In the news release, Apache Corporation announces second-quarter financial and operational results, issued 06-Aug-2015 by Apache Corporation over PR Newswire, we are advised by the company that the NON-GAAP FINANCIAL MEASURES tables were originally issued incorrectly by PR Newswire, and require updating. The complete, corrected release follows:

Apache Corporation announces second-quarter financial and operational results

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

- Delivered International and Offshore production (adjusted for divestitures, Egypt tax barrels and minority interest) of 172,000 boe per day, with strong contributions from recent Egyptian oil discoveries.

- Exited the second quarter with total debt of $9.7 billion and $3.0 billion of cash, a significant improvement from $12.3 billion of total debt and $200 million of cash at March 31, 2015.

- Raising 2015 onshore North American production guidance from flat year over year to up 1 to 2 percent, which brings full-year guidance to 305,000 to 308,000 boe per day.

- Updating 2015 International and Offshore production guidance (adjusted for divestitures, Egypt tax barrels and minority interest) to 164,000 to 168,000 boe per day, a 5 to 8 percent increase over 2014 pro forma production, and up from the previous guidance of a 'slight increase'.

HOUSTON, Aug. 6, 2015 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) today announced a second-quarter 2015 net loss of $5.6 billion, or $14.83 per diluted common share, which includes an after-tax ceiling-test write down of $3.7 billion resulting from current low commodity-price levels and $1.9 billion of other items, mostly after-tax losses and tax expense associated with the company's assets sold during the quarter. When adjusted for certain items that impact the comparability of results, Apache's second-quarter net income totaled $82 million, or $0.22 per share. Adjusted EBITDA from continuing operations was $1.3 billion. Worldwide reported production for the second quarter was 564,000 boe per day. Including 35,000 boe per day of production associated with discontinued operations in Australia, Apache's total production was 599,000 boe per day.

"I am pleased to report that Apache made excellent progress toward achieving the ambitious 2015 goals we laid out earlier this year," said John J. Christmann, IV, Apache's chief executive officer and president. "In February, we established a plan to maintain relatively flat pro forma production in 2015, despite an aggressive 60 percent reduction in budgeted capital expenditures from 2014 levels. 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."

During the quarter, Apache closed the sales of its LNG business and its remaining oil and gas assets in Australia, which served to more strategically align the company's portfolio with its core competencies. "Exiting these businesses eliminated our exposure to projects with large capital-spending commitments and uncertain project timing," Christmann said. "We deployed a portion of the proceeds from these sales to pay down debt, leaving our balance sheet in excellent shape and positioning us for success in this low-commodity-price environment. Importantly, during the first half of 2015, we quickly and cost effectively reduced our drilling and completion activity, commensurate with the deteriorating oil-and-gas price environment. We have also restructured our operational organization to better align with and support our more focused asset base."

Apache has made significant progress on its cost structure through widespread efforts across the organization. In North America, the company is now realizing a 25 percent reduction in average per-well drilling and completion costs year over year. Lease-operating costs per barrel of oil equivalent during the quarter were down approximately 13 percent year over year, and we have taken steps to significantly reduce G&A from the beginning of the year that will be fully realized in 2016.

Asset-sale proceeds and liquidity

Apache received $5.7 billion in proceeds during the second quarter from the sales of its LNG interests and oil and gas properties in Australia and Canada, of which a portion was used to repay $2.7 billion of outstanding commercial paper and short-term credit facilities. At June 30, Apache's long-term debt was $9.7 billion, and cash was approximately $3 billion. The company has excellent liquidity with low-cost, short-term borrowing capacity of $3.5 billion under its commercial paper program, which is supported by a senior credit facility that now extends through June 2020.

Overhead-cost reductions and organizational restructuring

Management has taken a proactive and disciplined approach toward improving Apache's organizational structure and efficiency. During the quarter, the company announced and implemented key organizational changes to better align its operational and technical teams with its refocused asset base. These changes include transitioning to an operating structure that will enable the allocation of resources and personnel quickly and efficiently in response to changing industry conditions. In addition, Apache has consolidated its technical expertise into centers of excellence, which will support the operating regions and strengthen the ability to share best practices around the globe.

Christmann noted, "We are implementing multiple overhead-reduction initiatives throughout the year and are on track to achieve a 25 to 30 percent reduction in cash G&A costs by year-end. We continue to work to identify further savings." Following asset divestments and other initiatives to streamline the organization, headcount has been reduced by approximately 20 percent since the end of 2014.

Second-quarter capital spending and activity

Total capital expenditures (before leasehold acquisitions, capitalized interest, noncontrolling interest, LNG and Australia discontinued operations) in the second quarter were $857 million, down 28 percent from the first quarter. Apache operated an average of 34 rigs, drilled 78 wells and completed 108 wells during the second quarter, down from 61, 119 and 175, respectively, during the first quarter.

