APACHE CORP, 424B3, 1999-04-30

APACHE CORP
424B3, 1999-04-30
CRUDE PETROLEUM & NATURAL GAS

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<PAGE> 1
Filed Pursuant to Rule 424(b)(3) and Rule 424(c)
Registration No. 33-61669

Prospectus Supplement to Prospectus dated September 21, 1995.

Apache Corporation
Common Stock

Apache common stock is traded on the New York Stock Exchange and the
Chicago Stock Exchange under the symbol "APA." The last reported sales price of
Apache common stock on April 27, 1999 was $26 7/8 per share.

-------------------

Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the accuracy
or adequacy of this prospectus. Any representation to the contrary is a criminal
offense.

-------------------

This prospectus supplement relates to an effective registration
statement under the Securities Act of 1933. Since the registration statement was
declared effective, Apache has issued 186,072 shares of its common stock in
transactions that were immaterial to Apache. There are 1,163,928 shares of
Apache common stock remaining to be issued under the registration statement.

Attached and made a part of this prospectus supplement are the
following documents:

[X] a draft of a preliminary prospectus supplement for an offering
of Apache common stock

[X] a draft of a preliminary prospectus supplement for an offering
of Apache depositary shares

[X] a draft of a press release from Apache dated April 29, 1999
regarding earnings for the quarter ended March 31, 1999, and

|X| a draft of a press release from Apache dated April 29, 1999
regarding a property acquisition from Shell and a public
offerings of securities.

We encourage you to read this prospectus supplement, which includes the
attached documents, and the prospectus in their entirety before making an
investment decision.

Prospectus Supplement dated April 28, 1999.

<PAGE> 2

THIS PROSPECTUS SUPPLEMENT RELATES TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933. THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT
COMPLETE AND MAY BE CHANGED. WE WILL DELIVER TO PURCHASERS OF THESE SECURITIES A
FINAL PROSPECTUS SUPPLEMENT AND PROSPECTUS. WE ARE NOT USING THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS TO OFFER TO SELL THESE SECURITIES OR TO SOLICIT
OFFERS TO BUY THESE SECURITIES IN ANY PLACE WHERE THE OFFER OR SALE IS NOT
PERMITTED.

SUBJECT TO COMPLETION. DATED APRIL 29, 1999.

Prospectus Supplement to Prospectus dated April 9, 1999.

10,000,000 Shares
[APACHE CORPORATION LOGO]

Common Stock

-------------------------

Apache common stock is traded on the New York Stock Exchange and the
Chicago Stock Exchange under the symbol "APA". The last reported sale price of
Apache common stock on the New York Stock Exchange Composite Transactions
Reporting System on April 27, 1999 was $26.875 per share.

Consider carefully the risk factors beginning on page S-8 of this
prospectus supplement.

-------------------------

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

-------------------------

<TABLE>
<CAPTION>
Per Share Total
--------- --------
<S> <C> <C>
Initial price to public..................................... $ $
Underwriting discount....................................... $ $
Proceeds, before expenses, to Apache........................ $ $
</TABLE>

The underwriter may, under certain circumstances, purchase up to an
additional 1,500,000 shares from Apache at the initial price to public less the
underwriting discount.

-------------------------

The underwriter expects to deliver the shares against payment in New York,
New York on May , 1999.

GOLDMAN, SACHS & CO.

-------------------------

Prospectus Supplement dated May , 1999.
<PAGE> 3
[MAP]

Percentages are calculated by combining Apache's December 31, 1998 proved
reserves with the proved reserves attributable to the offshore Gulf of Mexico
properties anticipated to be acquired in the pending Shell transaction as of
March 1, 1999.

Apache also has active exploration programs in Poland and offshore China.

OIL AND GAS TERMS

<TABLE>
<S> <C> <C> <C>
When describing natural gas: Mcf = thousand cubic feet
MMcf = million cubic feet
Bcf = billion cubic feet
When describing oil: bbl = barrel
Mbbls = thousand barrels
MMbbls = million barrels
When comparing natural gas to oil: 6 Mcf of gas = 1 bbl of oil equivalent
boe = barrel of oil equivalent
Mboe = thousand barrels of oil equivalent
MMboe = million barrels of oil equivalent
</TABLE>

S-2
<PAGE> 4

PROSPECTUS SUMMARY

This summary highlights selected information we have included or
incorporated by reference in this prospectus supplement and the accompanying
prospectus. However, it does not contain all information that may be important
to you. This prospectus supplement and the accompanying prospectus include
information about this offering, our business and our financial and operating
data. We encourage you to read this prospectus supplement and the accompanying
prospectus in their entirety before making an investment decision.

In this prospectus supplement and the accompanying prospectus, we refer to
Apache Corporation and its subsidiaries as "we", "our" or "Apache" unless the
context clearly indicates otherwise.

ABOUT APACHE

Apache Corporation is a Delaware corporation formed in 1954. We are an
independent energy company that explores for, acquires and develops oil and gas
reserves and produces natural gas, crude oil, condensate and natural gas
liquids.

In North America, our exploration and production interests are focused on
the Gulf of Mexico, the Anadarko Basin, the Permian Basin, the Gulf Coast and
the Western Sedimentary Basin of Canada. Outside North America, we have
exploration and production interests offshore Western Australia, in Egypt and
offshore the Ivory Coast, and exploration interests in Poland and offshore The
People's Republic of China.

In 1998, we achieved our 21st consecutive year of production growth and our
11th consecutive year of oil and gas reserves growth. Our 1998 average daily
production was:

- - 75.8 Mbbls of crude oil, condensate and natural gas liquids; and
- - 590 MMcf of natural gas.

As of December 31, 1998, our worldwide proved reserves totaled 613 MMboe,
including:

- - 251 MMbbls of crude oil, condensate and natural gas liquids; and
- - 2,172 Bcf of natural gas.

STRATEGY

Our strategy is to increase oil and gas reserves, production, cash flow and
earnings through a balanced growth program that involves:

- - exploiting our existing asset base;
- - acquiring properties to which we can add incremental value; and
- - investing in high-potential exploration prospects.

EXPLOITING EXISTING ASSET BASE. We seek to maximize the value of our
existing asset base by reducing operating costs per unit and increasing the
amount of recoverable reserves. In order to achieve these objectives, we
rigorously examine operations to cut costs, identify production enhancement
initiatives such as workovers and recompletions, and divest marginal and non-
strategic properties.

ACQUIRING PROPERTIES TO WHICH WE CAN ADD INCREMENTAL VALUE. We seek to
purchase reserves at attractive prices by generally avoiding auction processes
where we are competing against other buyers. Our aim is to follow each
acquisition with a cycle of reserve enhancement, property consolidation and cash
flow acceleration, facilitating asset growth and debt reduction.

INVESTING IN HIGH-POTENTIAL EXPLORATION PROSPECTS. We seek to concentrate
our exploratory investments in a select number of international areas and to
become the dominant operator in those regions. We believe that these
investments, although higher-risk, offer the potential for significant reserve
additions. Our international investments and exploration activities are a
significant component of our long-term growth strategy. They complement our
North American operations, which are more development oriented.

A critical component in implementing our three-pronged growth strategy is
maintenance of significant financial flexibility. We are committed to preserving
a strong balance sheet and credit position that gives us the foundation required
to pursue our growth initiatives.

S-3
<PAGE> 5

RECENT DEVELOPMENTS

On April 29, 1999, we signed an agreement with Shell Offshore Inc. and
affiliated Shell entities to purchase Shell's interest in 22 producing fields
and 16 undeveloped blocks in the Gulf of Mexico. We will operate 18 of the 22
producing fields and will also acquire related production assets and proprietary
3-D seismic data covering over 1,000 blocks in the Gulf of Mexico.

The purchase agreement will be effective as of March 1, 1999. The purchase
price, subject to reduction for production since March 1, 1999 and other
adjustments, will be $715 million in cash and 1 million shares of Apache common
stock. Shell has agreed not to sell the shares until 90 days after signing of
the purchase agreement, or earlier depending upon future circumstances.

The Shell fields complement our extensive existing offshore Gulf of Mexico
production and reserves. The working interests we will acquire from Shell
typically exceed 80%. In 32 of the 58 blocks comprising the 22 producing fields,
and in all 16 of the undeveloped blocks, we will acquire 100% working interests.

We estimate that the properties we will acquire in the Shell acquisition
had proved reserves as of March 1, 1999 of:

- - 69.3 MMbbls of crude oil; and
- - 348 Bcf of natural gas.

Using the conventional equivalence of one barrel of oil to six Mcf of gas,
these estimated reserves totaled 127.3 MMboe and were approximately 54% oil and
46% gas. Average daily production from these properties during February 1999
was:

- - 24.9 Mbbls of crude oil and natural gas liquids; and
- - 125 MMcf of natural gas.

Multiple pay horizons contribute to the long life of the Shell fields as
compared to many other offshore Gulf of Mexico properties. At March 1, 1999, the
reserve life of the Shell properties -- total proved reserves divided by prior
12 months' production -- was more than 7 years. These proved reserves were:
- - 85% proved developed; and
- - 15% proved undeveloped.

The Shell transaction has been approved by the boards of directors of
Apache and Shell and is not subject to financing. We expect that the only
remaining conditions under the purchase agreement -- U.S. regulatory approval
under the Hart-Scott-Rodino Act and completion of mutually agreeable schedules,
exhibits and arrangements with Shell for shared use of two offshore production
platforms located in one of the acquired fields -- will be satisfied and that
the acquisition will be completed in May 1999. However, we cannot be sure that
the transaction will be completed as expected until it is actually consummated.
The $715 million cash portion of the purchase price assumes that the other
owners of working interests in the Shell properties will not exercise any of
their preferential rights to purchase portions of the interests we have agreed
to acquire from Shell.

S-4
<PAGE> 6

THE OFFERING

The common stock information set out in this paragraph assumes the issuance
of 1 million shares to Shell, as described above under "Recent Developments",
and assumes that Goldman, Sachs & Co. does not exercise the option granted by
Apache to purchase additional shares of common stock in connection with the
offering, as discussed below under "Underwriting".

- - Shares offered by Apache............................................10,000,000
- -Approximate number of shares
outstanding after this offering
and the Shell transaction..........................................108,820,667
- - New York Stock Exchange symbol.............................................APA
- -Use of proceeds .. Added to working capital and used for general corporate
purposes. In particular, we expect to use the net proceeds from this offering
and the concurrent ACES offering described below, together with funds available
under money market lines of credit and commercial paper facilities, to fund the
cash portion of the purchase price in the pending Shell acquisition discussed
above under "Recent Developments".

CONCURRENT OFFERING

We are concurrently offering, in a separate public offering pursuant to a
separate prospectus, 5,000,000 depositary shares representing Automatically
Convertible Equity Securities, Conversion Preferred Stock, Series C, which we
will refer to in this prospectus supplement as "ACES". This offering of common
stock and the concurrent ACES offering are not conditioned upon each other. This
prospectus supplement relates only to the offering of common stock and not to
the ACES offering.

S-5
<PAGE> 7

SUMMARY FINANCIAL AND OPERATING DATA

We have provided in the tables below our selected financial and operating
data. The financial information for each of the years in the five-year period
ended December 31, 1998 has been derived from our audited financial statements.
The financial information for the three-month periods ended March 31, 1998 and
1999 has been derived from our unaudited financial statements. Our previously
reported data for 1994 has been restated to reflect the merger with DEKALB
Energy Company in May 1995 under the pooling of interests method of accounting.
You should read the following financial information in conjunction with our
consolidated financial statements and related notes that we have incorporated by
reference in the accompanying prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1994 1995(1) 1996(2) 1997(3) 1998
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total revenues............. $ 592,626 $ 750,702 $ 977,151 $1,176,273 $ 875,715
Net income (loss).......... 45,583 20,207 121,427 154,896 (129,387)
Income (loss) attributable
to common stock.......... 45,583 20,207 121,427 154,896 (131,391)
Net income (loss) per
common share
Basic.................... .65 .28 1.42 1.71 (1.34)
Diluted.................. .65 .28 1.38 1.65 (1.34)
Cash dividends per common
share(4)................. .28 .28 .28 .28 .28
Net cash provided by
operating activities..... $ 357,769 $ 332,123 $ 490,504 $ 723,808 $ 471,511
BALANCE SHEET DATA (AT YEAR
END):
Working capital
(deficit)................ $ (3,203) $ (22,013) $ (41,501) $ 4,546 $ (78,804)
Total assets............... 2,036,627 2,681,450 3,432,430 4,138,633 3,996,062
Long-term debt............. 719,033 1,072,076 1,235,706 1,501,380 1,343,258
Shareholders' equity....... $ 891,087 $1,091,805 $1,518,516 $1,729,177 $1,801,833
Common shares outstanding
at end of year........... 69,666 77,379 90,059 93,305 97,769
</TABLE>

(1) Includes the results of the acquisitions of certain oil and gas properties
from Texaco Exploration and Production, Inc. and Aquila Energy Resources
Corporation after March 1, 1995 and September 1995, respectively, and the
sale of a substantial portion of Apache's Rocky Mountain properties in
September 1995.

(2) Includes financial data after May 20, 1996 for Apache PHN Company, Inc.,
formerly known as The Phoenix Resource Companies, Inc.
(3) Includes financial data after November 20, 1997 relating to the acquisition
from Mobil Exploration & Producing Australia Pty Ltd of three companies
owning interests in certain oil and gas properties and production facilities
offshore Western Australia.

(4) No cash dividends were paid on outstanding DEKALB common stock in 1994 and
1995.

