<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 2, 1999
REGISTRATION NO. 333-
REGISTRATION NO. 333- -01
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
APACHE CORPORATION APACHE FINANCE CANADA CORPORATION
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter)
</TABLE>
<TABLE>
<S> <C>
DELAWARE NOVA SCOTIA
(State or other jurisdiction (State or other jurisdiction
of incorporation or organization) of incorporation or organization)
</TABLE>
<TABLE>
<S> <C>
NO. 41-0747868 TO BE APPLIED FOR
(I.R.S. Employer Identification Number) (I.R.S. Employer Identification Number)
ONE POST OAK CENTRAL SUITE 1000
2000 POST OAK BOULEVARD, SUITE 100 700-9TH AVE. S.W.
HOUSTON, TEXAS 77056-4400 CALGARY, ALBERTA
(713) 296-6000 CANADA T2P 3V4
(Address, including zip code, and (403) 261-1200
telephone number, including area code, of (Address, including zip code, and
registrant's executive offices) telephone number, including area code, of
registrant's executive offices)
</TABLE>
Z. S. KOBIASHVILI
2000 POST OAK BOULEVARD, SUITE 100
HOUSTON, TEXAS 77056-4400
(713) 296-6000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
<TABLE>
<S> <C>
RALPH K. MILLER, JR. CRAIG E. CHAPMAN
CHAMBERLAIN, HRDLICKA, WHITE, BROWN & WOOD LLP
WILLIAMS & MARTIN ONE WORLD TRADE CENTER
1200 SMITH STREET, SUITE 1400 NEW YORK, NEW YORK 10048-0557
HOUSTON, TEXAS 77002-4310
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, check the following
box and list the Securities Act of 1933 registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING
SECURITIES TO BE REGISTERED REGISTERED(1) UNIT(2) PRICE(2)(3)
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Debt Securities............................ $400,000,000 100% $400,000,000
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Guarantees(4)..............................
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<S> <C>
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TITLE OF EACH CLASS OF AMOUNT OF
SECURITIES TO BE REGISTERED REGISTRATION FEE
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Debt Securities............................ $111,200
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Guarantees(4)..............................
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</TABLE>
(1) In no event will the aggregate initial offering price of all Debt Securities
issued from time to time under this Registration Statement exceed
$400,000,000, or the equivalent thereof in one or more foreign currencies or
composite currencies. Any Debt Securities registered hereunder may be sold
separately or as units with other Debt Securities registered hereunder.
(2) Estimated solely for the purposes of computing the registration fee pursuant
to Rule 457(o) of the Securities Act of 1933.
(3) Any offering of Debt Securities denominated in any foreign currency or
foreign currency unit will be treated as the equivalent in U.S. dollars
based on the exchange rate applicable to the purchase of the Debt
Securities.
(4) The Debt Securities to be issued by Apache Finance Canada Corporation will
be irrevocably and unconditionally guaranteed on an unsecured senior basis
by Apache Corporation. No separate consideration will be received for the
Guarantees and, therefore, no additional registration fee is payable in
respect of the registration of the Guarantees.
---------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER FOR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 2, 1999
PROSPECTUS
[APACHE LOGO]
$400,000,000
APACHE FINANCE CANADA CORPORATION
DEBT SECURITIES
IRREVOCABLY AND UNCONDITIONALLY GUARANTEED BY
APACHE CORPORATION
---------------------
Apache Finance Canada Corporation may offer and sell, from time to
time, debt securities, in one or more series, consisting of notes, debentures or
other evidences of indebtedness. The aggregate initial offering price of all of
the debt securities will not exceed $400,000,000 or, if applicable, an
equivalent amount in any other currency. The specific terms of the debt
securities will be provided in supplements to this prospectus. You should read
this prospectus and any prospectus supplement carefully before you invest. The
accompanying prospectus supplement will specify the terms of the debt
securities.
---------------------
The debt securities will be irrevocably and unconditionally guaranteed by
Apache Corporation.
---------------------
Apache Finance Canada Corporation may sell the debt securities to or
through underwriters, and also to other purchasers or through agents. The
accompanying prospectus supplement will specify the names of these underwriters
or agents.
---------------------
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 may not be used to sell debt securities unless it is
accompanied by a prospectus supplement.
---------------------
Prospectus dated , 1999.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
About This Prospectus....................................... 3
Where You Can Find More Information......................... 3
Cautionary Statements Regarding Forward-Looking
Statements................................................ 4
Apache Corporation.......................................... 5
Apache Finance.............................................. 5
Ratios of Earnings to Fixed Charges......................... 5
Use of Proceeds............................................. 6
The Securities We and Apache Finance May Offer.............. 6
Description of Securities................................... 6
Book-Entry Securities....................................... 24
Certain Income Tax Considerations........................... 26
Plan of Distribution........................................ 30
Legal Matters............................................... 31
Experts..................................................... 31
</TABLE>
2
<PAGE> 4
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process. In
this prospectus, we will refer to the debt securities and guarantees
collectively as "securities." The total dollar amount of all debt securities
that Apache Finance may issue under this prospectus will not exceed
$400,000,000. This prospectus provides you with a general description of the
securities we and Apache Finance may offer. Each time we and Apache Finance
offer to sell securities, we and Apache Finance will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read this prospectus and any prospectus
supplement, together with additional information described under the heading
"Where You Can Find More Information."
In this prospectus, references to "Apache," "we," "us" and "our" mean
Apache Corporation, while references to "Apache Finance" mean Apache Finance
Canada Corporation.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. Our Securities and
Exchange Commission filings are available to the public over the Internet at the
Securities and Exchange Commission's web site at http://www.sec.gov. You may
also read and copy any document we file at the Securities and Exchange
Commission's public reference rooms located at:
- 450 Fifth Street, N.W.
Washington, D.C. 20549;
- 7 World Trade Center
New York, New York 10048; and
- Citicorp Center
500 West Madison Street
Chicago, Illinois 60661.
Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information on the public reference rooms and their copy charges.
Our common stock has been listed and traded on the New York Stock Exchange
since 1969 and the Chicago Stock Exchange since 1960. Accordingly, you may
inspect the information we file with the Securities and Exchange Commission at
the New York Stock Exchange, 20 Broad Street, New York, New York 10005, and at
the Chicago Stock Exchange, One Financial Place, 440 S. LaSalle Street, Chicago,
Illinois 60605-1070. For more information on obtaining copies of our public
filings at the New York Stock Exchange, you should call (212) 656-5060.
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is an important part of this prospectus.
Information that we file later with the Securities and Exchange Commission will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the Securities and
Exchange Commission under Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, until we sell all of the securities:
- Our Annual Report on Form 10-K for the fiscal year ended December 31,
1998;
- Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999
and June 30, 1999; and
- Our Current Reports on Form 8-K dated March 2, 1999 (as amended by
Amendment No. 1 on Form 8-K/A filed on March 5, 1999), April 29, 1999 (as
amended by Amendment No. 1 on Form 8-K/A filed on May 12, 1999 and
Amendment No. 2 on Form 8-K/A filed on May 24,
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<PAGE> 5
1999), May 18, 1999 (as amended by Amendment No. 1 on Form 8-K/A filed on
July 30, 1999), June 22, 1999 and October 5, 1999.
Each of these documents is available from the Securities and Exchange
Commission's web site and public reference rooms described above. You may also
request a copy of these filings, excluding exhibits, at no cost by writing or
telephoning Cheri L. Peper, Corporate Secretary, at our principal executive
office, which is:
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
(713) 296-6000
Our World Wide Web address is http://www.apachecorp.com. The information on
our website is not incorporated by reference into this prospectus. You should
rely only on the information incorporated by reference or provided in this
prospectus or any prospectus supplement. We have not authorized anyone to
provide you with different information.
On behalf of Apache Finance, we will apply to the Securities Exchange
Commission for an order exempting Apache Finance from the reporting requirements
of the Securities Exchange Act of 1934. We do not intend to include in our
consolidated financial statements any separate financial information regarding
Apache Finance. Also, in view of our guarantees, Apache Finance does not intend
to furnish holders of the debt securities with separate financial statements or
other reports.
We are not making an offer of the securities covered by this prospectus in
any state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement or in any other
document incorporated by reference in this prospectus is accurate as of any date
other than the date on the front of those documents.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus 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. These statements are based on our current expectations, estimates and
projections. Therefore, they could ultimately prove to be inaccurate. Our plans
for capital and exploratory spending and for cost and expense reduction may
change if business conditions, such as energy prices and world economic
conditions, change. Factors that could affect our ability to be Year 2000
compliant by the end of 1999 include: the failure of our customers and
suppliers, government entities and others to achieve compliance and the
inaccuracy of any certifications received from them; our inability to identify
and remediate every possible problem; and a shortage of necessary programmers,
hardware and software. Other factors that may have a direct bearing on our
results of operations and financial condition are:
- competitive practices in the industries in which we compete;
- fluctuations in oil and gas prices that have not been properly hedged or
that are inconsistent with our open position in our marketing activities;
- operational and systems risks;
- environmental liabilities that are not covered by indemnity or insurance;
- general economic and capital market conditions, including fluctuations in
interest rates; and
- the impact of current and future laws and governmental regulations
(particularly environmental regulations) affecting the energy industry in
general and Apache's operations in particular.
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APACHE CORPORATION
Apache Corporation is a Delaware corporation formed in 1954. We are an
independent energy company that explores for, develops and produces natural gas,
crude oil 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 of North America, we have exploration and production interests offshore
Western Australia and in Egypt and exploration interests in Poland and offshore
The People's Republic of China.
We hold interests in many of our U.S., Canadian and international
properties through operating subsidiaries, such as Apache Canada Ltd., DEK
Energy Company, which was formerly known as DEKALB Energy Company, Apache Energy
Limited, which was formerly known as Hadson Energy Limited, Apache
International, Inc., and Apache Overseas, Inc. The properties referred to in
this prospectus, in any prospectus supplement or in any other document
incorporated by reference in this prospectus may be held by our subsidiaries. We
treat all operations as one line of business.
APACHE FINANCE
Apache Finance is an unlimited liability company organized in October 1999
under the laws of Nova Scotia, Canada. Apache Finance is our indirect
wholly-owned subsidiary. We intend to use Apache Finance to issue debt
securities guaranteed by us. We intend to use the proceeds from these debt
securities primarily to finance and invest in our Canadian operations and
entities.
RATIOS OF EARNINGS TO FIXED CHARGES
Our ratios of earnings to fixed charges were as follows for the periods
indicated in the table below. Our 1998 earnings were inadequate to cover fixed
charges and dividends as described below.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
- ----------- --------------------------------
1999 1998 1998 1997 1996 1995 1994
- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
1.44 1.36 -- 2.93 2.72 1.15 2.34
</TABLE>
Our ratios of earnings to fixed charges were computed based on:
- "earnings," which consist of consolidated income or loss from continuing
operations plus income taxes and fixed charges, except capitalized
interest; and
- "fixed charges," which consist of consolidated interest on indebtedness,
including capitalized interest, amortization of debt discount and
expense, and the estimated portion of rental expense attributable to
interest.
Due to the $243.2 million non-cash write-down of the carrying value of our
U.S. oil and gas properties, for the year ended December 31, 1998, our 1998
earnings were inadequate to cover fixed charges by $236.8 million.
On May 17, 1995, Apache acquired DEKALB Energy Company, which is now known
as DEK Energy Company, through a merger which resulted in DEKALB becoming a
wholly-owned subsidiary of Apache. The merger was accounted for as a "pooling of
interests." As a result, our financial information for all preceding periods was
restated.
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USE OF PROCEEDS
Unless otherwise indicated in an accompanying prospectus supplement, we
expect to use the net proceeds from the sale of the debt securities for general
corporate purposes, which may include, among other things:
- financing and investing in our Canadian operations and entities;
- the repayment of outstanding indebtedness;
- working capital;
- capital expenditures; and
- acquisitions.
The precise amount and timing of the application of these proceeds will
depend upon our funding requirements and the availability and cost of other
funds.
THE SECURITIES WE AND APACHE FINANCE MAY OFFER
The descriptions of the securities contained in this prospectus, together
with the applicable prospectus supplements, summarize all the material terms and
provisions of the various types of securities that we and Apache Finance may
offer. The particular terms of the securities offered by any prospectus
supplement will be described in that prospectus supplement. If indicated in the
applicable prospectus supplement, the terms of the securities may differ from
the terms summarized below. The prospectus supplement will also contain
information, where applicable, about material U.S. and Canadian federal income
tax considerations relating to the securities, and the securities exchange, if
any, on which the securities will be listed.
We and Apache Finance may sell from time to time, in one or more offerings,
debt securities and the related guarantees.
If Apache Finance issues debt securities at a discount from their original
stated principal amount, then, for purposes of calculating the total dollar
amount of all debt securities issued under this prospectus, we and Apache
Finance will treat the initial offering price of the debt securities as the
total original principal amount of the debt securities.
This prospectus may not be used to sell securities unless it is accompanied
by a prospectus supplement.
