Apache Corp. (NYSE: APA) reported second-quarter adjusted earnings per share (EPS) of $2.07 on $3.97 billion in revenue before markets opened this morning. Adjusted EPS was 36% lower than last year’s $3.22, and revenue is down 8.5% from last year’s second-quarter total of $4.34 billion. The results compare to the Thomson Reuters consensus estimates for EPS of $2.53 and $4.34 billion in revenue.
The company’s chairman and CEO had this to say:
Apache has assembled an inventory of 67,000 drillable locations in liquids-rich onshore U.S. plays, and now is the time to drill wells. Rigs are running — 36 in the Permian Basin, up from 26 at the end of 2011, and 24 in the Anadarko Basin, up from seven at year-end. The impact of our accelerated drilling program is beginning to take hold. … Apache is gaining momentum, and we project rising production throughout the second half.
The company had no comments related to guidance in its press release. The company did announce that a second horizontal well in the North Sea is now producing 8,500 barrels a day of crude, bringing the company’s production from the U.K. sector of the field to 12,900 barrels a day.
That’s fine, but 4,400 new barrels a day does not make up for a lousy quarter. On an unadjusted basis, Apache’s EPS for the quarter was a miserable $0.86, compared with $3.17 in the same period a year ago. That’s a drop of 73%. Capital spending rose by more than $700 million in the quarter to $2.5 billion. Apache also spent $3.3 billion on acquisitions in the quarter. As the CEO said, now it is time to start drilling.
Crude oil volume in the quarter rose to about 348,000 barrels a day from 339,000 barrels a day in the same period a year ago. Natural gas volumes also rose, to 2.32 billion cubic feet a day from 2.27 billion cubic feet a day. The problem was realized pricing. The company’s realized price fell from $106.31 a barrel last year to $97.66 a barrel this year. Natural gas pricing dropped by 35% year over year.
Shares are down 2.4% in premarket trading this morning to $84.75. The current 52-week range is $73.04 to $124.05. Thomson Reuters had a consensus analyst price target of $115.65 before today’s results were announced.
Paul Ausick
Sponsored: Attention Savvy Investors: Speak to 3 Financial Experts – FREE
Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.