Slide 1: Second-Quarter 2019 Financial & Operational Supplement
SECOND-QUARTER 2019 FINANCIAL & OPERATIONAL SUPPLEMENT
Slide 2: Notice to Investors
NOTICE TO INVESTORS Certain statements in this earnings supplement 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 including, without limitation, expectations, beliefs, plans, and objectives r
Slide 3: 2Q 2019 Key Metrics
2Q 2019 KEY METRICS 2Q 2019 Reported Production 455 Mboe/d Adjusted Production(1) 396 Mboe/d Cost Incurred in Oil and Gas Property $661 Million Upstream Capital Investment(2) $589 Million Net Cash Provided by Operating Activities $856 Million Adjusted EBITDAX(2) $994 Million Earnings Per Share ($0.9
Slide 4: Delivering Value: 2Q 2019 Highlights
● Delivering Value: 2Q 2019 Highlights ● 2Q Results ● Appendix ● Non-GAAP Reconciliations 4
Slide 5: Framework for Long-Term Value Creation
FRAMEWORK FOR LONG-TERM VALUE CREATION BALANCED PORTFOLIO APPROACH Exploration / Development Conventional / Unconventional Oil / Liquids Rich Gas / Lean Gas OPERATIONAL FLEXIBILITY Actively Manage Capital Allocation to Reflect Commodity Price Environment FREE CASH FLOW GENERATION Capital Discipline,
Slide 6: Recent Highlights
RECENT HIGHLIGHTS ~13% below midpoint of Adjusted production of 2Q upstream capital guidance 396 MBOE/D On track to meet 2019 upstream capital Exceeded guidance budget of ~$2.4 billion Successfully Commissioned Subsequent to 2nd quarter end, First Two Cryos Repaid $150MM note due 7/1/19 ~$560MM Exce
Slide 7: 2019 Capital Budget & Activity Unchanged
2019 CAPITAL BUDGET & ACTIVITY UNCHANGED Upstream Capital Budget Commentary $1.2 Bn ~$1.2 Bn Reiterate full year 2019 budget of $2.4 billion with no increase in activity More completions weighted spend in 2H 2019 relative to 1H 2019 Planned 3Q incremental spend: Storr development in North Se
Slide 8: Revised 4Q'19 Production Guidance
REVISED 4Q’19 PRODUCTION GUIDANCE Adjusted Following Mid-Con Asset Sale (Mboe/d) Feb’19 Guidance New Guidance United States 317 - 329 283 287 - 299 247 (1) (1) 4Q'18A 4Q'19E 4Q'18 4Q'19E International Adjusted(2) 138 132 - 135 Unchanged 4Q'18A 4Q'19E (1) Adjusted to reflect Mid-Con asset sales consi
Slide 9: Permian Oil Production Outlook
PERMIAN OIL PRODUCTION OUTLOOK 2019 Production Guidance Update (Mbo/d) 100 - 105 99 98 94 - 98 90 90 92 85 85 Frac Holiday Frac Holiday Impact & Other Impact Timing Delays 4Q’17 4Q'17 1Q’18 1Q'18 2Q’18 2Q'18 3Q’18 3Q'18 4Q’18 4Q'18 1Q’19 1Q'19 2Q’19 2Q'19 3Q’19E 3Q'19E 4Q’19E 4Q'19E Investing at a P
Slide 10: Alpine High Production Outlook
ALPINE HIGH PRODUCTION OUTLOOK 2019 Production Guidance Update (Mboe/d) ▪ Deferred ~22 Mboe/d of net production in 2Q’19 ▪ Reduced 3Q’19 guidance range to reflect continued gas deferrals until GCX pipeline enters service ▪ 4Q’19 guidance assumes no deferrals and 100% ethane recovery 100 + 120 100 80
Slide 11: International Production Outlook
INTERNATIONAL PRODUCTION OUTLOOK 2019 Production Guidance Update (Mboe/d) Quarterly Annual ▪ 2Q’19 in-line with guidance ▪ No change to prior guidance for 3Q’19 & 4Q’19 145 132 - 135 133 - 134 132 123 North Sea Seasonal TAR Impact 1Q'19 2Q'19 3Q'19E 4Q'19E 2019E Note: Includes adjusted production fo
Slide 12: Natural Gas Liquids
NATURAL GAS LIQUIDS Market Fundamentals Y Grade as a % of WTI(1) Potential Price Support ~233 KBD of new ethane cracker capacity in 2H 2019 ~275 KBD of new Gulf Coast LPG export in 2H 2019 Favorable outlook for long-term growth in global Typically 40% to 60% of WTI petrochemical demand Apache
Slide 13: 2Q Results
