Apache Corporation (APA) 1998年年度報告「NYSE」.pdf

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1、FORM 10-K APACHE CORP(Annual Report)Filed 3/20/1998 For Period Ending 12/31/1997Address2000 POST OAK BLVD ONE POST OAK CENTER STE 100HOUSTON,Texas 77056-4400Telephone713-296-6000 CIK0000006769IndustryOil&Gas OperationsSectorEnergyFiscal Year12/31SECURITIES AND EXCHANGE COMMISSION Washington,D.C.2054

2、9 FORM 10-K MARK ONE X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31,1997,OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 1-

3、4300 APACHE CORPORATION A DELAWARE CORPORATION IRS EMPLOYER NO.41-0747868 ONE POST OAK CENTRAL 2000 POST OAK BOULEVARD,SUITE 100 HOUSTON,TEXAS 77056-4400 TELEPHONE NUMBER(713)296-6000 SECURITIES REGISTERED PURSUANT TO SECTION 12(b)OF THE ACT:SECURITIES REGISTERED PURSUANT TO SECTION 12(G)OF THE ACT:

4、None Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such

5、 filing requirements for the past 90 days.Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and will not be contained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by ref

6、erence in Part III of this Form 10-K or any amendment to this Form 10-K.DOCUMENTS INCORPORATED BY REFERENCE:Portions of registrants proxy statement relating to registrants 1998 annual meeting of shareholders have been incorporated by reference into NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH

7、REGISTERED -Common Stock,$1.25 Par Value New York Stock Exchange Chicago Stock Exchange Preferred Stock Purchase Rights New York Stock Exchange Chicago Stock Exchange 9.25%Notes due 2002 New York Stock Exchange Aggregate market value of the voting stock held by non-affiliates of registrant as of Feb

8、ruary 27,1998.$3,345,842,930 Number of shares of registrants common stock outstanding as of February 27,1998.98,407,145 Part III hereof.TABLE OF CONTENTS DESCRIPTION All defined terms under Rule 4-10(a)of Regulation S-X shall have their statutorily prescribed meanings when used in this report.Quanti

9、ties of natural gas are expressed in this report in terms of thousand cubic feet(Mcf),million cubic feet(MMcf)or billion cubic feet(Bcf).Oil is quantified in terms of barrels(bbls);thousands of barrels(Mbbls)and millions of barrels(MMbbls).Natural gas is compared to oil in terms of barrels of oil eq

10、uivalent(boe)or million barrels of oil equivalent(MMboe).Oil and natural gas liquids are compared with natural gas in terms of million cubic feet equivalent(MMcfe)and billion cubic feet equivalent(Bcfe).One barrel of oil is the energy equivalent of six Mcf of natural gas.Daily oil and gas production

11、 is expressed in terms of barrels of oil per day(b/d)and thousands of cubic feet of gas per day(Mcf/d)or millions of British thermal units per day(MMBtu/d),respectively.Gas sales volumes may be expressed in terms of one million British thermal units(MMBtu),which is approximately,equal to one Mcf.Wit

12、h respect to information relating to the Companys working interest in wells or acreage,net oil and gas wells or acreage is determined by multiplying gross wells or acreage by the Companys working interest therein.Unless otherwise specified,all references to wells and acres are gross.i ITEM PAGE-PART

13、 I 1.BUSINESS.1 2.PROPERTIES.11 3.LEGAL PROCEEDINGS.15 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.15 PART II 5.MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.15 6.SELECTED FINANCIAL DATA.16 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

14、OF OPERATIONS.17 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.26 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.26 PART III 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.26 11.EXECUTIVE COMPENSATION.26 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER

15、S AND MANAGEMENT.26 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.26 PART IV 14.EXHIBITS,FINANCIAL STATEMENT SCHEDULES,AND REPORTS ON FORM 8-K.27 PART I ITEM 1.BUSINESS GENERAL Apache Corporation(Apache or the Company),a Delaware corporation formed in 1954,is an independent energy company that e

16、xplores for,develops and produces natural gas,crude oil and natural gas liquids.In North America,Apaches exploration and production interests are focused on the Gulf of Mexico,the Anadarko Basin,the Permian Basin,the Gulf Coast and the Western Sedimentary Basin of Canada.Outside of North America,Apa

