<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ___________________ to _____________________
Commission File Number 1-4300
APACHE CORPORATION
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 41-0747868
------------------------------ -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
Suite 100, One Post Oak Central 77056-4400
2000 Post Oak Boulevard, Houston, TX ----------
---------------------------------------- (Zip Code)
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (713) 296-6000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
<TABLE>
<S> <C>
Number of shares of Registrant's common stock, outstanding as of June 30, 2000............114,132,738
</TABLE>
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
APACHE CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE QUARTER FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------------ ------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER COMMON SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas production revenues $ 488,206 $ 243,759 $ 934,323 $ 406,363
Equity in income of affiliates 310 -- 1,530 --
Other revenues (429) 2,659 (624) 3,477
--------- --------- --------- ---------
488,087 246,418 935,229 409,840
--------- --------- --------- ---------
OPERATING EXPENSES:
Depreciation, depletion and amortization 136,338 105,398 268,487 193,821
Operating costs 69,609 51,121 140,036 97,811
Administrative, selling and other 16,593 12,134 31,242 22,464
Financing costs:
Interest expense 41,615 32,659 83,183 64,107
Amortization of deferred loan costs 453 1,101 1,732 2,215
Capitalized interest (14,824) (13,053) (28,841) (25,969)
Interest income (564) (403) (1,104) (824)
--------- --------- --------- ---------
249,220 188,957 494,735 353,625
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 238,867 57,461 440,494 56,215
Provision for income taxes 93,530 24,693 178,853 25,615
--------- --------- --------- ---------
NET INCOME 145,337 32,768 261,641 30,600
Preferred stock dividends 4,908 3,136 10,172 4,556
--------- --------- --------- ---------
INCOME ATTRIBUTABLE TO COMMON STOCK $ 140,429 $ 29,632 $ 251,469 $ 26,044
========= ========= ========= =========
NET INCOME PER COMMON SHARE:
Basic $ 1.23 $ .28 $ 2.21 $ .26
========= ========= ========= =========
Diluted $ 1.19 $ .28 $ 2.15 $ .26
========= ========= ========= =========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of this statement.
1
<PAGE> 3
APACHE CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30,
------------------------
2000 1999
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 261,641 $ 30,600
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 268,487 193,821
Amortization of deferred loan costs 1,732 2,215
Provision for deferred income taxes and other 115,181 10,430
Cash distributions less than earnings of affiliates (947) --
Gain on sale of stock held for investment (751) --
Changes in operating assets and liabilities:
Increase in receivables (110,697) (64,504)
Increase in advances to oil and gas ventures and other (4,093) (9,094)
Increase in deferred charges and other (4,028) (2,074)
Increase in product inventory (3,674) (356)
Increase (decrease) in payables 42,658 (5,600)
Increase (decrease) in accrued expenses (15,056) 7,727
Decrease in advances from gas purchasers (13,785) (12,135)
Increase in deferred credits and noncurrent liabilities 10,579 12,898
--------- ---------
Net cash provided by operating activities 547,247 163,928
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (425,738) (278,551)
Non-cash portion of net oil and gas property additions (5,799) (41,931)
Acquisition of Repsol YPF properties (117,322) --
Acquisition of Collins & Ware properties (316,906) --
Acquisition of Shell Offshore properties -- (686,539)
Acquisition of British-Borneo, net of cash acquired -- (83,659)
Proceeds from sales of oil and gas properties 21,224 103,172
Other, net (7,291) (7,057)
--------- ---------
Net cash used in investing activities (851,832) (994,565)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term borrowings 537,438 630,799
Payments on long-term debt (198,581) (431,914)
Dividends paid (25,795) (16,532)
Issuance (repurchase) of preferred stock (2,613) 210,490
Proceeds from issuance of common stock 17,692 446,845
Payments to acquire treasury stock (17,727) --
Cost of debt and equity transactions (3) (1,161)
--------- ---------
Net cash provided by financing activities 310,411 838,527
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 5,826 7,890
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 13,171 14,537
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 18,997 $ 22,427
========= =========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of this statement.
2
<PAGE> 4
APACHE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
----------- ------------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 18,997 $ 13,171
Receivables 367,843 259,530
Inventories 51,546 45,113
Advances to oil and gas ventures and other 29,766 25,254
----------- -----------
468,152 343,068
----------- -----------
PROPERTY AND EQUIPMENT:
Oil and gas, on the basis of full cost accounting:
Proved properties 8,111,859 7,409,787
Unproved properties and properties under
development, not being amortized 1,002,738 869,108
Gas gathering, transmission and processing facilities 447,858 442,437
Other 110,191 105,635
----------- -----------
9,672,646 8,826,967
Less: Accumulated depreciation, depletion and amortization (3,972,636) (3,711,109)
----------- -----------
5,700,010 5,115,858
----------- -----------
OTHER ASSETS:
Deferred charges and other 46,637 43,617
----------- -----------
$ 6,214,799 $ 5,502,543
=========== ===========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of this statement.
3
<PAGE> 5
APACHE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
----------- ------------
(IN THOUSANDS)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 31,850 $ 6,158
Accounts payable 183,016 148,309
Accrued operating expense 20,315 18,226
Accrued exploration and development 95,465 101,490
Accrued compensation and benefits 12,725 22,631
Accrued interest 27,584 28,118
Other accrued expenses 4,482 11,846
----------- -----------
375,437 336,778
----------- -----------
LONG-TERM DEBT 2,192,815 1,879,650
----------- -----------
DEFERRED CREDITS AND OTHER NONCURRENT
LIABILITIES:
Income taxes 467,894 360,324
Advances from gas purchasers 167,171 180,956
Other 115,130 75,408
----------- -----------
750,195 616,688
----------- -----------
SHAREHOLDERS' EQUITY:
Preferred stock, no par value, 5,000,000 shares authorized -
Series B, 5.68% Cumulative Preferred Stock,
100,000 shares issued and outstanding 98,387 98,387
Series C, 6.5% Conversion Preferred Stock, 138,482 and
140,000 shares issued and outstanding, respectively 208,207 210,490
Common stock, $1.25 par, 215,000,000 shares authorized,
117,004,319 and 116,403,013 shares issued, respectively 146,255 145,504
Paid-in capital 1,739,242 1,717,027
Retained earnings 802,229 558,721
Treasury stock, at cost, 2,871,581 and 2,406,549 shares,
respectively (69,693) (52,256)
Accumulated other comprehensive income (28,275) (8,446)
----------- -----------
2,896,352 2,669,427
----------- -----------
$ 6,214,799 $ 5,502,543
=========== ===========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of this statement.