S-6
<PAGE> 8

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------
1998 1999
------------- -------------
(IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
INCOME STATEMENT DATA:
Total revenues.............................................. $ 245,941 $ 187,715
Net income (loss)........................................... 17,356 (2,168)
Income (loss) attributable to common stock.................. 17,356 (3,588)
Net income (loss) per common share
Basic..................................................... .18 (.04)
Diluted................................................... .18 (.04)
Cash dividends per common share............................. $ .07 $ .07
BALANCE SHEET DATA (AT PERIOD END):
Total debt.................................................. $ 1,547,082
Shareholders' equity........................................ $ 1,795,581
Common shares outstanding at end of period.................. 97,821
</TABLE>

<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
-------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
OPERATING DATA
Proved Reserves at December 31:
Oil (Mbbls)(1)....................... 110,624 170,329 235,294 273,778 251,008
Natural Gas (Bcf).................... 1,316 1,502 1,625 1,872 2,172
Total Proved Reserves (Mboe)(2)... 329,983 420,649 506,178 585,748 613,046
Reserves Outside North America (% of
Total)............................ 3.3% 4.7% 17.8% 27.9% 38.3%
Reserve Replacement Ratio(3)......... 189.7% 267.3% 257.2% 228.0% 142.9%
Reserve Life (years)(4).............. 7.5 7.8 9.3 9.4 9.6
Finding and Development Costs per
boe(2)(5)......................... $ 5.95 $ 5.30 $ 6.09 $ 5.75 $ 4.98
Average Daily Production:
Oil (Mbbls/day)(1)................... 40 52 55 69 76
Natural Gas (MMcf/day)............... 483 577 561 609 590
Total Production (Mboe/day)(2).... 120 148 149 170 174
Average Production Costs per boe(2).... $ 2.85 $ 3.34 $ 3.43 $ 3.07 $ 2.88
</TABLE>

(1) Includes crude oil, condensate and natural gas liquids.

(2) 6 Mcf of natural gas = 1 boe.

(3) Total reserve additions for the year, including revisions and net of
property sales, divided by annual production.

(4) Total proved reserves at year end divided by annual production.

(5) Total capitalized costs incurred for the year, excluding capitalized
interest and property sales, divided by total reserve additions for the
year, including revisions.

S-7
<PAGE> 9

CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS

This prospectus supplement, the accompanying prospectus and the documents
incorporated by reference contain 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. All statements other than statements of historical facts,
including, among others, statements regarding our future financial position,
business strategy, budgets, reserve information, projected levels of production,
projected costs and plans and objectives of management for future operations,
are forward-looking statements.

We typically use words such as "expect", "anticipate", "estimate",
"intend", "plan" and "believe" to identify our forward-looking statements.

Although we believe our expectations reflected in forward-looking
statements are based on reasonable assumptions, no assurance can be given that
these expectations will prove to have been correct. Important factors that could
cause actual results to differ materially from the expectations reflected in the
forward-looking statements include, among others:

- - the market prices of oil and gas;
- - economic and competitive conditions;
- - inflation rates;
- - legislative and regulatory changes;
- - financial market conditions;
- - political and economic uncertainties of foreign governments; and
- - future business decisions.

Some of these factors are discussed under "Risk Factors" beginning on page S-8
of this prospectus supplement.

In light of these risks, uncertainties and assumptions, the events
anticipated by our forward-looking statements might not occur. We undertake no
obligation to update or revise our forward-looking statements, whether as a
result of new information, future events or otherwise.

S-8
<PAGE> 10

RISK FACTORS

In considering whether to purchase the shares of Apache common stock, you
should carefully consider all the information we have included or incorporated
by reference in this prospectus supplement and the accompanying prospectus. In
particular, you should carefully consider the risk factors described below. In
addition, please read "Cautionary Statement Regarding Forward-Looking
Statements" on page S-7 of this prospectus supplement, where we describe
additional uncertainties associated with our business and the forward-looking
statements included or incorporated by reference in this prospectus supplement
and the accompanying prospectus.

RISK FACTORS RELATING TO APACHE

A SUBSTANTIAL OR EXTENDED DECLINE IN OIL AND GAS PRICES WOULD HAVE A MATERIAL
ADVERSE EFFECT ON US.

A substantial or extended decline in oil and gas prices would have a
material adverse effect on our financial position, results of operations,
quantities of oil and gas that may be economically produced, and access to
capital. Oil and natural gas prices have historically been and are likely to
continue to be volatile. This volatility makes it difficult to estimate with
precision the value of producing properties in acquisitions and to budget and
project the return on exploration and development projects involving our oil and
gas properties. In addition, unusually volatile prices often disrupt the market
for oil and gas properties, as buyers and sellers have more difficulty agreeing
on the purchase price of properties.

OUR ABILITY TO SELL OUR OIL AND GAS PRODUCTION COULD BE MATERIALLY HARMED IF WE
FAIL TO OBTAIN ADEQUATE SERVICES SUCH AS TRANSPORTATION AND PROCESSING.

The sale of our oil and gas production depends on a number of factors
beyond our control, including the availability and capacity of transportation
and processing facilities. Our failure to obtain such services on acceptable
terms could materially harm our business.

WE HAVE RECORDED WRITE-DOWNS BECAUSE OF FULL COST ACCOUNTING RULES AND MAY BE
REQUIRED TO DO SO AGAIN IN THE FUTURE.

Under the full cost accounting rules of the Securities and Exchange
Commission, we review the carrying value of our proved oil and gas properties
each quarter on a country-by-country basis. Under these rules, capitalized costs
of proved oil and gas properties -- net of accumulated depreciation, depletion
and amortization, and deferred income taxes -- may not exceed the present value
of estimated future net cash flows from proved oil and gas reserves, discounted
at 10 percent, plus the lower of cost or fair value of unproved properties
included in the costs being amortized, net of related tax effects.

These rules generally require pricing future oil and gas production at the
unescalated oil and gas prices in effect at the end of each fiscal quarter. They
also require a write-down if the "ceiling" is exceeded, even if prices declined
for only a short period of time. We recorded a $243.2 million pre-tax -- $158.1
million after-tax -- non-cash write-down of the carrying value of our U.S.
proved oil and gas properties as of December 31, 1998, due to these ceiling test
limitations.

If oil and gas prices again fall to the prices we realized at the end of
1998, it is likely that additional write-downs will occur in 1999. Write-downs
required by these rules do not impact cash flow from operating activities.

THE OIL AND GAS RESERVES DATA WE REPORT ARE ONLY ESTIMATES AND MAY PROVE TO BE
INACCURATE.

S-9
<PAGE> 11

based upon various assumptions about future production levels, prices and costs
that may prove to be incorrect over time. Any significant variance from the
assumptions could result in the actual quantity of our reserves and future net
cash flows from them being materially different from the estimates. In addition,
our estimated reserves may be subject to downward or upward revision based upon
production history, results of future exploration and development, prevailing
oil and gas prices, operating and development costs and other factors.

IF WE FAIL TO ACQUIRE OR FIND ADDITIONAL RESERVES, OUR RESERVES AND PRODUCTION
WILL DECLINE MATERIALLY FROM THEIR CURRENT LEVELS.

The rate of production from oil and gas properties generally declines as
reserves are depleted. Except to the extent that we acquire additional
properties containing proved reserves, conduct successful exploration and
development activities or, through engineering studies, identify additional
behind-pipe zones or secondary recovery reserves, our proved reserves will
decline materially as reserves are produced. Future oil and gas production is,
therefore, highly dependent upon our level of success in acquiring or finding
additional reserves.

THE PENDING SHELL TRANSACTION MIGHT NOT BE CONSUMMATED AS EXPECTED.

Under the purchase agreement, there are only two remaining conditions to
the obligations of the parties to complete the pending Shell transaction:

- - U.S. regulatory approval under the Hart-Scott-Rodino Act; and

- - completion of mutually agreeable schedules, exhibits and arrangements with
Shell for shared use of two offshore production platforms located in one of
the acquired fields.

We expect that these conditions will be satisfied and the transaction will be
completed in May 1999. However, we cannot be sure that the transaction will be
completed as expected until it is actually consummated.

Other owners of working interests in the Shell properties have preferential
rights to purchase portions of the interests we expect to acquire from Shell.
Although we do not expect that all of these preferential rights will be
exercised, properties valued at approximately 35% of the total purchase price
are subject to the rights. To the extent that these rights are exercised, the
properties we acquire and the cash portion of the purchase price we pay will
both be reduced.

WE INCUR SUBSTANTIAL COSTS TO COMPLY WITH GOVERNMENT REGULATIONS, ESPECIALLY
REGULATIONS RELATING TO ENVIRONMENTAL PROTECTION, AND COULD INCUR EVEN GREATER
COSTS IN THE FUTURE.

Our exploration, production and marketing operations are regulated
extensively at the federal, state and local levels, as well as by other
countries in which we do business. We have made and will continue to make large
expenditures in our efforts to comply with the requirements of environmental and
other regulations. Further, the oil and gas regulatory environment could change
in ways that might substantially increase these costs.

Hydrocarbon-producing states regulate conservation practices and the
protection of correlative rights. These regulations affect our operations and
limit the quantity of hydrocarbons we may produce and sell. In addition, at the
U.S. federal level, the Federal Energy Regulatory Commission regulates
interstate transportation of natural gas under the Natural Gas Act. Other
regulated matters include marketing, pricing, transportation and valuation of
royalty payments.

As an owner or lessee and operator of oil and gas properties, we are
subject to various federal, state, local and foreign regulations relating to
discharge of materials into, and protection of, the environment. These
regulations may, among other things, impose liability on us for the cost of
pollution clean-up resulting from operations, subject us to liability for
pollution damages, and require suspension or cessation of operations in affected
areas. Changes in or additions to

S-10
<PAGE> 12

regulations regarding the protection of the environment could hurt our business.

OUR BUSINESS COULD BE HARMED BY COMPETITION WITH OTHER COMPANIES.

The oil and gas industry is highly competitive. Our business could be
harmed by competition with other companies. Because oil and gas are fungible
commodities, our principal form of competition is price competition. We strive
to maintain the lowest finding and production costs possible to maximize
profits. In addition, as an independent oil and gas company, we frequently
compete for reserve acquisitions, exploration leases, licenses, concessions and
marketing agreements against companies with financial and other resources
substantially larger than we possess. Many of our competitors have established
strategic long-term positions and maintain strong governmental relationships in
countries in which we may seek new entry.

WE DO NOT INSURE AGAINST ALL POTENTIAL LOSSES AND COULD BE SERIOUSLY HARMED BY
UNEXPECTED LIABILITIES.

Exploration for and production of oil and natural gas can be hazardous,
involving natural disasters and other unforeseen occurrences such as blowouts,
cratering, fires and loss of well control, which can damage or destroy wells or
production facilities, injure or kill people, and damage property and the
environment. We maintain insurance against many potential losses or liabilities
arising from our operations in accordance with customary industry practices and
in amounts that we believe to be prudent. However, our insurance does not
protect us against all operational risks.

OUR HEDGING ACTIVITIES MAY PREVENT US FROM BENEFITING FROM PRICE INCREASES AND
MAY EXPOSE US TO OTHER RISKS.

To the extent that we engage in hedging activities, we may be prevented
from realizing the benefits of price increases above the levels of the hedges.
In addition, we are subject to risks associated with differences in prices at
different locations, particularly where transportation constraints restrict our
ability to deliver oil and gas volumes to the delivery point to which the
hedging transaction is indexed.

WHEN WE ACQUIRE OIL AND GAS PROPERTIES, OUR FAILURE TO FULLY IDENTIFY POTENTIAL
PROBLEMS, TO PROPERLY ESTIMATE RESERVES OR PRODUCTION RATES OR COSTS, OR TO
EFFECTIVELY INTEGRATE THE ACQUIRED OPERATIONS COULD SERIOUSLY HARM US.

We from time to time acquire oil and gas properties. When we do so, our
failure to fully identify potential problems, to properly estimate reserves or
production rates or costs, or to effectively integrate the acquired operations
could seriously harm us. Although we perform reviews of acquired properties that
we believe are consistent with industry practices, we do not review in depth
every individual property involved in each acquisition. Ordinarily we focus on
higher-value properties and sample the remainder. However, even a detailed
review of records and properties may not necessarily reveal existing or
potential problems, nor will it permit a buyer to become sufficiently familiar
with the properties to assess fully their deficiencies and potential.
Inspections may not always be performed on every well, and environmental
problems, such as ground water contamination, are not necessarily observable
even when an inspection is undertaken.

Even when problems are identified, we often assume environmental and other
risks and liabilities in connection with acquired properties. There are numerous
uncertainties inherent in estimating quantities of proved oil and gas reserves
and actual future production rates and associated costs with respect to acquired
properties. Actual results may vary substantially from those assumed in the
estimates. In addition, acquisitions may have adverse effects on our operating
results, particularly during the periods in which the operations of acquired
businesses are being integrated into our ongoing operations.

S-11
<PAGE> 13

OUR NON-U.S. OPERATIONS, ESPECIALLY IN DEVELOPING COUNTRIES, ARE SUBJECT TO
INCREASED RISKS AND UNCERTAINTIES.

Our non-U.S. oil and natural gas exploration, development and production
activities are subject to:

- - political and economic uncertainties, including, among others, changes,
sometimes frequent or marked, in governmental energy policies or the personnel
administering them;

- - expropriation of property;

- - cancellation or modification of contract rights;

- - foreign exchange restrictions;

- - currency fluctuations;

- - risks of loss due to civil strife, acts of war, guerrilla activities and
insurrection;

- - royalty and tax increases; and

- - other risks arising out of foreign governmental sovereignty over the areas in
which our operations are conducted.

These risks may be higher in the developing countries in which we conduct these
activities. Consequently, our non-U.S. exploration, development and production
activities may be substantially affected by factors beyond our control, any of
which could materially adversely affect our financial position or results of
operations. Furthermore, in the event of a dispute arising from non-U.S.
operations, we may be subject to the exclusive jurisdiction of courts outside
the United States or may not be successful in subjecting non-U.S. persons to the
jurisdiction of the courts in the United States, which could adversely affect
the outcome of the dispute.

A DECLINE IN THE CONDITION OF OUR CAPITAL MARKETS OR A SUBSTANTIAL RISE IN
INTEREST RATES COULD HARM US.

If the condition of the capital markets utilized by us to finance our
operations materially declines, we might not be able to finance our operations
on terms we consider acceptable. In addition, a substantial rise in interest
rates would decrease our net cash flows.

ADVERSE CHANGES IN THE EXCHANGE RATES WITH SOME FOREIGN CURRENCIES, ESPECIALLY A
DECREASE IN VALUE IN THE AUSTRALIAN OR CANADIAN DOLLARS RELATIVE TO THE U.S.
DOLLAR, COULD HARM US.