17、che has exploration and production interests offshore Western Australia and in Egypt,and exploration interests in Poland,offshore The Peoples Republic of China,offshore the Ivory Coast and in Indonesia.Apache common stock,par value$1.25 per share,has been listed on the New York Stock Exchange since

18、1969,and on the Chicago Stock Exchange since 1960.Apache holds interests in many of its U.S.,Canadian and international properties through operating subsidiaries,such as MW Petroleum Corporation(MW),Apache Canada Ltd.,DEK Energy Company(DEKALB,formerly known as DEKALB Energy Company),Apache Energy L

19、imited(formerly known as Hadson Energy Limited),Apache International,Inc.,Apache Overseas,Inc.and Apache PHN Company,Inc.(Phoenix,formerly known as The Phoenix Resource Companies,Inc.).Properties referred to in this document may be held by those subsidiaries.Apache treats all operations as one segme

20、nt of business.1997 RESULTS In 1997,Apache had record net income of$154.9 million,or$1.71 per share,on total revenues of$1.2 billion.Net cash provided by operating activities during 1997 was$723.8 million.The year 1997 was Apaches 20th consecutive year of production growth and 10th consecutive year

21、of oil and gas reserves growth.Apaches average daily production was 68.9 Mbbls of oil and natural gas liquids and 609 MMcf of natural gas for the year.Giving effect to 1997 production,acquisitions,dispositions and drilling activity,the Companys estimated proved reserves increased by 79.6 MMboe in 19

22、97 over the prior year to 585.7 MMboe,of which approximately 53 percent was natural gas.Based on 506.2 MMboe reported at year-end 1996,Apaches reserve growth during the year reflects replacement of 228 percent of the Companys 1997 production,including approximately 183 percent through drilling,revis

23、ions,recompletions,workovers and other production enhancement projects.Apaches active drilling and production-enhancement program yielded 321 new producing North American wells out of 399 attempts and involved 675 major North American workover and recompletion projects during the year.At December 31

24、,1997,Apache had interests in approximately 4,246 net oil and gas wells and 1,777,225 net developed acres of oil and gas properties.In addition,the Company had approximately 601,258 net undeveloped acres under North American leases and 20,303,930 net undeveloped acres under international exploration

25、 and production rights.APACHES GROWTH STRATEGY Apaches growth strategy is to increase oil and gas reserves,production,cash flow and earnings through a combination of exploratory drilling,development of its inventory of existing projects and property acquisitions meeting defined financial parameters.

26、The Companys drilling program emphasizes reserve additions through moderate-risk drilling primarily on its North American interests,and exploratory drilling primarily on its international interests.The Company also emphasizes reducing operating costs per unit produced and selling marginal and non-st

27、rategic properties in order to enhance its profit margins.Apaches international investments and exploration activities are an emerging component of its long-term growth strategy.In addition to an active,moderate-risk drilling program in Apaches North American focus areas,higher-risk international ex

28、ploration offers potential for greater rewards and significant reserve additions.Apache directed its international efforts in 1997 toward development of certain discoveries offshore Western Australia,Egypt and offshore The Peoples Republic of China,and toward further exploration efforts 1 in those a

29、reas and on its concessions offshore the Ivory Coast of western Africa and in Poland.Apache believes that reserve additions in these international areas are likely to continue through higher-risk exploration and through improved production practices and recovery techniques.For Apache,property acquis

30、ition is only one phase in a continuing cycle of business growth.Apaches aim is to follow each acquisition with a cycle of reserve enhancement,property consolidation and cash flow acceleration,facilitating asset growth and debt reduction.This approach requires a well planned and carefully executed p

31、roperty development program and,where appropriate,a selective program of property dispositions.It motivates Apache to target acquisitions that have ascertainable additional reserve potential and to apply an active drilling,workover and recompletion program to realize the potential of the acquired un

32、developed and partially developed properties.Apache prefers to operate its properties so that it can best influence their development;as a result,the Company operates properties accounting for over 78 percent of its production.1997 ACQUISITIONS AND DISPOSITIONS On October 8,1997,the Company entered

33、into three agreements with subsidiaries of Mobil Exploration&Producing Australia Pty Ltd(Mobil)pursuant to which the Company acquired all the capital stock of three companies owning interests in certain oil and gas properties and production facilities offshore Western Australia(the Harriet/East Spar

34、 Properties),on November 20,1997(the Ampolex Group Transaction).The total cost of the Ampolex Group Transaction was approximately$300 million,of which$218 million represented the purchase price for the capital stock of the acquired companies and$82 million was applied to discharge existing intercomp

