increased production by 31 percent from the year-ago period to 95,000 boe per day.

Worldwide, Apache received an average price of $107.50 per barrel of oil during the third quarter, up 5 percent from the same period in the prior year. But the company received an average price of $3.49 per thousand cubic feet or Mcf of natural gas, down 7 percent from the prior-year period.

Apache's net income for the third quarter was $300 million or $0.75 per share, up from $161 million or $0.41 per share in the same period last year.

Excluding items, adjusted earnings for the quarter were $932 million or $2.32 per share, compared to $861 million or $2.16 per share in the prior-year period.

On average, thirty one analysts polled by Thomson Reuters expected the company to report earnings of $2.15 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter declined 4 percent to $4.02 billion from $4.18 billion in the year-ago period. Analysts had a consensus revenue estimate of $4.32 billion.

However, oil and gas production revenues rose 7 percent to $4.41 billion from $4.14 billion in the same period last year. The company recorded derivative instrument losses of $422 million in the quarter.

During the quarter, Apache's mix of hydrocarbon production included around 46 percent crude oil and 9 percent natural gas liquids or NGLs. Due to the premium prices received for crude oil and NGLs, these products contributed 84 percent of the company's revenue in the period.

Apache recorded a deferred income tax benefit of $200 million in the quarter, compared to a tax provision of $141 million in the year-ago period.

Looking ahead, Apache said it has already repurchased nearly 8 million shares of its common stock, and is on track to pay down $2 billion in debt by year-end.

In Thursday's regular trading session, APA is trading at $89.37, up $1.44 or 1.63 percent on a volume of 15,610 shares.