PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
APACHE CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED INCOME
(Unaudited)
<TABLE>
(In thousands, except
per share data) For the Quarter For the Nine Months
Ended September 30, Ended September 30,
--------------------------------- --------------------------------
1994 1993 1994 1993
---------- ---------- ---------- ---------
REVENUES:
<S> <C> <C> <C> <C>
Oil and gas production revenues $128,193 $112,660 $365,106 $319,523
Gathering, processing and
marketing revenues 11,882 7,214 29,176 19,249
Equity in income of affiliates 94 132 385 594
Other revenues 596 2,007 2,636 2,509
---------- ----------- ---------- -------
140,765 122,013 397,303 341,875
---------- ----------- ----------- -----------
OPERATING EXPENSES:
Depreciation, depletion and
amortization 61,001 47,131 170,402 125,970
International impairments 1,000 10,300 7,300 17,500
Operating costs 35,631 34,769 101,807 94,271
Gathering, processing and
marketing costs 10,608 6,328 25,376 16,104
Administrative, selling and other 8,230 8,577 26,113 25,456
Financing costs:
Interest expense 8,213 7,961 22,308 22,416
Amortization of deferred
loan costs 1,097 918 2,809 2,912
Capitalized interest (1,261) (1,117) (3,431) (3,849)
Interest income (10) (111) (254) (297)
--------- ---------- ----------- ------
124,509 114,756 352,430 300,483
--------- ----------- ----------- ------------
INCOME BEFORE INCOME TAXES 16,256 7,257 44,873 41,392
Provision for income taxes 5,681 6,176 14,696 17,224
--------- ----------- ------------ ------------
NET INCOME $ 10,575 1,081 $30,177 $24,168
========= ========= ========= =========
NET INCOME PER COMMON SHARE $ 0.17 0.02 $ 0.49 $ 0.47
========= ======== = ======== = =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 61,397 52,904 61,269 51,085
========= ========= ========= ========
</TABLE>
APACHE CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
<TABLE>
(Unaudited)
(In thousands) For the Nine Months
Ended September 30,
----------------------------------
1994 1993
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 30,177 $ 24,168
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation, depletion and amortization 170,402 125,970
International impairments 7,300 17,500
Amortization of deferred loan costs 2,809 2,912
Provision for deferred income taxes 18,446 17,224
Other - 268
------------ ------------
229,134 188,042
Cash distributions less than
earnings of affiliates (384) (601)
Gain on sale of stock held for investment (1,780) -
Changes in operating assets and liabilities:
Increase in receivables (4,978) (16,890)
Increase in advances to oil and
gas ventures and other (3,654) (2,508)
Increase in other assets (3,098) (441)
Increase (decrease) in accounts payable 2,076 (14,221)
Decrease in accrued expenses (518) (8,896)
Decrease in deferred credits
and other noncurrent liabilities (8) (2,042)
------------- --------------
Net cash provided by operating activities 216,790 142,443
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Exploration and development expenditures (220,320) (157,285)
Acquisition of oil and gas properties (71,110) (151,466)
Non-cash portion of oil and gas property
additions 4,225 6,420
Proceeds from sale of oil and gas properties 3,567 2,989
Proceeds from sale of gas gathering system - 32,201
Purchase of HERC stock and other (17,128) (55,797)
Proceeds from sale of stock held for investment 5,423 -
(Increase) decrease in inventory, net (1,591) 319
Other capital expenditures, net (5,514) (28,656)
------------- -------------
Net cash used by investing activities (302,448) (351,275)
------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term borrowings 118,970 225,667
Payments on long-term debt (27,920) (156,126)
Proceeds from HERC common stock - 1,632
Proceeds from issuance of common stock, net 4,310 133,421
Dividends paid (12,831) (10,673)
Costs of debt transactions (875) (270)
-------------- --------------
Net cash provided by financing activities 81,654 193,651
-------------- --------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (4,004) (15,181)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 17,064 26,127
--------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 13,060 $ 10,946
========= ==========
</TABLE>
APACHE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
(In thousands) September 30, December 31,
1994 1993
----------------- ----------------
(Unaudited)
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 13,060 $ 17,064
Receivables 96,818 91,840
Inventories 8,743 7,152
Advances to oil and gas ventures and other 10,538 6,884