DESCRIPTION OF SECURITIES
The following description, together with the applicable prospectus
supplements, summarizes all the material terms and provisions of the securities
that we and Apache Finance may offer under this prospectus and the related trust
indenture. The indenture under which we and Apache Finance will issue securities
contains additional important terms and provisions and is or will be filed as an
exhibit to the registration statement that includes this prospectus.
This summary of the indenture and the securities relates to terms and
conditions applicable to the securities generally. The particular terms of any
series of securities will be summarized in the applicable prospectus supplement.
If indicated in the prospectus supplement, the terms of any series may differ
from the terms summarized below.
Unless otherwise specified in the applicable prospectus supplement, we and
Apache Finance will issue the securities under an indenture entered into among
us, Apache Finance and The Chase Manhattan Bank, as trustee. Apache Finance may
only offer up to $400,000,000 of debt securities under this prospectus. However,
the indenture does not limit the amount of securities we and Apache Finance may
issue under the indenture and provides that additional securities of any series
may be issued up to the aggregate principal amount that we and Apache Finance
authorize from time to time. We and Apache
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Finance may also issue securities under the indenture in transactions exempt
from the registration requirements of the Securities Act of 1933. Those
securities will not be considered in determining the aggregate amount of
securities issued under this prospectus.
Unless otherwise specified in the applicable prospectus supplement, we and
Apache Finance will issue the debt securities in denominations of $1,000 or
integral multiples of $1,000.
Principal and any premium and any interest will be payable, and the debt
securities will be transferable, at the corporate trust office of the
appropriate trustee, unless specified otherwise in the accompanying prospectus
supplement. At Apache Finance's option, however, payment of interest may be made
by check mailed to the registered holders of the debt securities at their
registered addresses.
Unless the applicable prospectus supplement specifies otherwise, the
covenants contained in the indenture and the securities will not provide special
protection to holders of securities if we or Apache Finance enter into a highly
leveraged transaction, recapitalization or restructuring.
RANKING
Unless otherwise specified in the applicable prospectus supplement:
- the debt securities issued by Apache Finance will be unsecured
obligations of Apache Finance and will rank equally with all other
unsecured and unsubordinated indebtedness of Apache Finance; and
- the guarantees will be unsecured obligations of Apache and will rank
equally with all other unsecured and unsubordinated indebtedness of
Apache.
Dividend and other distributions to us from our various subsidiaries may be
subject to certain statutory, contractual and other restrictions (including,
without limitation, exchange controls that may be applicable to foreign
subsidiaries). The rights of our creditors to participate in the assets of any
subsidiary upon that subsidiary's liquidation or recapitalization will be
subject to the prior claims of the subsidiary's creditors, except to the extent
that we may ourself be a creditor with recognized claims against the subsidiary.
The claims of holders under the guarantees will be effectively subordinated to
the claims of creditors of our subsidiaries other than, in the case of the debt
securities, Apache Finance. The indenture does not restrict the amount of
indebtedness that we, Apache Finance or our other subsidiaries may incur.
GENERAL
To the extent not described in this prospectus, the prospectus supplement
relating to the particular series of securities being offered will specify the
amounts, prices and terms of those securities. These terms may include:
- the designation, aggregate principal amount and authorized denominations
of the debt securities;
- the date or dates on which the debt securities will mature;
- the percentage of the principal amount at which the debt securities will
be issued;
- the date on which the principal of the debt securities will be payable;
- whether the debt securities will be issued as registered securities,
bearer securities or a combination of the two;
- whether the debt securities will be issued in the form of one or more
global securities and whether the global securities will be issued in a
temporary global form or permanent global form;
- the currency or currencies or units of two or more currencies in which
debt securities are denominated, for which they may be purchased, and in
which principal and any premium and interest is payable;
- if the currency or currencies or currency unit or units for which debt
securities may be purchased or in which principal and any premium
interest may be paid is at Apache Finance's election or at the election
of a purchaser, the manner in which an election may be made and its
terms;
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<PAGE> 9
- the annual rate or rates, which may be fixed or variable, or the method
of determining the rate or rates at which the debt securities will bear
interest;
- the date or dates from which any interest will accrue and the date or
dates on which interest will be payable;
- a description of any provisions providing for redemption, exchange or
conversion of the debt securities at Apache Finance's option or a
holder's option and the terms and provisions of the redemption, exchange
or conversion;
- information with respect to book-entry procedures relating to global debt
securities;
- any redemption or sinking fund terms;
- whether and under what circumstances Apache Finance will pay "additional
amounts," as defined in the indenture, in respect of any tax, assessment
or governmental charge and, if so, whether and on what terms Apache
Finance will have the option to redeem the debt securities rather than
pay any additional amounts. The term "interest," as used in this
prospectus, includes any additional amounts;
- any events of default or covenants of Apache or Apache Finance with
respect to the debt securities of a certain series that are different
from those described in this prospectus;
- if either or both of section 402(2) of the indenture relating to
defeasance or section 402(3) of the indenture relating to covenant
defeasance is not applicable to the debt securities, or if any covenants
in addition to those specified in section 402(3) of the indenture shall
be subject to covenant defeasance;
- any deletions from, or modifications or additions to, the provisions of
the indenture relating to satisfaction and discharge in respect of the
debt securities;
- any index or other method used to determine the amount of payments of
principal of, and any premium and interest on, the debt securities; and
- any other specific terms of the debt securities.
Apache Finance is not obligated to issue all debt securities of any one
series at the same time. The debt securities of any one series may not bear
interest at the same rate or mature on the same date.
If any of the debt securities are sold for foreign currencies or foreign
currency units or if the principal of, or any premium or interest on, any series
of debt securities is payable in foreign currencies or foreign currency units,
we will describe the restrictions, elections, tax consequences, specific terms
and other information with respect to those debt securities and the foreign
currencies or foreign currency units in the applicable prospectus supplement.
Other than as described below under "The Indenture Limits Our and Apache
Finance's Ability to Incur Liens," "The Indenture Limits Our and Apache
Finance's Ability to Engage in Sale/Leaseback Transactions" and "Apache Finance
is Obligated to Purchase Debt Securities on a Change in Control," the indenture
does not limit our or Apache Finance's ability to incur indebtedness or afford
holders of securities protection if our credit quality declines or if we are
involved in a takeover, recapitalization or highly leveraged or similar
transaction. The prospectus supplement relating to the particular series of
securities, to the extent not otherwise described in this prospectus, will
include any information with respect to any deletions from, modifications of or
additions to the events of default described below and contained in the
indenture, including any addition of a covenant or other provision providing
event risk or similar protection.
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GUARANTEES
We will irrevocably and unconditionally guarantee to each holder of a debt
security issued by Apache Finance and authenticated and delivered by the trustee
the due and punctual payment of the principal of, and any premium and interest
on, the debt security, when and as it becomes due and payable, whether at
maturity, upon acceleration, by call for redemption, repayment or otherwise in
accordance with the terms of the debt securities and of the indenture. We will
(a) agree that, if an event of default occurs under the debt securities, our
obligations under the guarantees will be as if we had issued the debt
securities, and will be enforceable irrespective of any invalidity, irregularity
or unenforceability of any series of the debt securities or the indenture or any
supplement thereto and (b) waive our right to require the trustee or the holders
to pursue or exhaust their legal or equitable remedies against Apache Finance
before exercising their rights under the guarantees.
INTEREST RATES AND DISCOUNTS
The debt securities will earn interest at a fixed or floating rate or rates
for the period or periods of time specified in the applicable prospectus
supplement. Unless otherwise specified in the applicable prospectus supplement,
the debt securities will bear interest on the basis of a 360-day year consisting
of twelve 30-day months.
Apache Finance may sell debt securities at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate that at
the time of issuance is below market rates. United States and Canadian federal
income tax consequences and special considerations that apply to any series will
be described to the extent not described in this prospectus, in the applicable
prospectus supplement.
EXCHANGE, REGISTRATION AND TRANSFER
Registered securities of any series that are not global securities will be
exchangeable for other registered securities of the same series and of like
aggregate principal amount and tenor in different authorized denominations. In
addition, if debt securities of any series are issuable as both registered
securities and bearer securities, the holder may choose, upon written request,
and subject to the terms of the indenture, to exchange bearer securities and the
appropriate related coupons of that series into registered securities of the
same series of any authorized denominations and of like aggregate principal
amount and tenor. Bearer securities with attached coupons surrendered in
exchange for registered securities between a regular record date or a special
record date and the relevant date for interest payment shall be surrendered
without the coupon relating to the interest payment date. Interest will not be
payable with respect to the registered security issued in exchange for that
bearer security. That interest will be payable only to the holder of the coupon
when due in accordance with the terms of the indenture. Bearer securities will
not be issued in exchange for registered securities.
You may present registered securities for registration of transfer,
together with a duly executed form of transfer, at the office of the security
registrar or at the office of any transfer agent designated by Apache Finance
for that purpose with respect to any series of debt securities and referred to
in the applicable prospectus supplement. This may be done without service charge
but upon payment of any taxes and other governmental charges as described in the
indenture. The security registrar or the transfer agent will effect the transfer
or exchange upon being satisfied with the documents of title and identity of the
person making the request. Apache Finance will appoint the trustee as security
registrar for the indenture. If a prospectus supplement refers to any transfer
agents initially designated by Apache Finance with respect to any series of debt
securities in addition to the security registrar, Apache Finance may at any time
rescind the designation of any of those transfer agents or approve a change in
the location through which any of those transfer agents acts. However, if debt
securities of a series are issuable solely as registered securities, Apache
Finance will be required to maintain a transfer agent in each place of payment
for that series, and if debt securities of a series are issuable as bearer
securities, Apache Finance will be required to maintain a transfer agent in a
place of payment for that series located in Europe in addition to the security
registrar.
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Apache Finance may at any time designate additional transfer agents with respect
to any series of debt securities.
If a redemption occurs, neither we nor Apache Finance will be required to:
- issue, register the transfer of or exchange debt securities of any series
during a period beginning at the opening of business 15 days before any
selection of debt securities of that series to be redeemed and ending at
the close of business on the day of mailing of the relevant notice of
redemption; or
- register the transfer of or exchange any registered security, or portion
thereof, called for redemption, except the unredeemed portion of any
registered security being redeemed in part.
PAYMENT AND PAYING AGENTS
Unless specified otherwise in the applicable prospectus supplement, payment
of principal of, and any premium and interest on, bearer securities will be
payable in accordance with any applicable laws and regulations, at the offices
of those paying agents outside the United States that we or Apache Finance may
designate at various times. Apache Finance will make interest payments on bearer
securities and the attached coupons on any interest payment date only against
surrender of the coupon relating to that interest payment date. No payment with
respect to any bearer security will be made at any of our or Apache Finance's
offices or agencies in the United States by check mailed to any U.S. address or
by transfer to an account maintained with a bank located in the United States.
However, if, but only if, payment in U.S. dollars of the full amount of
principal of, and any premium and interest on, bearer securities denominated and
payable in U.S. dollars at all offices or agencies outside the United States is
illegal or effectively precluded by exchange controls or other similar
restrictions, then those payments will be made at the office of our and Apache
Finance's paying agent in the Borough of Manhattan, The City of New York.
Unless otherwise specified in the applicable prospectus supplement, payment
of principal of, and any premium and interest on, registered securities will be
made at the office of the paying agent or paying agents that Apache Finance
designates at various times. However, at Apache Finance's option, it may make
interest payments by check mailed to the address, as it appears in the security
register, of the person entitled to the payments. Unless specified otherwise in
the applicable prospectus supplement, Apache Finance will make payment of any
installment of interest on registered securities to the person in whose name
that registered security is registered at the close of business on the regular
record date for the interest payment.
Unless otherwise specified in the applicable prospectus supplement, the
corporate trust office of the trustee in the Borough of Manhattan, The City of
New York, will be designated:
- as Apache Finance's sole paying agent for payments with respect to debt
securities that are issuable solely as registered securities; and
- as Apache Finance's paying agent in the Borough of Manhattan, The City of
New York, for payments with respect to debt securities, subject to the
limitation described above in the case of bearer securities, that are
issuable solely as bearer securities or as both registered securities and
bearer securities.
Apache Finance will name any paying agents outside the United States and
any other paying agents in the United States initially designated by it for the
debt securities in the applicable prospectus supplement. Apache Finance may at
any time designate additional paying agents or rescind the designation of any
paying agent or approve a change in the office through which any paying agent
acts. However, if debt securities of a series are issuable solely as registered
securities, Apache Finance will be required to
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maintain a paying agent in each place of payment for that series. If debt
securities of a series are issuable as bearer securities, Apache Finance will be
required to maintain:
- a paying agent in the Borough of Manhattan, The City of New York, for
payments with respect to any registered debt securities of the series and
for payments with respect to bearer securities of the series in the
circumstance described above, but not otherwise; and
- a paying agent in a place of payment located outside the United States
where debt securities of that series and any attached coupons may be
presented and surrendered for payment.
However, if the debt securities of that series are listed on the London
Stock Exchange, the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and if the stock exchange requires it, Apache
Finance will maintain a paying agent in London or Luxembourg or any other
required city located outside the United States for those debt securities.
