Second Quarter 2014 EARNINGS RELEASE OPERATIONS SUPPLEMENT … · 2014-09-04 · 1 SECOND QUARTER...

Second Quarter 2014 EARNINGS RELEASE OPERATIONS SUPPLEMENT & Pro Forma Production Reconciliation

TABLE OF CONTENTS Overview ............................................................................................................................................................................... 2

NORTH AMERICA .............................................................................................................................................................. 7

Permian......................................................................................................................................................................... 7

Central ........................................................................................................................................................................ 11

Gulf Coast ................................................................................................................................................................... 13

Canada ........................................................................................................................................................................ 15

Gulf of Mexico ............................................................................................................................................................ 18

INTERNATIONAL ............................................................................................................................................................. 19

Australia ...................................................................................................................................................................... 19

Egypt ........................................................................................................................................................................... 21

North Sea .................................................................................................................................................................... 24

1

SECOND QUARTER 2014

EARNINGS RELEASE OPERATIONS SUPPLEMENT

NOTICE TO INVESTORS This earnings release operations supplement contains certain "forward-looking statements" within the meaning of Section 27A of

the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended and, whenever

possible, are identified by use of the words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and

similar references to future periods. Any matters that are not historical facts are forward-looking and, accordingly, involve

estimates, assumptions, risks and uncertainties, including, without limitation, our assumptions and estimates about the market

prices of oil, natural gas, NGLs and other products or services, our commodity hedging arrangements, the supply and demand for oil,

natural gas, NGLs and other products or services, production and reserve levels, drilling risks, the number of wells drilled, economic

and competitive conditions, the availability of capital resources, capital expenditure and other contractual obligations, and our

ability to complete, test and produce the wells identified in this supplement. Because such statements involve risks and

uncertainties, Apache’s actual results and performance may differ materially from the results expressed or implied by the forward-

looking statements contained in this supplement. Other important factors that could cause actual results to differ materially from

expected results are described in “Risk Factors” in our most recently filed Annual Report on Form 10-K, recent Quarterly Reports on

Form 10-Q and amendments thereto, available on our Web site and in our other public filings and press releases. There is no

assurance that Apache's expectations will be realized, and readers are cautioned not to place undue reliance on forward looking

statements, which speak only as of the date hereof. Unless otherwise required by law, we assume no duty to update these

statements as of any future date.

Cautionary Note to Investors: The United States Securities and Exchange Commission ("SEC") permits oil and gas companies, in their

filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SEC's definitions for such terms. Apache

may use certain terms in this earnings release operations supplement, such as “resources,” “potential resources,” “resource

potential,” “reserves potential,” and other similar terms that the SEC guidelines strictly prohibit Apache from including in filings with

the SEC. Such terms do not take into account the certainty of resource recovery, which is contingent on exploration success,

technical improvements in drilling access, commerciality and other factors, and are therefore not indicative of expected future

resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in Apache’s Annual Report

on Form 10-K for the fiscal year ended December 31, 2013, available from Apache at www.apachecorp.com or by writing Apache at:

2000 Post Oak Blvd., Suite 100, Houston, Texas 77056 (Attn: Corporate Secretary). You can also obtain this report from the SEC by

calling 1-800-SEC-0330 or from the SEC's website at www.sec.gov.

Certain information may be provided in this supplement that includes financial measurements that are not required by, or presented

in accordance with, generally accepted accounting principles (GAAP), including these measures: adjusted earnings, pre-tax margin,

and cash from operations. These non-GAAP measures should not be considered as alternatives to GAAP measures, such as net

income or cash from operating activities, and may be calculated differently from, and therefore may not be comparable to, similarly

titled measures used at other companies. Reconciliation to the most directly comparable GAAP financial measure has been provided

on our website at www.apachecorp.com/financialdata.