4
<PAGE> 6
APACHE CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
SERIES B SERIES C
COMPREHENSIVE PREFERRED PREFERRED COMMON
(IN THOUSANDS) INCOME STOCK STOCK STOCK
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1998 $ 98,387 $ -- $ 124,738
Comprehensive income:
Net income $ 30,600 -- -- --
Currency translation adjustments 9,505 -- -- --
-----------
Comprehensive income $ 40,105
===========
Dividends:
Preferred -- -- --
Common ($.14 per share) -- -- --
Preferred shares issued -- 210,490 --
Common shares issued -- -- 20,117
Treasury shares issued, net -- -- --
----------- ----------- -----------
BALANCE AT JUNE 30, 1999 $ 98,387 $ 210,490 $ 144,855
=========== =========== ===========
BALANCE AT DECEMBER 31, 1999 $ 98,387 $ 210,490 $ 145,504
Comprehensive income:
Net income $ 261,641 -- -- --
Currency translation adjustments (19,700) -- -- --
Unrealized loss on marketable
securities, net of applicable income
tax benefits of $84 (129) -- -- --
-----------
Comprehensive income $ 241,812
===========
Dividends:
Preferred -- -- --
Common ($.07 per share) -- -- --
Preferred stock repurchased -- (2,283) --
Common shares issued -- -- 751
Treasury shares purchased, net -- -- --
----------- ----------- -----------
BALANCE AT JUNE 30, 2000 $ 98,387 $ 208,207 $ 146,255
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
ACCUMULATED
OTHER TOTAL
PAID-IN RETAINED TREASURY COMPREHENSIVE SHAREHOLDERS'
(IN THOUSANDS) CAPITAL EARNINGS STOCK INCOME EQUITY
----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1998 $ 1,245,738 $ 403,098 $ (36,924) $ (33,204) $ 1,801,833
Comprehensive income:
Net income -- 30,600 -- -- 30,600
Currency translation adjustments -- -- -- 9,505 9,505
Comprehensive income
Dividends:
Preferred -- (4,556) -- -- (4,556)
Common ($.14 per share) -- (14,818) -- -- (14,818)
Preferred shares issued -- -- -- -- 210,490
Common shares issued 454,190 -- -- -- 474,307
Treasury shares issued, net -- -- 142 -- 142
----------- ----------- ----------- ----------- -----------
BALANCE AT JUNE 30, 1999 $ 1,699,928 $ 414,324 $ (36,782) $ (23,699) $ 2,507,503
=========== =========== =========== =========== ===========
BALANCE AT DECEMBER 31, 1999 $ 1,717,027 $ 558,721 $ (52,256) $ (8,446) $ 2,669,427
Comprehensive income:
Net income -- 261,641 -- -- 261,641
Currency translation adjustments -- -- -- (19,700) (19,700)
Unrealized loss on marketable
securities, net of applicable income
tax benefits of $84 -- -- -- (129) (129)
Comprehensive income
Dividends:
Preferred -- (9,842) -- -- (9,842)
Common ($.07 per share) -- (7,961) -- -- (7,961)
Preferred stock repurchased -- (330) -- -- (2,613)
Common shares issued 21,990 -- -- -- 22,741
Treasury shares purchased, net 225 -- (17,437) -- (17,212)
----------- ----------- ----------- ----------- -----------
BALANCE AT JUNE 30, 2000 $ 1,739,242 $ 802,229 $ (69,693) $ (28,275) $ 2,896,352
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of this statement.
5
<PAGE> 7
APACHE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
These financial statements have been prepared by Apache Corporation (Apache
or the Company) without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission, and reflect all adjustments which are, in
the opinion of management, necessary for a fair statement of the results for the
interim periods, on a basis consistent with the annual audited financial
statements. All such adjustments are of a normal recurring nature. Certain
information, accounting policies, and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the financial statements and the summary of significant
accounting policies and notes thereto included in the Company's most recent
annual report on Form 10-K.
Beginning in the first quarter 2000, the portion of gathering, processing
and marketing margin related to oil and gas production revenues has been
reported as a net addition to oil and gas production revenues and the portion
related to gathering fee income has been reported as a reduction to operating
costs in the accompanying statement of consolidated operations.
Reclassifications have been made to reflect this change in the prior year
statements of consolidated operations.
1. ACQUISITIONS AND DIVESTITURES
Acquisitions - On January 24, 2000, Apache completed the acquisition of
producing properties in Western Oklahoma and the Texas Panhandle, formerly owned
by a subsidiary of Repsol YPF, for approximately $117.3 million, plus assumed
liabilities of approximately $29.8 million. The acquisition included estimated
proved reserves of approximately 199 billion cubic feet of natural gas
equivalent (Bcfe) as of the acquisition date.
On June 30, 2000, Apache completed the acquisition of long-lived producing
properties in the Permian Basin and South Texas from Collins & Ware, Inc.
(Collins & Ware) for approximately $316.9 million, subject to normal post
closing adjustments. The acquisition included estimated proved reserves of
approximately 502 Bcfe as of the acquisition date. One-third of the reserves are
liquid hydrocarbons.