35、any debt of one of the acquired companies.On December 9,1997,the Company entered into an agreement with Hardy Petroleum Limited(Hardy)under which Hardy agreed to purchase a 10 percent interest in the Companys East Spar field and related production facilities.The transaction closed on January 28,1998

36、,with a total sales price of approximately$63 million in cash,such amount being more than Apaches allocated cost.The Ampolex Group Transaction was recorded net of these interests.The Ampolex Group Transaction increased the Companys interest to 47.5 percent from 22.5 percent in the Carnarvon Basins H

37、arriet area,which includes the Varanus Island pipeline,processing and production complex and eight existing oil and gas fields.The transaction also raised the Companys interest in the East Spar field,which produces through the Varanus Island facilities,to 45 percent from 20 percent net of the sale t

38、o Hardy.Apache operates the Harriet/East Spar Properties.EXPLORATION AND PRODUCTION The Companys North American exploration and production activities were diversified among five operating regions in 1997,Offshore,Midcontinent,Western,Gulf Coast and Canada.Approximately 72 percent of the Companys pro

39、ved reserves are located in Apaches North American regions.Egypt and Australia are the Companys most important international regions.The Companys Egyptian operations are headquartered in Cairo,and Apache conducts its Australian and Indonesian exploration and production from Perth,Australia.Informati

40、on concerning the amount of revenue,operating income and identifiable assets attributable to U.S.,Canadian and international operations is set forth in the Supplemental Oil and Gas Disclosures under Item 8 below.Offshore.The Offshore region included all of Apaches interests in properties offshore Te

41、xas and Louisiana.The Offshore region was Apaches leading region for oil and gas revenues in 1997 with$202 million in revenue from 12.8 MMboe of production for the year.At December 31,1997,the Offshore region held 319,812 net acres,located in both state and federal waters,and accounted for 45.7 MMbo

42、e,or eight percent,of the Companys year-end 1997 total estimated proved reserves.Apaches operations in the Offshore region focused on workovers and recompletions,which totaled 58 in the region for 1997.Apache participated in drilling 27 wells that were drilled in the region during the year,14 of whi

43、ch were completed as producers.For 1997,Apaches gas production from the Offshore region was approximately 66.6 Bcf.At the start of the 1998 fiscal year,the Offshore region was merged into the Gulf Coast region to take advantage of administrative efficiencies.2 Midcontinent.Apaches Midcontinent regio

44、n operates in Oklahoma,eastern Texas,Arkansas and northern Louisiana.The region has focused operations on its sizable position in the Anadarko Basin of western Oklahoma.Apache has drilled and operated in the Anadarko Basin for over four decades,developing an extensive database of geologic informatio

45、n and a substantial acreage position.The Midcontinent region was Apaches leading producing region for 1997 with approximately 13.1 MMboe of production generating$197 million in revenue for the Company.At December 31,1997 Apache held an interest in 403,796 net acres in the region,which accounted for

46、approximately 103.1 MMboe,or 18 percent,of Apaches total estimated proved reserves.Apache participated in drilling 124 wells in the Midcontinent region during the year,108 of which were completed as producing wells.The Company performed 33 workover and recompletion operations in the region during 19

47、97.Western.The Western region includes assets in the Permian Basin of western Texas and New Mexico,the Green River Basin of Colorado and Wyoming,and the San Juan Basin of New Mexico.In 1997,the Western region produced approximately 9.8 MMboe and$168 million in production revenue.At December 31,1997,

48、the Company held 449,270 net acres in the region,which accounted for 136.8 MMboe,or 23 percent,of the Companys total estimated proved reserves.Apache participated in drilling 124 wells in the Western region,108 of which were productive wells.Apache performed 236 workovers and recompletions in the We

49、stern region during the year.Gulf Coast.The Gulf Coast region encompasses the Texas and Louisiana coasts,central Texas and Mississippi.In 1997,the Gulf Coast region contributed approximately$172 million in revenues from production of 9.6 MMboe for the year.The Company performed 215 workover and reco

50、mpletion operations during 1997 in the Gulf Coast region and participated in drilling 43 wells,31 of which were completed as producers.As of December 31,1997,the region encompassed 246,227 net acres,and accounted for 70.9 MMboe,or 12 percent,of the Companys year-end 1997 total estimated proved reser