None of the information contained in this document has been audited by any independent auditor. This supplemental document is

prepared as a convenience for securities analysts and investors and may be useful as a reference tool. Apache intends to continue

to publish this supplement in conjunction with our quarterly earnings release, but may elect to modify the format or discontinue

publication at any time, without notice to securities analysts or investors.

http://www.apachecorp.com/financialdata

2

SECOND QUARTER 2014


APACHE WORLDWIDE OPERATIONS

GLOBAL KEY STATS Second-Quarter 2014

Q2 Production: 635,814 Boe/d

Q2 Wells: 440 gross, 330 net

Q2 Rigs: Avg 116 rigs

NORTH AMERICAN ONSHORE KEY STATS

Second-Quarter 2014 Q2 Production: 351,302 Boe/d



Overview North American onshore liquids production grew 18 percent year-over-

year and 3 percent sequentially on a pro forma basis led by strong results

in our Permian region. Total North American onshore liquids volumes

reached a record 201,400 Bbls/d.

Total worldwide production during the quarter averaged 636 thousand

barrels of oil equivalent per day (Mboe/d). Liquids production comprised

59 percent of the total, up from 58 percent in the previous quarter.

Pro forma second-quarter production averaged 550 Mboe/d compared to

a second-quarter 2013 average of 529 Mboe/d.

Apache averaged 116 rigs worldwide during the second quarter, 82 of

which were focused onshore in North America.

The company completed 440 gross wells during the quarter, 360 of which

were onshore in North America.

Note: Pro forma production rates and growth percentages in this report are adjusted to exclude volumes from divestitures, noncontrolling interest and tax barrels in Egypt. The number of wells reported as drilled and/or completed throughout this report could be subject to reclassification that may cause adjustments to reported amounts in future periods. The number of wells reported is subject to SEC standards and therefore, along with other SEC guidelines, includes completed wells only.

3

SECOND QUARTER 2014


761 71

43 41

36 33

537 5 532

0

100

200

300

400

500

600

700

800

2013 AsReported

GOM Shelf Argentina Egypt TaxBarrels

NoncontrollingInterest

Canada Sales Initial 2013 ProForma

South TexasSale

Updated 2013Pro Forma

UPDATED PRO FORMA 2013 PRODUCTION BRIDGE

532 Mboe/d

Note: At Apache’s February 2014 Investor Day, we provided a reconciliation from 2013 reported production volumes of 761 Mboe/d to pro forma production volumes of 537 Mboe/d which were adjusted to exclude volumes from GOM Shelf, Argentina and Canada divestitures and noncontrolling interest and tax barrels in Egypt. We have since disclosed additional divestitures in South Texas and are therefore providing an updated 2013 pro forma production volume of 532 Mboe/d for the comparability of results. 2014 production guidance is based off of pro forma production volumes.

4

SECOND QUARTER 2014


16%

28%

5%

13%

2%

14%

13%9%

636 40 37

5 3 550

0

100

200

300

400

500

600

700

As Reported Egypt Tax Barrels NoncontrollingInterest

Canada Sales South Texas Sale 2Q 2014Pro Forma

PRO FORMA

SECOND-QUARTER PRODUCTION BRIDGE

550 Mboe/d

583 Mboe/d

PRO FORMA SECOND-QUARTER PRODUCTION BY REGION

550 Mboe/d

583 Mboe/d

North American Gas

International Gas

Australia

Canada Permian

Central

Gulf of Mexico

Gulf Coast

North Sea

Egypt

N.A. Onshore

62%

North American Onshore International & Offshore Liquids Natural Gas

22%

38%

26%

14%

PRO FORMA SECOND-QUARTER PRODUCTION BY PRODUCT

550 Mboe/d

International

Liquids

North American

Liquids

5

SECOND QUARTER 2014


313343

0

50

100

150

200

250

300

350

Q2 2013 Q2 2014

118141

52

60

0

50

100

150

200

250

300

350

Q2 2013 Q2 2014

PRO FORMA

NORTH AMERICAN ONSHORE PRODUCTION: 2Q 2013 VS 2Q 2014

PRO FORMA

WORLDWIDE PRODUCTION (Mboe/d)