All moneys Apache Finance pays to a paying agent for the payment of
principal of, and any premium or interest on, any debt security or coupon that
remains unclaimed at the end of two years after becoming due and payable will be
repaid to Apache Finance. After that time, the holder of the debt security or
coupon will look only to Apache Finance for payments out of those repaid
amounts.
GLOBAL SECURITIES
The debt securities of a series may be issued in whole or in part in the
form of one or more global certificates that Apache Finance will deposit with a
depositary identified in the applicable prospectus supplement. Global securities
may be issued in either registered or bearer form and in either temporary or
permanent form. Unless and until it is exchanged in whole or in part for the
individual debt securities it represents, a global security may not be
transferred except as a whole:
- by the applicable depositary to a nominee of the depositary;
- by any nominee to the depositary itself or another nominee; or
- by the depositary or any nominee to a successor depositary or any nominee
of the successor.
Apache Finance will describe the specific terms of the depositary
arrangement with respect to a series of debt securities in the applicable
prospectus supplement. Apache Finance anticipates that the provisions described
below will generally apply to depositary arrangements.
When Apache Finance issues a global security in registered form, the
depositary for the global security or its nominee will credit, on its book-entry
registration and transfer system, the respective principal amounts of the
individual debt securities represented by that global security to the accounts
of participants that have accounts with the depositary. Those accounts will be
designated by the dealers, underwriters or agents with respect to the underlying
debt securities or by Apache Finance if those debt securities are offered and
sold directly by Apache Finance. Ownership of beneficial interests in a global
security will be limited to participants or persons that may hold interests
through participants. For interests of participants, ownership of beneficial
interests in the global security will be shown on records maintained by the
applicable depositary or its nominee. For interests of persons other than
participants, that ownership information will be shown on the records of
participants. Transfer of that ownership will be effected only through those
records. The laws of some states require that certain purchasers of securities
take physical delivery of securities in definitive form. These limits and laws
may impair Apache Finance's ability to transfer beneficial interests in a global
security.
As long as the depositary for a global security, or its nominee, is the
registered owner of that global security, the depositary or nominee will be
considered the sole owner or holder of the debt securities
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represented by the global security for all purposes under the indenture. Except
as described below, owners of beneficial interests in a global security:
- will not be entitled to have any of the underlying debt securities
registered in their names;
- will not receive or be entitled to receive physical delivery of any of
the underlying debt securities in definitive form; and
- will not be considered the owners or holders under the indenture relating
to those debt securities.
Payments of principal of, and any premium and interest on, individual debt
securities represented by a global security registered in the name of a
depositary or its nominee will be made to the depositary or its nominee as the
registered owner of the global security representing those debt securities.
Neither Apache Finance, the trustee, any paying agent nor the registrar for the
debt securities will be responsible for any aspect of the records relating to or
payments made by the depositary or any participants on account of beneficial
interests of the global security.
Apache Finance expects that the depositary or its nominee, upon receipt of
any payment of principal, premium or interest relating to a permanent global
security representing any series of debt securities, immediately will credit
participants' accounts with the payments. Those payments will be credited in
amounts proportional to the respective beneficial interests of the participants
in the principal amount of the global security as shown on the records of the
depositary or its nominee. Apache Finance also expects that payments by
participants to owners of beneficial interests in the global security held
through those participants will be governed by standing instructions and
customary practices. This is now the case with securities held for the accounts
of customers in bearer form or registered in "street name." Those payments will
be the sole responsibility of those participants.
If the depositary for a series of debt securities is at any time unwilling,
unable or ineligible to continue as depositary and Apache Finance does not
appoint a successor depositary within 90 days, Apache Finance will issue
individual debt securities of that series in exchange for the global security or
securities representing that series. In addition, Apache Finance may at any time
in its sole discretion determine not to have any debt securities of a series
represented by one or more global securities. In that event, Apache Finance will
issue individual debt securities of that series in exchange for the global
security or securities. Further, if Apache Finance specifies, an owner of a
beneficial interest in a global security may, on terms acceptable to Apache
Finance, the trustee and the applicable depositary, receive individual debt
securities of that series in exchange for those beneficial interests. The
foregoing is subject to any limitations described in the applicable prospectus
supplement. In that instance, the owner of the beneficial interest will be
entitled to physical delivery of individual debt securities equal in principal
amount to the beneficial interest and to have the debt securities registered in
its name. Those individual debt securities will be issued in denominations,
unless Apache Finance specifies otherwise, of $1,000 or integral multiples of
$1,000.
For a description of the depository arrangements for global securities held
by The Depository Trust Company, see "Book-Entry Securities."
THE INDENTURE LIMITS OUR AND APACHE FINANCE'S ABILITY TO INCUR LIENS
Nothing in the indenture or the debt securities will in any way limit the
amount of indebtedness or securities which we or our subsidiaries, as defined in
the indenture, may incur or issue. The indenture provides that none of us,
Apache Finance or any of our other subsidiaries may issue, assume or guarantee
any notes, bonds, debentures or other similar evidences of indebtedness for
money borrowed secured by a mortgage, lien, pledge, security interest or other
encumbrance -- defined in the indenture as "liens" -- upon any of its property
unless we provide that any and all debt securities then outstanding shall be
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secured by a lien equally and ratably with any and all other obligations secured
by the lien. The restrictions on liens will not, however, apply to:
- liens existing on the date of the indenture or provided for under the
terms of agreements existing on the date of the indenture;
- liens securing all or part of the cost of exploring, producing,
gathering, processing, marketing, drilling or developing any of our or
our subsidiaries' properties, or securing indebtedness incurred to
provide funds therefor or indebtedness incurred to finance all or part of
the cost of acquiring, constructing, altering, improving or repairing
these properties, or securing indebtedness incurred to provide funds
therefor;
- liens securing only indebtedness owed by one of our subsidiaries to us,
Apache Finance or to one or more of our other subsidiaries;
- liens on the property of any corporation or other entity existing at the
time it becomes our subsidiary;
- liens on any property to secure indebtedness incurred in connection with
the construction, installation or financing of pollution control or
abatement facilities or other forms of industrial revenue bond financing
or indebtedness issued or guaranteed by the United States or any state or
any department, agency or instrumentality of either or indebtedness
issued to or guaranteed for the benefit of a foreign government or any
state or any department, agency or instrumentality of either or an
international finance agency or any division or department thereof,
including the World Bank, the International Finance Corp. and the
Multilateral Investment Guarantee Agency;
- any extension, renewal or replacement or successive extensions, renewals
or replacements of any lien referred to in the foregoing clauses that
existed on the date of the indenture;
- certain other liens incurred in the ordinary course of business; or
- liens which secure "Limited Recourse Indebtedness," as defined in the
indenture.
In addition, the following types of transactions, among others, shall not be
deemed to create indebtedness secured by liens:
- the sale or other transfer of crude oil, natural gas or other petroleum
hydrocarbons in place for a period of time until, or in an amount that,
the transferee will receive as a result of the transfer a specified
amount of money or of crude oil, natural gas or other petroleum
hydrocarbons;
- the sale or other transfer of any other interest in property of the
character commonly referred to as a production payment, overriding
royalty, forward sale or similar interest; and
- liens required by any contract or statute in order to permit us or one of
our subsidiaries to perform any contract or subcontract made by it with
or at the request of the U.S. government or any foreign government or
international finance agency, any state or any department thereof, or any
agency or instrumentality of either, or to secure partial, progress,
advance or other payments to us or one of our subsidiaries by any of
these entities pursuant to the provisions of any contract or statute.
THE INDENTURE LIMITS OUR AND APACHE FINANCE'S ABILITY TO ENGAGE IN
SALE/LEASEBACK TRANSACTIONS
Unless we specify otherwise in the applicable prospectus supplement,
neither we nor any of our subsidiaries will enter into any arrangement with any
person, other than us or one of our subsidiaries, to lease any property to us or
a subsidiary of ours for more than three years. For the restriction to apply, we
or one of our subsidiaries must sell or plan to sell the property to the person
leasing it to us or our
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subsidiary or to another person to which funds have been or are to be advanced
on the security of the leased property. The limitation does not apply where:
- either we, Apache Finance or our other subsidiaries would be entitled to
create debt secured by a lien on the property to be leased in a principal
amount equal to or exceeding the value of that sale/ leaseback
transaction;
- since the date of the indenture and within a period commencing six months
before the consummation of that arrangement and ending six months after
the consummation of the arrangement, we, Apache Finance or our other
subsidiaries have expended or will expend for any property -- including
amounts expended for the acquisition, exploration, drilling or
development of the property, and for additions, alterations, improvements
and repairs to the property -- an amount equal to all or a portion of the
net proceeds of that arrangement and we, Apache Finance or our other
subsidiaries designate that amount as a credit against that arrangement,
with any amount not being so designated to be applied as set forth in the
next item; or
- during or immediately after the expiration of the 12 months after the
effective date of that transaction, we, Apache Finance or any of our
other subsidiaries apply to the voluntary defeasance or retirement of the
debt securities and or other senior indebtedness, as defined in the
indenture, an amount equal to the greater of the net proceeds of the sale
or transfer of the property leased in that transaction or the fair value
of the property at the time of entering into the transaction, in either
case adjusted to reflect the remaining term of the lease and any amount
we utilize as set forth in the prior item. The amount will be reduced by
the principal amount of senior indebtedness we voluntarily retire within
that 12-month period.
EXEMPTED INDEBTEDNESS
Notwithstanding the limitations on liens and sale/leaseback transactions
described in this prospectus, we and Apache Finance may create liens or enter
into sale/leaseback transactions not otherwise permitted if immediately after
the transaction, the sum of outstanding indebtedness for borrowed money incurred
after the date of the indenture and secured by these liens plus the attributable
debt in respect of any sale/leaseback transaction entered into after the date of
the indenture does not exceed 10 percent of our consolidated net worth.
THE INDENTURE INCLUDES EVENTS OF DEFAULT
Unless otherwise specified in the applicable prospectus supplement, any one
of the following events will constitute an "event of default" under the
indenture with respect to the debt securities of any series:
- if we or Apache Finance fail to pay any interest on any debt security of
that series when due, and the failure continues for 30 days;
- if we or Apache Finance fail to pay principal of or any premium on the
debt securities of that series when due and payable, either at maturity
or otherwise;
- if we or Apache Finance fail to perform or breach any of the other
covenants or warranties in the indenture or the debt securities -- other
than a covenant or warranty included in the indenture solely for the
benefit of a series of securities other than the debt securities -- and
that breach or failure continues for 60 days after written notice as
provided in the indenture;
- if any of our, Apache Finance's or any of our other subsidiaries'
indebtedness, as defined in the indenture, in excess of an aggregate of
$25,000,000 in principal amount is accelerated under any event of default
as defined in any mortgage, indenture or instrument and the acceleration
has not been rescinded or annulled within 30 days after written notice as
provided in the indenture specifying the event of default and requiring
us and Apache Finance to cause that acceleration to be rescinded or
annulled;
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- if we, Apache Finance or any of our other subsidiaries fail to pay, bond
or otherwise discharge within 60 days of entry, a judgment, court order
or uninsured monetary damage award against us or them in excess of an
aggregate of $25,000,000 which is not stayed on appeal or otherwise being
appropriately contested in good faith;
- certain events of bankruptcy, insolvency or reorganization involving us,
Apache Finance or any of our other subsidiaries; and
- any other event of default provided with respect to the debt securities
of that series.
If an event of default with respect to the debt securities of any series,
other than an event of default described in the second to last and third to last
items above, occurs and is continuing, either the trustee or the holders of at
least 25% in aggregate principal amount of the outstanding debt securities of
that series may declare the principal amount of the debt securities to be due
and payable immediately. At any time after a declaration of acceleration has
been made, but before a judgment or decree for payment of money has been
obtained by the trustee, and subject to applicable law and certain other
provisions of the indenture, the holders of a majority in aggregate principal
amount of the debt securities of that series may, under certain circumstances,
rescind and annul the acceleration. If an event of default described in the
second to last and third to last items above occurs, the principal amount and
accrued interest -- or a lesser amount as provided for in the debt securities of
that series -- will become immediately due and payable without any declaration
or other act by the trustee or any holder.
Within 90 days after the occurrence of any event of default under the
indenture with respect to the debt securities of any series, the trustee must
transmit notice of the event of default to the holders of the debt securities of
that series unless the event of default has been cured or waived. However,
except in the case of a payment default, the trustee may withhold the notice if
and so long as the board of directors, the executive committee or a trust
committee of directors or responsible officers of the trustee has in good faith
determined that the withholding of the notice is in the interest of the holders
of debt securities of that series.
If an event of default occurs and is continuing with respect to the debt
securities of any series, the trustee may in its discretion proceed to protect
and enforce its rights and the rights of the holders of debt securities of that
series by all appropriate judicial proceedings.
Subject to the duty of the trustee during any default to act with the
required standard of care, the trustee is under no obligation to exercise any of
its rights or powers under the indenture at the request or direction of any of
the holders of debt securities, unless the holders offer the trustee reasonable
indemnity. Subject to indemnifying the trustee, and subject to applicable law
and certain other provisions of the indenture, the holders of a majority in
aggregate principal amount of the outstanding debt securities of a series may
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee, or exercising any trust or power conferred on the
trustee, with respect to the debt securities of that series.