--------------- --------------
129,159 122,940
--------------- --------------
PROPERTY AND EQUIPMENT:
Oil and gas on the basis of full
cost accounting:
Proved properties 2,792,137 2,516,801
Unproved properties and properties
under development, not being amortized 118,124 105,597
Gas gathering, transmission and
processing facilities 25,809 25,809
Other, at cost 41,508 36,938
-------------- -------------
2,977,578 2,685,145
Less: Accumulated depreciation,
depletion and amortization (1,424,733) (1,248,685)
--------------- --------------
1,552,845 1,436,460
-------------- ---------------
OTHER ASSETS:
Investments in affiliates 3,418 5,677
Deferred charges and other 30,027 27,330
--------------- --------------
33,445 33,007
--------------- --------------
$ 1,715,449 1,592,407
========= === ==============
</TABLE>
APACHE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
(In thousands) September 30, December 31,
1994 1993
----------------- ----------------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
<S> <C> > <C>
Current maturities of long-term debt $ 332 $ 9,017
Accounts payable 106,612 118,447
Accrued operating expense 17,102 17,371
Accrued exploration and development 19,308 15,083
Accrued income taxes 1,883 6,048
Accrued interest 5,682 2,010
Accrued compensation and benefits 5,682 9,170
Other accrued expenses 7,811 8,244
----------------- -------------
164,412 185,390
---------------- -------------
LONG-TERM DEBT 552,744 453,009
---------------- -------------
DEFERRED CREDITS AND OTHER NONCURRENT
LIABILITIES:
Income taxes 149,255 128,554
Advances on gas contracts 3,914 3,914
Future operating costs for royalty
interest sold 8,264 10,389
Other 29,324 25,297
---------------- -------------
190,757 168,154
--------------- -------------
SHAREHOLDERS' EQUITY:
Common stock, $1.25 par, 215,000,000
authorized, 62,545,858 and
62,334,241 shares issued, respectively 78,182 77,918
Paid-in capital 543,315 540,155
Retained earnings 199,491 182,195
Treasury stock, at cost, 1,118,956 and
1,248,827 shares, respectively (13,452) (14,414)
------------- ------------
807,536 785,854
------------ ------------
$1,715,449 $1,592,407
======== == ============
</TABLE>
APACHE CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED RETAINED EARNINGS
(Unaudited)
<TABLE>
(In thousands) For the Quarter
Ended September 30,
---------------------------
1994 1993
------------ ------------
<S> <C> <C>
RETAINED EARNINGS, Beginning of period $ 193,218 176,462
Net income 10,575 1,081
Dividends declared:
Common stock, $.07 per share (4,302) (4,247)
------------- -------------
RETAINED EARNINGS, End of period $ 199,491 $ 173,296
======== ========
For the Nine Months
Ended September 30,
----------------------------------
1994 1993
------------ ------------
RETAINED EARNINGS, Beginning of year $ 182,195 $ 160,763
Net income 30,177 24,168
Dividends declared:
Common stock, $.21 per share (12,881) (11,635)
------------ -------------
RETAINED EARNINGS, End of period 199,491 $ 173,296
======== ========
</TABLE>
APACHE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission, and reflect all adjustments
which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods, on a basis
consistent with the annual audited statements. All such
adjustments are of a normal recurring nature. Certain information,
accounting policies, and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. These
financial statements should be read in conjunction with the
financial statements and the summary of significant accounting
policies and notes thereto included in the Company's latest annual
report on Form 10-K.
INCOME TAXES
Under the liability method specified by Statement of Financial
Accounting Standards No. 109, deferred taxes are determined based on
the estimated future tax effect of differences between the financial
statement and tax bases of assets and liabilities given the
provisions of enacted laws.
INCOME PER SHARE
Primary income per common share was calculated by dividing net
income by the weighted average common shares outstanding. The
effect of common stock equivalents, including shares issuable upon
the assumed exercise of stock options (calculated using the treasury
stock method) and upon the assumed conversion of the Company's 3.93
percent convertible notes, was not significant or was anti-dilutive
for all periods presented.
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
The Company considers all highly liquid debt instruments purchased
with a maturity of three months or less to be cash equivalents.
These investments are carried at cost which approximates market.