170

201

Oil

Liquids

NGLs

54% % Liquids

19%

15%

9%

18%

Total Production (Mboe/d)

59%

Liquids Production (Mbbls/d)

529 532

544

550

500

510

520

530

540

550

560

570

PF 2Q 2013 Updated PF 2013 PF 1Q 2014 PF 2Q 2014

6

SECOND QUARTER 2014


REPORTED

SECOND-QUARTER PRODUCTION BY REGION

636 Mboe/d

45%

39%

10%6%

26%

33%

24%

17%

North American Onshore International & Offshore Liquids Natural Gas

Australia

Canada

Permian

Central

Gulf of Mexico

Gulf Coast

North Sea

Egypt

REPORTED

SECOND-QUARTER PRODUCTION BY PRODUCT

636 Mboe/d

SECOND-QUARTER REVENUE BY PRODUCT

$3.7 Billion

International Liquids

North American

Liquids

North American Gas

International Gas

International Liquids $1.7 Bn

North American

Liquids $1.5 Bn

North American Gas

$0.3 Bn

International Gas

$0.2 Bn

N.A. Onshore

55%

Note: Reported volumes are consistent with production included for purposes of GAAP financial reporting and therefore include noncontrolling interest and tax barrels in Egypt.

14%

24%

5%12%

2%

24%

11%8%

7

SECOND QUARTER 2014


PERMIAN KEY STATS Second-Quarter 2014




NORTH AMERICA Permian Second-quarter 2014 production in the Permian averaged a record

155,244 barrels of oil equivalent per day (Boe/d) (77 percent liquids),

up 4 percent over the previous quarter, and up 26 percent over the

second quarter of 2013.

The Barnhart (Irion County, Wolfcamp), Pecos Bend (Loving County,

Bones Springs), and Cedar Lake (Eddy County, Yeso) areas lead the

region’s production growth, while Deadwood and Barnhart in the Midland Basin remained the top two areas in

terms of production contribution.

The Permian region averaged 37 operated drilling rigs, with horizontal rigs increasing to 24 and vertical rigs

decreasing to 13. The region drilled (TD’d) 164 gross operated wells during the quarter including 74 horizontal and

90 vertical.*

APACHE PERMIAN REGION ACREAGE AND KEY PLAYS

* This is different from the 207 wells reported in the Key Stats due to differences in classification.

8

SECOND QUARTER 2014


Permian (Continued)

PERMIAN WELL HIGHLIGHTS

Second-Quarter 2014

PLAY/TARGET WELL NAME COUNTY, ST TVD LATERAL IP (Peak 24-Hour) IP (30-Day)

Wolfcamp Shale SRH 1335 HU Reagan, TX 7,700’ 5,800’ 1,184 Boe/d N/A

SRH 1336 HM Reagan, TX 8,000’ 5,800’ 812 Boe/d N/A

Cline Shale Augusta Barrow #1418H Ector, TX 9,900’ 4,460’ 1,268 Boe/d

518 Boe/d

Penn George D Hogg #8H Winkler, TX 8,696’ 5,577’ 1,158 Boe/d

1,162 Boe/d

Bone Springs

Robin 8 #103H Reeves, TX 10,583’ 4,567’ 1,192 Boe/d 912 Boe/d

Waha #802 HL Reeves, TX 10,612’ 4,892’ 971 Boe/d N/A

Chaparral 89 #103H Loving, TX 10,897’ 4,449’ 1,473 Boe/d 1,321 Boe/d

Spraberry Augusta Barrow #2309 Ector, TX 11,410’ VERTICAL 583 Boe/d

374 Boe/d

Yeso Tony Federal #56 Eddy, NM 6,500’ VERTICAL 789 Boe/d

348 Boe/d

Wolfcamp King 59-1 Crane, TX 8,045’ VERTICAL 354 Boe/d N/A

9

SECOND QUARTER 2014


Permian (Continued)

WOLFCAMP SHALE

During the second quarter, Apache drilled 37 wells in the Wolfcamp Shale in

Irion, Reagan, and Upton County.

