Apache Slides To Loss In Q4, To Cut Rig Count

(RTTNews) - Oil and natural gas producer Apache Corp. (APA) on Thursday reported a loss for the fourth quarter, reflecting one-time charges and lower revenues amid the decline in commodity prices. However, the company's production for the quarter rose from last year.

The company said it will reduce its rig count and drilling activity in response to the fall in crude oil prices.

Houston, Texas-based Apache's fourth-quarter net loss was $4.81 billion or $12.78 per share, compared to net income of $174 million or $0.43 per share in the year-ago period. The loss for the latest quarter was primarily as a result of after-tax, non-cash charges totaling $5.2 billion.

Excluding items, adjusted earnings for the quarter was $404 million or $1.07 per share, compared to $610 million or $1.52 per share in the same period last year.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.76 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues and other for the quarter declined 14 percent to $2.95 billion from $3.45 billion in the year-ago period. Analysts expected revenues of $3.09 billion.

John Christmann IV, Apache's chief executive officer and president said, "We have reduced our rig count from an average of 91 rigs in the third quarter of 2014 to an estimated 27 rigs by the end of this month. We have also reduced our frac crews by approximately 50 percent during the same time period and are delaying some well completions until service costs decrease materially."

Oil and gas production revenues for the quarter decreased 19 percent to $2.93 billion.

However, Apache's total worldwide production of oil, natural gas, and natural gas liquids for the quarter averaged 673,343 barrels of oil equivalent or boe per day, up 4 percent from last year.

Pro forma production in the quarter averaged 608.689 boe per day, up 12 percent from the year-ago period.

Worldwide, Apache received an average price of $70.89 per barrel of crude oil, down 30 percent from the year-ago period. Average price for natural gas rose 3 percent from the prior-year quarter to $3.89 per thousand cubic feet or Mcf.

For fiscal 2014, Apache's net loss was $5.40 billion or $14.06 per share, compared to net income of $2.19 billion or $5.50 per share in the prior year. Adjusted earnings for the year were $5.94, compared to $7.89 per share last year.

Revenues and other for the year decreased 11 percent to $13.85 billion from $15.56 billion in the previous year.

Street expected the company to earn $5.64 per share for the year on revenues of $13.98 billion.

In December, Apache agreed to sell its interests in the Wheatstone and Kitimat LNG projects along with certain other upstream assets in Australia. The company expects the transaction to close during the first quarter of 2015.

Upon closing, Apache will receive cash proceeds of about $2.75 billion plus recovery of an estimated $1 billion in net expenditures between June 30, 2014, and closing.

Looking ahead to fiscal 2015, Apache anticipates capital spending of $2.1 billion to $2.3 billion in onshore North America and plans to run an average of 17 rigs in 2015.

Onshore North American production in 2015 is projected to be relatively flat from 2014 average production of approximately 302,000 boe per day, as adjusted for 2014 asset sales.

Internationally and offshore, Apache plans a capital budget of $1.5 billion to $1.7 billion and estimates that 2015 pro forma production will be up slightly from 2014 average production of 207,000 boe per day, as adjusted for 2014 and announced 2015 asset sales.

Christmann said, "While we are fortunate to have a substantial inventory of projects that can make economics at these oil prices, we believe it more prudent to curtail our activity until costs are lower and prices recover."

APA is trading at $65.67, up $0.92 or 1.42 percent on a volume of 510.280 shares.