On May 18, 1999, Apache acquired from Shell Offshore Inc. and affiliated
Shell entities (Shell Offshore) its interest in 22 producing fields and 16
undeveloped blocks located in the Gulf of Mexico. The Shell Offshore acquisition
also included certain production-related assets and proprietary 2-D and 3-D
seismic data covering approximately 1,000 blocks in the Gulf of Mexico. The
purchase price was $687.7 million in cash and one million shares of Apache
common stock (valued at $28.125 per share). The Shell Offshore acquisition
included approximately 123.2 million barrels of oil equivalent (MMboe) of proved
reserves as of the acquisition date.
On November 30, 1999, Apache acquired from Shell Canada Limited (Shell
Canada) producing properties and other assets for C$761 million (US$517.8
million). The producing properties consisted of 150,400 net acres and comprised
20 fields with an average working interest of 55 percent and proved reserves of
approximately 87.2 MMboe as of the acquisition date. Apache also acquired
294,294 net acres of undeveloped leaseholdings, a 100 percent interest in a gas
processing plant with potential throughput capacity of 160 million cubic feet
(MMcf) per day, and 52,700 square miles of 2-D seismic and 884 square miles of
3-D seismic.
6
<PAGE> 8
The following unaudited pro forma information shows the effect on the
Company's consolidated results of operations as if the Shell Offshore and Shell
Canada acquisitions occurred on January 1, 1999. The pro forma information is
based on numerous assumptions and is not necessarily indicative of future
results of operations.
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1999
--------------------------------------
AS REPORTED PRO FORMA
-------------- -------------------
(IN THOUSANDS, EXCEPT PER COMMON SHARE DATA)
<S> <C> <C>
Revenues $409,840 $535,108
Net income 30,600 46,711
Preferred stock dividends 4,556 9,845
Income attributable to common stock 26,044 36,866
Net income per common share:
Basic $ .26 $ .32
Diluted .26 .32
Average common shares outstanding 101,698 113,771
</TABLE>
During the first six months of 2000, the Company also completed tactical
regional acquisitions for cash consideration totaling $37.2 million. These
acquisitions added approximately 9.6 MMboe to the Company's proved reserves.
Divestitures - During the six months ended June 30, 2000, Apache sold 1.9
MMboe of proved reserves from largely marginal United States properties,
collecting cash of $4.7 million.
On March 14, 2000, Apache sold proprietary rights to its Canadian seismic
data to Request Seismic Surveys Ltd., retaining license rights, for $16.5
million.
2. BUSINESS SEGMENT INFORMATION
Apache has five reportable segments which are primarily in the business of
natural gas and crude oil exploration and production. The Company evaluates
performance based on profit or loss from oil and gas operations before income
and expense items incidental to oil and gas operations and income taxes.
Apache's reportable segments are managed separately because of their geographic
locations. Financial information by operating segment is presented below:
<TABLE>
<CAPTION>
OTHER
UNITED STATES CANADA EGYPT AUSTRALIA INTERNATIONAL TOTAL
------------- ----------- ----------- ----------- ------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JUNE 30, 2000
Oil and Gas Production Revenues ........ $ 514,474 $ 130,566 $ 186,673 $ 102,610 $ -- $ 934,323
=========== =========== =========== =========== =========== ===========
Operating Income (Loss) (1) ............ $ 263,663 $ 73,437 $ 131,037 $ 57,687 $ (24) $ 525,800
=========== =========== =========== =========== ============
Other Income (Expense):
Equity in income of affiliates ...... 1,530
Other revenues ...................... (624)
Administrative, selling and other ... (31,242)
Financing costs, net ................ (54,970)
-----------
Income Before Income Taxes ............. $ 440,494
===========
Total Assets ........................... $ 3,409,038 $ 918,520 $ 923,421 $ 797,694 $ 166,126 $ 6,214,799
=========== =========== =========== =========== =========== ===========
</TABLE>
7
<PAGE> 9
<TABLE>
<CAPTION>
OTHER
UNITED STATES CANADA EGYPT AUSTRALIA INTERNATIONAL TOTAL
------------- ----------- ----------- ----------- ------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JUNE 30, 1999
Oil and Gas Production Revenues ........ $ 252,291 $ 34,293 $ 74,597 $ 43,875 $ 1,307 $ 406,363
=========== =========== =========== =========== =========== ===========
Operating Income (1) ................... $ 58,219 $ 10,077 $ 29,629 $ 16,365 $ 441 $ 114,731
=========== =========== =========== =========== ===========
Other Income (Expense):
Other revenues ...................... 3,477
Administrative, selling and other ... (22,464)
Financing costs, net ................ (39,529)
-----------
Income Before Income Taxes ............. $ 56,215
===========
Total Assets ........................... $ 2,731,207 $ 326,065 $ 894,033 $ 761,031 $ 182,633 $ 4,894,969
=========== =========== =========== =========== =========== ===========
</TABLE>
(1) Operating income consists of oil and gas production revenues less
depreciation, depletion and amortization (DD&A) expense and operating
costs.