APACHE FINANCE IS OBLIGATED TO PURCHASE DEBT SECURITIES ON A CHANGE IN CONTROL
If a change in control, as defined in the indenture, occurs, Apache Finance
must mail within 15 days a written notice regarding the change in control to the
trustee and to every holder of the debt securities of each series. The notice
must also be published at least once in an authorized newspaper, as defined in
the indenture, and must state:
- the event causing the change in control and the date of the event;
- the date by which notice of the change in control is required by the
indenture to be given;
- the date, 35 business days after the occurrence of the change in control,
by which Apache Finance must purchase debt securities it is obligated to
purchase pursuant to the selling holder's exercise of rights on change in
control;
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- the price Apache Finance must pay for the debt securities it is obligated
to purchase;
- the name and address of the trustee;
- the procedure for surrendering debt securities to the trustee or other
designated office or agent for payment;
- a statement of Apache Finance's obligation to make prompt payment on
proper surrender of the debt securities;
- the procedure for holders' exercise of rights of sale of the debt
securities; and
- the procedures by which a holder may withdraw the notice after it is
given.
After Apache Finance gives this notice it will be obligated, at the election of
each holder, to purchase those debt securities. Under the indenture, a change in
control is deemed to have occurred when:
- any event requiring the filing of any report under or in response to
Schedule 13D or 14D-1 pursuant to the Securities Exchange Act of 1934
disclosing beneficial ownership of either 50% or more of our common stock
then outstanding or 50% or more of the voting power of our voting stock
then outstanding;
- the completion of any sale, transfer, lease, or conveyance of our
properties and assets substantially as an entirety to any person or
persons that is not our subsidiary, as those terms are defined in the
indenture; or
- the completion of a consolidation or merger of us with or into any other
person or entity in a transaction in which either we are not the sole
surviving corporation or our common stock existing before the transaction
is converted into cash, securities or other property and those exchanging
our common stock do not, as a result of the transaction, receive either
75% or more of the survivor's common stock or 75% or more of the voting
power of the survivor's voting stock.
Apache Finance will not purchase any debt securities if there has occurred
and is continuing an event of default under the indenture, other than default in
payment of the purchase price payable for the debt securities upon change in
control. In connection with any purchase of debt securities after a change in
control, we and Apache Finance will comply with all federal and state securities
laws, including, specifically, Rule 13e-4, if applicable, of the Securities
Exchange Act of 1934, and any related Schedule 13E-4 required to be submitted
under that rule.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
We or Apache Finance may discharge certain obligations to holders of any
series of debt securities that have not already been delivered to the trustee
for cancellation and that:
- have become due and payable;
- will become due and payable within one year; or
- are scheduled for redemption within one year.
To discharge the obligations with respect to a series of debt securities, we or
Apache Finance must deposit with the trustee, in trust, an amount of funds in
U.S. dollars or in the foreign currency in which those debt securities are
payable sufficient to pay the entire amount of principal of, and any premium or
interest on, those debt securities to the date of the deposit if those debt
securities have become due and payable or to the maturity of the debt
securities, as the case may be.
The indenture provides that, unless the provisions of section 402 of the
indenture are made inapplicable to the debt securities, we or Apache Finance may
elect either
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- to defease and be discharged from any and all obligations with respect to
those debt securities, which is referred to as "legal defeasance"; or
- to be released from the obligations with respect to the debt securities
under the covenants described in "The Indenture Limits Our Ability to
Incur Liens" and "The Indenture Limits Our Ability to Engage in
Sale/Leaseback Transactions" above or, if provided pursuant to section
301 of the indenture, the obligations with respect to any other covenant,
which is referred to as "covenant defeasance."
In the case of legal defeasance we and Apache Finance will still retain
some obligations in respect of the debt securities, including the obligations:
- to pay additional amounts, if any, upon the occurrence of certain events
of taxation, assessment or governmental charge with respect to payments
on the debt securities;
- to register the transfer or exchange of the debt securities;
- to replace temporary or mutilated, destroyed, lost or stolen debt
securities; and
- to maintain an office or agency with respect to the debt securities and
to hold moneys for payment in trust.
After a covenant defeasance, any omission to comply with the obligations or
covenants that have been defeased shall not constitute a default or an event of
default with respect to the debt securities.
To elect either legal defeasance or covenant defeasance we or Apache
Finance must deposit with the trustee, in trust, an amount, in U.S. dollars or
in the foreign currency in which the relevant debt securities are payable at the
stated maturity, or in government obligations, as defined below, or both,
applicable to those debt securities which through the scheduled payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of and any premium and interest on those
debt securities on their scheduled due dates.
In addition, we or Apache Finance can only elect legal defeasance or
covenant defeasance if, among other things:
- the applicable defeasance does not result in a breach or violation of, or
constitute a default under, the indenture or any other material agreement
or instrument to which we or Apache Finance are a party or by which we or
Apache Finance are bound;
- no default or event of default with respect to the debt securities to be
defeased shall have occurred and be continuing on the date of the
establishment of the trust; and
- we or Apache Finance have delivered to the trustee an opinion of counsel
to the effect that the holders of the debt securities will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of
the defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if the defeasance had not occurred, and the opinion of counsel, in
the case of legal defeasance, must refer to and be based upon a letter
ruling of the Internal Revenue Service received by us, a Revenue Ruling
published by the Internal Revenue Service or a change in applicable U.S.
federal income tax law occurring after the date of the indenture.
The indenture deems a foreign currency to be any currency, currency unit or
composite currency, including, without limitation, the ECU or euro, issued by
the government of one or more countries other than the United States or by any
recognized confederation or association of governments.
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The indenture defines government obligations as securities which are not
callable or redeemable at the option of the issuer or issuers and are:
- direct obligations of the United States or the government or the
governments in the confederation which issued the foreign currency in
which the debt securities of a particular series are payable, for the
payment of which its full faith and credit is pledged; or
- obligations of a person or entity controlled or supervised by and acting
as an agency or instrumentality of the United States or the government or
governments which issued the foreign currency in which the debt
securities of a particular series are payable, the timely payment of
which is unconditionally guaranteed as a full faith and credit obligation
by the United States or that other government or governments.
Government obligations also include a depository receipt issued by a bank or
trust company as custodian with respect to any government obligation described
above or a specific payment of interest on or principal of or any other amount
with respect to any government obligation held by that custodian for the account
of the holder of the depository receipt, as long as, except as required by law,
that custodian is not authorized to make any deduction from the amount payable
to the holder of the depository receipt from any amount received by the
custodian with respect to the government obligation or the specific payment of
interest on or principal of or any other amount with respect to the government
obligation evidenced by the depository receipt.
Unless otherwise specified in the applicable prospectus supplement, if
after we or Apache Finance have deposited funds and/or government obligations to
effect legal defeasance or covenant defeasance with respect to debt securities
of any series, either:
- the holder of a debt security of that series is entitled to, and does,
elect to receive payment in a currency other than that in which the
deposit has been made in respect of that debt security; or
- a conversion event, as defined below, occurs in respect of the foreign
currency in which the deposit has been made,
the indebtedness represented by that debt security shall be deemed to have been,
and will be, fully discharged and satisfied through the payment of the principal
of, and any premium and interest on, that debt security as that debt security
becomes due out of the proceeds yielded by converting the amount or other
properties so deposited in respect of that debt security into the currency in
which that debt security becomes payable as a result of the election or
conversion event based on:
- in the case of payments made pursuant to the first of the two items in
the list above, the applicable market exchange rate for the currency in
effect on the second business day before the date of the payment; or
- with respect to a conversion event, the applicable market exchange rate
for the foreign currency in effect, as nearly as feasible, at the time of
the conversion event.
The indenture defines a "conversion event" as the cessation of use of:
- a foreign currency other than the ECU and euro both by the government of
the country or the confederation which issued the foreign currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community;
- the ECU and euro both within the European Monetary System and for the
settlement of transactions by public institutions of or within the
European Community; or
- any currency unit or composite currency other than the ECU and euro for
the purposes for which it was established.
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Unless otherwise specified in the applicable prospectus supplement, all payments
of principal of, and any premium and interest on, any debt security that are
payable in a foreign currency that ceases to be used by the government or
confederation of issuance shall be made in U.S. dollars.
If we or Apache Finance effect a covenant defeasance with respect to any
debt securities and the debt securities are declared due and payable because of
the occurrence of any event of default other than an event of default with
respect to which there has been covenant defeasance, the amount in the foreign
currency in which the debt securities are payable, and government obligations on
deposit with the trustee, will be sufficient to pay amounts due on the debt
securities at the time of the stated maturity but may not be sufficient to pay
amounts due on the debt securities at the time of the acceleration resulting
from the event of default. However, we or Apache Finance would remain liable for
payment of the amounts due at the time of acceleration.
The applicable prospectus supplement may further describe the provisions,
if any, permitting defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the debt
securities of or within a particular series.
Under the indenture, we and Apache Finance are required to furnish to the
trustee annually a statement as to our and Apache Finance's performance of
certain of our and Apache Finance's obligations under the indenture and as to
any default in performance. We and Apache Finance are also required to deliver
to the trustee, within five days after occurrence thereof, written notice of any
event which after notice or lapse of time or both would constitute an event of
default.
MODIFICATION AND WAIVER
We, Apache Finance and the trustee may modify the indenture or waive
certain provisions of the indenture with the consent of the holders of not less
than a majority in aggregate principal amount of the debt securities of each
series affected by the modification or waiver. However, provisions of the
indenture may not be waived or modified without the consent of the holder of
each debt security affected thereby if the modification or waiver would:
- change the stated maturity of the principal of, or premium, if any, on,
or any installment of principal, if any, of or interest on, or any
additional amounts payable with respect to, any debt security;
- reduce the principal amount of, or premium or interest on, or any
additional amounts payable with respect to, any debt security;
- change the coin or currency in which any debt security or any premium or
any interest on the debt security or any additional amounts payable with
respect to the debt security is payable;
- impair the right to institute suit for the enforcement of any payment on
or after the stated maturity of any debt securities or, in the case of
redemption, exchange or conversion, on or after the redemption, exchange
or conversion date or, in the case of repayment at the option of any
holder, on or after the date for repayment or in the case of a change in
control, after the change in control purchase date;
- reduce the percentage and principal amount of the outstanding debt
securities, the consent of whose holders is required in order to take
certain actions;
- change any of our or Apache Finance's obligations to maintain an office
or agency in the places and for the purposes required by the indenture;
- modify or affect in any manner adverse to the holders of the debt
securities the terms and conditions of our or Apache Finance's
obligations regarding the due and punctual payment of principal or, any
premium on or all interest on the debt securities; or
- modify any of the above provisions.
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The holders of at least a majority in aggregate principal amount of debt
securities of any series may, on behalf of the holders of all debt securities of
that series, waive our or Apache Finance's compliance with certain restrictive
provisions of the indenture. The holders of not less than a majority in
aggregate principal amount of debt securities of any series may, on behalf of
all holders of debt securities of that series, waive any past default and its
consequences under the indenture with respect to the debt securities of that
series, except:
- a payment default with respect to debt securities of that series; or
- a default of a covenant or provision of the indenture that cannot be
modified or amended without the consent of the holder of each debt
security of any series.
ASSUMPTION OF THE OBLIGATIONS UNDER THE DEBT SECURITIES BY APACHE
Under the indenture, we may, at our option, assume Apache Finance's
obligations under the debt securities if:
- we expressly assume the obligations in an assumption agreement or
supplemental indenture that is executed and delivered to the trustee in a
form that is acceptable to the trustee;
- no event of default and no event that after a notice or the lapse of time
or both would become an event of default occurs and is continuing after
giving effect to our assuming the obligations; and
- we expressly agree in an assumption agreement or supplemental indenture
to indemnify the holders of the debt securities against any tax
assessment or government charge imposed on a holder or required to be
withheld or deducted from any payment made to a holder, including any
charge or withholding required on account of this indemnification, and
any costs or expenses incurred by a holder on account of our assuming the
obligations. If we deliver to the trustee an opinion of an independent
tax counsel or consultant of recognized standing stating that the holders
will not recognize income, gain or loss, for United States federal income
tax purposes, as a result of assuming these obligations, then a holder
will have the above indemnification rights only if and when gain for
United States federal income tax purposes is actually recognized by a
holder.
If we assume Apache Finance's obligations, as described above, we will be
substituted for Apache Finance for all purposes regarding the debt securities so
assumed as if we had been the original issuer of the securities.
ASSIGNMENT TO ANOTHER SUBSIDIARY
Under the indenture, Apache Finance may assign its obligations under any
series of debt securities to any of our other subsidiaries and the new
subsidiary will be treated, for all purposes, as Apache Finance's successor with
respect to the series of debt securities assigned, provided that the conditions
described under "Consolidation, Merger and Sale of Assets" below are satisfied.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may, without the consent of the holders of the debt securities,
consolidate or merge with or into, or convey, transfer or lease our properties
and assets substantially as an entirety to, any person that is a corporation,
limited liability company, partnership or trust organized and validly existing
under the laws of any domestic jurisdiction. We may also permit any of those
persons to consolidate with or merge into us or convey, transfer or lease its
properties and assets substantially as an entirety to us, as long as any
successor person assumes our obligations on the securities and after giving
effect to the transaction no event of default under the indenture, and no event
which, after notice or lapse of time or both, would become an event of default,
will have occurred and be continuing, and as long as some other conditions are
met.