Our cash flow stream relating to certain international operations is based
on the U.S. dollar equivalent of cash flows measured in foreign currencies.
Australian gas production is sold under fixed-price Australian dollar contracts
and over half the costs incurred are paid in Australian dollars. Revenue and
disbursement transactions denominated in Australian dollars are converted to
U.S. dollar equivalents based on the exchange rate on the transaction date.
Reported cash flow relating to Canadian operations is based on cash flows
measured in Canadian dollars converted to the U.S. dollar equivalent based on
the average of the Canadian and U.S. dollar exchange rates for the period
reported. Substantially all of our international transactions, outside of Canada
and Australia, are denominated in U.S. dollars.

Our Canadian and Australian subsidiaries have net financial obligations
that are denominated in a currency other than the functional reporting currency
of the subsidiaries. A decrease in value of 10% in the Australian and Canadian
dollars relative to the U.S. dollar from the March 31, 1999 exchange rates would
result in a foreign currency loss of approximately $1.6 million, based on March
31, 1999 amounts.

OUR COMPUTER SYSTEMS AND THOSE OF THIRD PARTIES MAY NOT BE YEAR 2000 COMPLIANT,
WHICH MAY CAUSE SYSTEM FAILURES AND DISRUPTIONS IN OPERATIONS.

S-12
<PAGE> 14

hardware, software, telecommunications systems, office equipment, embedded chip
controls and systems, process control systems, facility control systems and
dependencies on external trading partners.

We presently believe that, with conversions to new software and completion
of efforts planned by the Year 2000 Task Force, the risk associated with year
2000 will be significantly reduced. However, we are unable to assure that the
consequences of year 2000 failures of systems maintained by us or by third
parties will not materially adversely impact our results of operations,
liquidity or financial condition.

USE OF PROCEEDS

We expect the net proceeds from this offering of common stock to be
approximately $ million, after deducting discounts to the underwriter and
estimated expenses of the offering that we will pay. We will add the net
proceeds to working capital and use them for general corporate purposes. In
particular, we expect to use the net proceeds from this offering and the
concurrent ACES offering, together with funds available under money market lines
of credit and commercial paper facilities, to fund the cash portion of the
purchase price in the pending Shell acquisition.

S-13
<PAGE> 15

CAPITALIZATION

The following table sets forth as of March 31, 1999:

- - our actual capitalization;

- - our as-adjusted capitalization showing the effects of our receipt of the
estimated net proceeds from the sale of the shares we are selling in this
offering; and

- - our pro forma as-adjusted capitalization showing the effects of

- our receipt of the estimated net proceeds from the sale of the shares we
are selling in this offering;

- our receipt of the estimated net proceeds from the sale of the depository
shares we are selling in the separate, concurrent ACES offering; and

- our issuance of the 1 million shares of common stock and payment of an
assumed $715 million to complete the pending Shell transaction.

The as-adjusted capitalization and the pro forma as-adjusted capitalization
assume that the underwriter does not exercise the options granted by Apache to
purchase additional shares in connection with the offerings.

<TABLE>
<CAPTION>
MARCH 31, 1999
--------------------------------------
PRO FORMA
ACTUAL AS ADJUSTED AS ADJUSTED
---------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>

TOTAL DEBT:
Apache:
7.95% notes due 2026......................... $ 178,549 $ 178,549 $ 178,549
7.625% debentures due 2096................... 149,175 149,175 149,175
7.375% debentures due 2047................... 147,988 147,988 147,988
9.25% notes due 2002......................... 99,851 99,851 99,851
7.7% notes due 2026.......................... 99,643 99,643 99,643
7.0% notes due 2018.......................... 148,256 148,256 148,256
Money market lines of credit and commercial
paper...................................... 237,434
Subsidiary and other obligations:
Global credit facility -- Australia.......... 62,000 62,000 62,000
Global credit facility -- Canada............. 5,000 5,000 5,000
Apache Finance 6.5% notes due 2007........... 168,840 168,840 168,840
Apache Finance 7% notes due 2009............. 99,341 99,341 99,341
Revolving credit facility -- Egypt........... 121,780 121,780 121,780
DEKALB 9.875% notes due 2000................. 29,225 29,225 29,225
---------- ---------- ----------
Total debt...................................... 1,547,082
SHAREHOLDERS' EQUITY:
Series B preferred stock..................... 98,386
Series C conversion preferred stock..........
Common stock................................. 124,793
Paid-in capital.............................. 1,246,380
Retained earnings............................ 392,662 392,662 392,662
Treasury stock............................... (36,790) (36,790) (36,790)
Accumulated other comprehensive income....... (29,850) (29,850) (29,850)
---------- ---------- ----------
Total shareholders' equity...................... 1,795,581
---------- ---------- ----------
TOTAL CAPITALIZATION.............................. $3,342,663 $ $
========== ========== ==========
</TABLE>

S-14
<PAGE> 16

PRICE RANGE OF COMMON STOCK

Our common stock is traded on the New York Stock Exchange and the Chicago
Stock Exchange under the symbol "APA". The table below provides information
regarding Apache common stock for 1997 and 1998. Prices shown are from the New
York Stock Exchange Composite Transactions Reporting System.

<TABLE>
<CAPTION>
1997 1998
-------------------------------- --------------------------------
PRICE RANGE PRICE RANGE
------------------ DIVIDENDS ------------------ DIVIDENDS
HIGH LOW PER SHARE HIGH LOW PER SHARE
------ ------ --------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
First Quarter........................... $39 3/8 $31 1/4 $.07 $38 3/4 $31 3/16 $.07
Second Quarter.......................... 35 5/8 30 1/8 $.07 38 1/8 30 3/8 $.07
Third Quarter........................... 42 7/8 32 1/16 $.07 32 3/8 22 1/2 $.07
Fourth Quarter.......................... 45 1/16 32 11/16 $.07 29 5/16 21 3/8 $.07
</TABLE>

For the first quarter of 1999, the high closing price for our common stock
was $28 1/4, the low closing price was $18 1/8, and we paid dividends per share
of $.07. The closing price per share of Apache common stock, as reported on the
New York Stock Exchange Composite Transactions Reporting System for April 27,
1999, was $26 7/8. At March 31, 1999, there were 97,820,667 shares of Apache
common stock outstanding, held by approximately 10,000 shareholders of record
and 45,000 beneficial owners.

DIVIDEND POLICY

We have paid cash dividends on Apache common stock for 129 consecutive
quarters through March 31, 1999. Since January 1983, we have paid an annual
common stock dividend of $.28 per share. We expect to continue the payment of
dividends at that level. However, future dividend payments will depend upon our
level of earnings, financial requirements and other relevant factors.

In December 1995, we declared a dividend of one preferred stock purchase
right for each share of Apache common stock outstanding on January 31, 1996 or
issued after that date. These rights are more fully described on pages 6 and 7
of the accompanying prospectus.

S-15
<PAGE> 17

VALIDITY OF SECURITIES

The validity of the shares of common stock we are offering will be passed
upon for Apache by its Vice President and General Counsel, Z. S. Kobiashvili,
and for Goldman, Sachs & Co. by Brown & Wood LLP, New York, New York. As of the
date of this prospectus supplement, Mr. Kobiashvili owns 2,073 shares of Apache
common stock through Apache's 401(k) savings plan, holds employee stock options
to purchase 45,700 shares of Apache common stock, of which options to purchase
21,200 shares are currently exercisable, and holds a conditional grant under
Apache's 1996 Share Price Appreciation Plan relating to 18,900 shares of Apache
common stock, none of which is vested.

Mayor, Day, Caldwell & Keeton, L.L.P., Houston, Texas, our outside legal
counsel, and Mr. Kobiashvili will issue opinions about some legal matters in
connection with the offering. Brown & Wood LLP, will issue an opinion about some
legal matters in connection with the offering for Goldman, Sachs & Co.

EXPERTS

The audited consolidated financial statements of Apache Corporation
incorporated by reference into this prospectus supplement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.

The information incorporated by reference into this prospectus supplement
regarding the total proved reserves of Apache was prepared by Apache and
reviewed by Ryder Scott Company Petroleum Engineers, as stated in their letter
reports, and is incorporated by reference in reliance upon the authority of said
firm as experts in such matters. The information incorporated by reference into
this prospectus supplement regarding the total estimated proved reserves
acquired from Texaco Exploration and Production Inc. was prepared by Apache and
reviewed by Ryder Scott, as stated in their letter reports, and is incorporated
by reference in reliance upon the authority of that firm as experts in these
matters. The information incorporated by reference into this prospectus
supplement regarding the total proved reserves of DEKALB was prepared by DEKALB
and for the four years ended December 31, 1994 was reviewed by Ryder Scott, as
stated in their letter reports with respect thereto, and is incorporated by
reference in reliance upon the authority of that firm as experts in these
matters.

A portion of the information incorporated by reference in this prospectus
supplement regarding the total proved reserves of Aquila Energy Resources
Corporation acquired by Apache was prepared by Netherland, Sewell & Associates,
Inc. as of December 31, 1994, as stated in their letter report, and is
incorporated by reference in reliance upon the authority of that firm as experts
in those matters. Netherland, Sewell did not review any of the reserves of
Aquila acquired during 1995.

S-16
<PAGE> 18

UNDERWRITING

Apache and Goldman, Sachs & Co. ("Goldman Sachs") have entered into an
underwriting agreement with respect to the shares being offered. Subject to
certain conditions, Goldman Sachs has agreed to purchase 10,000,000 shares of
common stock.

If Goldman Sachs sells more shares than the total number being offered,
Goldman Sachs has an option to buy up to an additional 1,500,000 shares from
Apache to cover those sales. Goldman Sachs may exercise that option for 30 days.

The following table shows the per share and total underwriting discounts
and commissions to be paid to Goldman Sachs by Apache. The amounts are shown
assuming both no exercise and full exercise of Goldman Sachs' option to purchase
additional shares.

<TABLE>
<CAPTION>
Paid by Apache
---------------------------
No Exercise Full Exercise
----------- -------------
<S> <C> <C>
Per Share............ $ $
Total................ $ $
</TABLE>

Shares sold by Goldman Sachs to the public will initially be offered at the
initial price to public set forth on the cover of this prospectus supplement.
Any shares sold by Goldman Sachs to securities dealers may be sold at a discount
of up to $ per share from the initial price to public. Those securities
dealers may resell any shares purchased from Goldman Sachs to certain other
brokers or dealers at a discount of up to $ per share from the initial price
to public. If all the shares are not sold at the initial price to public,
Goldman Sachs may change the offering price and the other selling terms.

Apache and the directors and executive officers of Apache have agreed with
Goldman Sachs not to offer, sell, contract to sell or otherwise dispose of or
hedge any shares of Apache common stock or securities convertible into or
exchangeable for shares of Apache common stock during the period from the date
of this prospectus supplement continuing through the date 90 days after the date
of this prospectus supplement, except with the prior written consent of Goldman
Sachs. This agreement does not apply to any existing employee benefit plans or
to Apache's dividend reinvestment plan.

In connection with the offering, Goldman Sachs may purchase and sell shares
of Apache common stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by Goldman Sachs of a greater number
of shares than it is required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of Apache common stock
while the offering is in progress.

These activities by Goldman Sachs may stabilize, maintain or otherwise
affect the market price of Apache common stock. As a result, the price of Apache
common stock may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, they may be discontinued by Goldman
Sachs at any time. These transactions may be effected on the New York Stock
Exchange, the Chicago Stock Exchange, in the over-the-counter market or
otherwise.

Apache estimates that its total expenses of the offering of common stock,
excluding underwriting discounts and commissions, will be approximately
$ .

Apache has agreed to indemnify Goldman Sachs against certain liabilities,
including liabilities under the Securities Act of 1933.

Goldman Sachs in the past has performed investment banking and other
financial services for Apache and has received compensation for these services.
Goldman Sachs or its affiliates may in the future provide investment banking and
other financial services to Apache or its affiliates for which it will receive
compensation.

U-1
<PAGE> 19

- ------------------------------------------------------
- ------------------------------------------------------

No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus supplement
and accompanying prospectus. You must not rely on any unauthorized information
or representations. This prospectus is an offer to sell only the shares offered
hereby, but only under circumstances and in jurisdictions where it is lawful to
do so. The information contained in this prospectus supplement and accompanying
prospectus is current only as of its date.

-------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
-----
<S> <C>
Prospectus Supplement
Oil and Gas Terms................... S-2
Prospectus Summary.................. S-3
Risk Factors........................ S-9
Use of Proceeds..................... S-13
Capitalization...................... S-14
Price Range of Common Stock......... S-15
Dividend Policy..................... S-15
Validity of Securities.............. S-16
Experts............................. S-16
Underwriting........................ U-1

Prospectus
About This Prospectus............... 1
Where You Can Find More
Information....................... 1
Apache Corporation.................. 2
Ratios of Earnings to Fixed Charges
and Ratios of Earnings to Combined
Fixed Charges and Preferred Stock
Dividends......................... 2
Use of Proceeds..................... 3
The Securities We May Offer......... 3
Description of Capital Stock........ 4
Description of Depositary Shares.... 9
Description of Debt Securities...... 12
Book-Entry Securities............... 24
Plan of Distribution................ 26
Legal Matters....................... 27
Experts............................. 27
</TABLE>

- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------

10,000,000 Shares

[APACHE CORPORATION LOGO]

Common Stock
----------------------
PROSPECTUS SUPPLEMENT
----------------------

GOLDMAN, SACHS & CO.

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 20

SUBJECT TO COMPLETION. DATED APRIL 29, 1999.

Prospectus Supplement to Prospectus dated April 9, 1999.

5,000,000 Shares
[APACHE CORPORATION LOGO]

$ Depositary Shares

Each depositary share represents 1/50th of a share of Automatically Convertible
Equity Securities, Conversion Preferred Stock, Series C
-------------------------

Apache will pay annual dividends on each depositary share in the amount of
$ , which is based on the $ annual dividend rate for each
share of conversion preferred stock. Dividends will be cumulative from the date
of issuance and will be paid after every quarter. The first dividend payment
will be made on July 30, 1999.