3. NET INCOME PER COMMON SHARE
A reconciliation of the components of basic and diluted net income per
common share is presented in the table below:
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED JUNE 30,
-------------------------------------------------------------------------
2000 1999
---------------------------------- ----------------------------------
INCOME SHARES PER SHARE INCOME SHARES PER SHARE
-------- -------- --------- -------- -------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
BASIC:
Income attributable to common stock $140,429 113,946 $ 1.23 $ 29,632 105,566 $ .28
======== ========
EFFECT OF DILUTIVE SECURITIES:
Stock options -- 1,069 -- 317
Series C Preferred Stock 3,488 5,676 -- --
-------- -------- -------- --------
DILUTED:
Income attributable to common
stock including assumed conversions $143,917 120,691 $ 1.19 $ 29,632 105,883 $ .28
======== ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30,
-------------------------------------------------------------------------
2000 1999
---------------------------------- ----------------------------------
INCOME SHARES PER SHARE INCOME SHARES PER SHARE
-------- -------- --------- -------- -------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
BASIC:
Income attributable to common stock $251,469 113,892 $ 2.21 $ 26,044 101,698 $ .26
======== ========
EFFECT OF DILUTIVE SECURITIES:
Stock options -- 802 -- 242
Series C Preferred Stock 7,332 5,676 -- --
-------- -------- -------- --------
DILUTED:
Income attributable to common
stock including assumed conversions $258,801 120,370 $ 2.15 $ 26,044 101,940 $ .26
======== ======== ======== ======== ======== ========
</TABLE>
The effect of the Series C Preferred Stock was not included in the
computation of diluted net income per common share during 1999, because to do so
would have been antidilutive.
8
<PAGE> 10
4. NON-CASH INVESTING AND FINANCING ACTIVITIES
In January 2000, the Company acquired producing properties formerly owned
by a subsidiary of Repsol YPF for cash and the assumption of certain
liabilities. The accompanying financial statements include the amounts detailed
in Note 1.
The following table provides supplemental disclosure of cash flow
information:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30,
---------------------------------
2000 1999
---------- -------------
(IN THOUSANDS)
<S> <C> <C>
Cash paid during the period for:
Interest (net of amounts capitalized) $54,876 $35,779
Income taxes (net of refunds) 64,053 15,185
</TABLE>
5. SUBSEQUENT EVENTS
On July 14, 2000, the Company signed a definitive agreement to acquire a
Delaware limited liability company (LLC) owned by subsidiaries of Occidental
Petroleum Corporation (Occidental) and the related natural gas production for a
total purchase price of $385 million, subject to reduction for production since
July 1, 2000 (the effective date) and other closing adjustments. A portion of
the purchase price ($44 million) is expected to be paid ratably over the next
four years. The Occidental properties are located in 32 fields on 93 blocks on
the Outer Continental Shelf of the Gulf of Mexico, and the Company expects to
operate half of the fields acquired. The Occidental properties have estimated
proved reserves of approximately 56.8 MMboe as of the effective date, net to
Apache, and the LLC owns proprietary 3-D seismic data on 113 blocks covering
1,022 square miles. The acquisition is expected to close August 15, 2000. A
portion of the production for the first few years of this transaction was
hedged. The hedges were structured to establish a minimum price floor while
preserving some price upside potential.
On July 14, 2000, Apache entered into a new $500 million, 364-day revolving
credit agreement with a group of banks. The terms of the facility are
substantially the same as those of Apache's global credit facility. The new
facility will be used along with the U.S. portion of the global credit facility
to support Apache's commercial paper program, which was increased from $700
million to $1.2 billion in late July 2000.
On August 2, 2000, the Company completed a public offering of 9.2 million
shares of Apache common stock, including 1.2 million shares for the
underwriters' over-allotment option, for net proceeds of approximately $433.9
million. The proceeds will be used to fund the pending Occidental transaction
and repay indebtedness under Apache's commercial paper program.
9
<PAGE> 11
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
On a foundation of strong production combined with high oil and natural gas
prices, Apache reported record earnings for the fourth consecutive quarterly
period. Further, results for the first six months of 2000 surpassed the 1999
full-year period. Following are highlights for the first half of 2000:
o Record income attributable to common stock of $251.5 million ($2.21 per
share) was generated. These results exceeded 1999's record full year
earnings of $186.4 million ($1.73 per share). Last year's first six months
reflected income attributable to common stock of $26.0 million ($.26 per
share).
o In conjunction with substantially improved prices over last year, oil and
gas production was up 44 percent and 26 percent, respectively. The improved
production, net of additional DD&A expense and operating costs, added a
combined $.76 to earnings per share.
o Net cash provided by operating activities increased $383.3 million, or 234
percent, to $547.2 million from $163.9 million.
Commodity Prices - Apache's average realized oil price increased $11.73 per
barrel from $13.96 per barrel in the first six months of 1999 to $25.69 per
barrel in the comparable 2000 period, increasing revenues by $167.6 million. The
average realized price for natural gas increased $.93 per thousand cubic feet
(Mcf) from $1.87 per Mcf in the first six months of 1999 to $2.80 per Mcf in
2000, positively impacting revenues by $100.9 million.
Production - Oil production increased 44 percent during the first six
months of 2000 when compared to the same period last year, which positively
impacted revenues by $163.8 million. The increase was primarily due to the
acquisition of producing properties from Shell Offshore in the U.S. and Shell
Canada during 1999 and increased production from the Stag field in Australia.
Gas production increased 26 percent during the first six months of 2000 compared
to the same period last year, positively impacting revenues by $80.9 million.
The increase was primarily due to 1999 producing property acquisitions from
Shell Offshore in the U.S., Shell Canada and British-Borneo Oil and Gas Plc
(British-Borneo) in Australia, and completion of the northern portion of the
Western Desert Gas Pipeline on the Khalda Concession in Egypt with first sales
commencing in August 1999.
RESULTS OF OPERATIONS
Apache reported 2000 second quarter income attributable to common stock of
$140.4 million compared to income of $29.6 million in the prior year. Basic net
income per common share of $1.23 for the second quarter of 2000 was more than
four times the $.28 reported in 1999. A significant increase in oil and gas
production revenues was partially offset by higher DD&A expense, operating
costs, net financing costs and administrative, selling and other (G&A) costs.
For the first half of 2000, income attributable to common stock of $251.5
million, or $2.21 per share, compared to $26.0 million, or $.26 per share, in
the comparable year-earlier period. The increase resulted primarily from
increased oil and gas production revenues partially offset by higher DD&A
expense, operating costs, net financing costs, G&A costs and preferred stock
dividends.
