Output prices drive Apache’s profit

Ray Tyson

Petroleum News Houston correspondent

Big exploration and production independent Apache, on the strength of increased production and strong commodity prices, weighed in April 22 with a record 2004 first-quarter profit of $1.06 per share or $348 million, up from the previous record established in the first quarter of 2003 of $1.05 per share or $338 million.

Houston, Texas-based Apache’s first-quarter production averaged 430,400 barrels of oil equivalent per day, up 23 percent from 348,600 boe per day in the prior-year period. Liquid production alone averaged 228,300 bpd, up 37 percent, while natural gas production averaged 1.2 billion cubic feet per day, up 11 percent.

“Higher production and strong commodity prices drove our record first-quarter financial results,” said Steve Farris, Apache’s chief executive officer.

He said that strong prices for both oil and gas also are driving the acquisition market for producing properties continually higher.

“Although we are always looking for acquisitions which have the potential to bring added value, in the current environment, we intend to continue our active drilling program and to be patient,” Farris said.

During the 2004 first quarter, Apache said it completed 422 wells worldwide compared to just 156 a year ago. “We were active in each of our core areas, and this activity should benefit our financial results in future quarters,” Farris said.

Cash from operations before changes in operating assets and liabilities during the 2004 first quarter totaled $737 million, up from $645 million in the year-earlier period. Apache’s debt-to-capitalization ratio declined to 24.2 percent at the end of the quarter, from 26.3 percent at year-end 2003.