Irion County:

The Barnhart area of Irion County remained extremely active ending the

second quarter with seven rigs. The activity focused on drilling 12 Upper

and 7 Middle Wolfcamp wells, four of which were drilled to two-mile

lateral lengths and the remaining 15 wells were drilled to 1.5-mile

lateral lengths.

Reagan County (Southern Midland Basin):

During the quarter, four wells were drilled at Scottish Rite Hospital (SRH)

with two drilling rigs. Two recently completed wells, the SRH 1335HU and

1336HM, produced 24-hour initial production (IP) rates of 1,184 Boe/d

and 812 Boe/d, respectively.

MIDLAND VERTICAL

The southern end of the Deadwood core continued to provide excellent

Wolfwood results due to a combination of Strawn and Wolfcamp potential.

The Midland vertical program in the Permian continues to provide strong

rates of return with select wells exhibiting 30-day average production rates

in excess of 300 Boe/d.

CLINE SHALE We continued our active program in the Deadwood field in Glasscock

County (Midland Basin) drilling nine Lower Cline horizontal wells in the

second quarter.

Apache is also testing new areas including eastern Ector County at the

Augusta Barrow field (Central Basin Platform) with very strong initial results.

The Augusta Barrow #1418H recently generated a peak 24-hour IP of 1,268

Boe/d.

10

SECOND QUARTER 2014


Waha

Permian (Continued)

CENTRAL BASIN PLATFORM (CBP) Horizontal activity during the second quarter was focused in Andrews

County on the Super Bar area where five horizontal wells were drilled

targeting the upper Wichita Albany formation.

Additional activity centered on the North Monahans horizontal

development in Winkler County.

Apache is also testing Grayburg potential in Crane County drilling five

horizontal wells during the quarter.

NORTHWEST SHELF - YESO Apache ran two rigs in the Yeso play during the second quarter and spud

a total of 20 wells, four of which were horizontal and the other 16

vertical.

16 wells were brought onto production adding 1,578 Bo/d and 3,351

Mcf/d to the field (2,137 Boe/d).

The 10 horizontal wells completed last year in the Cedar Lake area are

still among the best Yeso wells producing approximately 3,700 Bo/d due

to lift upgrades installed during the second quarter.

DELAWARE BASIN Three rigs continued to drill in Pecos Bend and Waha during the second

quarter. In Pecos Bend, seven wells were spud: two in the 2nd

Bone

Springs, four in the 3rd

Bone Springs and one in the Wolfcamp

formations.

11

SECOND QUARTER 2014


CENTRAL KEY STATS Second-Quarter 2014




Central Second-quarter 2014 production in the Central Region was 89,883

Boe/d. Production growth was lower than expected because fewer

wells were brought online than had been planned.

Liquids now constitute 51 percent of production (oil is 24 percent), up

from 49 percent in the second quarter of 2013.

For the quarter, the Central Region averaged 33 drilling rigs and drilled

98 gross wells versus a planned 108 gross wells.

APACHE CENTRAL REGION ACREAGE AND KEY PLAYS

12

SECOND QUARTER 2014


Central (Continued)

CANYON LIME/CANYON WASH Evaluation of the extensive acreage position is underway as Apache has already drilled two horizontal wells

exhibiting promising performance.

Apache’s first horizontal well in the Canyon Lime formation was drilled in the first quarter. The Bivins East 41-1H,

was drilled to a vertical depth of roughly 9,500 feet with a one mile lateral and successfully tested the play.

A follow-up Canyon Lime well, the Bivins East 94-1H, was drilled south of the Bivins East 41-1H in the second

quarter and produced an average 30-day rate of 1,718 Boe/d.

The Bivins-LIT 110 1H was also drilled and reached total depth of 15,275 feet. Completion of the well is underway.