For the second quarter of 2000, revenues increased 98 percent to $488.1
million compared to $246.4 million in 1999, driven by a 100 percent increase in
oil and gas production revenues. The increase in oil and gas production revenues
was the result of a 61 percent increase in the average realized oil price, a 30
percent increase in oil production, a 52 percent increase in the average
realized price for natural gas and a 22 percent increase in natural gas
production. Crude oil, including natural gas liquids, contributed 56 percent and
natural gas contributed 44 percent of oil and gas production revenues during the
second quarter of 2000.
For the first six months of 2000, total revenues increased 128 percent to
$935.2 million compared to $409.8 million for the same period in 1999. Revenues
from oil and gas production increased 130 percent over the same period in 1999,
with crude oil, including natural gas liquids, contributing 59 percent and
natural gas contributing 41 percent of oil and gas production revenues. The
increase in oil and gas production revenues was the result of an 84 percent
increase in the average realized oil price, a 44 percent increase in oil
production, a 50 percent increase in the average realized gas price and a 26
percent increase in gas production.
10
<PAGE> 12
Volume and price information for the Company's oil and gas production is
summarized in the following table:
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED JUNE 30, FOR THE SIX MONTHS ENDED JUNE 30,
-------------------------------------------- --------------------------------------------
INCREASE INCREASE
2000 1999 (DECREASE) 2000 1999 (DECREASE)
----------- ----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Natural Gas Volume - Mcf per day:
United States 476,171 447,046 7% 480,530 422,502 14%
Canada 131,641 98,540 34% 128,775 103,790 24%
Australia 108,754 69,411 57% 98,860 64,762 53%
Egypt 47,995 4,261 1,026% 46,007 3,855 1,093%
Ivory Coast -- 6,314 -- -- 3,779 --
----------- ----------- ----------- -----------
Total 764,561 625,572 22% 754,172 598,688 26%
=========== =========== =========== ===========
Average Natural Gas price - Per Mcf:
United States $ 3.38 $ 2.19 54% $ 3.00 $ 2.00 50%
Canada 2.87 1.62 77% 2.50 1.52 64%
Australia 1.38 1.53 (10%) 1.42 1.51 (6%)
Egypt 4.30 2.63 63% 4.51 2.32 94%
Ivory Coast -- 1.72 -- -- 1.72 --
Total 3.07 2.02 52% 2.80 1.87 50%
Oil Volume - Barrels per day:
United States 54,085 43,420 25% 53,991 37,842 43%
Canada 14,020 2,069 578% 13,836 2,124 551%
Australia 15,760 9,526 65% 15,069 9,889 52%
Egypt 28,656 31,302 (8%) 30,611 29,017 5%
Ivory Coast -- 87 -- -- 49 --
----------- ----------- ----------- -----------
Total 112,521 86,404 30% 113,507 78,921 44%
=========== =========== =========== ===========
Average Oil price - Per barrel:
United States $ 25.65 $ 15.91 61% $ 25.57 $ 13.91 84%
Canada 20.88 14.80 41% 21.28 12.81 66%
Australia 29.22 17.70 65% 28.09 14.63 92%
Egypt 26.93 15.78 71% 26.73 13.89 92%
Ivory Coast -- 14.48 -- -- 14.43 --
Total 25.88 16.03 61% 25.69 13.96 84%
Natural Gas Liquids (NGL)
Volume - Barrels per day:
United States 5,089 2,676 90% 4,836 2,534 91%
Canada 1,019 598 70% 1,277 614 108%
----------- ----------- ----------- -----------
Total 6,108 3,274 87% 6,113 3,148 94%
=========== =========== =========== ===========
Average NGL Price - Per barrel:
United States $ 18.18 $ 8.73 108% $ 17.86 $ 8.11 120%
Canada 14.83 7.80 90% 15.38 6.56 134%
Total 17.62 8.56 106% 17.34 7.81 122%
</TABLE>
SECOND QUARTER 2000 REVENUES COMPARED TO SECOND QUARTER 1999
Natural gas sales for the second quarter of 2000 totaled $213.4 million, 85
percent higher than the second quarter of 1999. Average realized natural gas
prices increased 52 percent, positively impacting revenues by $59.4 million. The
Company periodically engages in hedging activities, including fixed price
physical and financial contracts. The net result of these activities decreased
the Company's realized gas price by $.06 per Mcf during the second quarter of
2000 and increased the Company's realized gas price by $.01 for the same period
in 1999.
Natural gas production increased 139 million cubic feet per day (MMcf/d),
or 22 percent, on a worldwide basis, favorably impacting revenues by $38.8
million. The completion of the northern portion of the Western Desert Gas
Pipeline on the Khalda Concession, with first sales commencing in August 1999,
was the primary contributor to the 43.7 MMcf/d gas production increase in Egypt.
Australia's gas production increased 57 percent due to new contracts,
11
<PAGE> 13
spot sales and the acquisition of producing properties from British-Borneo in
1999. Gas production in Canada increased 34 percent primarily due to producing
properties acquired from Shell Canada in 1999.
The Company's crude oil sales for the second quarter of 2000 totaled $265.0
million, a 110 percent increase from the second quarter of 1999, due to
increased average realized prices and production volumes. Average realized oil
prices increased $9.85 per barrel, positively increasing revenues by $77.5
million. Realized losses from hedging positions negatively impacted the
Company's realized oil price by $1.79 per barrel during the second quarter of
2000 and had no impact in the second quarter of 1999.
Second quarter 2000 oil production increased 30 percent compared to the
prior year, favorably impacting revenues by $61.5 million. Increases were driven
by property acquisitions from Shell Offshore in the U.S. and Shell Canada during
1999 and increased production from the Stag field in Australia.
