Sunday, February 13, 2011

Apache Corp. (NYSE: APA): Q4 Earnings Preview 2010

Apache Corp. (NYSE: APA) the largest independent U.S. oil and natural-gas producer by market value, is scheduled to release its fourth-quarter financial results before the market open on Thursday, February 17, 2011. Analysts, on average, expect the company to report earnings of $2.45 per share on revenue of $3.46 billion. In the year ago quarter, the company reported earnings of $1.96 per share on revenue of $2.56 billion.

Apache Corporation, together with its subsidiaries, engages in the exploration, development, and production of natural gas, crude oil, and natural gas liquids.

In the preceding third quarter, the Houston, Texas-based company's net income was $764.9 million or $2.12 per share, compared to $440.6 million or $1.30 per share in the year-ago quarter. On a non-GAAP basis, earnings increased to $791.3 million or $2.19 per share from $533.7 million or $1.58 per share in the same quarter of last year. Revenue rose to $3.01 billion from $2.33 billion. Analysts, on average, expected the company to post earnings of $2.24 per share on revenue of $3.09 billion.

Apache is making lucrative acquisitions and utilizing the acquired assets to enhance production. Apache, which has bought $12 billion in assets last year, expected to finish the year 2010 with output up 35 percent from end-2009 levels. In November, the company closed its previously announced acquisition of Texas-based deepwater Gulf of Mexico operator Mariner Energy Inc. for about $4.3 billion in stock, cash and debt. This acquisition enabled Apache to extend its operations in the deepwater of the Gulf and the company began its first production at the field on December 28, last year.

The company also also benefited from a rally in oil prices. Oil prices rose 12 percent in the fourth quarter, which likely contributed to sizable gains in fourth-quarter net income. Oil is trading above $90 in the last days. With the economic rebound showing signs of strengthening, oil may go even higher.  

Early in January, the company announced that it has started producing hydrocarbon at its Balboa Field in the Gulf of Mexico, south of Galveston, Texas.

Late in January, the company said that its production operations in Egypt remained unaffected by political unrest in the country. Apache has biggest acreage position in the North African nation. Apache has more than 11 million gross acres in Egypt, according to the company’s website, and some 30 percent of the company’s 2009 production revenue was based in the nation. Apache announced last month that cyclones in Australia had caused a production shutdown to major oil fields, but by late January the company announced that the shutdown had ended.

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