On May , 2002, each depositary share will automatically convert, subject
to adjustments described in this prospectus supplement, into not more than one
share and not less than of a share of Apache common stock, depending
on the Current Market Price of Apache common stock. At any time prior to May ,
2002, holders may elect to convert each of their depositary shares, subject to
adjustments described in this prospectus supplement, into of a share of
Apache common stock.

Prior to this offering, there has been no public market for the depositary
shares. Apache has applied to list the depositary shares on the New York Stock
Exchange under the symbol " ". Apache common stock is listed on the New
York Stock Exchange and the Chicago Stock Exchange under the symbol "APA". On
April 27, 1999, the last reported sale price of Apache common stock on the New
York Stock Exchange Composite Transactions Reporting System was $26.875 per
share.

Consider carefully the "risk factors" beginning on page S-10 of this
prospectus supplement.

-------------------------

<TABLE>
<CAPTION>
Per Depositary Share Total
-------------------- -----------
<S> <C> <C>
Initial price to public................................. $ $
Underwriting discount................................... $ $
Proceeds, before expenses, to Apache.................... $ $
</TABLE>

The underwriter may, under certain circumstances, purchase up to an
additional 750,000 depositary shares from Apache at the initial price to public
less the underwriting discount.

-------------------------

The underwriter expects to deliver the depositary shares against payment in
New York, New York on May , 1999.

GOLDMAN, SACHS & CO.
-------------------------
Prospectus Supplement dated May , 1999.
<PAGE> 21
[MAP]

Apache also has active exploration programs in Poland and offshore China.

OIL AND GAS TERMS

S-2
<PAGE> 22

PROSPECTUS SUMMARY

In this prospectus supplement and the accompanying prospectus, we refer to
Apache Corporation and its subsidiaries as "we", "our" or "Apache" unless the
context clearly indicates otherwise.

ABOUT APACHE

In 1998, we achieved our 21st consecutive year of production growth and our
11th consecutive year of oil and gas reserves growth. Our 1998 average daily
production was:

- - 75.8 Mbbls of crude oil, condensate and natural gas liquids; and
- - 590 MMcf of natural gas.

As of December 31, 1998, our worldwide proved reserves totaled 613 MMboe,
including:

- - 251 MMbbls of crude oil, condensate and natural gas liquids; and
- - 2,172 Bcf of natural gas.

STRATEGY

Our strategy is to increase oil and gas reserves, production, cash flow and
earnings through a balanced growth program that involves:
- - exploiting our existing asset base;
- - acquiring properties to which we can add incremental value; and
- - investing in high-potential exploration prospects.

S-3
<PAGE> 23

reserve additions. Our international investments and exploration activities are
a significant component of our long-term growth strategy. They complement our
North American operations, which are more development oriented.

RECENT DEVELOPMENTS

We estimate that the properties we will acquire in the Shell acquisition
had proved reserves as of March 1, 1999 of:

- - 69.3 MMbbls of crude oil; and
- - 348 Bcf of natural gas.

Using the conventional equivalence of one barrel of oil to six Mcf of gas,
these estimated reserves totaled 127.3 MMboe and were approximately 54% oil and
46% gas.

Average daily production from these properties during February 1999 was:

- - 24.9 Mbbls of crude oil and natural gas liquids; and
- - 125 MMcf of natural gas.

- - 85% proved developed; and
- - 15% proved undeveloped.

S-4
<PAGE> 24

THE OFFERING

DEPOSITARY SHARES AND
CONVERSION PREFERRED STOCK

TITLE. $ Depositary Shares, each representing 1/50th of a share of
Automatically Convertible Equity Securities, Conversion Preferred Stock, Series
C.

SECURITIES OFFERED. 5,000,000 depositary shares.

INITIAL PRICE. $ for each depositary share based on $ for each
share of conversion preferred stock. $ is the last reported sale price of
Apache common stock on the New York Stock Exchange on the date of this
prospectus supplement.

DIVIDEND PAYMENT DATES. The last business day of each January, April, July
and October, starting July 30, 1999.

DIVIDEND RATE. $ for each depositary share per year based on $ for
each share of conversion preferred stock per year.

MANDATORY CONVERSION DATE. May , 2002.

MANDATORY CONVERSION. On May , 2002, each depositary share will
automatically convert into shares of Apache common stock, based on the Exchange
Rate for 1/50th of a share of conversion preferred stock.

EXCHANGE RATE. The Exchange Rate for each depositary share, based on the
Exchange Rate for each share of conversion preferred stock, will be not more
than one share and not less than shares of Apache common stock,
depending on the Current Market Value.

The Exchange Rate is subject to adjustments as described under "Description
of Conversion Preferred Stock -- Conversion Adjustments" and "-- Adjustments for
Certain Consolidations or Mergers" on page S-22 of this prospectus supplement.

The Current Market Value is the average trading price of Apache common
stock during the 20 Trading Days ending on the Trading Day before May , 2002.
It will be calculated as described under "Description of Conversion Preferred
Stock -- Automatic Conversion of Conversion Preferred Stock".

The following table illustrates the applicable Exchange Rate and
approximate market value of Apache common stock receivable upon conversion of
the depositary shares at specified assumed Current Market Values:

<TABLE>
<CAPTION>
VALUE OF SHARES
OF COMMON STOCK
RECEIVED PER
DEPOSITARY
IF THE CURRENT EXCHANGE SHARE UPON
MARKET VALUE IS RATE CONVERSION*
- --------------------- -------- --------------------
<S> <C> <C>
$ per share (that $ (that is, %
is, 150% of Initial of Initial Price)
Price)
$ per share (that $ (that is, 100%
is, Threshold of Initial Price)
Price)
$ per share (that $ (that is, 100%
is, 1/2 way of Initial Price)
between Initial
Price and Threshold
Price)
$ per share (that $ (that is, 100%
is, Initial Price) of Initial Price)
$ per share (that $ (that is, 50%
is, 50% of Initial of Initial Price)
Price)
</TABLE>

- ---------------

* Assumes that the Current Market Value accurately reflects fair market value on
May , 2002.

LIQUIDATION PREFERENCE. $ for each depositary share based on
$ for each share of conversion preferred stock, plus accrued and unpaid
dividends.

OPTIONAL CONVERSION. At any time prior to May , 2002, you may elect to
convert each of your depositary shares into of a share of Apache common stock.
This conversion rate is subject to adjustment as described below under
"Description of Conversion Preferred Stock -- Conversion Adjustments" and
"-- Adjustment for Certain Consolidations or Mergers" on page S-22 of this
prospectus supplement.

USE OF PROCEEDS

The net proceeds of this offering will be added to working capital and used
for general

S-5
<PAGE> 25

corporate purposes. In particular, we expect to use the net proceeds from this
offering and the concurrent common stock offering described below, together with
funds available under money market lines of credit and commercial paper
facilities, to fund the cash portion of the purchase price in the pending Shell
acquisition discussed above under "Recent Developments".

LISTING

Apache has applied to list the depositary shares on the New York Stock
Exchange under the symbol " ".

FEDERAL INCOME TAX CONSIDERATIONS

Dividends paid on the conversion preferred stock will be taxable as
ordinary income to the extent of Apache's current or accumulated earnings and
profits. As a general rule, no gain or loss will be recognized by a holder on
the conversion of conversion preferred stock into shares of Apache common stock.

CONCURRENT OFFERING

We are concurrently offering 10,000,000 shares of Apache common stock in a
separate public offering pursuant to a separate prospectus. This offering of
depositary shares and the concurrent common stock offering are not conditioned
upon each other. This prospectus supplement relates only to the offering of
depositary shares and not to the offering of common stock.

S-6
<PAGE> 26

SUMMARY FINANCIAL AND OPERATING DATA

(4) No cash dividends were paid on outstanding DEKALB common stock in 1994 and
1995.

S-7
<PAGE> 27

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-------------------------------
1998 1999
-------------- --------------
(IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C>
INCOME STATEMENT DATA:
Total revenues.............................................. $ 245,941 $ 187,715
Net income (loss)........................................... 17,356 (2,168)
Income (loss) attributable to common stock.................. 17,356 (3,588)
Net income (loss) per common share
Basic..................................................... .18 (.04)
Diluted................................................... .18 (.04)
Cash dividends per common share............................. $ .07 $ .07
BALANCE SHEET DATA (AT PERIOD END):
Total debt.................................................. $ 1,547,082
Shareholders' equity........................................ $ 1,795,581
Common shares outstanding at end of period.................. 97,821
</TABLE>

<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
OPERATING DATA
Proved Reserves at December 31:
Oil (Mbbls)(1)..................... 110,624 170,329 235,294 273,778 251,008
Natural Gas (Bcf).................. 1,316 1,502 1,625 1,872 2,172
Total Proved Reserves
(Mboe)(2)..................... 329,983 420,649 506,178 585,748 613,046
Reserves Outside North America (%
of Total)....................... 3.3% 4.7% 17.8% 27.9% 38.3%
Reserve Replacement Ratio(3)....... 189.7% 267.3% 257.2% 228.0% 142.9%
Reserve Life (years)(4)............ 7.5 7.8 9.3 9.4 9.6
Finding and Development Costs per
boe(2)(5)....................... $ 5.95 $ 5.30 $ 6.09 $ 5.75 $ 4.98
Average Daily Production:
Oil (Mbbls/day)(1)................. 40 52 55 69 76
Natural Gas (MMcf/day)............. 483 577 561 609 590
Total Production (Mboe/day)(2).. 120 148 149 170 174
Average Production Costs per
boe(2)............................. $ 2.85 $ 3.34 $ 3.43 $ 3.07 $ 2.88
</TABLE>

(1) Includes crude oil, condensate and natural gas liquids.

(2) 6 Mcf of natural gas = 1 boe.

(3) Total reserve additions for the year, including revisions and net of
property sales, divided by annual production.

(4) Total proved reserves at year end divided by annual production.

(5) Total capitalized costs incurred for the year, excluding capitalized
interest and property sales, divided by total reserve additions for the
year, including revisions.

S-8
<PAGE> 28

CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS

We typically use words such as "expect", "anticipate", "estimate",
"intend", "plan" and "believe" to identify our forward-looking statements.

Some of these factors are discussed under "Risk Factors" beginning on page S-10
of this prospectus supplement.

S-9
<PAGE> 29

RISK FACTORS

In considering whether to purchase the depositary shares, you should
carefully consider all the information we have included or incorporated by
reference in this prospectus supplement and the accompanying prospectus. In
particular, you should carefully consider the risk factors described below. In
addition, please read "Cautionary Statement Regarding Forward-Looking
Statements" on page S-9 of this prospectus supplement, where we describe
additional uncertainties associated with our business and the forward-looking
statements contained or incorporated by reference in this prospectus supplement
and the accompanying prospectus.

RISK FACTORS RELATING TO THE DEPOSITARY SHARES AND THE CONVERSION PREFERRED
STOCK

YOU ASSUME THE RISK THAT THE MARKET VALUE OF APACHE COMMON STOCK MAY DECLINE.

The Current Market Value of Apache common stock on May , 2002 may be less
than the last reported sale price of Apache common stock on the New York Stock
Exchange on the date of this prospectus supplement, which is $ and
called the Initial Price. If that Current Market Value is less than the Initial
Price, then holders of depositary shares will receive shares of Apache common
stock on May , 2002 with a market value that is less than the Initial Price.
Any decline in the market value of Apache common stock may be substantial.

THE OPPORTUNITY FOR EQUITY APPRECIATION PROVIDED BY AN INVESTMENT IN THE
DEPOSITARY SHARES IS LESS THAN THAT PROVIDED BY A DIRECT INVESTMENT IN APACHE
COMMON STOCK.

The number of shares of Apache common stock that will be issued upon
conversion of the conversion preferred stock may decline by up to % if the
Current Market Value increases. Therefore, the opportunity for equity
appreciation provided by an investment in the depositary shares is less than
that provided by a direct investment in Apache common stock. Assuming the
Current Market Value accurately reflects fair market value, the Current Market
Value on May , 2002 must exceed the Threshold Price of $ per depositary
share, based on the Threshold Price of $ per share of conversion preferred
stock, before a holder of depositary shares will realize any equity
appreciation.

THE TRADING PRICES FOR THE DEPOSITARY SHARES WILL BE DIRECTLY AFFECTED BY THE
TRADING PRICES FOR APACHE COMMON STOCK.

To the extent there is a secondary market for the depositary shares, we
believe that the trading prices of the depositary shares will be directly
affected by the trading prices of Apache common stock. We cannot predict how
Apache common stock will trade. Trading prices of Apache common stock will be
influenced by our consolidated operating results and financial condition and by
economic, financial and other factors and market conditions that can affect the
capital markets generally. These include the level of, and fluctuations in, the
trading prices of stocks generally and sales of substantial amounts of Apache
common stock in the market at the same time as or subsequent to the offering of
the depositary shares, or the perception that these sales may occur.
Concurrently, we are also offering 10,000,000 shares of Apache common stock in a
separate public offering. This offering and the common stock offering are not
conditioned on each other. We have also agreed to issue 1,000,000 shares of
Apache common stock in connection with our pending Shell acquisition. Those
shares could be resold after 90 days from the signing of the purchase agreement
on April 29, 1999, or earlier depending upon future circumstances.

THE SECONDARY MARKET FOR THE DEPOSITARY SHARES MAY BE ILLIQUID.

Since the depositary shares are a new issue of securities, they currently
have no secondary market. We have applied to list the depositary shares on the
New York Stock Exchange. Also, the underwriter has advised us that it intends to
facilitate secondary market trading by making a market in the depositary shares.
However, the underwriter is not obligated to make a market in the

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depositary shares and may discontinue market making at any time. We cannot
predict how the depositary shares will trade in the secondary market.

RISK FACTORS RELATING TO APACHE

A SUBSTANTIAL OR EXTENDED DECLINE IN OIL AND GAS PRICES WOULD HAVE A MATERIAL
ADVERSE EFFECT ON US.

OUR ABILITY TO SELL OUR OIL AND GAS PRODUCTION COULD BE MATERIALLY HARMED IF WE
FAIL TO OBTAIN ADEQUATE SERVICES SUCH AS TRANSPORTATION AND PROCESSING.

WE HAVE RECORDED WRITE-DOWNS BECAUSE OF FULL COST ACCOUNTING RULES AND MAY BE
REQUIRED TO DO SO AGAIN IN THE FUTURE.

