Apa Corporation · NASDAQ:APA
Apa — Q3 2020 Earnings Presentation
28 slides from Apa's earnings presentation, Nov 5, 2020
Slide 1: Third-Quarter 2020 Financial & Operational Supplement
Third-Quarter 2020 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: 3Q 2020 Key Metrics
3Q 2020 Key Metrics 3Q 2020 Reported Production 445 Mboe/d Adjusted Production(1) 394 Mboe/d Cost Incurred in Oil and Gas Property $188 Million Upstream Capital Investment(2) $141 Million Net Cash Provided by Operating Activities $304 Million Adjusted EBITDAX(2) $563 Million Diluted Loss Per Share (
Slide 4: Apache's Strategy
Apache’s Strategy Foundation For Leveraging Disciplined Long-Term Diversified Financial Success Portfolio Approach • Prioritizing returns over production • International assets generating more • Aggressively managing cost structure growth robust investment economics at lower • Aligning capital inves
Slide 5: ESG Leadership: Primary Focus Areas
ESG Leadership: Primary Focus Areas Do our Is it directly Can we have a stakeholders view related to our core material impact on ESG Vision Supporting Actions these as important business? the issue? issues? Enacted policies and procedures Be at forefront of industry’s efforts to significantly reduce
Slide 6: 2021 Plan Commentary
2021 Plan Commentary Capital Allocation Priorities Remain Unchanged • Appraisal & exploration program in Suriname • 5 – 6 rig program in Egypt 2021 Plan • 1 floating rig / 1 platform crew in the North Sea • Anticipate upstream capital budget of $1 billion or less • Permian DUC completion program • B
Slide 7: Debt Reduction & Advancing Suriname Remain Clear Priorities
Debt Reduction & Advancing Suriname Remain Clear Priorities WTI Oil Price INCREMENTAL CASH FLOW TO $30 - $40 $40+ RETURN TO INVESTORS Primarily focus on debt reduction until Debt/EBITDAX is reduced to at least 1.5x, then focus will shift to improving the dividend SURINAME EGYPT NORTH SEA PERMIAN 7
Slide 8: Success Continues in Block 58 Offshore Suriname
Success Continues in Block 58 Offshore Suriname • Keskesi East-1 exploration well currently drilling • Announced major discovery at Kwaskwasi-1 at end of July o Targeting submission of appraisal plan before year-end • Sapakara appraisal plan finalized in September • Selected location of 5th explorat
Slide 9: Positioning the Balance Sheet in 2020
Positioning the Balance Sheet in 2020 Updated Debt Maturity Profile ($MM)(1) ~$4,500 $1,600 • Issued $1.25BN of 5- and 7-year notes at sub 5% $1,400 coupons in 3Q20 $1,200 $1,000 • Use of proceeds(2): Called 2021 o ~$638MM cash tender for notes in 3Q20 notes at par on $800 Nov. 3rd o ~$341MM open ma
Slide 10: 4Q20 Guidance
4Q20 Guidance New 4Q 2020 Quarterly Guidance Guidance Production (Mboe/d) United States…………………………………………………………………… 225 International (Adjusted)…………………………………………………… 130 Total Adjusted Production…………………………………………. 355 United States Oil (Mbo/d)…………................................... 73 Upstream Capital I
Slide 11: 3Q Results
3Q Results 11
Slide 12: 3Q 2020 Global Portfolio
3Q 2020 Global Portfolio GLOBAL 445,241 BOE/D 47% / 18% / 35% 19 Gross, 17 Net 8 Reported Production Oil / NGL / Gas Drilled & Completed Wells(1) Avg Rigs UNITED STATES INTERNATIONAL 258,058 BOE/D 187,183 BOE/D Reported Production Reported Production 32% / 29% / 39% 68% / 2% / 30% Oil / NGL / Gas Oi
Slide 13: 3Q 2020 Operating Cash Margins
3Q 2020 Operating Cash Margins Egypt North Sea United States(2) $50 $45 $40 $35 $36 / Boe $30 $32 / Boe $20 Per Boe $25 $23 + $10 Per Boe vs. 2Q $20 $15 + $10 vs. 2Q $16 / Boe $20 / Boe $12 Per Boe $9 / Boe $10 $8 / Boe + $7 vs. 2Q $5 $0 Operating Cash Margin(1) Avg Realization Cash Operating Cost (
Slide 14: 3Q Egypt Summary
3Q Egypt Summary REGION HIGHLIGHTS REGION STATS • Gross production declined as a result of significant drilling activity 127,595 BOE/D Reported Production reductions this spring & natural declines 62% / 1% / 37% o 11 rigs in 1Q’20 => 5 rigs currently Oil / NGL / Gas 14 Gross, 14 Net Drilled & Comple
Slide 15: 3Q North Sea Summary
3Q North Sea Summary REGION HIGHLIGHTS REGION STATS • Production increased 4% in 3Q driven by the return of 2Q 59,588 BOE/D Reported Production curtailed production, partially offset by scheduled maintenance 82% / 3% / 15% turnarounds Oil / NGL / Gas 3 Gross, 2 Net Drilled & Completed Wells(1) • Mai
Slide 16: 3Q U.S. Summary
3Q U.S. Summary REGION HIGHLIGHTS REGION STATS • Changes in Permian Basin activity associated with low oil prices: 258,058 BOE/D o Suspended drilling & completion activity in April 2020 Reported Production o Curtailed workover activity 32% / 29% / 39% o Conducted Midland Basin spacing tests in 3Q Oi
Slide 17: Appendix
Appendix 17
Slide 18: Commodity Hedging Program
Commodity Hedging Program Open Commodity Derivative Positions As of November 3, 2020 Weighted Avg Price Production Period Trade Type Index Units Daily Volume $ / Unit Midland Basis Hedges October – December 2020 Basis Swap (S) Midland / WTI BBL 73,000 ($2.15) October – December 2020 Basis Swap (B) M
Slide 19: Credit Facility Profile
Credit Facility Profile $4 Billion Revolving Credit Facility • Apache’s $4 BN committed credit facility for general corporate purposes, matures March 2024 Facility Type Senior Unsecured o Unsecured facility held by 18 banks, 17 of which are ‘A’ rated or Maturity March 2024 higher o No ratings trigge
Slide 20: Upstream Capital Investment
Upstream Capital Investment ($ in Millions) 1Q20 2Q20 3Q20 $ United States…….…………………………………………......... 261 $ 52 $ 6 Egypt (Apache's interest only)………………………......... 99 79 65 North Sea…………………………………………………………….. 51 52 40 Suriname…………………………………………..................... 31 33 30 Upstream Capital Investment
Slide 21: Egypt: Production Detail
Egypt: Production Detail 2Q 2020 3Q 2020 Liquids Gas Liquids Gas (Bbls/d) (Mcf/d) Boe/d (Bbls/d) (Mcf/d) Boe/d Gross Production 173,546 642,003 280,547 161,116 649,566 269,377 Reported Production 80,749 279,561 127,342 79,804 286,744 127,595 % Gross 47% 44% 45% 50% 44% 47% Less: Tax Barrels (1,865)
Slide 22: 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 23: Non-GAAP Reconciliations
Non – GAAP Reconciliations 23
Slide 24: 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 Commo
Slide 25: 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 26: Non-GAAP Reconciliation: Segment Cash Flows
Non – GAAP Reconciliation Segment 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
Slide 27: 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 a
Slide 28: 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 capit