The following table provides additional disclosure of cash payments
(in thousands):
<TABLE>
For the Nine Months
Ended September 30,
----------------------------------
1994 1993
------------ ------------
Cash paid during the period for:
<S> <C> <C>
Interest (net of amounts capitalized) $ 15,763 $ 22,499
Income taxes (net of refunds) $ 5,829 1,387
</TABLE>
SUBSEQUENT EVENT
On November 7, 1994, Apache announced it had entered into an
agreement with Crystal Oil Company (Crystal) to purchase
substantially all of Crystal's domestic oil and gas assets for
approximately $101 million, subject to adjustment. The properties
include net proved reserves of 91.6 billion cubic feet of gas and
five million barrels of oil. Consummation of this transaction is
subject to various conditions, including shareholder and regulatory
approval. Apache will fund the acquisition, which is expected to
close by the end of 1994, under its current bank credit facility.
See Item 5 below.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Financial Results
Apache reported net income of $10.6 million, or $.17 per share, for
the third quarter of 1994 compared to $1.1 million, or $.02 per
share for the comparable 1993 period. Apache recorded two non-cash
charges during the third quarter of 1993 which combined to reduce
net income by $7.8 million, or $.15 per share. Apache's $6.7 million
impairment of its remaining investment in West Africa reduced third
quarter 1993 net income by $4.3 million, or $.08 per share. Apache
also took a 1993 charge to earnings of $3.5 million, or $.07 per
share, as a result of 1993 legislation which increased the federal
corporate income tax rate. Total revenues for the quarter rose to
$140.8 million from $122 million in the third quarter of 1993.
Net income of $30.2 million, or $.49 per share, was reported in the
first nine months of 1994, compared to $24.2 million, or $.47 per
share, in 1993. Total revenue increased 16 percent from a year ago,
rising to $397.3 million for the first nine months of 1994.
The Company's 1994 financial performance was impacted by the
following items.
Oil and Gas Prices -
During the first nine months of 1994, oil and gas prices
declined by 13 percent and six percent, respectively, from a
year ago. Lower product prices, after considering DD&A and
taxes, negatively impacted 1994 earnings by approximately
$.29 per share.
Drilling and Recompletions -
Apache's active drilling and recompletion program boosted gas
production for the first nine months of 1994 by approximately
71 million cubic feet per day (MMcfd) from a year ago. While
Apache increased net production in each of its domestic
operating regions through drilling and recompletions, 66
percent of the Company increase was from properties in the
Gulf of Mexico.
Acquisitions -
Apache continued to pursue acquisition opportunities,
purchasing more than $71 million of oil and gas properties
during the first nine months of 1994. During the second half
of 1993, Apache purchased substantially all of the producing
properties of Hall-Houston Oil Company (Hall-Houston) in the
Gulf of Mexico for $84.4 million and acquired the stock of
Hadson Energy Resources Corporation (HERC) for approximately
$98 million. In June 1993, Apache purchased Hall-Houston's
interest in Mustang Island 787 and 805 for $29.3 million.
The acquisitions during 1994 and 1993 combined to increase
Apache's first nine month oil and gas production by more than
three thousand barrels per day (MBopd) and 55 MMcfd,
respectively.
Results of Operations
<TABLE>
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
--------------------------------- -----------
1994 1993 1994 1993
----------- ----------- ----------- ----------
Selected Oil and Gas
Operating Statistics
Gas Volume - Mcf per day:
<S> <C> <C> <C> <C>
Domestic 431,638 309,446 405,901 284,010
Foreign 11,815 8,006 6,630 2,698
Total 443,453 317,452 412,531 286,708
Average Gas Price - Per Mcf $ 1.71 $ 2.01 $ 1.89 $ 2.00
Oil Volume - Barrels per day:
Domestic 32,801 32,490 32,425 31,482
Foreign 3,646 3,225 3,014 1,498
Total 36,447 35,715 35,439 32,980
Average Oil Price - Per barrel$ 16.90 15.93 $ 15.28 $ 17.54
Natural Gas Liquids (NGL)
Barrels per day 1,363 1,429 1,347 1,396
NGL Price - Per barrel $ 13.19 $ 11.89 $ 12.30 $ 12.60
Domestic Full Cost
Amortization Rate 45.7% 40.4% 44.9% 38.1%
</TABLE>
Oil and gas production revenues for the third quarter and first nine
months of 1994 were higher than the comparable periods in 1993 by
$15.5 million and $45.6 million, respectively, as higher production
more than offset the impact of lower prices.