THE OIL AND GAS RESERVES DATA WE REPORT ARE ONLY ESTIMATES AND MAY PROVE TO BE
INACCURATE.

There are numerous uncertainties inherent in estimating quantities of oil
and natural gas reserves of any category and in projecting future rates of
production and timing of development expenditures, which underlie the reserve
estimates, including many factors beyond our control. Reserve data represent
only estimates. In addition, the estimates of future net cash flows from our
proved reserves and their present value are based upon various assumptions about
future production levels, prices and costs that may prove to be incorrect over
time. Any significant variance from the assumptions could result in the actual
quantity of our reserves and future net cash flows from them being materially
different from the estimates. In addition, our estimated reserves may be subject
to downward or upward revision based upon production history, results of future
exploration and development, prevailing oil and gas prices, operating and
development costs and other factors.

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<PAGE> 31

IF WE FAIL TO ACQUIRE OR FIND ADDITIONAL RESERVES, OUR RESERVES AND PRODUCTION
WILL DECLINE MATERIALLY FROM THEIR CURRENT LEVELS.

THE PENDING SHELL TRANSACTION MIGHT NOT BE CONSUMMATED AS EXPECTED.

Under the purchase agreement, there are only two remaining conditions to
the obligations of the parties to complete the pending Shell transaction:

- - U.S. regulatory approval under the Hart-Scott-Rodino Act; and

- - completion of mutually agreeable schedules, exhibits and arrangements with
Shell for shared use of two offshore production platforms located in one of
the acquired fields.

WE INCUR SUBSTANTIAL COSTS TO COMPLY WITH GOVERNMENT REGULATIONS, ESPECIALLY
REGULATIONS RELATING TO ENVIRONMENTAL PROTECTION, AND COULD INCUR EVEN GREATER
COSTS IN THE FUTURE.

OUR BUSINESS COULD BE HARMED BY COMPETITION WITH OTHER COMPANIES.

S-12
<PAGE> 32

addition, as an independent oil and gas company, we frequently compete for
reserve acquisitions, exploration leases, licenses, concessions and marketing
agreements against companies with financial and other resources substantially
larger than we possess. Many of our competitors have established strategic
long-term positions and maintain strong governmental relationships in countries
in which we may seek new entry.

WE DO NOT INSURE AGAINST ALL POTENTIAL LOSSES AND COULD BE SERIOUSLY HARMED BY
UNEXPECTED LIABILITIES.

OUR HEDGING ACTIVITIES MAY PREVENT US FROM BENEFITING FROM PRICE INCREASES AND
MAY EXPOSE US TO OTHER RISKS.

OUR NON-U.S. OPERATIONS, ESPECIALLY IN DEVELOPING COUNTRIES, ARE SUBJECT TO
INCREASED RISKS AND UNCERTAINTIES.

Our non-U.S. oil and natural gas exploration, development and production
activities are subject to:

- - political and economic uncertainties, including, among others, changes,
sometimes frequent or marked, in governmental energy policies or the personnel
administering them;

- - expropriation of property;

- - cancellation or modification of contract rights;

- - foreign exchange restrictions;

- - currency fluctuations;

- - risks of loss due to civil strife, acts of war, guerrilla activities and
insurrection;

S-13
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- - royalty and tax increases; and

- - other risks arising out of foreign governmental sovereignty over the areas in
which our operations are conducted.

A DECLINE IN THE CONDITION OF OUR CAPITAL MARKETS OR A SUBSTANTIAL RISE IN
INTEREST RATES COULD HARM US.

ADVERSE CHANGES IN THE EXCHANGE RATES WITH SOME FOREIGN CURRENCIES, ESPECIALLY A
DECREASE IN VALUE IN THE AUSTRALIAN OR CANADIAN DOLLARS RELATIVE TO THE U.S.
DOLLAR, COULD HARM US.

OUR COMPUTER SYSTEMS AND THOSE OF THIRD PARTIES MAY NOT BE YEAR 2000 COMPLIANT,
WHICH MAY CAUSE SYSTEM FAILURES AND DISRUPTIONS IN OPERATIONS.

The inability of some computer programs and embedded computer chips to
distinguish between the year 1900 and the year 2000 poses a serious threat of
business disruption to any organization that utilizes computer technology and
computer chip technology in their business systems or equipment. We have formed
a Year 2000 Task Force with representation from major business units to
inventory and assess the risk associated with hardware, software,
telecommunications systems, office equipment, embedded chip controls and
systems, process control systems, facility control systems and dependencies on
external trading partners.

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<PAGE> 34

USE OF PROCEEDS

We expect the net proceeds from this offering of depositary shares to be
approximately $ million, after deducting discounts to the underwriter and
estimated expenses of the offering that we will pay. We will add the net
proceeds to working capital and use them for general corporate purposes. In
particular, we expect to use the net proceeds from this offering and the
concurrent common stock offering, together with funds available under money
market lines of credit and commercial paper facilities, to fund the cash portion
of the purchase price in the pending Shell acquisition.

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<PAGE> 35

CAPITALIZATION

The following table sets forth as of March 31, 1999:

- - our actual capitalization;

- - our as-adjusted capitalization showing the effects of our receipt of the
estimated net proceeds from the sale of the depositary shares we are selling
in this offering; and

- - our pro forma as-adjusted capitalization showing the effects of

- our receipt of the estimated net proceeds from the sale of the depositary
shares we are selling in this offering;

- our receipt of the estimated net proceeds from the issuance of the shares
of common stock we are selling in the separate, concurrent common stock
offering; and

- our issuance of the 1 million shares of common stock and payment of an
assumed $715 million to complete the pending Shell transaction.

<TABLE>
<CAPTION>
MARCH 31, 1999
--------------------------------------
PRO FORMA
ACTUAL AS ADJUSTED AS ADJUSTED
---------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
TOTAL DEBT:
Apache:
7.95% notes due 2026......................... $ 178,549 $ 178,549 $ 178,549
7.625% debentures due 2096................... 149,175 149,175 149,175
7.375% debentures due 2047................... 147,988 147,988 147,988
9.25% notes due 2002......................... 99,851 99,851 99,851
7.7% notes due 2026.......................... 99,643 99,643 99,643
7.0% notes due 2018.......................... 148,256 148,256 148,256
Money market lines of credit and commercial
paper...................................... 237,434
Subsidiary and other obligations:
Global credit facility -- Australia.......... 62,000 62,000 62,000
Global credit facility -- Canada............. 5,000 5,000 5,000
Apache Finance 6.5% notes due 2007........... 168,840 168,840 168,840
Apache Finance 7% notes due 2009............. 99,341 99,341 99,341
Revolving credit facility -- Egypt........... 121,780 121,780 121,780
DEKALB 9.875% notes due 2000................. 29,225 29,225 29,225
---------- ---------- ----------
Total debt...................................... 1,547,082
SHAREHOLDERS' EQUITY:
Series B preferred stock..................... 98,386
Series C conversion preferred stock..........
Common stock................................. 124,793
Paid-in capital.............................. 1,246,380
Retained earnings............................ 392,662 392,662 392,662
Treasury stock............................... (36,790) (36,790) (39,790)
Accumulated other comprehensive income....... (29,850) (29,850) (29,850)
---------- ---------- ----------
Total shareholders' equity...................... 1,795,581
---------- ---------- ----------
TOTAL CAPITALIZATION.............................. $3,342,663 $ $
========== ========== ==========
</TABLE>

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PRICE RANGE OF COMMON STOCK

<TABLE>
<CAPTION>
1997 1998
-------------------------- --------------------------
PRICE RANGE PRICE RANGE
------------ DIVIDENDS ------------- DIVIDENDS
HIGH LOW PER SHARE HIGH LOW PER SHARE
---- ----- --------- ---- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
First Quarter........................... $39 3/8 $31 1/4 $.07 $38 3/4 $31 3/16 $.07
Second Quarter.......................... 35 5/8 30 1/8 $.07 38 1/8 30 3/8 $.07
Third Quarter........................... 42 7/8 32 1/16 $.07 32 3/8 22 1/2 $.07
Fourth Quarter.......................... 45 1/16 32 11/16 $.07 29 5/16 21 3/8 $.07
</TABLE>

DIVIDEND POLICY

DESCRIPTION OF CONVERSION PREFERRED STOCK

The description in this prospectus supplement of the terms of Apache's
Automatically Convertible Equity Securities, Conversion Preferred Stock, Series
C is only a summary. The terms of the conversion preferred stock are contained
in a certificate of designation that amends our charter. A copy of this
certificate of designation is incorporated by reference as an exhibit to the
registration statement that relates to this prospectus supplement.

GENERAL

Our charter authorizes the issuance of 5,000,000 shares of preferred stock.
The conversion preferred stock constitutes a series of this preferred stock. See
"Description of Capital Stock" in the accompanying prospectus for a description
of our capital stock.

As described under "Description of Depositary Shares", each of the
depositary shares represents beneficial ownership of 1/50th of a single share of
conversion preferred stock and entitles the owner to that proportion of all the
rights and preferences of that share.

The conversion preferred stock is a single series consisting of 100,000
shares. The holders of conversion preferred stock will have no preemptive
rights. The conversion

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preferred stock will be fully paid and non-assessable.

The conversion preferred stock will rank prior to all common stock now
outstanding or that we may issue in the future, and prior to Apache's Series A
Junior Participating Preferred Stock, as to payment of dividends and
distribution of assets upon dissolution, liquidation or winding up of Apache.

The conversion preferred stock will rank equal to Apache's 5.68% Cumulative
Preferred Stock, Series B, as to payment of dividends and distribution of assets
upon dissolution, liquidation or winding up of Apache. The Series B preferred
stock has a liquidation preference of $1,000 per share, plus accumulated
dividends. There are currently 100,000 shares of Series B preferred stock
outstanding.

The terms of the conversion preferred stock restrict our ability to issue
capital stock that ranks senior to the conversion preferred stock, as discussed
below under "Voting Rights".

DIVIDENDS

GENERAL

Dividends on the conversion preferred stock will be payable quarterly, if
declared, on the last business day of January, April, July and October of each
year (each a "Dividend Payment Date") at the annual rate of $ per share,
which is equivalent to $ per depositary share. The initial dividend on the
conversion preferred stock, for the dividend period commencing on May , 1999,
to but excluding July 30, 1999, will be $ per share, which is equivalent to
$ per depositary share, and will be payable, if declared, on July 30, 1999.

The amount of dividends payable on each share of conversion preferred stock
for each full quarterly period will be computed by dividing the annual dividend
rate by four. The amount of dividends payable for any other period that is
shorter or longer than a full quarterly dividend period will be computed on the
basis of a 360-day year consisting of twelve 30-day months.

A dividend period is the period ending on the day before a Dividend Payment
Date and beginning on the preceding Dividend Payment Date or, if none, the date
of issue. Dividends payable, if declared, on a Dividend Payment Date will be
payable to holders of record as they appear on our stock books on the fifteenth
day of the calendar month in which the applicable Dividend Payment Date falls.

We are only obligated to pay a dividend on the conversion preferred stock
if our board of directors or an authorized committee of our board declares the
dividend payable and we have assets that legally can be used to pay the
dividend.

Dividends on the conversion preferred stock will be cumulative. This means
that, if our board of directors or an authorized committee of our board fails to
declare a dividend, the dividend will accumulate until declared and paid.

We are not obligated to pay holders of conversion preferred stock any
interest or sum of money in lieu of interest on any dividend not paid on a
Dividend Payment Date or any other late payment. We are also not obligated to
pay holders of conversion preferred stock any dividend in excess of the full
dividends on the conversion preferred stock that are payable as described above.

If our board of directors or an authorized committee of our board does not
declare a dividend on any Dividend Payment Date, the board of directors or an
authorized committee may declare and pay the dividend on any other date, whether
or not a Dividend Payment Date. The persons entitled to receive the dividend
will be holders of the conversion preferred stock as they appear on our stock
register on a date selected by the board of directors or an authorized
committee. That date must be not less than ten and not more than 30 days prior
to the payment date.

PAYMENT RESTRICTIONS

If we do not pay a dividend on a Dividend Payment Date, then, until all
accrued and unpaid dividends are paid and the full quarterly dividend on the
conversion preferred stock for the current and all prior dividend

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<PAGE> 38

periods is declared and set apart for payment:

- - We may not take any of the following actions with respect to any capital stock
of Apache that ranks junior to the conversion preferred stock as to payment of
dividends or the distribution of assets upon winding up, including Apache
common stock and the Series A preferred stock:

- declare or pay any dividend or make any distribution of assets on the
junior capital stock, other than dividends or distributions of capital
stock of Apache that ranks junior to the conversion preferred stock as to
payment of dividends or the distribution of assets upon winding up; or

- redeem, purchase or otherwise acquire the junior capital stock, except
upon conversion or exchange for capital stock of Apache that ranks junior
to the conversion preferred stock as to payment of dividends or the
distribution of assets upon winding up.

- - We may not declare dividends or make any distributions on any capital stock of
Apache that ranks equally with the conversion preferred stock as to payment of
dividends or the distribution of assets upon winding up, including the Series
B preferred stock unless:

- the dividends or distributions are of capital stock of Apache that ranks
junior to the conversion preferred stock as to payment of dividends or
the distribution of assets upon winding up; or

- all dividends and other distributions on the conversion preferred stock
and the equally-ranking capital stock are declared and set apart for
payment or made pro rata such that the dividends or distributions on the
conversion preferred stock and the equally-ranking capital stock will
bear the same ratio that accrued and unpaid dividends per share on the
conversion preferred stock and the equally-ranking capital stock bear to
each other.

- - We may not redeem, purchase or otherwise acquire other capital stock of Apache
that ranks equally with the conversion preferred stock as to payment of
dividends or the distribution of assets upon winding up, including the Series
B preferred stock, except for conversion or exchange for capital stock of
Apache that ranks junior to the conversion preferred stock as to payment of
dividends or the distribution of assets upon winding up.