● Delivering Value: 2Q 2019 Highlights ● 2Q Results ● Appendix ● Non-GAAP Reconciliations 13
Slide 14: 2Q 2019 Global Portfolio
2Q 2019 GLOBAL PORTFOLIO Balanced Portfolio Aligns Returns Focus & Strategic Objectives GLOBAL UNITED STATES INTERNATIONAL 455,023 BOE/D 264,024 BOE/D Reported Production 190,999 BOE/D Reported Production Reported Production 67 Gross, 64 Net 54 Gross, 51 Net Drilled & Completed Wells* 13 Gross, 13 N
Slide 15: 2Q Permian Summary
2Q PERMIAN SUMMARY MIDLAND BASIN REGION STATS ✓ Averaged 4 rigs, 2 frac crews and placed 20 wells on production 226,318 BOE/D ✓ Brought online two pads (Black Dog, Kashmir) with ~2 mile laterals Reported Production ✓ Commissioned an electric powered frac fleet that has generated more than $250,000 i
Slide 16: Well Highlights: Midland Basin
WELL HIGHLIGHTS: MIDLAND BASIN MIDLAND BASIN Midland Glasscock 1 Powell 2 3 Upton Reagan LATERAL AVG 30-DAY AVG 30-DAY IP PAD FORMATION AREA COUNTY OIL (FT) IP/WELL BOEPD/1,000 FT 1 Black Dog (9 Wells) Wolfcamp Powell Upton 10,416 1,298 BOE/D 125 76% Wolfcamp, 2 Kashmir (3 Wells) Powell Upton 9,647
Slide 17: Well Highlights: Alpine High/Delaware Basin
WELL HIGHLIGHTS: ALPINE HIGH/DELAWARE BASIN ALPINE HIGH OTHER DELAWARE BASIN 4 1 2 3 LATERAL AVG 30-DAY AVG 30-DAY IP BTU PAD / WELL FORMATION AREA COUNTY Oil % (FT) IP/WELL BOEPD/1,000 FT CONTENT Alpine High Rich Gas Development 1 Mont Blanc (7 Wells) Barnett Central Trough Reeves 4,848 1,601 BOE/D
Slide 18: Continued Alpine High Well Cost Improvements
CONTINUED ALPINE HIGH WELL COST IMPROVEMENTS Average Drilling Costs Average Completions Costs $/Ft $/Lateral Ft $300 $800 $250 $700 698 242 $600 $200 615 202 $500 $150 178 $400 156 412 394 $100 $300 $200 $50 $100 $0 $0 2017 2018 2019 1H 2017 2018 2019 1H 2019 Label Label Label 2019 Label1H Label Lab
Slide 19: 2Q Egypt Summary
2Q EGYPT SUMMARY Laying Foundation for Oil Focused Initiatives REGION HIGHLIGHTS REGION STATS ✓ Identified several hundred new leads and prospects thus far, in 130,917 BOE/D both legacy and new concession areas Reported Production o 3-D Seismic Shoot: ~65% completed across 3MM acres 11 Gross, 11 Net
Slide 20: 2Q North Sea Summary
2Q NORTH SEA SUMMARY Recent Exploration Success Drives Step Change in Production REGION HIGHLIGHTS REGION STATS ✓ Development of Storr discovery remains on schedule with 60,082 BOE/D expected first production in 4Q 2019 Reported Production ✓ 2nd Garten well expected to be drilled & completed in 4Q 2
Slide 21: 2Q 2019 Operating Cash Margins
2Q 2019 OPERATING CASH MARGINS Brent Oil Price Exposure Drives Strong International Margins Egypt North Sea Permian $70 $66 / Boe $60 $50 $50 / Boe $47 $40 Per Boe $30 $38 Per Boe $27 / Boe $20 $19 / Boe $16 $12 / Boe Per Boe $11 / Boe $10 Margins Reflect Impact of Weak NGL & Gas Prices $0 Operating
Slide 22: 2019 Guidance
2019 GUIDANCE (1) Includes decrease of ~15 Mboe/d related to Mid-Con asset sales. (2) Includes impact of projected 3Q production deferrals at Alpine High. (3) Refer to glossary of referenced terms for definition of Upstream Capital Investment. (4) Represents combination of 100% Altus Midstream Compa
Slide 23: 3Q 2019 Guidance
3Q 2019 GUIDANCE (1) Includes impact of projected production deferrals at Alpine High. (2) Represents combination of 100% Altus Midstream Company operating expense and Apache upstream GPT costs. (3) Excludes dry hole and unproved leasehold impairments. 23
Slide 24: Appendix
● Delivering Value: 2Q 2019 Highlights ● 2Q Results ● Appendix ● Non-GAAP Reconciliations 24
Slide 25: Glossary of Referenced Terms