Apache Finance may, without the consent of the holders of the debt
securities, consolidate or merge into, or convey, transfer or lease its
properties and assets substantially as an entirety to any person or
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permit any person to consolidate with or merge into or convey, transfer or lease
its properties and assets substantially as an entirety to us or Apache Finance,
as long as the person assumes Apache Finance's obligations on the debt
securities and under the indenture, and immediately after the transaction, no
event of default, and no event which, after notice or lapse of time or both,
would become an event of default, under the indenture has occurred.
Also, the successor person to us or Apache Finance must expressly agree in
a supplemental indenture:
- that all payments on the debt securities in respect of the principal of
and any premium and interest shall be made without withholding or
deduction for any present or future taxes, duties, assessments or
governmental charges of any nature imposed or levied by or on behalf of
the person's jurisdiction of organization or political subdivision or
taxing authority, unless the taxes are required by the jurisdiction,
subdivision or authority to be withheld or deducted, in which case the
person will pay additional amounts so that after deducting the taxes the
holder of a debt security receives the same amount that the holder would
have received if no withholding or deduction was required; and
- to indemnify immediately the holder of each debt security against
- any tax, assessment or governmental charge imposed on the holder or
required to be withheld or deducted from any payment to the holder as a
consequence of the transaction; and
- any other tax costs or other tax expenses of the transaction.
If we, Apache Finance or the successor person deliver an opinion of an
independent counsel or a tax consultant of recognized standing that the holder
will not recognize income, gain or loss for U.S. federal income tax purposes as
a result of the transaction, a holder will have this right to indemnification
only if and when gain for U.S. federal income tax purposes is actually
recognized by the holder.
PAYMENT OF ADDITIONAL AMOUNTS
Apache Finance must make all payments of, or in respect of, principal of
and any premium and interest on the debt securities without withholding or
deduction for any taxes imposed or levied by or on behalf of any Canadian taxing
authorities. If the taxing authorities nonetheless require Apache Finance to
withhold taxes, Apache Finance must pay as additional interest an amount that
will result, after deducting the taxes, in the payment to the holder of the debt
securities of the amount that would have been paid if no withholding was
required. Except as otherwise specified in the applicable prospectus supplement,
Apache Finance is not required to pay this additional interest for or on account
of:
- any tax that would not have been imposed but for the fact that the holder
- was a resident, domiciled or national of, or engaged in business or
maintained a permanent establishment or was physically present in Canada
or otherwise had some connection with Canada other than merely owning
the debt security;
- presented, if presentation is required, the debt security for payment in
Canada, unless the debt security could not have been presented for
payment elsewhere;
- presented, if presentation is required, the debt security more than 30
days after the date on which the payment relating to the debt security
first became due and payable or provided for, whichever is later, except
to the extent that the holder would have been entitled to the additional
interest if it had presented the debt security for payment on any day
within this 30 day period;
- is not dealing with Apache Finance, directly or indirectly, on an
arm's-length basis; or
- entered into or participated in a scheme to avoid Canadian withholding
tax that Apache Finance was neither a party to nor participated in;
- any estate, inheritance, gift, sale, transfer, personal property or
similar tax, assessment or other governmental charge;
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- any tax that is payable other than by withholding or deduction from
payments of, or in respect of, principal of or any premium or interest on
the debt securities;
- any tax that is imposed or withheld because the holder or the beneficial
owner of a debt security failed, upon request of Apache Finance to
provide information concerning the nationality, residence or identity of
the holder or the beneficial owner, or to make any declaration or other
similar claim or satisfy any information or reporting requirement that is
required or imposed by Canadian federal income tax laws as a precondition
to exemption from all or part of the tax, assessment or other
governmental charge; or
- any combination of four items listed above.
Apache Finance also does not have to pay additional interest with respect
to any payment of the principal of or any premium or interest on the debt
security to any holder that is a fiduciary or partnership or other than the sole
beneficial owner of the payment to the extent the payment would be required by
the laws of Canada to be included in the income for tax purposes of a
beneficiary or settlor with respect to a fiduciary or a member of the
partnership or a beneficial owner who would not have been entitled to the
additional interest if it held the debt security.
Any amounts paid by us, as guarantor, under the indenture must be paid
without withholding or deduction for any taxes imposed or levied by or on behalf
of any U.S. taxing authority. If a U.S. taxing authority nonetheless requires us
to withhold taxes, we must pay an additional amount so that the net amount paid
to the holder, after deducting the taxes, is not less than the amount then due
and payable on the debt securities. We are not required to pay this additional
amount to any holder of a debt security who is:
- subject to U.S. tax by reason of the holder being connected with the U.S.
otherwise than by holding or owning the debt securities; or
- not dealing at arm's length with us.
Where this prospectus mentions, in any context, the payment of principal
of, or any premium or interest on, or in respect of, the debt securities of any
series or the net proceeds received on the sale or exchange of the debt
securities, this amount shall be deemed to include the payment of additional
amounts provided for in the indenture to the extent that the additional amounts
are, were or would be payable under the indenture.
REDEMPTION FOR TAXATION REASONS
If Canadian taxing authorities change or amend their laws, regulations or
published tax rulings or the official administration, application or
interpretation of their laws, regulations or published tax rulings either
generally or in relation to the debt securities, and Apache Finance determines
that:
- it will be required to pay any additional amounts under the indenture or
the terms of any debt security
- in respect of interest on the next succeeding interest payment date; or
- in respect of the principal of any discounted debt securities on the
date of the determination, assuming that a payment in respect of
principal were required to be made on this date under the terms of the
debt securities; and
- Apache Finance cannot avoid paying the additional amount by taking
reasonable measures available to it,
it may, at its option, redeem all, but not less than all, of the debt securities
of any series in respect of which any additional amounts would be so payable at
any time, upon not less than 30 nor more than 60 days' written notice as
provided in the indenture. Unless otherwise specified in the accompanying
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prospectus supplement, the redemption price will be equal to 100 percent of the
principal amount of the debt securities plus accrued interest to the date of
redemption, except that any debt securities that are discounted debt securities
may be redeemed at the redemption price specified in the debt securities' terms,
as long as:
- no notice of redemption may be given earlier than 60 days before the
earliest date on which Apache Finance would be obligated to pay any
additional amounts if a payment was due in respect of the debt
securities; and
- at the time any redemption notice is given, the obligation to pay any
additional amounts must remain in effect.
If
- Apache Finance has consolidated with or merged into, or conveyed or
transferred or leased its properties and assets as an entirety or
substantially as an entirety to, any person that is organized under the
laws of any jurisdiction other than the United States or Canada;
- as the result of any change in or any amendment to the laws, regulations
or published tax rulings of the jurisdiction under which Apache Finance's
successor is organized or of its political subdivisions or taxing
authorities affecting taxation, or any change in the official
administration, application or interpretation of its laws, regulations or
published tax rulings either generally or in relation to any particular
debt securities, Apache Finance's successor must pay any additional
amounts under the indenture or the terms of any debt securities
- in respect of interest on any debt securities on the next succeeding
interest payment date; or
- in respect of the principal of any discounted debt securities on the
date of the determination, assuming the principal must be paid on that
date under the terms of the debt securities; and
- Apache Finance or its successor taking reasonable measures cannot avoid
this obligation,
Apache Finance or its successor may redeem all, but not less than all, of the
debt securities of any series in respect of which any additional amounts would
be so payable at any time, upon not less than 30 nor more than 60 days' written
notice as provided in the indenture, at a redemption price equal to 100 percent
of the principal amount of the debt securities plus accrued interest to the date
fixed for redemption, unless otherwise specified in the applicable prospectus
supplement, except that any debt securities that are discounted debt securities
may be redeemed at the price specified in the debt securities' terms. No notice
of redemption may be given earlier than 60 days before the earliest date on
which a successor must pay any additional amounts if a payment was due in
respect of the debt securities. Also, at the time any redemption notice is
given, the successor's obligation to pay any additional amounts must remain in
effect.
CONCERNING THE TRUSTEE
Unless otherwise specified in the applicable prospectus supplement, The
Chase Manhattan Bank, New York, New York will be the trustee under the
indenture.
SERVICE OF PROCESS
Under the indenture, Apache Finance will irrevocably appoint CT Corporation
System, 111 8th Avenue, New York, New York 10011, as its agent for service of
process in any suit, action or proceeding with respect to the indenture, the
debt securities or the guarantees issued thereunder and for actions brought
under the federal or state securities laws brought in any federal or state court
located in New York City, and submitted to jurisdiction in New York.
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GOVERNING LAW
The indenture, the debt securities and the guarantees are governed by and
construed under the laws of the State of New York, without regard to the
principles of conflicts of laws, except as may otherwise be required by
mandatory provisions of law. All matters governing the authorization and
execution of the indenture and the debt securities by Apache Finance will be
governed by and construed in accordance with the laws of Nova Scotia, Canada.
ENFORCEABILITY OF JUDGMENTS
Since a substantial portion of Apache Finance's assets are outside the
United States, any judgment obtained in the United States against Apache
Finance, including judgments with respect to the payment of principal or
interest on the securities, may not be collectible in the United States.
BOOK-ENTRY SECURITIES
Unless otherwise specified in the applicable prospectus supplement, we and
Apache Finance will issue securities in the form of one or more book-entry
certificates registered in the name of a depositary or a nominee of a
depositary. Unless otherwise specified in the applicable prospectus supplement,
the depositary will be The Depository Trust Company, also referred to as DTC. We
and Apache Finance have been informed by DTC that its nominee will be Cede & Co.
Accordingly, Cede is expected to be the initial registered holder of all
securities that are issued in book-entry form.
No person that acquires a beneficial interest in securities issued in
book-entry form will be entitled to receive a certificate representing those
securities, except as set forth in this prospectus or in the applicable
prospectus supplement. Unless and until definitive securities are issued under
the limited circumstances described below, all references to actions by
beneficial owners of securities issued in book-entry form will refer to actions
taken by DTC upon instructions from its participants, and all references to
payments and notices to beneficial owners will refer to payments and notices to
DTC or Cede, as the registered holder of the securities.
DTC has informed us and Apache Finance that it is:
- a limited purpose trust company organized under New York banking laws;
- a "banking organization" within the meaning of the New York banking laws;
- a member of the Federal Reserve System;
- a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
- a "clearing agency" registered under the Securities Exchange Act.
DTC has also informed us that it was created to:
- hold securities for "participants"; and
- facilitate the clearance and settlement of securities transactions among
participants through electronic book-entry, thereby eliminating the need
for the physical movement of securities certificates.
Participants have accounts with DTC and include securities brokers and
dealers, banks, trust companies and clearing corporations. Indirect access to
the DTC system also is available to indirect participants such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
Persons that are not participants or indirect participants but desire to
buy, sell or otherwise transfer ownership of or interests in securities may do
so only through participants and indirect participants. Under the book-entry
system, beneficial owners may experience some delay in receiving payments, as
payments
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will be forwarded by our agent to Cede, as nominee for DTC. DTC will forward
these payments to its participants, which thereafter will forward them to
indirect participants or beneficial owners. Beneficial owners will not be
recognized by the applicable registrar, transfer agent, trustee or depositary as
registered holders of the securities entitled to the benefits of the certificate
or the indenture. Beneficial owners that are not participants will be permitted
to exercise their rights as an owner only indirectly through participants and,
if applicable, indirect participants.
Under the current rules and regulations affecting DTC, DTC will be required
to make book-entry transfers of securities among participants and to receive and
transmit payments to participants. Participants and indirect participants with
which beneficial owners of securities have accounts are also required by these
rules to make book-entry transfers and receive and transmit those payments on
behalf of their respective account holders.
Because DTC can act only on behalf of participants, who in turn act only on
behalf of other participants or indirect participants, and on behalf of certain
banks, trust companies and other persons approved by it, the ability of a
beneficial owner of securities issued in book-entry form to pledge those
securities to persons or entities that do not participate in the DTC system may
be limited due to the unavailability of physical certificates for the
securities.
DTC has advised us and Apache Finance that it will take any action
permitted to be taken by a registered holder of any securities under the
certificate or the indenture only at the direction of one or more participants
to whose accounts with DTC the securities are credited.