TONKAWA For the quarter, Apache drilled 11 Tonkawa wells and completed 17 wells with an average 30-day rate of 250 Bo/d

and 500 Mcf/d.

Apache continues to lead the industry in low-cost horizontal Tonkawa wells with typical completed well costs

between $3.9 and $4.5 million.

CENTRAL WELL HIGHLIGHTS

Second-Quarter 2014

PLAY/TARGET WELL NAME COUNTY, ST TVD Lateral IP (30-Day)

Granite Wash Moore, R. #2-1H Wheeler, TX 13,300’ 4,758’ 756 Boe/d

Tonkawa Currier 3-18H Roger Mills, OK 8,937’ 4,836’ 769 Boe/d

Canyon Lime Bivins East 94 #1H Potter, TX 9,099’ 4,472’ 1,718 Boe/d

Des Moines Deal 5-11-21 #1H Beckham, OK 12,940’ 4,500’ 779 Boe/d

Cleveland Fiskin 5 15-26 2H Roger Mills, OK 10,083’ 4,450’ 1,571 Boe/d

13

SECOND QUARTER 2014


GULF COAST KEY STATS Second-Quarter 2014



Q2 Rigs: Avg 7 rigs

Gulf Coast Second-quarter 2014 reported production averaged 29,483 Boe/d, down

2 percent from the first quarter of 2014 due to planned downtime at

Belle Isle facility and a small asset sale of approximately 3,000 Boe/d on

average for the quarter in South Texas. When adjusting for asset

divestitures, production was flat sequentially.

For the quarter, Apache operated five rigs in the East Texas Eagle Ford

and two rigs in South Louisiana for a total of seven operated drilling rigs

while completing a total of 24 gross (19 net) wells.

APACHE GULF COAST REGION ACREAGE AND KEY PLAYS

14

SECOND QUARTER 2014


Gulf Coast (Continued)

EAST TEXAS EAGLE FORD During the quarter, Apache continued its drilling program in its emerging East Texas Eagle Ford play in Brazos and

Burleson Counties.

Apache is utilizing pads for greater efficiency and began drilling a total of 26 wells during the quarter. One well was

completed and brought online during the quarter, with the rest expected to come on in the second half of the

year. The timing of the production impact from wells drilled during the second quarter will not be evident until all

wells are completed and come online.

Early tests on third quarter completed wells such as the Reveille 10H and Reveille 14H had 24-hour initial

production rates of 906 Boe/d and 1,220 Boe/d, respectively.

Apache’s commitment to the East Texas Eagle Ford area continues to increase with the rig count during the

quarter approaching a total of eight rigs.

GULF COAST WELL HIGHLIGHTS

Second-Quarter 2014

PLAY/TARGET WELL NAME TMD Lateral Length 24-Hour Peak Rate Eagle Ford Reveille #8H 17,775’ 7,174’ 987 Boe/d

15

SECOND QUARTER 2014


CANADA KEY STATS* Second-Quarter 2014



Q2 Rigs: Avg 5 rigs

Canada Second-quarter 2014 production in Canada, which includes Kitimat

upstream production, was 76,692 Boe/d.

Total production was down 13 percent from the first-quarter 2014

due to the closing of the previously announced sale of Ojay, Noel and

Wapiti areas in Alberta and British Columbia on April 30, 2014 and

third-party downtime of approximately 3,000 Boe/d. The production

associated with the downtime is now online.

These divestitures were primarily dry gas-producing properties comprising 622,600 gross acres (328,400 net acres).

In the Wapiti area, Apache retained 100 percent of its working interest in horizons below the Cretaceous including

rights to the liquids-rich Montney and other deeper horizons. During 2013, production from the fields divested

averaged 101 MMcf/d of natural gas and 1,500 Bbls/d of liquid hydrocarbons.

During the quarter, the region averaged one rig (excluding Kitimat), down from eight in the previous quarter due

to the planned spring break-up season. Apache anticipates increasing the rig count to an average of seven rigs in

the third quarter.