AUTOMATIC CONVERSION OF CONVERSION
PREFERRED STOCK

On May , 2002, unless previously converted at the option of the holder,
each of the outstanding shares of conversion preferred stock will automatically
convert into a number of shares of Apache common stock equal to 50 times the
Exchange Rate. The Exchange Rate, subject to adjustment as described below, is
equal to:

- - if the Current Market Price of Apache common stock is greater than or equal to
$ per share (the "Threshold Price"), of a share of Apache common
stock per depositary share;

- - if the Current Market Price is less than the Threshold Price but greater than
the Initial Price, a fractional share of Apache common stock per depositary
share having a value, determined at the Current Market Price, equal to the
Initial Price; and

- - if the Current Market Price is less than or equal to the Initial Price, one
share of Apache common stock per depositary share.

The "Initial Price" is $ per share of Apache common stock.

The "Current Market Price" means the average Closing Price per share of our
common stock on the 20 Trading Days immediately prior to, but not including, May
, 2002.

S-19
<PAGE> 39

The "Closing Price" of a share of Apache common stock on any date of
determination means:

- - the closing per share sale price or, if no closing sale price is reported, the
last reported per share sale price of Apache common stock on the New York
Stock Exchange on that date; or

- - if Apache common stock is not listed for trading on the New York Stock
Exchange on that date, on the principal U.S. securities exchange on which
Apache common stock is listed for trading; or

- - if Apache common stock is not listed for trading on a U.S. national or
regional securities exchange on that date, as reported by The Nasdaq Stock
Market; or

- - if none of the foregoing is available on that date, the last quoted per share
bid price for Apache common stock in the over-the-counter market as reported
by the National Quotation Bureau or similar organization; or

- - if none of the foregoing is available on that date, the market value of a
share of Apache common stock on that date as determined by a nationally
recognized independent investment banking firm retained for this purpose by
Apache.

"Trading Day" means a day on which Apache common stock:

- - is not suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business; and

- - has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of Apache common stock.

Because the price of Apache common stock is subject to market fluctuations,
the value of Apache common stock received by a holder of the conversion
preferred stock upon automatic conversion of the conversion preferred stock on
May , 2002 may be more or less than the Current Market Price used to compute
the Exchange Rate.

CONVERSION AT OPTION OF HOLDER

The holders of the conversion preferred stock and the related depositary
shares have the right to convert them, in whole or in part, at any time prior to
May , 2002, into shares of Apache common stock at the rate (the "Optional
Conversion Rate") of shares of Apache common stock for each share of
conversion preferred stock -- of a share of common stock per
depositary share -- subject to adjustment as described below. The Optional
Conversion Rate is equivalent to a conversion price equal to the Threshold
Price.

Holders of conversion preferred stock at the close of business on a record
date for any payment of dividends will be entitled to receive the dividend then
payable on that conversion preferred stock on the corresponding Dividend Payment
Date even though the optional conversion of that conversion preferred stock is
between the record date and that Dividend Payment Date. However, if you
surrender conversion preferred stock for conversion after the close of business
on a record date for any payment of dividends and before the opening of business
on the next succeeding Dividend Payment Date, you must include with the
conversion preferred stock payment of an amount equal to the dividend on
conversion preferred stock which is to be paid on that Dividend Payment Date.

Except as described above, upon any optional conversion of conversion
preferred stock, we will make no payment or allowance for unpaid dividends,
whether or not in arrears, on that conversion preferred stock, or for dividends
or distributions on the shares of Apache common stock issued upon conversion.

ENHANCED DIVIDEND YIELD; LESS EQUITY
APPRECIATION

We will pay holders of conversion preferred stock or the depositary shares
representing conversion preferred stock dividends at a higher annual rate than
the current annual rate of dividends paid on

S-20
<PAGE> 40

Apache common stock. The opportunity for equity appreciation afforded by an
investment in the conversion preferred stock and in the related depositary
shares, however, is less than that afforded by an investment in Apache common
stock.

Holders of conversion preferred stock or the related depositary shares will
realize no equity appreciation if, on May , 2002, the Current Market Price of
Apache common stock is below the Threshold Price, and less than all of that
appreciation if, at that time, the Current Market Price of Apache common stock
is above the Threshold Price. Holders of conversion preferred stock or the
related depositary shares will realize the entire decline in equity value if, at
that time, the Current Market Price of Apache common stock is less than the
Initial Price.

CONVERSION ADJUSTMENTS

The Exchange Rate and the Optional Conversion Rate are subject to
adjustment if we:

- - pay a stock dividend or make a distribution on Apache common stock in shares
of Apache common stock;

- - subdivide or split Apache common stock;

- - combine our common stock into a smaller number of shares;

- - issue any shares of common stock by reclassification of any shares of our
common stock;

- - issue certain rights or warrants to all holders of Apache common stock;

- - pay a dividend or distribute to all holders of Apache common stock evidences
of its indebtedness, securities, cash or other assets, including capital stock
of Apache but excluding any cash dividends or distributions and dividends and
distributions referred to in the first and second points above;

- - make distributions consisting exclusively of cash to all holders of Apache
common stock in the aggregate amount that, when combined with (1) other
all-cash distributions made within the preceding 12 months and (2) the cash
and fair market value, as of the date of expiration of the tender or exchange
offer referred to below, of the consideration paid in respect of any tender or
exchange offer by Apache or a subsidiary for Apache common stock concluded
within the preceding 12 months, exceeds 12.5% of our aggregate market
capitalization -- being the product of the current market price of Apache
common stock multiplied by the number of shares of Apache common stock then
outstanding -- on the date fixed for the determination of stockholders
entitled to receive those distributions; or

- - complete successfully a tender or exchange offer made by Apache or any
subsidiary for Apache common stock that involves an aggregate consideration
that, when combined with (1) any cash and the fair market value of other
consideration payable in respect of any other tender or exchange offer by
Apache or a subsidiary for Apache common stock concluded within the preceding
12 months and (2) the aggregate amount of any all-cash distributions to all
holders of Apache common stock made within the preceding 12 months, exceeds
12.5% of our aggregate market capitalization on the date of expiration of that
tender or exchange offer.

In addition, we may make upward adjustments in the Exchange Rate and the
Optional Conversion Rate if we, in our discretion, determine it to be advisable.
Consequently, any stock dividend, subdivision of shares, distribution of rights
to purchase stock or securities, or distribution of securities convertible into
or exchangeable for stock -- or any transaction that could be treated as any of
the foregoing transactions pursuant to Section 305 of the Internal Revenue Code
of 1986 -- hereafter made by us to our stockholders will not be taxable. All
adjustments to the Exchange Rate and the Optional Conversion Rate will be
calculated to the nearest 1/10,000th of a share of Apache common stock.

No adjustment in the Exchange Rate or the Optional Conversion Rate will be
required

S-21
<PAGE> 41

unless that adjustment would require an increase or decrease of at least 1% in
the Exchange Rate. However, any adjustments which, by reason of the foregoing,
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All adjustments will be made successively.

Whenever the Exchange Rate and the Optional Conversion Rate are adjusted as
provided in the preceding paragraph, we will:

- - notify each transfer agent for the conversion preferred stock of the
adjustment;

- - make a prompt public announcement of the adjustment; and

- - mail a notice of the adjustment to holders of the conversion preferred stock.

At least 10 days prior to taking any action that could result in an
adjustment in the Exchange Rate and the Optional Conversion Rate, we will notify
each holder of conversion preferred stock about the proposed action.

ADJUSTMENT FOR CERTAIN
CONSOLIDATIONS OR MERGERS

In case of any consolidation or merger to which we are a party -- other
than a merger or consolidation in which we are the continuing corporation and in
which Apache common stock outstanding immediately prior to the merger or
consolidation remains unchanged -- or in case of any sale or transfer to another
corporation of the property of Apache as an entirety or substantially as an
entirety, or in case of any statutory exchange of securities with another
corporation other than in connection with a merger or acquisition, each share of
conversion preferred stock will, after consummation of that transaction, be
subject to:

- - conversion at the option of the holder into the kind and amount of securities,
cash, or other property receivable upon consummation of that transaction by a
holder of the number of shares of Apache common stock into which that share of
conversion preferred stock might have been converted immediately prior to
consummation of that transaction; and

- - conversion on May , 2002 into the kind and amount of securities, cash, or
other property receivable upon consummation of that transaction by a holder of
the number of shares of Apache common stock into which that conversion
preferred stock would have been converted if the conversion on May , 2002
had occurred immediately prior to the date of consummation of that
transaction,

assuming in each case that the holder of Apache common stock fails to exercise
rights of election, if any, as to the kind or amount of securities, cash, or
other property receivable upon consummation of that transaction.

If the kind or amount of securities, cash or other property receivable upon
consummation of the transaction is not the same for each non-electing share,
then we will treat the kind and amount of securities, cash or other property
receivable upon consummation of the transaction for each non-electing share as
the kind and amount so receivable per share by a plurality of the non-electing
shares.

The kind and amount of securities into which the conversion preferred stock
will be convertible after consummation of the transaction will be subject to
adjustment as described above under the caption "Conversion Adjustments"
following the date of consummation of the transaction. We may not become a party
to any like transaction unless the terms are consistent with the foregoing.

FRACTIONAL SHARES

No fractional shares of Apache common stock will be issued upon conversion
of the conversion preferred stock. In lieu of any fractional share otherwise
issuable in respect of the aggregate number of shares of conversion preferred
stock of any holder which are converted upon mandatory conversion or any
optional conversion, that

S-22
<PAGE> 42

holder will be entitled to receive an amount in cash equal to the same fraction
of:

- - in the case of automatic conversion, the Current Market Price; or

- - in the case of an optional conversion by a holder, the Closing Price of Apache
common stock determined as of the second Trading Day immediately preceding the
effective date of conversion.

COMMON STOCK RIGHTS

Reference is made to the "Description of Capital Stock -- Stockholder
Rights Plan" in the accompanying prospectus for a description of Apache common
stock purchase rights that will accompany the common stock delivered upon
conversion of the conversion preferred stock.

LIQUIDATION RIGHTS

In the event of the voluntary or involuntary liquidation, dissolution or
winding up of Apache, the holders of shares of conversion preferred stock will
be entitled to receive out of the assets of Apache available for distribution to
stockholders -- before any distribution of assets is made on Apache common stock
or any other class or series of stock of Apache ranking junior to the conversion
preferred stock and equally with the conversion preferred stock, including the
Series B preferred stock -- a liquidating distribution in the amount of $
per share, which is equivalent to $ per depositary share, plus an amount
equal to the sum of all accrued and unpaid dividends, whether or not earned or
declared, for the then-current dividend period and all prior dividend periods.

For the purpose of the last paragraph, none of the following will
constitute a voluntary or involuntary liquidation, dissolution or winding up of
Apache:

- - the sale of all or substantially all of the property or business of Apache;

- - the merger or consolidation of Apache into or with any other corporation; or

- - the merger or consolidation of any other corporation into or with Apache.

After the payment to the holders of conversion preferred stock of the full
preferential amounts provided above, the holders of conversion preferred stock
will have no right or claim to any of the remaining assets of Apache.

In the event the assets of Apache available for distribution to the holders
of conversion preferred stock upon any liquidation, dissolution or winding up of
Apache, whether voluntary or involuntary, are insufficient to pay in full all
amounts to which the holders are entitled as provided above, no such
distribution will be made on account of any other stock ranking equally with the
conversion preferred stock as to the distribution of assets upon that
liquidation, dissolution or winding up unless a pro rata distribution is made on
the conversion preferred stock and that other stock of Apache, with the amount
allocable to each series of that stock determined on the basis of the aggregate
liquidation preference of the outstanding shares of each series and
distributions to the shares of each series being made on a pro rata basis.

VOTING RIGHTS

The holders of the shares of conversion preferred stock are not entitled to
any voting rights, except as required by applicable state law and as described
below.

If the equivalent of six quarterly dividends payable on the conversion
preferred stock or any other class or series of preferred stock ranking equally
with the conversion preferred stock as to the payment of dividends, including
the Series B preferred stock, have not been paid, we have resolved to increase
the number of directors of Apache by two, without duplication of any increase
made pursuant to the terms of any other series of preferred stock of Apache. The
holders of conversion preferred stock -- voting as a single class with the
holders of shares of any other class of preferred stock ranking equally with the
conversion preferred stock either as to dividends or distributions of assets and
upon which like voting rights have been conferred and are exercisable -- will be
entitled to elect two directors at any meeting

S-23
<PAGE> 43

of stockholders of Apache at which directors are to be elected during the period
their dividends remain in arrears. This voting right will continue until we have
paid, or declared and set apart for payment, full cumulative dividends for all
past periods on all of that preferred stock, including the Series B preferred
stock and the conversion preferred stock.

We will not, without the approval of the holders of at least 80% of the
shares of conversion preferred stock then outstanding amend any of the
provisions of our charter so as to affect adversely the powers, preferences,
privileges or rights of the holders of conversion preferred stock.

We will not, without the approval of the holders, voting together as a
single class, of 80% of all the shares of conversion preferred stock then
outstanding and all shares of any other series of the preferred stock of Apache
ranking equally with the conversion preferred stock as to dividends or upon
dissolution:

- - issue, authorize or increase the authorized amount of, or issue or authorize
any security convertible into, any stock of any class ranking prior to the
conversion preferred stock as to dividends or upon dissolution; or

- - reclassify any authorized Apache stock into any stock of any class, or any
security convertible into such stock, ranking prior to the conversion
preferred stock,

provided that no such vote will be required for Apache to take any of these
actions to issue, authorize or increase the authorized amount of, or issue or
authorize any security convertible into, any stock ranking equally with or
junior to the conversion preferred stock.

We will not, without the approval of the holders of at least a majority of
the shares of conversion preferred stock then outstanding, become a party to any
merger, conversion, consolidation or compulsory share exchange unless the terms
of that transaction do not provide for a change in the terms of the conversion
preferred stock and the conversion preferred stock ranks equally with or prior
to any stock of the surviving corporation as to dividends or upon dissolution,
other than prior-ranking Apache stock previously authorized with the consent of
holders of the conversion preferred stock.

MISCELLANEOUS

We will at all times reserve and keep available out of our authorized and
unissued common stock, solely for issuance upon the conversion of conversion
preferred stock, that number of shares of common stock as shall from time to
time be issuable upon the conversion of all the conversion preferred stock then
outstanding. Conversion preferred stock converted into Apache common stock or
otherwise reacquired by Apache shall resume the status of authorized and
unissued shares of Apache preferred stock, undesignated as to series, and shall
be available for subsequent issuance.