51、ves.Canada.Exploration and development activity in the Canadian region is concentrated in the Provinces of Alberta and British Columbia.The region produced approximately 6.5 MMboe,84 percent of which was natural gas,and generated$61 million in production revenue,six percent of the Companys productio

52、n revenues in 1997.Apache participated in drilling 81 wells in this region during the year,60 of which were completed as producers.The Company performed 133 workovers and recompletions on operated wells during 1997.At December 31,1997,the region encompassed approximately 317,524 net acres,and accoun

53、ted for 66 MMboe,or 11 percent,of the Companys year-end 1997 total estimated proved reserves.Egypt.At year end,Apache held 13,621,304 net acres in Egypt with 78.7 MMboe of estimated proved reserves or 13 percent of Apaches total estimated proved reserves.Apache owns a 75 percent interest in the Qaru

54、n Block and a 40 percent interest in the Khalda Block,both in the Western Desert of Egypt.Future production of gas from Khalda is expected to be delivered for sale to the Egyptian General Petroleum Corporation(EGPC)at a point west of Alexandria,Egypt,via a 34-inch gas pipeline,construction of which

55、commenced in 1997 with completion projected to occur in 1999.The costs of building the pipeline will be borne by Apache,the other Khalda participants and the owners of a neighboring block.Construction costs paid by Apache and the other Khalda participants are recoverable from oil and gas production

56、from the Khalda Block.Both the Khalda and Qarun Concession Agreements provide that Apache and its partners in the concessions will pay all of the operating and capital costs for developing the concessions,while the production will be split between EGPC and the partners.Up to 40 percent of the oil an

57、d gas produced from each of the concessions is available to the Company and its partners to recover operating and capital costs for the applicable concession.To the extent eligible costs exceed 40 percent of the oil and gas produced and sold from a concession in any given quarter,such excess costs m

58、ay be carried into future quarters without limit.The remaining 60 percent of all oil and gas produced from the concessions is divided between EGPC and Apache and its partners,with the percentage received by Apache and its partners reducing as the gross daily average of oil and gas produced on a quar

59、terly basis increases.Under the Khalda Agreement,capital costs are amortized over four years,while the Qarun agreement provides for a five year amortization.3 In addition to the Qarun and Khalda Blocks,Apache holds interests in the Darag Block in the northern Gulf of Suez,the East Beni Suef and Asyo

60、ut Blocks to the south of the Qarun Block,and three other blocks in the Western Desert of Egypt,the North East Abu Gharadig Block,the East Bahariya Block,and the West Mediterranean Block No.1(partly onshore and partly offshore).The latter three blocks were purchased from Mobil Exploration Egypt,Inc.

61、in January 1997,and Apaches interest in the West Mediterranean Block was increased to 66 percent in an October 1997 transaction with Amoco Egypt West Mediterranean B.V.Apache also acquired interests in the Ras El Hekma and Ras Kanayes concessions from Repsol Exploracion Egipta S.A.in December 1997.E

62、xploratory drilling on the East Beni Suef Block commenced in 1997 with a significant discovery made on the#1 well.Delineation drilling is continuing in 1998.Due to conflicting governmental requirements regarding the placement of drilling rigs on the Darag Block,the Company is presently unable to exp

63、lore on the block.Negotiations with appropriate authorities are continuing to attempt to resolve the impasse and Apache may ultimately relinquish the Darag concession.Australia.Western Australia became an important region for Apache after the 1993 acquisition of Hadson Energy Resources Corporation(s

64、ubsequently known as Apache Energy Resources Corporation or AERC).In 1997,natural gas production in the region increased by 88 percent from the prior year to approximately 26 MMcf/d.Apache acts as operator for most of its Western Australia properties through a wholly-owned subsidiary,Apache Energy L

65、imited(AEL).During 1997,Apaches estimated proved reserves in Australia increased by 156 percent to 80 MMboe,or 14 percent of the Companys year-end total estimated proved reserves.The increase reflects,among other matters,the acquisition of three companies with holdings in the East Spar and Harriet f

66、ields.As of December 31,1997,Apache held 159,850 net developed acres and 1,104,440 net undeveloped acres in Western Australia.Through AEL and its subsidiaries,Apache also operates the Harriet Gas Gathering Project,a gas processing and compression facility with a throughput capacity of 175 MMcf/d,and