APACHE CANADA REGION ACREAGE AND KEY ASSETS

*Includes Kitimat Upstream.

16

SECOND QUARTER 2014


Canada (Continued)

* Less than 30-day rate. Well 00/02-28-062-20W5 does not have a representative 30-day IP rate at this time due to facility constraints.

** Only 60% of the lateral well bore was treated during the hydraulic fracture completion process due to service company performance issues.

CANADA WELL HIGHLIGHTS Second-Quarter 2014

PLAY/TARGET WELL NAME TVD Lateral Length 30-Day IP (% Gas)

Kaybob - Bluesky 00/04-34-059-19W5/00 7,054’ 4,219’ 817 Boe/d (73%)

House Mountain - Beaverhill 00/09-16-069-09W5/00 7,161’ 4,452’ 309 Boe/d (7%)

West 5 - Cardium 00/16-23-033-04W5/00 6,819’ 4,438’ 318 Boe/d (13%)*

00/02-14-033-04W5/00 6,826’ 3,844’ 317 Boe/d (12%)*

Previously Unreported Wells Drilled in First-Quarter 2014

Kaybob Duvernay

00/02-28-062-20W5 10,840’ 3,927’ 1,963 Boe/d (44%)*

00/02-08-062-20W5 11,125’ 4,219’ 713 Boe/d (54%)**

Wapiti Montney 00/13-18-067-07W6 10,134’ 4,974’ 926 Boe/d (67%)

17

SECOND QUARTER 2014


Canada (Continued)

KITIMAT UPSTREAM (50 PERCENT APA) During the second quarter, Kitimat Upstream gross production in the Horn River and Liard Basins averaged 140

MMcf/d (55 MMcf/d net to Apache’s interest), down 5 percent from first-quarter 2014 due mainly to natural field

declines.

During the quarter, two vertical tenure wells reached total depth, retaining 40,861 gross acres (18,480 net acres).

Operations concluded on the 2013/2014 winter 3D seismic programs in early second quarter with 515-square-

miles acquired.

At 54 ̊ ̊ north, Kitimat is one of North America’s closest ports to Asian markets.

Kitimat-Tokyo3,988 nm, 10 daysQatar-Tokyo6,500 nm, 16 days

0 100

KM

Liard

18

SECOND QUARTER 2014


APACHE GULF OF MEXICO REGION ACREAGE POSITION

GULF OF MEXICO Second-Quarter 2014



Q2 Rigs: Avg 1 rig

Gulf of Mexico Second-quarter 2014 production in the Gulf of Mexico averaged

11,908 Boe/d, up 11 percent from first-quarter 2014 with

natural declines being offset by a full quarter of production at

Bushwood.

Apache averaged one rig during the quarter and drilled the

Bimini prospect but did not encounter commercial quantities of

hydrocarbons.

On May 8, 2014, Apache announced the sale of the Lucius and Heidelberg development projects to Freeport-

McMoRan Copper & Gold. The deal closed on June 30, 2014.

Bushwood

19

SECOND QUARTER 2014


APACHE AUSTRALIA REGION ACREAGE AND KEY PROJECTS

AUSTRALIA KEY STATS Second-Quarter 2014



Q2 Rigs: Avg 2 rigs

INTERNATIONAL Australia Second-quarter 2014 production averaged 49,633 Boe/d, down 6

percent from first quarter 2014. New production from the BHP

Billiton Petroleum-operated Moondyne project was offset by

natural field declines at the Pyrenees Venture FPSO.

During the quarter, the region operated two semi-submersible

drilling rigs and drilled the first tri-lateral development well at

Coniston and a delineation well in the greater Julimar area.

20

SECOND QUARTER 2014


Australia (Continued)

BALNAVES (65 PERCENT APA) The Armada Claire FPSO left the Singapore shipyard and arrived in the field. Final hook-up and commissioning

activities are now underway in preparation for first oil production.