Revenue from the sale of natural gas liquids totaled $9.8 million for the
second quarter of 2000, compared to $2.6 million for the second quarter of 1999
in response to a 106 percent improvement in realized prices and an 87 percent
increase in natural gas liquids production.
YEAR-TO-DATE 2000 REVENUES COMPARED TO YEAR-TO-DATE 1999
Natural gas sales for the first half of 2000 of $384.2 million increased
$181.8 million, or 90 percent, from those recorded in the same period of 1999.
Average realized natural gas prices increased 50 percent, positively affecting
revenues by $100.9 million. U.S. natural gas production, which comprised 64
percent of the Company's worldwide gas production, sold at an average price of
$3.00 per Mcf, 50 percent higher than in 1999, positively impacting natural gas
revenues by $76.1 million. Natural gas production increased 155 MMcf/d, or 26
percent, on a worldwide basis, favorably impacting revenues by $80.9 million.
The gas production increase was primarily a result of property acquisitions from
Shell Offshore in the U.S., Shell Canada and British-Borneo in Australia in
1999, along with completion of the Western Desert Gas Pipeline on the Khalda
Concession in Egypt with first sales commencing in August 1999. The Company
periodically engages in hedging activities, including fixed price physical and
financial contracts. The net result of these activities decreased the Company's
realized gas price by $.02 per Mcf during the first half of 2000 and increased
the Company's realized gas price by $.04 per Mcf during the same period of 1999.
For the first half of 2000, oil revenues of $530.8 million increased $331.3
million, or 166 percent, from the same period in 1999 due to higher oil prices
and improved production. On a worldwide basis, average oil prices increased
$11.73 per barrel, or 84 percent, to $25.69 per barrel positively impacting oil
revenues by $167.6 million. Oil production increased 34,586 barrels per day, or
44 percent, for the first six months of 2000 primarily due to 1999 property
acquisitions from Shell Offshore in the U.S. and Shell Canada along with
increased production from the Stag field in Australia. Realized losses from
hedging positions negatively impacted the Company's realized oil price by $1.77
per barrel during the first half of 2000 and had no impact in the first half of
1999.
Natural gas liquids revenues for the first six months of 2000 of $19.3
million increased $14.8 million, or 333 percent, from the same period in 1999.
Natural gas liquids prices increased by $9.53 per barrel, or 122 percent and
natural gas liquids production increased 2,965 barrels per day, or 94 percent.
OPERATING EXPENSES
The Company's DD&A expense for the second quarter and first six months of
2000 totaled $136.3 million and $268.5 million, respectively, compared to $105.4
million and $193.8 million for the comparable periods in 1999. On an equivalent
barrel basis, full cost DD&A expense increased $.05 per boe, from $5.64 per boe
in the second quarter of 1999 to $5.69 per boe in 2000. For the six months ended
June 30, 2000, the full cost DD&A rate totaled $5.62 per boe compared to $5.53
per boe in 1999. The increase is primarily due to an increased percentage of oil
production, with a higher cost basis, in the Company's oil and gas product mix
in Canada as a result of the Shell Canada acquisition. Canadian DD&A expense
increased from $4.36 per boe in the first half of 1999 to $5.49 per boe in 2000.
Operating costs, including lease operating expense (LOE) and severance
taxes, increased 36 percent from $51.1 million in the second quarter of 1999 to
$69.6 million for the same period in 2000 due primarily to increased production.
For the first half of 2000, operating costs, including LOE and severance taxes,
totaled $140.0 million, an increase of $42.2 million, or 43 percent, compared to
the same period in 1999. For the second quarter and first six months of 2000,
LOE, excluding severance taxes, totaled $58.5 million and $120.0 million,
respectively, compared to $44.2 million and $85.3 million for the comparable
periods in 1999.
12
<PAGE> 14
On an equivalent barrel basis, LOE increased from $2.51 per boe in the
second quarter of 1999 to $2.61 per boe in the second quarter of 2000. For the
first six months of 2000, LOE averaged $2.69 per boe, a four percent increase
from $2.59 per boe, for the same period in 1999. The boe rate in Canada
increased due to the Shell Canada acquisition, which increased oil as a
percentage of total production. The boe rate in Australia increased primarily
due to higher production, workover activity and higher maintenance costs. The
boe rate in Egypt decreased due to the Western Desert Gas Pipeline coming on
line and increased volumes at Khalda due to development programs. Severance tax
increased $7.5 million to $20.1 million for the first half of 2000 due to higher
oil and gas production revenues and a special gross revenue tax on certain
Canadian properties.
G&A expense in the second quarter and first six months of 2000 increased
$4.5 million or 37 percent, and $8.8 million or 39 percent, respectively, from a
year ago. The Company's overall infrastructure was enlarged to properly handle
increased responsibilities associated with 1999 and 2000 North American
producing property acquisitions. On an equivalent barrel basis, G&A expenses
increased to $.70 per boe, for the first half of 2000 as compared to $.68 per
boe for the same period in 1999.
Net financing costs for the second quarter and first six months of 2000
increased $6.4 million, or 31 percent, and $15.4 million, or 39 percent,
respectively, compared to a year ago. This increase is primarily due to higher
gross interest expense, the result of a higher average outstanding debt balance
related to acquisition activity during 1999, partially offset by higher
capitalized interest.
MARKET RISK
COMMODITY RISK
The Company's major market risk exposure continues to be the pricing
applicable to its oil and gas production. Realized pricing is primarily driven
by the prevailing worldwide price for crude oil and spot prices applicable to
its U.S. and Canadian natural gas production. Historically, prices received for
oil and gas production have been volatile and unpredictable. Price volatility is
expected to continue. See "Results of Operations" above.
The information set forth under "Market Risk - Interest Rate Risk and -
Foreign Currency Risk" in Item 7 of the Company's annual report on Form 10-K for
the year ended December 31, 1999, is incorporated herein by reference.