DTC has further advised us and Apache Finance that its management is aware
that some computer applications, systems, and the like for processing data that
are dependent upon calendar dates, including dates before, on, and after January
1, 2000, may encounter "Year 2000 problems." DTC has informed its participants
and other members of the financial community that it has developed and is
implementing a program so that its computer systems, as they relate to the
timely payment of distributions to security holders, book-entry deliveries, and
settlement of trades within DTC, continue to function appropriately. This
program includes a technical assessment and a remediation plan, each of which is
complete. Additionally, DTC's plan includes a testing phase, which is expected
to be completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including issuers and their agents, as well as DTC's direct
and indirect participants and third party vendors from whom DTC licenses
software and hardware, and third party vendors on whom DTC relies for
information or the provision of services, including telecommunication and
electrical utility service providers, among others. DTC has informed its
participants and other members of the financial community that it is contacting
and will continue to contact third party vendors from whom it acquires services
to impress upon them the importance of these services being Year 2000 compliant
and determine the extent of their efforts for Year 2000 remediation -- and, as
appropriate, testing -- of their services. In addition, DTC is in the process of
developing contingency plans that it considers appropriate.
According to DTC, the information with respect to DTC has been provided to
its participants and other members of the financial community for informational
purposes only and is not intended to serve as a representation, warranty, or
contract modification of any kind.
Unless otherwise specified in the applicable prospectus supplement, a
book-entry security will be exchangeable for definitive securities registered in
the names of persons other than DTC or its nominee only if:
- DTC notifies us or Apache Finance that it is unwilling or unable to
continue as depositary for the book-entry security or DTC ceases to be a
clearing agency registered under the Securities Exchange Act at a time
when DTC is required to be so registered; or
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- we or Apache Finance execute and deliver to the applicable registrar,
transfer agent, trustee and/or depositary an order complying with the
requirements of the certificate, the indenture or any deposit agreement
that the book-entry security will be so exchangeable.
Any book-entry security that is exchangeable in accordance with the preceding
sentence will be exchangeable for securities registered in those names as DTC
directs.
If one of the events described in the immediately preceding paragraph
occurs, DTC is generally required to notify all participants of the availability
through DTC of definitive securities. Upon surrender by DTC of the book-entry
security representing the securities and delivery of instructions for re-
registration, the registrar, transfer agent, trustee or depositary, as the case
may be, will reissue the securities as definitive securities. After reissuance
of the securities, those persons will recognize the beneficial owners of
definitive securities as registered holders of securities.
Except as described above:
- a book-entry security may not be transferred except as a whole book-entry
security by or among DTC, a nominee of DTC and/or a successor depositary
appointed by Apache Finance; and
- DTC may not sell, assign or otherwise transfer any beneficial interest in
a book-entry security unless the beneficial interest is in an amount
equal to an authorized denomination for the securities evidenced by the
book-entry security.
None of Apache, Apache Finance, the trustees, any registrar and transfer
agent or any depositary, or any agent of any of them, will have any
responsibility or liability for any aspect of DTC's or any participant's records
relating to, or for payments made on account of, beneficial interests in a
book-entry security.
CERTAIN INCOME TAX CONSIDERATIONS
This section summarizes certain United States and Canadian federal income
tax consequences of purchasing, owning and disposing of the debt securities.
Except as specified otherwise in this section, this summary is based upon laws,
regulations, rulings and decisions now in effect, all of which are subject to
change or possible differing interpretations. It deals only with debt securities
held as capital assets or capital property and does not purport to address all
aspects of United States or Canadian federal income taxes that may be relevant
to investing in the debt securities, nor does it address the United States or
Canadian tax consequences that apply to persons in special tax situations, such
as financial institutions, insurance companies, regulated investment companies,
dealers in securities or currencies, or persons holding debt securities as a
hedge against currency risks or as a position in a "straddle" for tax purposes.
It also does not deal with holders other than original purchasers, except where
otherwise specifically noted. Persons considering the purchase of the debt
securities should consult their own tax advisors concerning the application of
United States and Canadian federal income tax laws to their particular
situations as well as any consequences of purchasing, owning or disposing of the
debt securities arising under the laws of any other taxing jurisdiction.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
It is the opinion of Chamberlain, Hrdlicka, White, Williams & Martin,
Houston, Texas, special U.S. tax counsel to Apache, that the following summary
addresses the material United States federal income tax considerations of
purchasing, owning and disposing of the debt securities.
As used herein, the term "U.S. holder" means a beneficial owner of a debt
security that is
- a citizen or resident of the United States;
- a corporation, partnership or other entity treated as a corporation or a
partnership for United States federal income tax purposes created or
organized in or under the laws of the United States or of
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any state thereof, including the District of Columbia (other than a
partnership that is not treated as a United States person under any
applicable Treasury regulations);
- an estate the income of which is subject to United States federal income
taxation regardless of its source; or
- a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of
the trust.
Certain trusts that do not satisfy the last criteria above, but that existed on
August 20, 1996 and were treated as United States persons before this date, may
elect to continue to be so treated and also shall be considered U.S. holders.
As used herein, the term "non-U.S. holder" means a holder of a debt
security that is not a U.S. holder.
U.S. Holders
Taxation of Interest. U.S. holders generally must include in their gross
income, as ordinary interest income, the gross amount of interest, including
additional amounts, if any, accrued or received in respect of the debt
securities. We or Apache Finance will file an election with the Internal Revenue
Service to disregard Apache Finance as an entity separate from us for United
States federal income tax purposes. Accordingly, the interest income will be
treated as U.S. source income. Neither we nor Apache Finance intend to apply for
a ruling from the Internal Revenue Service regarding the debt securities.
Taxation of Dispositions. A U.S. holder that owns the debt securities as
capital assets will recognize capital gain or loss, except as described below
with respect to certain accrued but unpaid interest or market discount, upon a
sale or other disposition of the debt securities in an amount equal to the
difference between the U.S. holder's amount realized and its adjusted tax basis
in the debt securities. The capital gain or loss recognized by a U.S. holder on
a sale or other disposition of the debt securities will be
- short-term if the debt securities have been held for 12 months or less;
or
- long-term if the debt securities have been held for more than 12 months.
A U.S. holder of a debt security may recognize capital gain or loss equal
to the difference between the fair market value of the debt security and the
U.S. holder's adjusted tax basis in the debt security if
- Apache Finance consolidates with or merges into any other person or
conveys, transfers or leases its properties and assets substantially as
an entirety to any other person;
- we assume the obligations of Apache Finance under any series of debt
securities;
- Apache Finance exercises its option to redeem the debt securities; or
- Apache Finance assigns its obligations under any series of debt
securities to any other person.
As described above, the indenture provides that, if a U.S. holder, other than
certain tax-exempt entities, recognizes gain as a result of any of the
transactions described above, Apache Finance or any person assuming our or
Apache Finance's obligations as part of the transaction, must indemnify the U.S.
holder for any tax imposed on the U.S. holder as a result of the transaction.
A U.S. holder will also recognize gain on disposition of a debt security in
the amount of
- any accrued but unpaid interest on the security; and
- the amount of any market discount associated with the security.
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Any accrued but unpaid interest or accrued market discount not previously
included in the U.S. holder's income will be treated as ordinary interest
income.
Original Issue Discount. The debt securities may be issued with "original
issue discount." U.S. holders of the debt securities must include original issue
discount in gross income as it accrues, on a constant-yield basis, regardless of
their method of accounting.
The amount of the original issue discount in the debt securities will be
the difference between the stated redemption price at maturity and the issue
price of the debt securities, subject to a statutorily defined de minimis
exception. The "issue price" of the debt securities will be the price at which a
substantial amount of the debt securities are sold to the public for cash
(excluding sales to bond houses, brokers or similar persons or organizations
acting in the capacity as underwriters, placement agents or wholesalers). The
"stated redemption price" at maturity is the total of all payments to be made on
the debt security other than payments of qualified stated interest. "Qualified
stated interest" includes only interest that is unconditionally payable in cash
or property, other than debt instruments of Apache Finance, at least annually at
a single fixed rate that appropriately takes into account the time between
payments.
U.S. holders of the debt securities must include in gross income, as
interest, the daily portions of original issue discount for each day during the
taxable year on which it holds the debt securities. The daily portions of the
original issue discount will be determined by allocating to each day in each
accrual period the ratable portion of the original issue discount allocable to
that period. The accrual periods may be of any length and may vary in length
over the debt security's term, as long as each accrual period is no longer than
one year, and each scheduled payment of interest or principal occurs on either
the final day or the first day of an accrual period. The original issue discount
allocable to an accrual period will equal the product of the adjusted issue
price of the debt securities at the beginning of the accrual period and the debt
securities' yield to maturity. The adjusted issue price of the debt securities
at the start of any accrual period will be the issue price of the debt
securities increased by the amount of the original issue discount that has
accrued in all previous accrual periods and decreased by the amount of any
payments previously made on the first day of the current accrual period. Because
U.S. holders of the debt securities will include original issue discount in
income as it accrues, actual payments of interest, other than qualified stated
interest, on the debt securities issued at a discount will not trigger any
additional interest income to the holders.
Information Reporting and Backup Withholding. Apache Finance will provide
annual information statements to U.S. holders of the debt securities and
information returns to the Internal Revenue Service regarding the amount of
original issue discount, if any, that accrue on the debt securities during the
year.
Apache Finance, its paying agent, or other withholding agent may be
required to withhold and remit to the Internal Revenue Service 31 percent of the
interest payments on the debt securities if the Internal Revenue Service
notifies Apache Finance, its paying agent, or other withholding agent that any
U.S. holder is subject to backup withholding, or if the U.S. holder
- fails to provide a taxpayer identification number;
- provides an incorrect taxpayer identification number;
- fails to certify that the holder is not subject to backup withholding; or
- otherwise fails to comply with applicable requirements of the backup
withholding rules.
Certain U.S. holders are not subject to these backup withholding rules. A U.S.
holder may credit amounts paid as backup withholding against its United States
federal income tax liability.
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Non-U.S. Holders
A non-U.S. holder will not be subject to United States federal income taxes
on payments of principal, premium, if any, or interest, including original issue
discount, if any, on a debt security, unless the non-U.S. holder is
- a direct or indirect 10 percent or greater shareholder of Apache;
- a controlled foreign corporation related to Apache; or
- a bank receiving interest described in Section 881(c)(3)(A) of the
Internal Revenue Code of 1986.
To qualify for the exemption from taxation, the last United States payor in
the chain of payment before payment to a non-U.S. holder, i.e., the "withholding
agent," must have received in the year in which a payment of interest or
principal occurs, or in either of the two preceding calendar years, a statement
that
- is signed by the beneficial owner of the debt security under penalties of
perjury;
- certifies that the owner is not a U.S. holder; and
- provides the name and address of the beneficial owner.
This statement is generally provided on Form W-8 or a substantially similar
form.
Generally, a non-U.S. holder will not be subject to United States federal
income taxes on any amount that constitutes capital gain upon sale or
disposition of a debt security, unless
- the gain is effectively connected with a U.S. trade or business;
- subject to certain exceptions, the non-U.S. Holder is an individual who
holds the debt security as a capital asset and is present in the United
States for 183 days or more in the year of sale or disposition; or
- the non-U.S. Holder is subject to tax under provisions of United States
federal income tax law that applies to certain U.S. expatriates,
including certain former U.S. citizens or residents.
Certain other exceptions may apply, and a non-U.S. holder should consult its own
tax advisor in this regard.
On October 6, 1997, the United States Department of Treasury issued final
regulations dealing with withholding tax on income paid to foreign persons,
backup withholding and related matters. These regulations generally attempt to
unify certification requirements and modify reliance standards. These
regulations generally will be effective for payments made after December 31,
2000, subject to certain transition rules. Prospective investors should consult
their own tax advisors with respect to these regulations.
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
It is the opinion of Bennett Jones, Calgary, Alberta, Canada, special
Canadian tax counsel to Apache, that the following summary addresses the
material Canadian federal income tax considerations to persons who are
non-residents of Canada of purchasing, owning and disposing of the debt
securities. This summary is based on the current provisions of the Income Tax
Act (Canada) (the "ITA") and the regulations thereunder, the understanding of
Bennett Jones of the current assessing and administrative practices of Revenue
Canada, Customs, Excise and Taxation ("Revenue Canada") and all specific
proposals to amend the ITA and the regulations thereunder publicly announced by
the Minister of Finance (Canada) before the date of this prospectus. This
summary does not otherwise take into account or anticipate changes in the law or
in the assessment and administrative practices of Revenue Canada, whether by
judicial,
29
<PAGE> 31
governmental or legislative decision or action, nor does it take into account
tax legislation or considerations of any province or territory of Canada or any
jurisdiction other than Canada. This summary is of a general nature only and is
not intended to be, and should not be interpreted as, legal or tax advice to any
holder of debt securities.
The payment of interest, premium, if any, and principal by Apache Finance
on the debt securities to initial holders who are non-residents of Canada with
whom we and Apache Finance are dealing at arm's length, within the meaning of
the ITA, at the time of making the payment will be exempt from non-resident
withholding tax under the ITA.
No other taxes on income (including capital gains) will be payable under
the ITA in respect of the holding, repayment, redemption or disposition of the
debt securities, or the receipt of interest, premium, if any, or principal
thereon by holders who are not resident, nor deemed to be resident, in Canada at
any time when debt securities are owned by those holders and who, for the
purposes of the ITA, do not use or hold and are not deemed to use or hold the
debt securities in carrying on business in Canada. However, in certain
circumstances, any holders who are non-resident insurers carrying on an
insurance business in Canada and elsewhere may be subject to tax under the ITA
in respect of the holding, repayment, redemption or disposition of the debt
securities, or the receipt of interest, premium, if any, or principal thereon.