Gas production during the quarter increased 126 MMcfd, or 40
percent, from a year ago, climbing to a record 443.5 MMcfd. For the
third quarter of 1994, gas sales of $69.9 million increased $11.1
million, or 19 percent, over the previous year. Acquisitions added
approximately 32 MMcfd, whereas drilling and recompletions accounted
for nearly 94 MMcfd. Apache's realized natural gas price dropped
$.30 per Mcf to $1.71 per Mcf, negatively impacting sales by $12.2
million.
For the first nine months of 1994, gas production reached 412.5
MMcfd, an increase of 125.8 MMcfd, or 44 percent, from a year ago.
Gas sales of $212.8 million were $56 million higher than the
comparable period in 1993. Acquisitions contributed 55 MMcfd, or 43
percent, and drilling and recompletions added another 71 MMcfd. The
Company's realized natural gas price of $1.89 per Mcf during the
first nine months of 1994 was six percent lower than the prior
year's price of $2.00 per Mcf for the same period. The decline in
price is a result of lower spot prices during 1994.
Oil sales of $56.7 million for the third quarter of 1994 were $4.3
million, or eight percent, higher than last year as a result of
higher oil production and prices. Apache's realized oil price
climbed to $16.90 per barrel, a $.97 per barrel increase over the
$15.93 per barrel price for the third quarter of 1993. For the
quarter, the Company increased its oil production by 732 barrels per
day (Bopd) to 36,447 Bopd compared to 35,715 Bopd for the comparable
1993 period. The increase in the realized oil price added sales of
approximately $3.2 million and the increase in oil production
contributed $1.1 million to sales.
For the first nine months of 1994, oil sales of $147.8 million
decreased $10.1 million, or six percent, from a year ago. Lower
average oil prices in 1994 negatively impacted oil sales by $21.9
million and more than offset the favorable impact of higher
production. Reflecting lower average posted prices during 1994,
Apache's realized oil price of $15.28 per barrel for the first nine
months dropped $2.26 per barrel below the 1993 price of $17.54 per
barrel. For the nine month period of 1994, the Company reported oil
production of 35,439 Bopd, a 2,459 Bopd increase over the previous
year's production of 32,980 Bopd. The seven percent increase in
production was the result of acquisitions during the second half of
1993.
Revenues from the sale of natural gas liquids and sulphur for the
third quarter of 1994 totaled $1.6 million. For the first nine
months of 1994, revenues decreased $.4 million compared to a year
ago, a result of lower natural gas liquids prices and decreased
volumes.
Third quarter gathering, processing and marketing revenues of $11.9
million were 65 percent higher than last year's revenues of $7.2
million due to increased volumes sold under crude oil contracts.
For the nine months of 1994, gathering, processing and marketing
revenues of $29.2 million were 52 percent higher than last year's
revenues of $19.2 million although the gross margin for these
activities was up 21 percent.
During the third quarter of 1994, Apache sold its remaining .4
million shares of XCL Ltd. common stock for $.5 million, or a $.3
million pre-tax gain. In another transaction, the Company sold .2
million shares of Key Production Company Inc. (Key) common stock
back to Key for a pre-tax gain of nearly $.3 million.
Depreciation, depletion and amortization (DD&A) expense of $61
million for the third quarter of 1994 and $170.4 million for the
first nine months of the year increased 29 percent and 35 percent,
respectively, over the comparable 1993 periods. DD&A expense for
domestic oil and gas properties rose as a result of the increase in
oil and gas sales and a higher domestic amortization rate expressed
as a percentage of sales. Apache's DD&A rate rose to 45.7 percent
and 44.9 percent for the third quarter and first nine months of
1994, respectively, compared to 40.4 percent and 38.1 percent for
the same periods in 1993. The increase in DD&A rate, as a
percentage of sales, is a result of lower gas prices during 1994 and
a higher average finding cost in 1993 compared to recent years.
International impairments totaled $1 million and $7.3 million for
the third quarter and first nine months of 1994, respectively,
compared to $10.3 million and $17.5 million for the like periods of
1993. Last year's impairments included the write-off of the
carrying value of certain West-African concessions. Lower
impairments for the first nine months of 1994 are the result of
favorable drilling results in China and Indonesia.