CASH FLOW, LIQUIDITY AND CAPITAL RESOURCES
CAPITAL COMMITMENTS
Apache's primary cash needs are for exploration, development and
acquisition of oil and gas properties, repayment of principal and interest on
outstanding debt, payment of dividends and capital obligations for affiliated
ventures. Apache budgets capital expenditures based upon projected cash flow and
routinely adjusts its capital expenditures in response to changes in oil and
natural gas prices and corresponding changes in cash flow. The Company cannot
accurately predict future oil and gas prices.
13
<PAGE> 15
Capital Expenditures - A summary of oil and gas capital expenditures during
the first six months of 2000 and 1999 is presented below:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30,
---------------------------------
2000 1999
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Exploration and development:
United States $219,550 $ 54,612
Canada 59,778 15,160
Egypt 44,548 29,316
Australia 18,390 21,341
Other international 11,105 11,754
-------- --------
353,371 132,183
Capitalized Interest 28,841 25,969
-------- --------
Total $382,212 $158,152
======== ========
Acquisition of oil and gas properties $501,155 $880,485
======== ========
</TABLE>
In North America, Apache completed 83 producing wells out of 129 wells
drilled during the first half of 2000, while internationally the Company
discovered 11 new producers out of 21 wells drilled. Worldwide, the Company was
drilling or completing an additional 158 wells as of June 30, 2000. In addition,
Apache completed 526 production enhancement projects, including 240
recompletions, during the first half of 2000.
On January 24, 2000, Apache completed the acquisition of producing
properties in Western Oklahoma and the Texas Panhandle, formerly owned by a
subsidiary of Repsol YPF, for approximately $117.3 million plus assumed
liabilities of approximately $29.8 million. The acquisition included estimated
proved reserves of approximately 199 Bcfe as of the acquisition date.
On June 30, 2000, Apache completed the acquisition of long-lived producing
properties in the Permian Basin and South Texas from Collins & Ware for
approximately $316.9 million, subject to normal post closing adjustments. The
acquisition included estimated proved reserves of approximately 502 Bcfe as of
the acquisition date. One-third of the reserves are liquid hydrocarbons.
On July 14, 2000, the Company signed a definitive agreement to acquire an
LLC owned by subsidiaries of Occidental and the related natural gas production
for a total purchase price of $385 million, subject to reduction for production
since July 1, 2000 (the effective date) and other closing adjustments. A portion
of the purchase price ($44 million) is expected to be paid ratably over the next
four years. The Occidental properties are located in 32 fields on 93 blocks on
the Outer Continental Shelf of the Gulf of Mexico, and the Company expects to
operate half of the fields acquired. The Occidental properties have estimated
proved reserves of approximately 56.8 MMboe as of the effective date, net to
Apache, and the LLC owns proprietary 3-D seismic data on 113 blocks covering
1,022 square miles. The acquisition is expected to close August 15, 2000.
CAPITAL RESOURCES AND LIQUIDITY
Net Cash Provided by Operating Activities - Apache's net cash provided by
operating activities during the first half of 2000 totaled $547.2 million, an
increase of 234 percent from $163.9 million in the first half of 1999. This
increase was primarily due to higher oil and gas production as a result of 1999
acquisitions and higher realized oil and gas prices as compared to last year.
Credit Facility - On July 14, 2000, Apache entered into a new $500 million,
364-day revolving credit agreement with a group of banks. The terms of the
facility are substantially the same as those of Apache's global credit facility.
The new facility will be used along with the U.S. portion of Apache's global
credit facility to support Apache's commercial paper program, which was
increased from $700 million to $1.2 billion in late July 2000.
Stock Transactions - In the first half of 2000, the Company bought back
75,900 depository shares, each representing one-fiftieth (1/50) of a share of
Series C Preferred Stock, at an average price of $34.42 per share. The
14
<PAGE> 16
excess of the purchase price to reacquire the depository shares over the
original issuance price is reflected as a preferred stock dividend in the
accompanying statement of consolidated operations.
In the first half of 2000, the Company repurchased 478,100 shares of common
stock to be held in treasury at an average price of $37.08 per share.
On August 2, 2000, the Company completed the public offering of 9.2 million
shares of Apache common stock, including 1.2 million shares for the
underwriters' over-allotment option, for net proceeds of approximately $433.9
million. The proceeds will be used to fund the pending Occidental transaction
and repay indebtedness under Apache's commercial paper program.
Liquidity - The Company had $19.0 million in cash and cash equivalents on
hand at June 30, 2000, up from $13.2 million at December 31, 1999. Apache's
ratio of current assets to current liabilities at June 30, 2000 was 1.25:1
compared to 1.02:1 at December 31, 1999.
Apache believes that cash on hand, net cash generated from operations, and
unused committed borrowing capacity under its global credit facility will be
adequate to satisfy the Company's financial obligations to meet future liquidity
needs for at least the next two fiscal years. As of June 30, 2000, Apache's
available borrowing capacity under its global credit facility was $498.1
million.
FUTURE TRENDS
Apache's strategy is to increase its oil and gas reserves, production, cash
flow and earnings through a balanced growth program that involves:
o exploiting our existing asset base;
o acquiring properties to which we can add value; and
o investing in high-potential exploration prospects.
EXPLOITING EXISTING ASSET BASE
Apache seeks to maximize the value of our existing asset base by reducing
operating costs per unit and increasing the amount of recoverable reserves. In
order to achieve these objectives, we rigorously pursue operations to cut costs,
identify production enhancement initiatives such as workovers and recompletions,
and divest marginal and non-strategic properties.
ACQUIRING PROPERTIES TO WHICH WE CAN ADD VALUE
Apache seeks to purchase reserves at appropriate prices by generally
avoiding auction processes where we are competing against other buyers. Our aim
is to follow each acquisition with a cycle of reserve enhancement, property
consolidation and cash flow acceleration, facilitating asset growth and debt
reduction.