CONISTON DEVELOPMENT AND NINGALOO VISION UPGRADE PROJECT (52.5 PERCENT APA) Development drilling on the Coniston development continued during the second quarter with the completion of its

first tri-lateral well development. Apache has now successfully drilled seven of the 17 well laterals.

Maintenance and upgrade works continued during the quarter on the Ningaloo Vision FPSO in the shipyard dry-

dock.

Removal and replacement of the subsea flowlines to increase capacity for Coniston took place. Offshore

installation of the last flowline replacement is now underway and will complete the offshore Coniston facilities

development work.

JULIMAR (65 PERCENT APA) / WHEATSTONE LNG (13 PERCENT APA) Wheatstone LNG:

Nearly 38 percent complete. Platform fabrication continued with all topside deck blocks and steel gravity

substructure blocks erected.

Chevron completed installation of the 44-inch main trunkline from shore to platform location. The pipelay was

completed with excellent safety performance and productivity.

At the LNG Plant site, the first LNG tank foundation was completed. A key downstream milestone was

achieved with the material offloading facility (MOF) completed and ready to receive the first module.

Julimar:

Nearly 60 percent complete and on track to meet the year-end 2016 forecast for first LNG sales from

Wheatstone.

Apache completed drilling operations on intermediate hole sections for five development wells. All five subsea

trees were successfully installed ready for final drilling and completion in 2015. Mobilization activities

commenced for installation of the two Julimar 18-inch pipelines.

MOONDYNE (28.57 PERCENT APA) Moondyne subsea installation work to connect its two production and one water injection to the Pyrenees Venture

FPSO was completed and first oil was achieved in the second quarter.

NORTHERN CARNARVON BASIN Apache entered an agreement with Karoon Gas Australia to farm in to WA-482-P in the Northern Carnarvon Basin.

The permit offers exploration opportunities for large potential targets in a proven petroleum system.

21

SECOND QUARTER 2014


EGYPT KEY STATS* Second-Quarter 2014

Q2 Gross Production: 351,059 Boe/d

Liquids: 199,767 Bo/d

Gas: 907,752 Mcf/d



Egypt Second-quarter gross liquids production was 199,767 Bo/d and

gross gas production was 908 MMcf/d, for a total of 351,059

Boe/d.

Apache averaged 26 rigs in the second quarter and drilled a

total of 67 gross (59 net) wells.

Apache continued its active exploration program and appraisal

drilling campaign in Egypt. Khalda remains on pace to drill 37

exploration wells for the year with 14 reaching total depth and

eight classified as discoveries with logged pay in the quarter.

Notable tests in the second quarter included the Ras Kanayes-10X well located in the Ras Kanayes B Concession.

The well tested the Safa and AEB5/6 resevoirs and encountered pay in the AEB-4, Masajid, Zahra, Upper Safa and

Lower Safa formations. The post-frac drill stem test in the Upper Safa tested 872 Bo/d and 7 MMcf/d on a 32/64-

inch choke.

The Pinot-3HX, a horizontal exploration well, is pursuing Bahariya oil reserves in the large Pinot-Nour structure.

During the second quarter, the well was drilled vertically 6,900 feet and then horizontally 3,300 feet through a 40-

foot window in the Upper Bahariya formation. The time to drill required only 20 days and costs came in under AFE.

A multiple-staged fracture stimulation program is scheduled to be completed in the third quarter.

As part of the ongoing horizontal drilling program, during the quarter the region spud another Upper Bahariya

horizontal well, the Cyngus 23H. The Cyngus field was discovered in 2007 but deemed to be uneconomic as the

vertical well performance was poor. A large area of potential reserves remains and this well represents a trial to

improve economics of the play utilizing horizontal drilling and multi-stage hydraulic fracturing technology.