Operating costs increased $.9 million, or two percent to $35.6
million for the quarter and $7.5 million, or eight percent, to
$101.8 million year-to-date from the comparable periods last year
due primarily to the impact of acquisitions and new wells added from
the drilling program. Operating costs include lifting costs,
workover expense and production and severance taxes. Based on an
equivalent unit of production, operating costs dropped $.75 per
barrel of oil equivalent (Boe), or 18 percent, for the third quarter
of 1994 compared to a year ago. Operating costs decreased 16
percent in the first nine months of 1994, to $3.58 per Boe. The unit
cost decrease is a result of company-wide cost control measures,
increased offshore production with low associated unit cost and
reduced water injection expense in the Rocky Mountain region.
Administrative, selling and other costs decreased $.3 million, or
four percent, in the third quarter of 1994 from a year ago, while
dropping 23 percent on a Boe basis. Costs increased $.7 million, or
three percent, in the first nine months of 1994 compared to last
year, while dropping 20 percent on a Boe basis. Apache acquired
HERC and the Hall-Houston properties with minimal increases in
Apache's administrative staff.
Net financing costs for the third quarter of $8 million increased
$.4 million from the comparable period in 1993 due to an increase of
approximately $26 million in the average debt outstanding during the
quarter. For the first nine months of 1994, net financing costs of
$21.4 million increased one percent from the like period in 1993.
Liquidity and Capital Resources
Apache's primary needs for cash are for exploration, development and
acquisition of oil and gas properties, repayment of principal and
interest on outstanding debt and payment of dividends. The Company
generally funds its exploration and development activities through
internally generated cash flows. Apache budgets its capital
expenditures based upon projected cash flows and routinely adjusts
its capital expenditures in response to changes in oil and gas
prices and corresponding changes in cash flow.
Expenditures for exploration and development increased to $220.3
million for the first nine months of 1994 from $157.3 million during
the comparable period last year. In the first nine months of 1994,
Apache completed 166 of 207 gross wells as producers, while the
Company completed 142 of 184 gross wells as producers in the same
period in 1993. Apache has been actively drilling in the
Midcontinent region, the Permian Basin, the Gulf Coast region, the
Gulf of Mexico and the Rocky Mountain region of the United States.
Internationally, Apache has drilled four exploratory wells and three
developmental wells in Australia and one exploratory well in each of
the Congo, People's Republic of China and Indonesia during the first
nine months of 1994. Drilling results in the Congo, China and
Indonesia indicated discoveries but further testing and drilling is
required to determine commerciality. Year-to date international
exploration and development expenditures of $20.5 million increased
$7.8 million, or 61 percent, from the like period a year ago.
Apache's exploration and development expenditures are expected to
total more than $290 million in 1994.
Acquisitions during the third quarter and first nine months of 1994
amounting to $44.1 million and $71.1 million, respectively, were
less than the comparable period in 1993 of $107.4 million and $151.5
million, respectively. The two primary acquisitions in the third
quarter of 1994 were the purchase of certain properties in the San
Juan Basin and the purchase of interests in 21 producing fields in
southeast Texas.
Other capital expenditures for the first nine months of 1994 totaled
$5.5 million compared to $28.7 million for the 1993 period. The
1993 expenditures include the purchase of NGC's interest in a
western Oklahoma gas system which was subsequently sold in a
transaction discussed below.
The purchase of HERC stock in the first quarter of 1994 largely
reflects cash payments for HERC common stock which had not been
tendered to Apache as of December 31, 1993. The purchase of the
remaining shares was accrued as a cost of the HERC acquisition in
1993.
Capital Resources
Apache's primary capital resources are net cash provided by
operating activities, unused borrowing capacity under the Company's
revolving bank credit facility and proceeds from the sale of non-
strategic assets. Net cash provided by operating activities totaled
$216.8 million for the first nine months of 1994 compared to $142.4
million for the like period in 1993. The 52-percent increase in
cash flows largely reflects increased oil and gas production in 1994
and reduced working capital requirements for 1994 compared to 1993.
During the second quarter of 1994, Apache amended its bank credit
facility, increasing the amount committed under the revolving
portion of the facility from $400 million to $700 million, subject
to borrowing base availability. The borrowing base was increased
from $450 million to $500 million on November 4, 1994 as a result of
a regularly scheduled October redetermination by the banks. The
amount of the borrowing base, which is determined at the sole
discretion of the banks, is redetermined according to a schedule
specified by the agreement but may be redetermined at the request of
the Company. Management expects the borrowing base to be further
increased as a result of the anticipated acquisition of oil and gas
assets from Crystal Oil Company. Apache had $351 million
outstanding under its bank credit facility on September 30, 1994.