67、 a 60-mile,12-inch offshore pipeline with a throughput capacity of 175 MMcf/d that connects to a pipeline grid onshore.See 1997 Acquisitions and Dispositions and Oil and Natural Gas Marketing.Other International Operations.Outside of Canada,Egypt and Australia,Apache currently has exploration intere

68、sts in Poland,offshore The Peoples Republic of China,offshore the Ivory Coast and in Indonesia.Effective April 16,1997,Apache entered into an agreement with FX Energy,Inc.(FX Energy)pursuant to which Apache assumed operatorship and a 50 percent interest in over 5.5 million acres in Poland located ne

69、ar Lublin,southeast of Warsaw.The Company has also acquired additional acreage in Poland in which FX Energy does not participate,giving Apache interests in 8,176,065 total gross undeveloped acres and 5,563,542 net undeveloped acres as of December 31,1997.The concessions in Poland include requirement

70、s for Apache to drill at least eleven wells and to shoot at least 1,290 miles of seismic data.In February 1998,Apache entered into an additional agreement with FX Energy,acquiring a 50 percent interest in approximately 3 million acres in the Carpathian area near the southern border of Poland and opt

71、ions to participate at the present interest in a further 2.275 million acres in the Pomeranian area of northwest Poland.Apaches operations in Poland are headquartered in Warsaw.Apache is also the operator,with a 50 percent interest,of the Zhao Dong Block in Bohai Bay,offshore The Peoples Republic of

72、 China.In 1994 and 1995,discovery wells tested at rates between 1,300 and 4,000 b/d of oil.The Company elected to proceed with the second exploration phase,commencing in May 1996,which involved a commitment to drill two additional exploratory wells.In early 1997,one well tested at rates up to 11,571

73、 b/d of oil and another tested at rates up to 15,359 b/d,and the Company is currently evaluating the discovery areas for commercial potential.An overall development plan for the C and D Fields in the Zhao Dong Block was submitted to Chinese authorities in late 1997 and is awaiting approval.In the Iv

74、ory Coast,Apache drilled an exploratory well in 1996 on the CI-27 offshore Block,confirming the existence of substantial reserves of gas in the Foxtrot field and the producibility of some oil from the fields lower horizons.Apache is operator of the block,holding a 24 percent interest.In March 1997,A

75、pache and its partners signed a 10 year take or pay contract to supply approximately 168 Bcf of gas to a power plant in Abidjan at 30 MMcf per day initially,rising to 50 MMcf per day in the third year.Gas deliveries are to commence in 1999,upon completion of a pipeline.4 In Indonesia,Apache holds a

76、39 percent interest in the Bentu Segat Block on Central Sumatra,on which an undeveloped gas field is located.OIL AND NATURAL GAS MARKETING On October 27,1995,wholly owned affiliates of each of Apache,Oryx Energy Company and Parker&Parsley Petroleum Company(Parker&Parsley)formed Producers Energy Mark

77、eting,LLC,a Delaware limited liability company(ProEnergy).ProEnergy became fully operational on April 1,1996,and markets substantially all of its members domestic natural gas pursuant to member gas purchase agreements having an initial term of 10 years,subject to early termination following specifie

78、d events.The price of gas purchased by ProEnergy from its members is based upon agreed to published indexes.ProEnergy also provides its members with certain contract administration and other services.In December 1997,Parker&Parsley gave notice to the other members that it was withdrawing from ProEne

79、rgy effective as of January 1,1998.ProEnergys limited liability company agreement provides that capital funding obligations,allocations of profit and loss,and voting rights are calculated based upon the members respective throughputs of natural gas sold to ProEnergy.So long as there are two or more

80、members,the approval of any action requires the votes of at least two members holding the requisite voting interests.Each members liability with respect to future capital funding obligations is subject to certain limitations.Natural gas throughputs are calculated,profit distributed,and/or capital ca

81、lled on a quarterly basis.As of December 31,1997,the Company held an approximate 48 percent interest in ProEnergy.Apache is also delivering natural gas under several long-term supply agreements with terms greater than one-year.In 1997,Apache delivered an average of 135 MMcf/d under such contracts at

82、 an average price of$2.48 per Mcf.Apache assumed its own U.S.crude oil marketing operations in 1992.Most of Apaches U.S.crude oil production is sold through lease-level marketing to refiners,traders and transporters,generally under 30 day contracts that renew automatically until canceled.Oil produce