Development drilling success during the second quarter included the North Razak #12 and WKAL-I7ST1 wells

drilled in the Alamein and Faghur Basins, respectively. The North Razak #12 well encountered unswept Alamein

reservoir and after acid stimulation initially flowed 3,500 Bo/d, while the WKAL-I7ST1 initially tested at 3,550 Bo/d

and 11.5 MMcf/d furthering development of the Jurassic and Safa projects.

Following the significant field discovery at Herunefer-1X during the first quarter in the Khalda Offset (East)

Concession, Apache was granted a new development lease covering 4,450 acres in this area.

*Includes noncontrolling interest.

22

SECOND QUARTER 2014


Egypt (Continued)

EGYPT WELL HIGHLIGHTS Second-Quarter 2014

PLAY/TARGET WELL NAME IP (30-Day)

Safa WKAL I7 1,817 Boe/d

Upper Safa Scorpion 1X 7,747 Boe/d

PLZC Hydra 1 5,897 Boe/d

Siwa 3R2 920 Bo/d

AEB 3C WKAL A6 3,240 Bo/d

AEB 3D Buchis W3 2,970 Bo/d

ALM DOL NRZK 12 1,150 Bo/d

ARG MRZK 104 905 Bo/d

APACHE EGYPT REGION ACREAGE AND KEY BASINS

23

SECOND QUARTER 2014


Egypt (Continued)

EGYPT PRODUCTION DETAIL

2Q 2014 1Q 2014

Liquids (Bbls/d)

Gas (Mcf/d) Boe/d

Liquids (Bbls/d)

Gas (Mcf/d) Boe/d

Gross Production 199,767 907,752 351,059 199,268 921,440 352,841

Net Production With Tax:

Apache Share 59,724 245,285 100,606 59,182 252,558 101,275

Noncontrolling Interest 29,803 122,665 50,247 29,144 124,799 49,944

Total Net Production With Tax 89,527 367,950 150,853 88,326 377,357 151,219

% of Gross 44.8% 40.5% 43.0% 44.3% 41.0% 42.9%

Total Tax Barrels 24,183 95,115 40,036 22,630 89,805 37,598

Net Production Without Tax:

Apache Share 43,573 181,791 73,871 44,039 192,890 76,188

Noncontrolling Interest 21,771

91,044 36,946 21,657 94,662 37,434

Total Net Production Without Tax 65,344 272,835 110,817 65,696 287,552 113,621

% of Gross 32.7% 30.1% 31.6% 33.0% 31.2% 32.2%

24

SECOND QUARTER 2014


NORTH SEA KEY STATS Second-Quarter 2014



Q2 Rigs: Avg 5 rigs

North Sea Second-quarter 2014 production in the North Sea was 72,118 Boe/d,

up 7 percent from the first quarter due to a combination of

production efficiency and drilling success.

During the second quarter, the region operated an average of five

drilling rigs and drilled eight wells.

From the Beryl Bravo Platform, the BDR development well drilled

into the East Flank, which intersected 268 feet of vertical depth net pay and achieved a 30-day IP of 4,500 Boe/d.

From the Forties Alpha Platform, Maule M6 development well was drilled to target an unswept oil accumulation

based on the 2013 Forties 4D seismic and found 21 feet true vertical depth net oil pay. The well came online in

June with a 30-day IP of 5,105 Bo/d.

From the Forties Echo Platform, the Rowan Gorilla-7 successfully drilled the T268 horizontal completion hole and

encountered 230 feet net pay along the wellbore with a 30-day IP of 2,367 Bo/d.

NORTH SEA WELL HIGHLIGHTS Second-Quarter 2014

PLAY/TARGET WELL NAME IP (30-Day)

Beryl B76 4,500 Boe/d

Forties T268 2,367 Bo/d

Forties T267 1,661 Bo/d

Maule M6 5,105 Bo/d

APACHE NORTH SEA REGION ACREAGE AND KEY PROJECTS

Second Quarter 2014 EARNINGS RELEASE OPERATIONS SUPPLEMENT … · 2014-09-04 · 1 SECOND QUARTER...

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