Also during the second quarter of this year, Apache terminated a
bank credit facility held in the name of HERC and amended and
restated the debt agreement of HERC's wholly-owned subsidiary,
Hadson Energy Limited (HEL). The HEL amendment provided for a rate
reduction from 1 1/8 percent above the discount rate of U.S. dollar
bankers' acceptances to 7/8 percent above the bankers' acceptance
rate. The initial borrowing base was established at $25 million, of
which $23.5 million was outstanding at September 30, 1994. As with
the previous HEL agreement, the HEL credit facility is not
guaranteed by Apache.
Total outstanding long-term debt increased to $553.1 million at
September 30, 1994, a $91.1 million increase from year-end 1993.
Apache drew on its bank facility to fund the acquisitions closed
during the first nine months of 1994 and purchase the HERC shares
tendered to Apache in 1994.
In March 1993, Apache and NGC completed the sale of their respective
interests in a gas gathering system in western Oklahoma. Apache
received gross cash proceeds of $32.2 million in the transaction,
approximately $16.4 million of which was attributable to NGC's
interest in the system. The sale price approximated the net book
value of the interests sold.
Also in March 1993, Apache completed the public offering of
approximately 5.8 million shares of common stock for net proceeds of
$131.8 million. In April 1993, Apache applied the proceeds of the
equity offering to repay all outstanding bank debt under the
revolving bank credit. The debt was redrawn in subsequent periods
to fund acquisitions completed during 1993. In September 1993,
Apache completed the conversion of its 7 1/2 percent convertible
subordinated debentures due in the year 2000 with the issuance of
7.8 million shares of Apache common stock.
Liquidity
Cash equivalents on hand at September 30, 1994 amounted to $13.1
million, a $4 million decrease from the $17.1 million at the end of
1993. The Company's ratio of current assets to current liabilities
at the end of the nine months of .8:1 improved from the ratio of
.7:1 at year-end 1993.
Management believes that cash on hand, net cash provided by
operating activities and available borrowing capacity under its
revolving credit facilities will be adequate to meet liquidity needs
for the next two fiscal years, including satisfying the Company's
financial obligations and funding exploration and development
operations and routine acquisitions.
Future Trends
Apache's exploitation, workover and recompletion operations continue
to be a key component of Apache's goal to increase production and
replace oil and gas reserves. Also, the Company continues to pursue
acquisition opportunities, some of which may be significantly larger
than those completed in the last two years. Spot market natural gas
prices remain volatile and continue to behave independent of
historical seasonal patterns. Spot market oil prices, which are
especially vulnerable to complex and unpredictable political and
economic forces, are also expected to remain volatile.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
On November 6, 1994, Apache entered into a purchase and sale
agreement with Crystal to purchase substantially all of Crystal's
domestic oil and gas assets for approximately $101 million, subject
to adjustments under certain circumstances. Apache issued a press
release, dated November 7, 1994, which is attached hereto as Exhibit
99.1 and incorporated herein by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
11.1 Computation of earnings per share.
27.1 Financial Data Table.
99.1 Press Release, dated November 7, 1994 (Apache to
purchase oil and gas assets for $101 million).
b) Reports filed on Form 8-K.
None.
EXHIBIT 11.1
APACHE CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(In thousands except per share data)
<TABLE>
For the For the
Quarter Ended Nine Months Ended
September 30, 1994 September 30, 1994
------------------------------- -------------------------------
Fully Fully
Primary Diluted Primary Diluted
------------ ----------- -----------------
<S> <C> <C> <C> <C>
Net income $ 10,575 10,575 $ 30,177 $ 30,177
Assumed reduction of interest
expense upon conversion of
$75 million 3.93% convertible
notes, net of tax 531 531 1,593 1,593
Net income, as adjusted $ 11,106 $ 11,106 $ 31,770 $ 31,770
Weighted average common
shares outstanding 61,397 61,397 61,269 61,269
Stock options: common stock
equivalents outstanding using
the treasury stock method 112 112 112 112
Common shares issuable upon
assumed conversion of
3.93% convertible notes 2,778 2,778 2,778 2,778
Common shares outstanding,
as adjusted 64,287 64,287 64,159 64,159
Earnings per share $ .17 17 $ .49 .49
</TABLE>
EXHIBIT 99.1
[APACHE LETTERHEAD]
Monday, November 7, 1994
Apache to Purchase Oil and Gas Assets for $101 Million
Houston, TX -- Apache Corporation today announced that it has
entered into a purchase and sale agreement with Crystal Oil
Company to purchase substantially all of Crystal's domestic
oil and gas assets for $101 million.