GLOSSARY OF REFERENCED TERMS Upstream Capital Investment: Includes exploration, development, gathering, processing, and transmission capital, capitalized overhead, and settled asset retirement obligations, and excludes capitalized interest, non-cash asset retirement additions and revisions, and Eg
Slide 26: Upstream Capital Investment
UPSTREAM CAPITAL INVESTMENT ($ in Millions) 1Q19 2Q19 Permian…….………………………………….. $ 415 $ 426 MidCon / Gulf Coast….………………….. 18 12 Gulf of Mexico………………………………. 12 16 United States…..…….…………… 445 454 Egypt (Apache's interest only)………. 88 71 North Sea……………………………………… 62 62 Other ………………………………………….... 2 2 U
Slide 27: Open Commodity Derivative Positions
OPEN COMMODITY DERIVATIVE POSITIONS As of July 31, 2019 Oil Basis Hedges Weighted BBL Average Price Production Period Index (per day) Differential July- September 2019 Midland/WTI 27,000 (8.60) October- December 2019 Midland/WTI 15,000 (3.72) Natural Gas Basis Hedges Weighted MMBtu Average Price Pro
Slide 28: Egypt: Production Detail
EGYPT: PRODUCTION DETAIL 1Q 2019 2Q 2019 Liquids Gas Liquids Gas (Bbls/d) (Mcf/d) Boe/d (Bbls/d) (Mcf/d) Boe/d Gross Production 206,050 755,715 332,003 200,374 729,378 321,937 Reported Production 92,766 315,508 145,351 84,659 277,552 130,917 % Gross 45% 42% 44% 42% 38% 41% Less: Tax Barrels 19,265 4
Slide 29: Non-GAAP Reconciliations
● Delivering Value: 2Q 2019 Highlights ● 2Q Results ● Appendix ● Non-GAAP Reconciliations 29
Slide 30: Non-GAAP Reconciliation: Adjusted Earnings
NON-GAAP RECONCILIATION Adjusted Earnings Reconciliation of Income Attributable to Common Stock to Adjusted Earnings Our presentation of adjusted earnings and adjusted earnings per share are non-GAAP measures because they exclude the effect of certain items included in Income Attributable to Common
Slide 31: Non-GAAP Reconciliation: Adjusted EBITDAX
NON-GAAP RECONCILIATION Adjusted EBITDAX Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDAX Management believes EBITDAX, or earnings before income tax expense, interest expense, depreciation, amortization and exploration expense is a widely accepted financial indicator,
Slide 32: Non-GAAP Reconciliation: Regional Cash Flows
NON-GAAP RECONCILIATION Regional Cash Flows Reconciliation of Net Cash Provided by Operating Activities to Cash Flows from Continuing Operations before Changes in Operating Assets and Liabilities Cash flows from continuing operations before changes in operating assets and liabilities is a non-GAAP f
Slide 33: Non-GAAP Reconciliation: Cash Flow From Operations
NON-GAAP RECONCILIATION Cash Flow From Operations Before Changes in Operating Assets and Liabilities Reconciliation of Net Cash Provided by Operating Activities to Cash Flows from Operations before Changes in Operating Assets and Liabilities Cash flows from operations before changes in operating ass
Slide 34: Non-GAAP Reconciliation: Net Debt
NON-GAAP RECONCILIATION Net Debt Reconciliation of Debt to Net Debt Net debt, or outstanding debt obligations less cash and cash equivalents, is a non-GAAP financial measure. Management uses net debt as a measure of the Company's outstanding debt obligations that would not be readily satisfied by it
Slide 35: Non-GAAP Reconciliation: Upstream Capital Investment
NON-GAAP RECONCILIATION Upstream Capital Investment Reconciliation of Costs Incurred to Upstream Capital Investment Management believes the presentation of upstream capital investments is useful for investors to assess Apache's expenditures related to our upstream capital activity. We define capital