Houston independent Apache Corp. reported a first-quarter net loss of $489 million, including noncash, aftertax ceiling test writedowns of $325 million driven primarily by low commodity prices. That compares with a net loss of $7.2 billion in fourth-quarter 2015 and a first-quarter 2015 net loss of $4.7 billion.
“Our substantial well-cost reductions, coupled with the recent improvement in oil prices, have created a better investment environment,” commented John J. Christmann IV, Apache’s chief executive officer and president.
“As we become more confident in the sustainability of higher oil prices and the resulting increase in cash flow relative to our $35/bbl plan, we will increase our capital investment program accordingly,” he said. “The majority of any additional investment would most likely go to the Permian basin.”
Total capital investment during the quarter, excluding Egypt noncontrolling interest, was $466 million, below the company’s guidance of $500-550 million. Apache is reiterating full-year 2016 capital guidance of $1.4-1.8 billion (OGJ Online, Feb. 25, 2016).
The company ran a cash-flow deficit for the first quarter, but anticipates a cash-flow surplus for the balance of the year. The company remains committed to cash-flow neutrality and ending the year with unchanged or lower net debt.
Following first-quarter results, the company is raising full-year 2016 North American onshore production guidance to 268,000-278,000 boe/d, up from initial guidance of 263,000-273,000 boe/d set at the beginning of the year.
Apache is also raising full-year 2016 total pro forma production guidance, excluding Egypt noncontrolling interest and tax barrels, by 5,000 boe/d to 438,000-458,000 boe/d.