PLAN OF DISTRIBUTION
We and Apache Finance may sell the securities through agents, underwriters
or dealers, or directly to one or more purchasers without using underwriters or
agents.
We and Apache Finance may designate agents who agree to use their
reasonable efforts to solicit purchases for the period of their appointment or
to sell securities on a continuing basis.
If we and Apache Finance use underwriters for a sale of securities, the
underwriters will acquire the securities for their own account. The underwriters
may resell the securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The obligations of the underwriters to purchase the
securities will be subject to the conditions set forth in the applicable
underwriting agreement. The underwriters will be obligated to purchase all the
securities of the series offered if any of the securities of that series are
purchased. Any initial public offering price and any discounts or concessions
allowed or re-allowed or paid to dealers may be changed from time to time.
Underwriters, dealers and agents that participate in the distribution of
the securities may be underwriters as defined in the Securities Act and any
discounts or commissions they receive from us or Apache Finance and any profit
on their resale of the securities may be treated as underwriting discounts and
commissions under the Securities Act. The applicable prospectus supplement will
identify any underwriters, dealers or agents and will describe their
compensation. We or Apache Finance may have agreements with the underwriters,
dealers and agents to indemnify them against certain civil liabilities,
including liabilities under the Securities Act. Underwriters, dealers and agents
may engage in transactions with or perform services for us or our subsidiaries
in the ordinary course of their businesses.
TRADING MARKETS AND LISTING OF SECURITIES
Unless otherwise specified in the applicable prospectus supplement, each
class or series of securities will be a new issue with no established trading
market. We and Apache Finance may elect to list any other class or series of
securities on any exchange, but we are not obligated to do so. It is possible
that one or more underwriters may make a market in a class or series of
securities, but the underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. We and Apache Finance
cannot give any assurance as to the liquidity of the trading market for any of
the securities.
30
<PAGE> 32
STABILIZATION ACTIVITIES
Any underwriter may engage in over-allotment, stabilizing transactions,
short-covering transactions and penalty bids in accordance with Regulation M
under the Securities Exchange Act. Over-allotment involves sales in excess of
the offering size, which create a short position. Stabilizing transactions
permit bids to purchase the underlying security so long as the stabilizing bids
do not exceed a specified maximum. Short-covering transactions involve purchases
of the securities in the open market after the distribution is completed to
cover short positions. Penalty bids permit the underwriters to reclaim a selling
concession from a dealer when the securities originally sold by the dealer are
purchased in a covering transaction to cover short positions. Those activities
may cause the price of the securities to be higher than it would otherwise be.
If commenced, the underwriters may discontinue any of the activities at any
time.
LEGAL MATTERS
The legality of the securities will be passed upon for Apache by its Vice
President and General Counsel, Z. S. Kobiashvili. As of the date of this
prospectus, Mr. Kobiashvili holds employee stock options to purchase 56,550
shares of Apache common stock, of which options to purchase 30,125 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. In addition, other customary legal matters relating to the
offering of the securities, including matters relating to our due incorporation,
legal existence and authorized capitalization, will be passed upon for Apache by
Mr. Kobiashvili, Chamberlain, Hrdlicka, White, Williams & Martin, Houston,
Texas, Bennett Jones, Calgary, Alberta, Canada, or McInnes Cooper & Robertson,
Nova Scotia, Canada. Unless otherwise specified in the accompanying prospectus
supplement, certain U.S. legal matters will be passed upon for any underwriters
or agents by Brown & Wood LLP, New York, New York.
EXPERTS
The audited consolidated financial statements of Apache, incorporated by
reference into this prospectus, 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 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 these matters. The information incorporated by reference into this prospectus
regarding the total estimated proved reserves acquired from Texaco Exploration
and Production Inc. was prepared by Apache and reviewed by Ryder Scott 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
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
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.
31
<PAGE> 33
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses, other than underwriting discounts and commissions, in
connection with the issuance and distribution of the securities are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $111,200
Rating agency fees.......................................... 15,000
Legal fees and expenses..................................... 350,000
Accounting fees and expenses................................ 75,000
Trustee's fees and expenses................................. 12,000
Printing and engraving...................................... 100,000
Miscellaneous............................................... 7,000
--------
Total............................................. $670,200
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
APACHE
Apache's restated certificate of incorporation provides that Apache shall,
to the full extent permitted under the Delaware General Corporation Law,
indemnify its officers, directors, employees and agents.
Section 145 of the Delaware General Corporation Law, inter alia, authorizes
a corporation to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, other than an action by or in the right of the corporation, because
such person is or was a director, officer, employee or agent of the corporation
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or other enterprise, against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reason to believe his conduct was
unlawful. Similar indemnity is authorized for such persons against expenses,
including attorneys' fees, actually and reasonably incurred in defense or
settlement of any such pending, completed or threatened action or suit by or in
the right of the corporation if such person acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and provided further that, unless a court of competent jurisdiction
otherwise provides, such person shall not have been adjudged liable to the
corporation. Any such indemnification may be made only as authorized in each
specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him. Apache maintains policies
insuring its and its subsidiaries' officers and directors against certain
liabilities for actions taken in such capacities, including liabilities under
the Securities Act of 1933.
Article VII of Apache's bylaws provides, in substance, that directors,
officers, employees and agents of Apache shall be indemnified to the extent
permitted by Section 145 of the Delaware General Corporation Law. Additionally,
Article Seventeen of Apache's restated certificate of incorporation eliminates
in certain
II-1
<PAGE> 34
circumstances the monetary liability of directors of Apache for a breach of
their fiduciary duty as directors. These provisions do not eliminate the
liability of a director
- for a breach of the director's duty of loyalty to Apache or its
stockholders;
- for acts or omissions by the director not in good faith;
- for acts or omissions by a director involving intentional misconduct or a
knowing violation of the law;
- under Section 174 of the Delaware General Corporation Law, which relates
to the declaration of dividends and purchase or redemption of shares in
violation of the Delaware General Corporation Law; and
- for transactions from which the director derived an improper personal
benefit.
APACHE FINANCE
The Articles of Association of Apache Finance provide, in substance, that
every director and officer of Apache Finance shall be indemnified by Apache
Finance against all costs, losses and expenses which such person may incur by
reason of any contract entered into, or any act or thing done, by him in such
capacity or in anyway in the discharge of his duties.
Nova Scotia law does not make any statutory provision for, nor impose any
statutory restriction upon, the ability of a company to indemnify directors and
officers.
Although the matter has not been judicially considered, the obligation to
indemnify may not extend to losses occasioned by a breach by a director of his
common law fiduciary duty to Apache Finance.
Reference is made to the form of underwriting agreements to be incorporated
by reference in this registration statement for a description of the
indemnification arrangements Apache and Apache Finance agree to in connection
with offerings of the securities registered by this registration statement.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
1.1 -- The form of underwriting agreement will be filed as an
exhibit to a current report of Apache and incorporated in
this registration statement by reference.
**4.1 -- Form of Indenture among Apache, Apache Finance and The
Chase Manhattan Bank, as Trustee, governing the Debt
Securities and the Guarantees.
**5.1 -- Opinion of general counsel regarding legality of
securities being registered.
**5.2 -- Opinion of McInness, Cooper & Robertson regarding Apache
Finance Canada.
*8.1 -- Opinion of Chamberlain, Hrdlicka, White, Williams &
Martin as to certain United States federal income tax
matters.
*8.2 -- Opinion of Bennett Jones as to certain Canadian federal
income tax matters.
*12.1 -- Statement of computation of ratios of earnings to fixed
charges and to combined fixed charges and preferred stock
dividends (incorporated by reference to Exhibit 12.1 to
Apache's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999, SEC File No. 1-4300).
*23.1 -- Consent of Arthur Andersen LLP, Houston, Texas.
*23.2 -- Consent of Ryder Scott Company Petroleum Engineers.
*23.3 -- Consent of Netherland, Sewell & Associates, Inc.
**23.4 -- Consent of general counsel (included in Exhibit 5.1).
*23.5 -- Consent of Chamberlain, Hrdlicka, White, Williams &
Martin (included in Exhibit 8.1).
</TABLE>
II-2
<PAGE> 35
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
*23.6 -- Consent of Bennett Jones (included in Exhibit 8.2).
**23.7 -- Consent of McInness, Cooper & Robertson (included in
Exhibit 5.2).
24.1 -- Powers of Attorney (included in Part II as a part of the
signature pages of the Registration Statement).
*25.1 -- Statement of Eligibility and Qualification under Trust
Indenture Act of 1939 of The Chase Manhattan Bank,
Trustee, is filed separately on Form T-1.
</TABLE>
- ---------------
* Filed herewith.
** To be filed by Amendment.
II-3
<PAGE> 36
ITEM 17. UNDERTAKINGS
1. Each of the undersigned registrants hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculations of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (1)(a)(i) and (1)(a)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by Apache pursuant to Sections 13 or 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement;
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
2. Each of the undersigned registrants hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
Apache's annual report pursuant to Sections 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this registration statement relating
to the securities offered therein, shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
3. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrants have been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-4
<PAGE> 37
4. Each of the undersigned registrants hereby undertakes that:
(a) For the purpose of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrants pursuant to
Rules 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this Registration Statement as of the time it was declared
effective;
(b) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
5. Each of the undersigned registrants hereby undertakes to file an
application for the purpose of determining the eligibility of the trustee to act
under subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Trust Indenture Act.
II-5
<PAGE> 38
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Houston, State of Texas.
APACHE CORPORATION
By: /s/ RAYMOND PLANK
------------------------------------
Raymond Plank,
Chairman and Chief Executive
Officer
Date: November 2, 1999
POWER OF ATTORNEY
The undersigned directors and officers of Apache Corporation do hereby
constitute and appoint Raymond Plank, G. Steven Farris, Z. S. Kobiashvili and
Roger B. Plank, and each of them, with full power of substitution, our true and
lawful attorneys-in-fact to sign and execute, on behalf of the undersigned, any
and all amendments (including post-effective amendments) to this Registration
Statement; and each of the undersigned does hereby ratify and confirm all that
said attorneys-in-fact shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RAYMOND PLANK Chairman and Chief Executive November 2, 1999
- ----------------------------------------------------- Officer (Principal Executive
Raymond Plank Officer)
/s/ ROGER B. PLANK Vice President and Chief Financial November 2, 1999
- ----------------------------------------------------- Officer (Principal Financial
Roger B. Plank Officer)
/s/ THOMAS L. MITCHELL Vice President and Controller November 2, 1999
- ----------------------------------------------------- (Principal Accounting Officer)
Thomas L. Mitchell
</TABLE>
<PAGE> 39
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ FREDERICK M. BOHEN Director November 2, 1999
- -----------------------------------------------------
Frederick M. Bohen
/s/ G. STEVEN FARRIS Director November 2, 1999
- -----------------------------------------------------
G. Steven Farris
/s/ RANDOLPH M. FERLIC Director November 2, 1999
- -----------------------------------------------------
Randolph M. Ferlic
/s/ EUGENE C. FIEDOREK Director November 2, 1999
- -----------------------------------------------------
Eugene C. Fiedorek
/s/ A. D. FRAZIER, JR. Director November 2, 1999
- -----------------------------------------------------
A. D. Frazier, Jr.
/s/ STANLEY K. HATHAWAY Director November 2, 1999
- -----------------------------------------------------
Stanley K. Hathaway
/s/ JOHN A. KOCUR Director November 2, 1999
- -----------------------------------------------------
John A. Kocur
/s/ GEORGE D. LAWRENCE JR. Director November 2, 1999
- -----------------------------------------------------
George D. Lawrence Jr.
/s/ MARY RALPH LOWE Director November 2, 1999
- -----------------------------------------------------
Mary Ralph Lowe
/s/ F. H. MERELLI Director November 2, 1999
- -----------------------------------------------------
F. H. Merelli
/s/ JOSEPH A. RICE Director November 2, 1999
- -----------------------------------------------------
Joseph A. Rice
</TABLE>
<PAGE> 40
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Apache Finance
Canada Corporation certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas.
APACHE FINANCE CANADA
CORPORATION
By: /s/ RAYMOND PLANK
----------------------------------
Raymond Plank
Chairman
Date: November 2, 1999
POWER OF ATTORNEY
The undersigned directors and officers of Apache Finance Canada Corporation
do hereby constitute and appoint G. Steven Farris, Floyd R. Price, Z. S.
