Apache hints at another deal
Petroleum News Houston staff
Apache, whose production has rocketed on the strength of property acquisitions, says it has plenty of ammunition left to do another deal this year. The big Houston independent even dropped a hint.
“We believe the majors will continue to divest of properties, and our strong balance sheet gives us the leverage to take advantage,” Steve Farris, Apache’s chief executive officer, said in a July 24 conference call.
Apache already bought about $1.5 billion worth of mature properties from majors this year, including $1.3 billion for BP assets in the Gulf of Mexico and the U.K. North Sea.
Because of strong commodity prices and increased production, Apache’s cash flow from operations during the first half of 2003 jumped to a record $1.283 billion, providing the company with additional financial leverage to secure another property transaction, Apache indicated. In fact, cash flow over the first two quarters of 2003 doubled versus the same period last year, the company said.
Oil production soared 40 percent to 211,701 barrels per day in the second quarter, compared to 151,480 barrels per day for the year-ago quarter, while natural gas production increased 15 percent to 1.25 billion cubic feet per day from 1.1 bcf per day. Natural gas liquids averaged 9,342 barrels per day, up 10 percent from 8,483 bpd in the prior year’s quarter.
Record production also fueled Apache’s second-quarter profit of $243 million or $1.49 per share, compared to a profit of $143 million or 95 cents per share for the same period last year. Excluding a non-cash charge, Apache earned $288 million or $1.76 per share in the second quarter, the company said.
However, while Apache’s net income for the second quarter was up nearly 70 percent compared to the year-ago period, it was down 28 percent from the prior quarter when commodity prices were higher.
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