TRANSFER AGENT, REGISTRAR AND DIVIDEND
DISBURSING AGENT

Norwest Bank Minnesota, National Association will act as transfer agent,
registrar, and paying agent for the payment of dividends for the conversion
preferred stock.

DESCRIPTION OF DEPOSITARY SHARES

Each depositary share represents 1/50th of a share of conversion preferred
stock deposited under the Deposit Agreement dated as of May , among us,
Norwest Bank Minnesota, National Association, as Depositary, and all holders
from time to time of depositary receipts issued under the Depositary Agreement.

Subject to the terms of the Deposit Agreement, each owner of a depositary
share is entitled, proportionately, to all the rights, preferences and
privileges of the share of conversion preferred stock they represent, including
dividend, conversion, voting, and liquidation rights, and is subject to all of
the limitations of the fractional share of conversion preferred stock it
represents,

S-24
<PAGE> 44

which are summarized above under "Description of Conversion Preferred Stock" or
in the accompanying prospectus under "Description of Capital Stock". The
depositary shares are evidenced by depositary receipts.

The description in this prospectus supplement of the Deposit Agreement, the
depositary shares and the Depositary is only a summary. The terms of the
depositary shares and the depositary receipts are detailed in the Deposit
Agreement, which contains the form of the depositary receipts. A copy of the
Deposit Agreement is incorporated by reference as an exhibit to the registration
statement that relates to this prospectus supplement.

Copies of the forms of Deposit Agreement and depositary receipt may be
obtained from Apache or the Depositary at the principal office of the Depositary
at 161 North Concord Exchange, P.O. Box 738, South St. Paul, Minnesota 55075,
upon written request during regular business hours.

ISSUANCE OF DEPOSITARY RECEIPTS AND
WITHDRAWAL OF CONVERSION PREFERRED STOCK

Immediately following our issuance of the conversion preferred stock, we
will deposit the conversion preferred stock with the Depositary, which will then
issue and deliver the depositary receipts to us. We will, in turn, deliver the
depositary receipts to the underwriter. Depositary receipts will be issued
evidencing only whole depositary shares.

The depositary shares will be registered under a book-entry-only system
maintained by The Depository Trust Company, New York, New York. The book-entry
only system will evidence interests in the depositary shares in book-entry-only
form. When you purchase depositary shares, you will not receive a certificate
representing your interests in the depositary shares. Instead, your ownership
interest will be reflected in the records of the direct or indirect participant
in DTC whom you elect, which may be the broker or dealer that sold the
depositary shares to you.

For more information about DTC's facilities and the book-entry-only system
it maintains, see "Book-Entry Securities" in the accompanying prospectus.

Upon surrender of depositary receipts at the Corporate Office (as defined
in the Deposit Agreement) of the Depositary or any other office as the
Depositary may designate, Apache is entitled to delivery at the Corporate Office
of certificates evidencing the number of shares of conversion preferred stock,
but only in whole shares, and any money and other property represented by those
depositary receipts. If the depositary receipts we deliver evidence a number of
depositary shares in excess of the number of whole shares of conversion
preferred stock to be withdrawn, the Depositary will deliver to us at the same
time a new depositary receipt evidencing that excess number of depositary
shares. We do not expect that there will be any public trading market for the
shares of conversion preferred stock except those represented by the depositary
shares.

CONVERSION PROVISIONS

AUTOMATIC CONVERSION. As described above under "Description of Conversion
Preferred Stock -- Automatic Conversion of Conversion Preferred Stock", the
conversion preferred stock is subject to automatic conversion into shares of
Apache common stock on May , 2002. The depositary shares are subject to
automatic conversion upon the same terms and conditions as the conversion
preferred stock held by the Depositary, except that the number of shares of
Apache common stock that the Depositary will deliver upon automatic conversion
of each depositary share will be equal to the number of shares of Apache common
stock it receives upon automatic conversion of each share of conversion
preferred stock divided by 50.

CONVERSION AT OPTION OF HOLDER. As described above under "Description of
Conversion Preferred Stock -- Conversion at Option of Holder", the conversion
preferred stock may be converted, in whole or in part, into shares of Apache
common stock at the option of the holders of conversion preferred stock at any
time prior to May , 2002. The depositary shares may, at the option of their
holders, be converted into shares of Apache

S-25
<PAGE> 45

common stock upon the same terms and conditions as the conversion preferred
stock, except that the number of shares of Apache common stock that the
Depositary will deliver upon conversion of each depositary share will be equal
to the number of shares of Apache common stock it receives upon conversion of
each share of conversion preferred stock divided by 50.

To effect an optional conversion, a holder of depositary shares must
deliver depositary receipts evidencing the depositary shares to be converted,
together with a written notice of conversion and a proper assignment of the
depositary receipts to Apache, to any transfer agent for the depositary shares,
or in blank and, if applicable, payment of an amount equal to the dividend
payable on those depositary shares, to the Depositary or its agent. Each
optional conversion of depositary shares will be effective immediately prior to
the close of business on the date on which the holder satisfies the requirements
described above. The conversion will be at the Optional Conversion Rate in
effect at that time and on that date, adjusted to reflect the fact that 50
depositary shares are the equivalent of one share of conversion preferred stock.

FRACTIONAL SHARES. No fractional shares of Apache common stock will be
issued to any holder of depositary shares upon the conversion of depositary
shares. If any conversion would result in a fractional share of Apache common
stock being issued, we will pay the holder an amount in cash equal to the value
of the fractional interest.

DIVIDENDS AND OTHER DISTRIBUTIONS

The Depositary will distribute all cash dividends or other cash
distributions it receives in respect of the conversion preferred stock to the
record holders of depositary shares in proportion, insofar as possible, to the
number of depositary shares owned by the record holders, subject to obligations
of the record holders to file proofs, certificates and other information and to
pay certain charges and expenses to the Depositary.

In the event of a distribution other than cash in respect of the conversion
preferred stock, the Depositary will distribute property it receives to the
record holders of depositary shares in proportion, insofar as possible, to the
number of depositary shares owned by the record holder, subject to obligations
of holders to file proofs, certificates and other information and to pay certain
charges and expenses to the Depositary. However, if the Depositary determines
that it is not feasible to make that distribution, the Depositary may, with our
approval, sell that property and distribute the net proceeds from that sale to
the record holders.

RECORD DATE

Whenever:

- - any cash dividend or other cash distribution becomes payable, any distribution
other than cash shall be made or any rights, preferences or privileges are
offered with respect to the conversion preferred stock; or

- - the Depositary receives notice of any meeting at which holders of conversion
preferred stock are entitled to vote or of which holders of conversion
preferred stock are entitled to notice,

the Depositary will in each instance fix a record date, which will be the same
date as the record date for the conversion preferred stock, for the
determination of the holders of depositary receipts:

- - who are entitled to receive that dividend, distribution, rights, preferences,
or privileges, or the net proceeds of the sale thereof; and

- - who are entitled to give instructions for the exercise of voting rights at any
such meeting or to receive notice of such meeting.

VOTING OF CONVERSION PREFERRED STOCK

Upon receipt of notice of any meeting at which the holders of conversion
preferred stock are entitled to vote, the Depositary will mail the information
contained in that notice of meeting to the record holders of depositary

S-26
<PAGE> 46

shares. Each record holder of depositary shares on the record date, which will
be the same date as the record date for the conversion preferred stock, will be
entitled to instruct the Depositary as to the exercise of voting rights
pertaining to the number of shares of conversion preferred stock or fraction
thereof, represented by that holder's depositary shares.

The Depositary will endeavor, insofar as practicable, to vote the number of
shares of conversion preferred stock or fractions thereof represented by those
depositary shares in accordance with the instructions it receives, and we have
agreed to take all action which may be deemed necessary by the Depositary in
order to enable the Depositary to do so. The Depositary will abstain from voting
the shares of conversion preferred stock if it does not receive specific written
instructions from the holders of depositary shares representing those shares.

Each depositary share will entitle the holder to instruct the Depositary to
cast 1/50th of the vote of a share of conversion preferred stock on each matter
on which holders of the conversion preferred stock are entitled to vote.

RESIGNATION AND REMOVAL OF DEPOSITARY; TERMINATION OF THE DEPOSIT AGREEMENT

The Depositary may resign at any time by delivering to us notice of its
election to do so. We may at any time remove the Depositary. Any such
resignation or removal will take effect upon the appointment of a successor
Depositary and its acceptance of that appointment. We will appoint a successor
Depositary within 60 days after delivery of the notice of resignation or
removal.

The Deposit Agreement may be terminated by us or by the Depositary if:

- - there has been a final distribution in respect of the conversion preferred
stock in connection with any liquidation, dissolution or winding up of Apache
and that distribution has been distributed to the holders of depositary
receipts; or

- - each share of conversion preferred stock has been converted into shares of
Apache common stock.

S-27
<PAGE> 47

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of the material U.S. federal income tax
consequences relevant to the purchase, ownership, and disposition of the
conversion preferred stock. The following summary is based upon current
provisions of the Internal Revenue Code of 1986, Treasury regulations and
judicial or administrative authority, all of which are subject to change, which
change may be retroactive. The summary is limited to the U.S. federal income tax
consequences to investors who are citizens or residents of the United States or
that are U.S. corporations. State, local and foreign tax consequences are not
summarized, nor are tax consequences to special classes of investors, including
tax-exempt organizations, insurance companies, banks or dealers in securities.
Tax consequences may vary depending upon the particular status of an investor.
The summary is limited to taxpayers who will hold the depositary shares and any
Apache common stock received in exchange therefor as "capital assets" within the
meaning of Section 1221 of the Internal Revenue Code. There can be no assurance
that future changes in applicable law or administrative and judicial
interpretations thereof will not adversely affect the tax consequences
summarized herein or that there will not be differences of opinion as to the
interpretation of applicable law.

Each potential investor should consult with its own tax adviser as to the
federal, state, local, foreign and any other tax consequences of the purchase,
ownership, and disposition of the conversion preferred stock.

DEPOSITARY SHARES

The owners of the depositary shares will be treated for federal income tax
purposes as if they were the owners of the underlying securities. Accordingly,
the tax treatment for the owners of the depositary shares will be the same as
the tax treatment for the owners of securities described below. In addition, no
gain or loss will be recognized upon the withdrawal of conversion preferred
stock in exchange for depositary shares pursuant to the Deposit Agreement, an
owner's tax basis in the withdrawn conversion preferred stock will be the same
as the tax basis in the surrendered depositary shares, and the owner's holding
period of the withdrawn securities will include the period during which the
owner held the surrendered depositary shares.

DIVIDENDS

Dividends paid on conversion preferred stock will be taxable as ordinary
income to the extent of Apache's current or accumulated earnings and profits.
Corporate holders of the conversion preferred stock should consider the 46-day
holding period required by Section 246(c) of the Internal Revenue Code for the
70% dividends received deduction, the rules in Section 246A of the Internal
Revenue Code that reduce the 70% dividends received deduction for dividends on
certain debt-financed stock, and the rules in Section 1059 of the Internal
Revenue Code that reduce the basis of stock in respect of certain extraordinary
dividends. Under a special rule in Section 1059(f), any dividend with respect to
"disqualified preferred stock" is treated as an extraordinary dividend.
"Disqualified preferred stock" is defined to include stock that has a dividend
rate that declines in the future. While the issue is not free from doubt due to
the lack of authority directly on point, the conversion preferred stock should
not constitute "disqualified preferred stock".

DISPOSITIONS

A holder will generally recognize capital gain or loss on a sale or
exchange of the conversion preferred stock or Apache common stock equal to the
difference between the amount realized upon the sale or exchange and the
holder's tax basis in the stock sold or exchanged. Such capital gain or loss
will be long-term capital gain or loss if the holder has held the securities for
more than one year.

S-28
<PAGE> 48

CONVERSION INTO COMMON STOCK

As a general rule, no gain or loss will be recognized by a holder on the
conversion of conversion preferred stock into shares of Apache common stock.
Gain may be recognized upon the receipt by a holder of cash in lieu of a
fractional share of Apache common stock.

The tax basis of the shares of Apache common stock received upon conversion
will generally be equal to the tax basis of the conversion preferred stock
converted, adjusted to reflect any income or gain recognized on the conversion.
The holding period of the Apache common stock received will include the holding
period of the conversion preferred stock converted.

CONVERSION PREMIUM

Under some circumstances, Section 305 of the Internal Revenue Code requires
that any excess of the redemption price of preferred stock over its issue price
is includable in income, prior to receipt, as a constructive dividend. While the
issue is not free from doubt due to a lack of authority directly on point, a
holder of conversion preferred stock should not be required to include any
conversion premium in income as a redemption premium under Section 305 of the
Internal Revenue Code in respect of the conversion into Apache common stock.

ADJUSTMENT OF CONVERSION RATE

Holders of conversion preferred stock might be treated as receiving a
constructive distribution from Apache if:

- - a conversion rate is adjusted and as a result of the adjustment the
proportionate interest of holders of conversion preferred stock in the assets
or earnings and profits of Apache is increased; and

- - the adjustment is not made pursuant to a bona fide, reasonable antidilution
formula. An adjustment in a conversion rate would not be considered made
pursuant to a reasonable antidilution formula if the adjustment were made to
compensate for certain taxable distributions with respect to Apache common
stock.

Thus, under some circumstances, an increase in a conversion rate would be
likely to be taxable to holders of conversion preferred stock as a dividend to
the extent of our current or accumulated earnings and profits. Holders of
conversion preferred stock would be required to include their allocable share of
that constructive dividend in gross income but would not receive any cash
related to it.

FOREIGN INVESTORS

Generally, dividends paid to a nonresident alien individual or foreign
corporation who does not hold the conversion preferred stock or Apache common
stock in connection with a U.S. trade or business will be subject to a 30% U.S.
withholding tax. The withholding tax may be reduced if a tax treaty is in effect
between the United States and the foreign investor's country. A nonresident
alien individual or foreign corporation generally will not be subject to U.S.
federal income tax with respect to gain recognized on a sale, exchange or
redemption of the conversion preferred stock or Apache common stock, unless:

- - the gain is effectively connected with a U.S. trade or business of the holder;
or

- - in the case of a nonresident alien individual who holds stock as a capital
asset, such holder is present in the United States for 183 or more days in the
taxable year of the sale or disposition and certain other conditions are met.