Kobiashvili and Roger B. Plank, and each of them, with full power of
substitution, our true and lawful attorneys-in-fact to sign and execute, on
behalf of the undersigned, any and all amendments (including post-effective
amendments) to this Registration Statement; and each of the undersigned does
hereby ratify and confirm all that said attorneys-in-fact shall do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
TITLE DATE
----- ----
<C> <S> <C>
/s/ RAYMOND PLANK Chief Executive Officer November 2, 1999
- ----------------------------------------------------- (Principal Executive
Raymond Plank Officer)
/s/ ROGER B. PLANK Director, Vice President and November 2, 1999
- ----------------------------------------------------- Chief Financial Officer
Roger B. Plank (Principal Financial
Officer)
/s/ THOMAS L. MITCHELL Vice President and November 2, 1999
- ----------------------------------------------------- Controller
Thomas L. Mitchell (Principal Accounting
Officer)
/s/ G. STEVEN FARRIS Director November 2, 1999
- -----------------------------------------------------
G. Steven Farris
/s/ FLOYD R. PRICE Director November 2, 1999
- -----------------------------------------------------
Floyd R. Price
/s/ Z. S. KOBIASHVILI Director November 2, 1999
- -----------------------------------------------------
Z. S. Kobiashvili
/s/ JOHN F. CURRAN Director November 2, 1999
- -----------------------------------------------------
John F. Curran
/s/ JAMES G. SMELTZER Director November 2, 1999
- -----------------------------------------------------
James G. Smeltzer
</TABLE>
<PAGE> 41
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
1.1 -- The form of underwriting agreement will be filed as an
exhibit to a current report of Apache and incorporated in
this registration statement by reference.
**4.1 -- Form of Indenture among Apache, Apache Finance and The
Chase Manhattan Bank, as Trustee, governing the Debt
Securities and the Guarantees.
**5.1 -- Opinion of general counsel regarding legality of
securities being registered.
**5.2 -- Opinion of McInness, Cooper & Robertson regarding Apache
Finance Canada.
*8.1 -- Opinion of Chamberlain, Hrdlicka, White, Williams &
Martin as to certain United States federal income tax
matters.
*8.2 -- Opinion of Bennett Jones as to certain Canadian federal
income tax matters.
*12.1 -- Statement of computation of ratios of earnings to fixed
charges and to combined fixed charges and preferred stock
dividends (incorporated by reference to Exhibit 12.1 to
Apache's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999, SEC File No. 1-4300).
*23.1 -- Consent of Arthur Andersen LLP, Houston, Texas.
*23.2 -- Consent of Ryder Scott Company Petroleum Engineers.
*23.3 -- Consent of Netherland, Sewell & Associates, Inc.
**23.4 -- Consent of general counsel (included in Exhibit 5.1).
*23.5 -- Consent of Chamberlain, Hrdlicka, White, Williams &
Martin (included in Exhibit 8.1).
*23.6 -- Consent of Bennett Jones (included in Exhibit 8.2).
**23.7 -- Consent of McInness, Cooper & Robertson (included in
Exhibit 5.2).
24.1 -- Powers of Attorney (included in Part II as a part of the
signature pages of the Registration Statement).
*25.1 -- Statement of Eligibility and Qualification under Trust
Indenture Act of 1939 of The Chase Manhattan Bank,
Trustee, is filed separately on Form T-1.
</TABLE>
- ---------------
* Filed herewith.
** To be filed by Amendment.
<PAGE> 1
EXHIBIT 8.1
[CHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & MARTIN LETTERHEAD]
November 2, 1999
Apache Corporation
2000 Post Oak Boulevard
Suite 100
Houston, Texas 77056-4400
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel for Apache Corporation, a Delaware corporation
(the "Company"), and Apache Finance Canada Corporation, an unlimited liability
company organized under the laws of Nova Scotia, Canada (the "Issuer"), in
connection with the Company's and the Issuer's Registration Statement on Form
S-3 (the "Registration Statement") relating to the registration under the
Securities Act of 1933, as amended (the "1933 Act"), of up to an aggregate
$400,000,000 principal amount of the Issuer's debt securities (the "Debt
Securities") and the guarantees (the "Guarantees") of the Debt Securities by the
Company. The Debt Securities are to be issued from time to time in one or more
series pursuant to an Indenture among the Issuer, the Company, as guarantor, and
the Chase Manhattan Bank, as trustee. The terms of the Debt Securities and
Guarantees, which are set forth in the Registration Statement, are incorporated
herein by reference.
Based upon the terms of the Debt Securities and the Guarantees, as set
forth in the Registration Statement, we hereby confirm that the discussion set
forth in the Registration Statement under the caption "Certain Income Tax
Considerations - United States Federal Income Tax Considerations," except as
otherwise stated therein, constitutes our opinion as to the material United
States federal income tax considerations of purchasing, owning and disposing of
the Debt Securities.
The opinions expressed in the preceding paragraph are limited to the
tax matters specifically discussed under the caption "Certain Income Tax
Considerations - United States Federal Income Tax Considerations" in the
Registration Statement, and we have not been asked to address, nor have we
addressed, any other tax considerations relating to the Debt Securities and the
Guarantees, including the discussion set forth in the Registration Statement
under the caption "Certain Income Tax Considerations - Canadian Federal Income
Tax Considerations," for which we understand you are relying on the opinion of
Bennett Jones, Calgary, Alberta, Canada.
Pursuant to the provisions of Rule 436(a) promulgated by the Securities
and Exchange Commission under the 1933 Act, we hereby consent to the filing of
this letter as an exhibit to the Registration Statement and to the reference to
us under the caption "Certain Income Tax Considerations - United States Federal
Income Tax Considerations" and "Legal Matters" in the related prospectus
included therein.
Very truly yours,
/s/ CHAMBERLAIN, HRDLICKA, WHITE,
WILLIAMS & MARTIN
<PAGE> 1
EXHIBIT 8.2
[BENNETT JONES LETTERHEAD]
November 2, 1999
Apache Corporation
2000 Post Oak Boulevard
Suite 100
Houston, Texas 77056-4400
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel for Apache Corporation, a Delaware corporation
(the "Company"), and Apache Finance Canada Corporation, an unlimited liability
company organized under the laws of Nova Scotia, Canada (the "Issuer"), in
connection with the Company's and the Issuer's Registration Statement on Form
S-3 (the "Registration Statement") relating to the registration under the
Securities Act of 1933, as amended (the "1933 Act"), of up to an aggregate
$400,000,000 principal amount of the Issuer's debt securities (the "Debt
Securities") and the guarantees (the "Guarantees") of the Debt Securities by the
Company. The Debt Securities are to be issued from time to time in one or more
series pursuant to an Indenture among the Issuer, the Company, as guarantor, and
the Chase Manhattan Bank, as trustee. The terms of the Debt Securities and
Guarantees, which are set forth in the Registration Statement, are incorporated
herein by reference.
Based upon the terms of the Debt Securities and the Guarantees, as set
forth in the Registration Statement, we hereby confirm that the discussion set
forth in the Registration Statement under the caption "Certain Income Tax
Considerations - Canadian Federal Income Tax Considerations," except as
otherwise stated therein, constitutes our opinion as to the material Canadian
federal income tax considerations to persons who are non-residents of Canada of
purchasing, owning and disposing of the Debt Securities.
The opinions expressed in the preceding paragraph are limited to the
tax matters specifically discussed under the caption "Certain Income Tax
Considerations - Canadian Federal Income Tax Considerations" in the Registration
Statement, and is subject to the qualifications, limitations and restrictions
contained generally in the opening paragraph under the caption "Certain Income
Tax Considerations" in the Registration Statement and more specifically under
the caption "Certain Income Tax Considerations - Canadian Federal Income Tax
Considerations" in the Registration Statement. We have not been asked to
address, nor have we addressed, any other tax considerations relating to the
Debt Securities and the Guarantees, including the discussion set forth in the
Registration Statement under the caption "Certain Income Tax Considerations -
United States Federal Income Tax Considerations," for which we understand you
are relying on the opinion of Chamberlain, Hrdlicka, White, Williams & Martin,
Houston, Texas.
<PAGE> 2
Pursuant to the provisions of Rule 436(a) promulgated by the Securities
and Exchange Commission under the 1933 Act, we hereby consent to the filing of
this letter as an exhibit to the Registration Statement and to the reference to
us under the caption "Certain Income Tax Considerations - Canadian Federal
Income Tax Considerations" and "Legal Matters" in the related prospectus
included therein.
Very truly yours,
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ARTHUR ANDERSEN LLP
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated March 5, 1999 on
the audited consolidated financial statements of Apache Corporation and
subsidiaries included in the Apache Corporation Annual Report on Form 10-K for
the year ended December 31, 1998, and to all references to our Firm included in
this registration statement.
/s/ Arthur Andersen LLP
------------------------------
ARTHUR ANDERSEN LLP
Houston, Texas
October 29, 1999
<PAGE> 1
EXHIBIT 23.2
[RYDER SCOTT COMPANY LETTERHEAD]
CONSENT OF RYDER SCOTT COMPANY PETROLEUM ENGINEERS
As independent petroleum engineers, we hereby consent to the incorporation
by reference in this registration statement of our Firm's review of the proved
oil and gas reserve quantities of Apache Corporation as of January 1, 1999, and
to all references to our Firm included in this registration statement.
/s/ RYDER SCOTT COMPANY, L.P.
RYDER SCOTT COMPANY, L.P.
Houston, Texas
October 29, 1999
<PAGE> 1
EXHIBIT 23.3
[NETHERLAND, SEWELL & ASSOCIATES LETTERHEAD]
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
As independent petroleum engineers and geologists, we hereby consent to the
incorporation by reference in this registration statement of our Firm's review
of the proved oil and gas reserve quantities as of January 1, 1997, for certain
of Apache Corporation's interests located in The Arab Republic of Egypt, and to
all references to our Firm included in this Registration Statement.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: /s/ CLARENCE M. NETHERLAND
------------------------------------
Clarence M. Netherland
Chairman
Dallas, Texas
October 29, 1999
<PAGE> 1
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
</TABLE>
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------------
<TABLE>
<S> <C>
APACHE CORPORATION APACHE FINANCE CANADA CORPORATION
(Exact name of obligor as specified in its charter) (Exact name of obligor as specified in its charter)
DELAWARE NOVA SCOTIA
(State or other jurisdiction of incorporation or (State or other jurisdiction of incorporation or
organization) organization)
41-0747868 TO BE APPLIED FOR
(I.R.S. employer identification No.) (I.R.S. employer identification No.)
2000 POST OAK BOULEVARD SUITE 1000
SUITE 100 700 9TH AVE. S.W.
HOUSTON, TEXAS 77056-4400 CALGARY ALBERTA
(Address, including zip code, of principal executive CANADA T2P 3V4
offices) (Address, including zip code, of principal executive
offices)
</TABLE>
--------------------------------------------
DEBT SECURITIES
(Title of the indenture securities)
-------------------------------------------------------------------
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany,
New York 12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September
9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which
is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 7th day of November, 1997.
THE CHASE MANHATTAN BANK
By /s/ ANDREW M. DECK
---------------------------
ANDREW M. DECK
VICE PRESIDENT
-4-
<PAGE> 5
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999,
in accordance with a call made by the Federal
Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
--------------
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................................... $ 13,119
Interest-bearing balances ................................................ 6,761
Securities:
Held to maturity securities ................................................... 892
Available for sale securities ................................................. 42,965
Federal funds sold and securities purchased under
agreements to resell ..................................................... 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income ................................. $130,602
Less: Allowance for loan and lease losses................................. 2,551
Less: Allocated transfer risk reserve .................................... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve .............................................. 128,051
Trading Assets ................................................................ 41,426
Premises and fixed assets (including capitalized
leases) .................................................................. 3,190
Other real estate owned ....................................................... 28
Investments in unconsolidated subsidiaries and
associated companies ..................................................... 182
Customers' liability to this bank on acceptances
outstanding .............................................................. 901
Intangible assets ............................................................. 2,010
Other assets .................................................................. 14,567
--------
TOTAL ASSETS .................................................................. $286,369
========
</TABLE>
-1-
<PAGE> 6
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
LIABILITIES IN MILLIONS
--------------
<S> <C>
Deposits
In domestic offices ...................................................... $101,979
Noninterest-bearing ...................................................... $ 42,241
Interest-bearing ......................................................... 59,738
--------
In foreign offices, Edge and Agreement
subsidiaries and IBF's ............................................... 76,395
Noninterest-bearing ...................................................... $ 4,645
Interest-bearing ......................................................... 71,750
Federal funds purchased and securities sold under agreements to repurchase .... 36,604
Demand notes issued to the U.S. Treasury ...................................... 1,001
Trading liabilities ........................................................... 30,287
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less ............................ 3,606
With a remaining maturity of more than one year through three years....... 14
With a remaining maturity of more than three years........................ 91
Bank's liability on acceptances executed and outstanding ...................... 901
Subordinated notes and debentures ............................................. 5,427
Other liabilities ............................................................. 11,247
TOTAL LIABILITIES ............................................................. 267,552
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus.................................. 0
Common stock .................................................................. 1,211
Surplus (exclude all surplus related to preferred stock)...................... 11,016
Undivided profits and capital reserves ........................................ 7,317
Net unrealized holding gains (losses)
on available-for-sale securities ......................................... (743)
Accumulated net gains (losses) on cash flow hedges............................. 0
Cumulative foreign currency translation adjustments ........................... 16
TOTAL EQUITY CAPITAL .......................................................... 18,817
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .......................................... $286,369
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR. ) DIRECTORS
FRANK A. BENNACK, JR. )
-2-