INVESTING IN HIGH-POTENTIAL EXPLORATION PROSPECTS
Apache seeks to concentrate our exploratory investments in a select number
of international areas and to become the dominant operator in those regions. We
believe that these investments, although higher-risk, offer the potential for
significant reserve additions. Our international investments and exploration
activities are a significant component of our long-term growth strategy. They
complement our U.S. operations, which are more development oriented.
A critical component in implementing our three-pronged growth strategy is
maintenance of significant financial flexibility. A strong balance sheet and
credit position give us the foundation required to pursue our growth
initiatives.
15
<PAGE> 17
CHINA
In June 2000, our subsidiary, Apache China Corporation LDC, filed a lawsuit
against PetroChina Company Limited, China National Petroleum Corporation and
China National Oil and Gas Exploration and Development Corporation in connection
with certain of our Chinese investments and operations. The Company filed
seeking damages and injunctive relief to prevent the Chinese parties from
declaring that we had relinquished some of our Chinese exploratory acreage, and
other claims. The lawsuit was filed in the U.S. Bankruptcy Court in Opelousas,
Louisiana, in connection with bankruptcy proceedings of XCL-China, Ltd., the
co-owner of some of our Chinese interests. On June 30, 2000, Apache and
PetroChina Company Limited announced an agreement to resolve most of the issues
that should permit all parties to proceed with development of portions of the
49,000-acre Zhao Dong Block. The agreement calls for PetroChina and the China
National Petroleum Corporation to obtain final governmental approval of the
overall development plan. Implementation of the agreement and the development
plan is subject to these additional approvals. On July 21, 2000, the bankruptcy
court issued an order approving the agreement reached between Apache and
PetroChina. On July 31, 2000, XCL Ltd., sole shareholder of XCL-China Ltd.,
appealed the Bankruptcy Court's order to the U.S. District Court. On August 10,
2000, XCL Ltd. filed a motion to withdraw its appeal, which is subject to a
further order of dismissal and has yet to be obtained. If all necessary
approvals, including a final non-appealable order of approval, are obtained, the
agreement will resolve the issues raised in our lawsuit and Apache, as operator,
will proceed with construction of production facilities and development drilling
on the shallow-water Zhao Dong Block.
FORWARD-LOOKING STATEMENTS AND RISK
Certain statements in this report, including statements of the future
plans, objectives, and expected performance of the Company, are forward-looking
statements that are dependent upon certain events, risks and uncertainties that
may be outside the Company's control, and which could cause actual results to
differ materially from those anticipated. Some of these include, but are not
limited to, the market prices of oil and gas, economic and competitive
conditions, inflation rates, legislative and regulatory changes, financial
market conditions, political and economic uncertainties of foreign governments,
future business decisions, and other uncertainties, all of which are difficult
to predict.
There are numerous uncertainties inherent in estimating quantities of
proved oil and gas reserves and in projecting future rates of production and the
timing of development expenditures. The total amount or timing of actual future
production may vary significantly from reserves and production estimates. The
drilling of exploratory wells can involve significant risks, including those
related to timing, success rates and cost overruns. Lease and rig availability,
complex geology and other factors can affect these risks. Although Apache makes
use of futures contracts, swaps, options and fixed-price physical contracts to
mitigate risk, fluctuations in oil and gas prices, or a prolonged continuation
of low prices, may substantially adversely affect the Company's financial
position, results of operations and cash flows.
16
<PAGE> 18
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information set forth in Note 10 to the Consolidated Financial
Statements contained in the Company's annual report on Form 10-K for
the year ended December 31, 1999 (filed with the SEC on March 29,
2000) is incorporated herein by reference.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's annual meeting of stockholders was held in Houston,
Texas at 10:00 a.m. local time, on Thursday, May 4, 2000. Proxies for
the meeting were solicited pursuant to Regulation 14 under the
Securities Exchange Act of 1934, as amended. There was no solicitation
in opposition to the nominees for election as directors as listed in
the proxy statement, and all nominees were elected.
Out of a total of 113,582,831 shares of the Company's common stock
outstanding and entitled to vote, 99,681,250 shares were present at
the meeting in person or by proxy, representing approximately 87.8
percent. Matters voted upon at the meeting were as follows:
Election of five directors to serve on the Company's board of
directors. Mr. Bohen, Mr. Lawrence, Mr. Patton and Mr. Rice were
elected to serve until the annual meeting in 2003, and Mr. Pitman
was elected to serve until the annual meeting in 2001. The vote
tabulation with respect to each nominee was as follows:
<TABLE>
<CAPTION>
AUTHORITY
NOMINEE FOR WITHHELD
------- --- ---------
<S> <C> <C>
Frederick M. Bohen 99,011,525 669,725
George D. Lawrence, Jr. 96,913,330 2,767,920
Rodman D. Patton 99,018,600 662,650
Charles J. Pitman 99,015,896 665,354
Joseph A. Rice 98,777,862 903,388
</TABLE>
ITEM 5. OTHER INFORMATION
None
17
<PAGE> 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
12.1 - Statement of computation of ratios of earnings to fixed
charges and combined fixed charges and preferred stock
dividends.
27.1 - Financial Data Table
(b) Reports filed on Form 8-K
The following current reports on Form 8-K were filed during
the fiscal quarter ended June 30, 2000:
None
18
<PAGE> 20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
APACHE CORPORATION
Dated: August 14, 2000 /s/ Roger B. Plank
-----------------------------
Roger B. Plank
Executive Vice President and
Chief Financial Officer
Dated: August 14, 2000 /s/ Thomas L. Mitchell
-----------------------------
Thomas L. Mitchell
Vice President and Controller
(Chief Accounting Officer)
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
12.1 - Statement of computation of ratios of earnings to fixed charges and combined fixed charges
and preferred stock dividends
27.1 - Financial Data Table
</TABLE>