Foreign investors are urged to consult their own tax advisors regarding the
purchase, ownership and disposition of the conversion preferred stock.

BACKUP WITHHOLDING

Each holder -- other than an exempt holder such as a corporation,
tax-exempt organization, qualified pension and profit-sharing trust, individual
retirement account, or a nonresident alien who provides certification as to
status as a nonresident -- will be required to provide, under penalties of
perjury, a certification setting forth the holder's name, address, correct
federal
S-29
<PAGE> 49

taxpayer identification number and a statement that the holder is not subject to
backup withholding. Should a nonexempt holder fail to provide the required
certification, we will be required to withhold 31% of the amount otherwise
payable to the holder, and remit the withheld amount to the IRS as a credit
against the holder's federal income tax liability. Holders should consult their
tax advisers regarding their qualification for exemption from backup withholding
and the procedure for obtaining any applicable exemption.

VALIDITY OF SECURITIES

The validity of the depositary shares,
the conversion preferred stock and the Apache common stock issuable upon
conversion thereof will be passed upon for Apache by its Vice President and
General Counsel, Z. S. Kobiashvili, and for Goldman, Sachs & Co. by Brown & Wood
LLP, New York, New York. As of the date of this prospectus supplement, Mr.
Kobiashvili owns 2,073 shares of Common Stock through Apache's 401(k) savings
plan, holds employee stock options to purchase 45,700 shares of Apache common
stock, of which options to purchase 21,200 shares are currently exercisable, and
holds a conditional grant under Apache's 1996 Share Price Appreciation Plan
relating to 18,900 shares of Apache common stock, none of which is vested.

Mayor, Day, Caldwell & Keeton, L.L.P., Houston, Texas, our outside legal
counsel, and Mr. Kobiashvili will issue opinions about some legal matters in
connection with the offering. Brown & Wood LLP will issue an opinion about some
legal matters in connection with the offering for Goldman, Sachs & Co.

EXPERTS

S-30
<PAGE> 50

UNDERWRITING

Apache and Goldman, Sachs & Co. ("Goldman Sachs") have entered into an
underwriting agreement with respect to the depositary shares being offered.
Subject to certain conditions, Goldman Sachs has agreed to purchase the
depositary shares.

If Goldman Sachs sells more depositary shares than the total number being
offered, Goldman Sachs has an option to buy up to an additional 750,000
depositary shares from Apache to cover those sales. Goldman Sachs may exercise
that option for 30 days.

The following table shows the per depositary share and total underwriting
discounts and commissions to be paid to Goldman Sachs by Apache. These amounts
are shown assuming both no exercise and full exercise of Goldman Sachs' option
to purchase 750,000 additional depositary shares.

<TABLE>
<CAPTION>
PAID BY APACHE
---------------------------
NO EXERCISE FULL EXERCISE
----------- -------------
<S> <C> <C>
Per Depositary
Share.............. $ $
Total................ $ $
</TABLE>

Depositary shares sold by Goldman Sachs to the public will initially be
offered at the initial price to public set forth on the cover of this prospectus
supplement. Any depositary shares sold by Goldman Sachs to securities dealers
may be sold at a discount of up to $ per depositary share from the initial
price to public. Any of those securities dealers may resell any depositary
shares purchased from Goldman Sachs to certain other brokers or dealers at a
discount of up to $ per depositary share from the initial price to public.
If all the depositary shares are not sold at the initial price to public,
Goldman Sachs may change the offering price and the other selling terms.

Apache and the directors and executive officers of Apache have agreed with
Goldman Sachs not to offer, sell, contract to sell or otherwise dispose of or
hedge any of its common stock, preferred stock, depositary shares or securities
convertible into or exchangeable for shares of Apache common stock during the
period from the date of this prospectus supplement continuing through the date
90 days after the date of this prospectus supplement, except the common stock
that is the subject of a concurrent public offering and with the prior written
consent of Goldman Sachs. This agreement does not apply to any existing employee
benefit plans or to Apache's dividend reinvestment plan.

In connection with the offering, Goldman Sachs may purchase and sell the
depositary shares or common stock in the open market. These transactions may
include short sales, stabilizing transactions and purchases to cover positions
created by short sales. Short sales involve the sale by Goldman Sachs of a
greater number of depositary shares than it is required to purchase in the
offering. Stabilizing transactions consist of certain bids or purchases made for
the purpose of preventing or retarding a decline in the market price of the
depositary shares or Apache common stock while the offering is in progress.

The depositary shares will be a new issue of securities with no established
trading market. Apache intends to list the depositary shares on the New York
Stock Exchange. Goldman Sachs has advised Apache that it intends to make a
market in the depositary shares, but it is not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the depositary shares.

These activities by Goldman Sachs may stabilize, maintain or otherwise
affect the market price of the depositary shares or Apache common stock. As a
result, the price of the depositary shares or Apache common stock may be higher
than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by Goldman Sachs at any time.
These transactions may be effected on the New York Stock Exchange, in the
over-the-counter market or otherwise.

U-1
<PAGE> 51

Apache estimates that its total expenses of the offering of depositary
shares, excluding underwriting discounts and commissions, will be approximately
$ .

Apache has agreed to indemnify Goldman Sachs against certain liabilities,
including liabilities under the Securities Act of 1933.

U-2
<PAGE> 52

- ------------------------------------------------------
- ------------------------------------------------------

-------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Supplement
Oil and Gas Terms..................... S-2
Prospectus Summary.................... S-3
Risk Factors.......................... S-10
Use of Proceeds....................... S-15
Capitalization........................ S-16
Price Range of Common Stock........... S-17
Dividend Policy....................... S-17
Description of Conversion Preferred
Stock............................... S-17
Description of Depositary Shares...... S-24
Certain Federal Income Tax
Considerations...................... S-28
Validity of Securities................ S-30
Experts............................... S-30
Underwriting.......................... U-1

Prospectus
About This Prospectus................. 1
Where You Can Find More Information... 1
Apache Corporation.................... 2
Ratios of Earnings to Fixed Charges
and Ratios of Earnings to Combined
Fixed Charges and Preferred Stock
Dividends........................... 2
Use of Proceeds....................... 3
The Securities We May Offer........... 3
Description of Capital Stock.......... 4
Description of Depositary Shares...... 9
Description of Debt Securities........ 12
Book-Entry Securities................. 24
Plan of Distribution.................. 26
Legal Matters......................... 27
Experts............................... 27
</TABLE>

[APACHE CORPORATION LOGO]

$ Depositary Shares
Each depositary share represents
1/50th of a share of Automatically
Convertible Equity Securities, Conversion
Preferred Stock, Series C
----------------------
PROSPECTUS SUPPLEMENT
----------------------

GOLDMAN, SACHS & CO.

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 53

News Release--DRAFT

APACHE TO ACQUIRE GULF OF MEXICO PROPERTIES FROM SHELL
FOR $715 MILLION PLUS 1 MILLION APACHE SHARES

Houston, April 29, 1999--Apache Corporation (NYSE: APA) announced
today that it has signed a definitive agreement to acquire strategic oil and
gas assets on the Outer Continental Shelf of the Gulf of Mexico from Shell
Exploration & Production Company in a negotiated transaction. The properties
have proved reserves of 127.3 million barrels of oil equivalent, based on
Apache estimates. The purchase price is $715 million in cash plus 1 million
shares of Apache common stock.

The properties to be acquired include 22 fields, 18 of which will be
operated by Apache. In February, the properties recorded average net production
of 24,900 barrels of oil and 125 million cubic feet of gas per day. The
fields' production and reserve mix is 54 percent oil and 46 percent natural
gas. The properties are in water depths of less than 700 feet.

The acquisition also includes 16 undeveloped blocks and access to 3-D
seismic data covering more than 1,000 blocks throughout the Gulf.

Apache President and Chief Operating Officer G. Steven Farris said,
"The transaction is expected to add significantly to earnings per share and
cash flow per share. In addition, while service costs are appropriate, we
intend to accelerate production and reduce costs to add shareholder value
through a program of recompletions, workovers and drilling."

"These properties play to Apache's strength of adding value through
operational enhancements," Farris said.

The transaction is expected to close within 30 days. The acquisition
will be effective retroactively to March 1, 1999. The purchase price will be
adjusted for production and costs between March 1 and closing.
<PAGE> 54

"This transaction will be financed through a combination of debt and
equity with an objective of maintaining Apache's balance sheet," said Roger
Plank, Apache's Chief Financial Officer. "In addition, we have agreed in
principle to sell more than $100 million of existing Apache properties, which
we will continue to operate for a management fee and a reversionary interest in
the upside."

Apache Chairman and Chief Executive Raymond Plank said, "This is the
largest to date of a series of transforming events as we build Apache to last.
Ultimate shareholder reward is predicated upon the value we seek to add, the
continuing environment of volatile oil and gas prices, and the success of our
strategy to fund discovery of oil and gas in our growing international core
areas.

"The working relationships developed between Shell and Apache
employees during evaluation and negotiations have been outstanding. We would
like to thank Shell for their effort and cooperation in enabling this
transaction," he said.

"We have enjoyed working with representatives of Apache, and are very
pleased to have reached mutually acceptable terms on this negotiation,"
commented Walter van de Vejver, Shell Exploration & Production Company's
president and chief executive officer.

Goldman, Sachs & Co. is advising Apache on the transaction and expects
to underwrite the equity that Apache plans to offer. The equity may only be
offered by means of a prospectus, copies of which may be obtained from Goldman
Sachs.

Apache Corporation is an oil and gas independent with operations in
North America, Egypt, Western Australia, Poland, the People's Republic of China
and Cote d'Ivoire. Its common stock is traded on the New York and Chicago
stock exchanges.

This news release contains certain "forward-looking statements" as
defined by the Private Securities Litigation Reform Act of 1995 including,
without limitation, expectations, beliefs, plans and objectives regarding
Apache's earnings, cash flow, production, reserves, capitalization and property
sales. Any matters that are not historical facts are forward-looking and,
accordingly, involve estimates, assumptions and uncertainties. There is no
assurance that Apache's expectations will be realized, and actual results may
differ materially from those expressed in the forward- looking statements.

-end-
<PAGE> 55

CONTACTS:

(MEDIA): BILL MINTZ (713/296-7276)
TONY LENTINI (713/296-6227)
(INVESTOR): ROBERT DYE (713/296-6662)

(WEB SITE): www.apachecorp.com

FOR RELEASE AT 7:30 A.M. CENTRAL TIME

APACHE REPORTS FIRST QUARTER LOSS OF 4 CENTS PER SHARE

Houston (April 29, 1999) - Apache Corporation (NYSE: APA) today reported
a first quarter loss of $3.6 million, or 4 cents per share as a result of low
oil and gas prices. Apache reported net income of $17.4 million, or 18 cents
per share, in the prior-year period.

"The rebound in oil prices arrived too late to bolster first quarter
results," said G. Steven Farris, president and chief operating officer. "Oil
prices have improved considerably since March."

Apache realized $11.43 per barrel of oil during the first quarter, down
from $14.07 per barrel in the prior-year period. The company realized $1.69 per
thousand cubic feet (Mcf) of gas, compared with $1.98 per Mcf in the
year-earlier period.

Cash from operations in the first quarter totaled $84.4 million,
compared with $122.3 million in the year-earlier period.

Oil production averaged 71,356 barrels per day, down from 78,091 barrels
per day in the prior-year period, and gas production dropped to 572 million
cubic feet (MMcf) per day, from 611 MMcf per day.

Apache Corporation is an oil and gas independent with operations in
North America, Egypt, Western Australia, Poland, People's Republic of China and
Cote d'Ivoire. Its common stock is traded on the New York and Chicago stock
exchanges.

-end-
<PAGE> 56
APACHE CORPORATION
FINANCIAL INFORMATION
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the Quarter
Ended March 31,
----------------------
1999 1998
--------- ---------
<S> <C> <C>
FINANCIAL DATA:

Revenues ................................................ $ 187,715 $ 245,941
========= =========
Income (Loss) Attributable to Common Stock .............. $ (3,588) $ 17,356
========= =========
Basic Net Income (Loss) Per Common Share ................ $ (.04) $ .18
========= =========
Diluted Net Income (Loss) Per Common Share .............. $ (.04) $ .18
========= =========
Weighted Average Common Shares .......................... 97,788 97,581
========= =========

PRODUCTION AND PRICING DATA:

NATURAL GAS VOLUME - Mcf per day
United States ........................................ 397,685 467,123
Canada ............................................... 109,099 96,520
Australia ............................................ 60,062 46,973
Egypt ................................................ 3,445 450
Ivory Coast .......................................... 1,214 --
----------------------
Total .............................................. 571,505 611,066
======================
AVERAGE NATURAL GAS PRICE PER MCF
United States ........................................ 1.79 2.18
Canada ............................................... 1.43 1.24
Australia ............................................ 1.48 1.60
Egypt ................................................ 1.93 1.78
Ivory Coast .......................................... 1.77 --
Total .............................................. 1.69 1.98

OIL VOLUME - Barrels per day
United States ........................................ 32,202 39,634
Canada ............................................... 2,180 2,075
Australia ............................................ 10,255 7,130
Egypt ................................................ 26,707 29,252
Ivory Coast .......................................... 12 --
----------------------
Total .............................................. 71,356 78,091
======================
AVERAGE OIL PRICE PER BARREL
United States ........................................ 11.16 14.33
Canada ............................................... 10.90 15.75
Australia ............................................ 11.75 14.06
Egypt ................................................ 11.66 13.60
Ivory Coast .......................................... 14.00 --
Total .............................................. 11.43 14.07

NGL VOLUME - Barrels per day
United States ........................................ 2,390 1,910
Canada ............................................... 632 604
----------------------
Total .............................................. 3,022 2,514
======================
NGL PRICE PER BARREL
United States ........................................ 7.42 9.14
Canada ............................................... 5.36 7.26
Total .............................................. 6.99 8.68
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