Second-quarter 2015 regional activity

• Permian – Apache operated 10 rigs in the Permian and completed 53 wells during the second quarter, down from 15 operated rigs and 88 well completions in the first quarter. Production averaged 172,000 boe per day, nearly 9 percent higher than the first quarter.
  • Delaware Basin – Apache averaged five rigs, unchanged from the prior quarter, and targeted the Bone Spring and Wolfcamp formations in the Pecos Bend and Waha areas. Completions in the Pecos Bend area exhibited very high deliverability and added approximately 4,000 boe per day, which helped drive overall Permian growth in the quarter.
  • Midland Basin – Apache averaged three rigs during the quarter, all targeting its southern Midland focus areas in Glasscock, Reagan, Upton and Midland counties. The company completed 20 wells during the quarter with notable results coming from the Upper Wolfcamp in the Wildfire area of Midland County and in the SRH area of northern Reagan County. Apache also had strong results from nine well completions in the Barnhart area.
  • Central Basin Platform/NW Shelf – Apache averaged two rigs during the quarter targeting the Yeso formation in its Cedar Lake play in Eddy County. In addition, the company has several high-rate-of-return, low-capital-cost initiatives underway in its CO₂ and waterflood project areas that are helping to mitigate regional production declines.
• Midcontinent (formerly Central) – During the quarter, Apache ramped down to two rigs in the Midcontinent, where it targeted the Woodford/SCOOP, Canyon Lime and Marmaton plays. Production declined 7 percent, or 4,700 boe per day, sequentially as a result of declining completion activity.
• Gulf Coast (Eagle Ford) – Apache ramped down from an average of four rigs in the first quarter to zero during the second quarter. Production increased 20 percent, or 2,400 boe per day, sequentially as four new high-volume wells were placed on production. In the Ferguson Crossing area, the company placed on production its two most prolific wells in the play to date. The Walker 1H and 3H wells averaged 1,935 boe per day in their first 30 days of production, significantly exceeding Apache's "Area A" type curve. The strong well results were the product of optimized frac design, spacing, fluid composition and proppant type.
• Canada – Production was down 3 percent, or 1,900 boe per day, sequentially, which was a lower-than-expected decline, resulting primarily from decreased operational downtime and better well performance.
• Egypt – Gross production was up 2 percent sequentially on strong delineation-drilling results at the Ptah and Berenice oil fields. Apache also made several new field discoveries across multiple concessions during the second quarter, which increases its confidence in Egypt's oil-production outlook for the remainder of 2015. In the second quarter, Apache drilled nine exploration wells with a success rate of 78 percent, significantly above its historical average exploration-success rate.
• North Sea – Production decreased modestly from first-quarter levels as the company performed two significant seasonal platform-maintenance turnarounds during the quarter. Absent the maintenance turnaround, which impacted production by approximately 3,300 boe per day, production would have been up sequentially in the second quarter. Apache drilled eight new wells in the North Sea with a 90 percent success rate, including its first-ever subsea-tieback exploration well in the Beryl area.

"Apache's second-quarter production performance was very strong both domestically and internationally," Christmann remarked. "In North America, all of our key operating areas exceeded our expectations, and we delivered these results on a disciplined capital budget. Internationally, our drilling-success rate in Egypt and the North Sea was well above our historical success rate. As a result, we are raising our full-year 2015 North American production guidance to 305,000 to 308,000 boe per day and are updating our International and Offshore production guidance to a range of 164,000 to 168,000 boe per day. We are also tightening our 2015 capital-budget guidance range from $3.4 to $3.9 billion to $3.6 to $3.9 billion."

2015 planned activity increase

Greater capital efficiencies and lower costs are enabling the company 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 anticipate that it will have a backlog of 80 to 100 drilled-but-uncompleted wells in North America at the end of 2015.

"This increase in activity during the second half of 2015 is not expected to have a material impact on our full-year 2015 production; however, it will establish a positive production trajectory in the fourth quarter and heading in to 2016," Christmann concluded.

Conference call

Apache Corporation (NYSE, Nasdaq: APA) will host a conference call Thursday, Aug. 6, 2015, to discuss its second-quarter 2015 financial results. The call will begin at 1 p.m. CT (2 p.m. ET). To access the live audio webcast, please visit Apache's website at www.apachecorp.com.  

A replay of the conference call will be available for seven days following the call. The number for the replay is 855-859-2056 or 404-537-3406 for international calls. The conference access code is 31405369.

Sign up for email alerts to be reminded of the webcast at http://investor.apachecorp.com/alerts.cfm.

Additional Information

Additional information follows, including reconciliations of adjusted earnings, adjusted EBITDA and net debt (non-GAAP financial measures) to GAAP measures and information regarding pro forma production. Apache's quarterly supplement is available at www.apachecorp.com/financialdata.

About Apache

Apache Corporation is an oil-and-gas exploration-and-production company with operations in the United States, Canada, Egypt and the United Kingdom. Apache posts announcements, operational updates, investor information and copies of all press releases on its website, www.apachecorp.com, and on its Media and Investor Center mobile application, which is available for free download from the Apple App Store and the Google Play Store.

Non-GAAP financial measures

Apache's financial information includes information prepared in conformity with generally accepted accounting standards (GAAP) as well as non-GAAP information. It is management's intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted earnings, adjusted EBITDA and net debt are non-GAAP measures. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure.

Forward-looking statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "guidance" and similar references to future periods. These statements include, but are not limited to, statements about future plans, expectations and objectives for Apache's operations, including statements about our capital plans, drilling plans, production expectations, asset sales and monetizations. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See "Risk Factors" in our 2014 Form 10-K filed with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development or otherwise, except as may be required by law.

Website: www.apachecorp.com