Apache posts loss due to non-cash charges

Apache Corporation revealed a fourth-quarter 2014 net loss of $4.8 billion primarily as a result of after-tax, non-cash charges totaling $5.2 billion.

Adjusted earnings, which exclude certain items that impact the comparability of results, totaled $404 million. Net cash provided by operating activities was approximately $1.9 billion in the fourth quarter of 2014, with cash from operations, before changes in operating assets and liabilities, totaling $2.1 billion.

John J. Christmann IV, Apache’s chief executive officer and president said “Since our Nov. 20th North American Update, oil and gas prices have decreased substantially, prompting us to act quickly and decisively to reduce activity levels and reset our well cost structure.  We have reduced our rig count from an average of 91 rigs in the third quarter of 2014 to an estimated 27 rigs by the end of this month.  We have also reduced our frac crews by approximately 50 percent during the same time period and are delaying some well completions until service costs decrease materially.”

In 2015, Apache will run a streamlined capital program that focuses on efficiency improvements, downspacing and other strategic tests to further delineate the extensive inventory of locations within the Permian, Eagle Ford, Canyon Lime, Duvernay and Montney, Christmann said. While we are fortunate to have a substantial inventory of projects that can make

“While we are fortunate to have a substantial inventory of projects that can make economics at these oil prices, we believe it more prudent to curtail our activity until costs are lower and prices recover.  This strategy will enable us to further strengthen our balance sheet and preserve the financial flexibility to capitalize on industry opportunities during the downturn,” he said.

In December, Apache entered into an agreement to sell its interests in the Wheatstone and Kitimat LNG projects along with certain other upstream assets in Australia. The company anticipates closing the transaction during the first quarter of 2015. Upon closing, Apache will receive cash proceeds of approximately $2.75 billion plus recovery of an estimated $1 billion in net expenditures between June 30, 2014, and closing.

[mappress mapid=”16736″]

Image: Apache Corp