Apa Corporation · NASDAQ:APA
Apa — Q2 2020 Earnings Presentation
27 slides from Apa's earnings presentation, Jul 30, 2020
Slide 1: Second-Quarter 2020 Financial & Operational Supplement
Second-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: 2Q 2020 Key Metrics
2Q 2020 Key Metrics 2Q 2020 Reported Production 435 Mboe/d Adjusted Production(1) 394 Mboe/d Cost Incurred in Oil and Gas Property $269 Million Upstream Capital Investment(2) $216 Million Net Cash Provided by Operating Activities $84 Million Adjusted EBITDAX(2) $235 Million Loss Per Share ($1.02) Ad
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: Debt Reduction & Suriname Are Clear Priorities
Debt Reduction & Suriname Are Clear Priorities WTI Oil Price INCREMENTAL CASH FLOW TO < $30 $30 - $40 $40+ RETURN TO INVESTORS Primarily focus on debt reduction until Debt/EBITDAX is reduced to at least 1.5x, then focus will shift to improving the dividend SURINAME EGYPT NORTH SEA PERMIAN 5
Slide 6: Opportunistic Debt Repurchases During Second Quarter
Opportunistic Debt Repurchases During Second Quarter 2Q 2020 Open Market Repurchases ($ in Millions) Amount Repurchase Remaining Yield to Reduced Aggregate LT Debt by $147 MM Maturity Repurchased Price(1) Term (Yrs) Maturity (%) at a 36% Discount to Par 4/15/2022 3 3 2.0 10.7% 10/15/2028 7 5 8.5 8.7
Slide 7: Success Continues in Block 58 Offshore Suriname
Success Continues in Block 58 Offshore Suriname • Announced major discovery at Kwaskwasi-1 o 149 meters of net pay in Campanian o 129 meters of net pay in Santonian Maka Discovery Jan 2020 Kwaskwasi Discovery July 2020 • Following Kwaskwasi-1, drillship will move to Keskesi East-1 Sapakara Discovery
Slide 8: 3Q20 Guidance
3Q20 Guidance New 3Q 2020 Quarterly Guidance Guidance Production (Mboe/d) United States…………………………………………………………………… 235 – 245 International (Adjusted)…………………………………………………… ~135 Total Adjusted Production…………………………………………. 370 – 380 Upstream Capital Investment ($ in millions)(1)………….... $190 Upstream Leas
Slide 9: ESG Highlights
ESG Highlights New for 2020 Linked 2020 ESG performance directly to annual incentive compensation ~60% year-over-year decrease in U.S. flared volumes YTD Apache is a strong community partner in our areas of operation, focused on protecting the safety and health of our employees, local populations an
Slide 10: 2Q Results
2Q Results 10
Slide 11: 2Q 2020 Global Portfolio
2Q 2020 Global Portfolio GLOBAL 435,448 BOE/D 51% / 17% / 32% 45 Gross, 45 Net 12 Reported Production Oil / NGL / Gas Drilled & Completed Wells(1) Avg Rigs UNITED STATES INTERNATIONAL 250,589 BOE/D 184,859 BOE/D Reported Production Reported Production 38% / 28% / 34% 69% / 1% / 30% Oil / NGL / Gas O
Slide 12: 2Q 2020 Operating Cash Margins
2Q 2020 Operating Cash Margins Egypt North Sea United States(2) $50 $45 International realizations averaged an $40 unprecedented $5.50 per barrel discount to Brent due to market volatility $35 $30 $25 $22 / Boe $26 / Boe $10 $20 Per Boe $13 $16 / Boe $15 Per Boe $10 $9 / Boe $13 / Boe $8 / Boe $5 Pe
Slide 13: 2Q Egypt Summary
2Q Egypt Summary REGION HIGHLIGHTS REGION STATS 127,342 BOE/D • Adjusted production positively impacted by PSC effects from lower prices Reported Production 63% / 1% / 36% Oil / NGL / Gas • Drilling success continues in 2Q 22 Gross, 22 Net o Program success rate: 77% (17 out of 22 wells) Drilled & C
Slide 14: 2Q North Sea Summary
2Q North Sea Summary REGION HIGHLIGHTS REGION STATS • Actively managed production in response to price volatility 57,517 BOE/D o Curtailments of ~10,000 BOE/D (81% Oil) Reported Production o Reinstated as realizations improved later in the quarter 82% / 3% / 15% Oil / NGL / Gas 1 Gross, 1 Net • Main
Slide 15: 2Q U.S. Summary
2Q U.S. Summary REGION HIGHLIGHTS REGION STATS • Placed 20 wells on production in April and eliminated all drilling 250,589 BOE/D activity by mid-May Reported Production o At quarter end, 15 DUCs at Alpine High and 47 DUCs in other Permian 38% / 28% / 34% Oil / NGL / Gas 22 Gross, 22 Net • Alpine Hi
Slide 16: Appendix
Appendix 16
Slide 17: Commodity Hedging Program
Commodity Hedging Program Open Commodity Derivative Positions As of July 28, 2020 Note: B – Bought; S - Sold 17
Slide 18: Credit Facility Profile
Credit Facility Profile $4 Billion Revolving Credit Facility • Apache’s $4 BN committed credit facility for general corporate purposes, matures March 2024 Facility Type Senior Unsecured o Unsecured facility held by 18 banks, 17 of which are ‘A’ rated or Maturity March 2024 higher o No ratings trigge
Slide 19: Upstream Capital Investment
Upstream Capital Investment ($ in Millions) 1Q20 2Q20 $ 261 $ 52 United States…….…………………………………………..... 99 79 Egypt (Apache's interest only)………………………..... 51 52 North Sea…………………………………………………………. 31 33 Other…………………………………………....................... Upstream Capital Investment Total…………… $ 442 $ 216 For a
Slide 20: Egypt: Production Detail
Egypt: Production Detail 1Q 2020 2Q 2020 Liquids Gas Liquids Gas (Bbls/d) (Mcf/d) Boe/d (Bbls/d) (Mcf/d) Boe/d Gross Production 185,408 655,410 294,643 173,546 642,003 280,547 Reported Production 74,095 254,579 116,525 80,749 279,561 127,342 % Gross 40% 39% 40% 47% 44% 45% Less: Tax Barrels 6,442 12
Slide 21: 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 22: Non-GAAP Reconciliations
Non – GAAP Reconciliations 22
Slide 23: Non-GAAP Reconciliation
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 24: Non-GAAP Reconciliation
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 25: Non-GAAP Reconciliation
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
Slide 26: Non-GAAP Reconciliation
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 27: Non-GAAP Reconciliation
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