Consummation of this transaction is subject to various
conditions, including shareholder and regulatory approvals.
Quantum Fund N.V. and certain of its affiliates, who together
own approximately 66 percent of the total voting power of
Crystal, have entered into a voting trust arrangement under
the terms of which they have agreed to have all their shares
voted in favor of this transaction. The effective date of the
purchase is October 1, 1994, with closing expected by year-
end. Apache will fund the acquisition under its current bank
credit agreement.
The properties include net proved reserves of 91.6 billion
cubic feet (Bcf) of gas and 5 million barrels of oil, or 20
million barrels energy equivalent. The producing properties
are primarily located along the Arkansas-Louisiana border and
in southern Louisiana. The acquisition also includes
approximately 40,000 net undeveloped mineral acres located in
southern Louisiana.
The properties are highly concentrated with 90 percent of the
value represented in 13 fields. The two top fields --
Southeast Pass and Vernon -- account for approximately 60
percent of the value. Apache will operate each of these
fields with a 97-percent working interest. Overall, Apache
will own an average 80-percent working interest in the
properties.
"This acquisition adds significant long-lived reserves and
production increases to Apache's Midcontinent and Gulf Coast
regions," said Apache Chairman and Chief Executive Officer
Raymond Plank. "There is upside potential in the major
fields from continued drilling, and further exploration
upside in the remaining undeveloped acreage. In addition,
Apache is able to absorb operation of the properties into
existing field management programs, thereby avoiding
significant increases in administrative costs."
Currently, the properties are producing 20 million cubic feet
per day of gas and 2,700 barrels of oil per day. Apache
expects to increase production in 1995 through development
drilling in the Southeast Pass and Vernon fields.
Apache Corporation is an independent energy company engaged
in the exploration for and development and production of
natural gas and crude oil. The company's securities are
traded on the New York and Chicago Stock Exchanges under the
symbol APA.
###
Investor Relations: Paul Korus Media Relations: Suzanne Best
(713) 296-6662 (713) 296-6154
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------------ -------
Commission file number 1-4300
------------
APACHE CORPORATION
- - ------------------------------------------------------------------
- - ------------
(Exact name of registrant as specified in its charter)
Delaware 41-0747868
- - ------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Suite 100, One Post Oak Central
2000 Post Oak Boulevard, Houston, TX 77056-4400
- - ------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (713) 296-6000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X . NO .
----- -----
Number of shares of Apache Corporation common stock, $1.25 par
value, outstanding as of September 30, 1994 . . . . . . ........61,426,902
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned
thereunto duly authorized.
APACHE CORPORATION
Dated: November 14, 1994 /S/ Mark A. Jackson
------------------------------
Mark A. Jackson
Vice President, Finance
Dated: November 14, 1994 /S/ R. Kent Samuel
------------------------------
R. Kent Samuel
Controller and Chief
Accounting Officer
APACHE CORPORATION
2000 Post Oak Blvd., Suite 100
Houston, Texas 77056-4400
713-296-6000
November 14, 1994 VIA EDGAR SUBMISSION
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549
Re: Apache Corporation (Commission File No. 1-4300)
Quarterly Report on Form 10-Q, for the quarter ended
September 30, 1994
Ladies and Gentlemen:
This letter accompanies the filing of a quarterly report on Form
10-Q, for the quarter ended September 30, 1994. As required under
the EDGAR rules a paper copy of this Form 10-Q is being sent to
EDGAR filer support, and an originally signed copy is on file with
the Office of the Secretary of Apache Corporation.
Please direct any communications regarding this filing to the
undersigned at the address above or by calling 713-296-6507.
Very truly yours,
/s/ Cheri L. Peper
Cheri L. Peper
Assistant Secretary
cc: New York Stock Exchange
Chicago Stock Exchange
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ARTICLE 5 OF REGULATION S-X
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<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
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0
0
<OTHER-SE> 729,354
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<SALES> 365,106
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