83、d from Canadian properties is sold to crude oil purchasers or refiners at market prices,which depend on worldwide crude prices adjusted for transportation and crude quality.Natural gas produced from Canadian properties is sold to major aggregators of natural gas,gas marketers and direct users under

84、long-term and short-term contracts.The oil and gas contracts provide for sales at specified prices,or at prices that are subject to change due to market conditions.The Company diversifies the markets for its Canadian gas production by selling directly or indirectly to customers through aggregators a

85、nd brokers in the United States and Canada.Apache transports natural gas via the Companys firm transportation contracts to California(12 MMcf/d)and to the Province of Ontario,Canada(four MMcf/d)through end-users firm transportation contracts.Pursuant to an agreement entered into in 1994,the Company

86、is also selling five MMcf/d of natural gas to the Hermiston Cogeneration Project,located in the Pacific Northwest of the United States.In 1996,the Company entered into an agreement with Westcoast Gas Services,Inc.for the sale of 5,000 MMBtu/d for delivery in the United States for a 10 year term.Sale

87、s under the contract are contingent on regulatory approval of the required pipeline expansion,and are expected to begin in 1998.In Australia,the Company entered into seven gas sales contracts during 1997 and has a total of 13 contracts for periods of five to 11 years,to deliver 260 Bcf of AELs gas f

88、rom its Harriet and East Spar fields for mining,power generation,nickel refining,ammonia production and other industrial and domestic uses.Under these contacts AEL is required to deliver its gas at contract rates of approximately 50 MMcf/day increasing to 80 MMcf/day by the year 2000,with take or pa

89、y provisions,net to AEL,of approximately 14 Bcf/year increasing to 20 Bcf/year by the year 2000.Apache operates both the Harriet and the East Spar Joint Ventures,holding a 47.5 percent interest in Harriet and a 45 percent interest in East Spar.AEL marketed all oil and natural gas liquids produced fr

90、om its interests in the Harriet and East Spar fields during 1997 through a contract with Glencore International AG(Glencore).Pricing under the contract in 1997 represented a fixed premium to the quoted market prices of Tapis crude oil,with payment made in U.S.dollars.In 1997,the weighted average pri

91、ce based on regional production was$20.51 per barrel.At the 5 beginning of January 1998,the Glencore contract was terminated and replaced by a similar contract with Mitsui Oil(Asia)Pty.Ltd.In Egypt,oil from the Qarun Block is delivered by pipeline to tanks owned by the Company and its partners in th

92、e Qarun Concession at the Dashour pumping station northeast of the Qarun Block or by truck to the Tebbin refinery south of Alexandria,Egypt.At the discretion of the operator of the pipelines,oil from the Qarun Block is put into the two 42-inch diameter SUMED pipelines,which transport significant qua

93、ntities of Egyptian and other crude oil from the Gulf of Suez to Sidi Kherir,west of Alexandria,Egypt,on the Mediterranean Coast.All Qarun and Khalda crude oil is currently sold to EGPC.In 1996,the Company and its partners in the Khalda Block entered into a take or pay contract with EGPC,which oblig

94、ates EGPC to pay for 75 percent of 200 MMcf/d of future production of gas from the Khalda Block.Sales of gas under the contract are expected to begin in 1999 upon completion of a gas pipeline from the Khalda Block.In late 1997,the same sellers entered into a supplement to the contract with EGPC to s

95、ell an additional 50 MMcf/d through a southern gas line to be constructed by the Company and its partners from the Khalda Block to a point near the Qarun Block to tie into an existing gas pipeline.OIL AND NATURAL GAS PRICES Natural gas prices remained volatile during 1997,with Apaches realized price

96、s ranging from$3.38 per MMbtu in January to$1.78 per MMbtu in April.Fluctuations are largely due to natural gas supply and demand perceptions.Apaches average realized gas price of$2.28 per Mcf for 1997 increased 13 percent from the prior-year average of$2.02 per Mcf,and its 1996 average realized nat

97、ural gas price was 29 percent higher than the 1995 average price of$1.57 per Mcf.Due to minimum price contracts which escalate at an average of 80 percent of the Australian consumer price index,AELs natural gas production in Western Australia is not subject to the same degree of price volatility as

98、Apaches U.S.and Canadian gas production;however,natural gas sales under such Australian minimum price contracts represent less than two percent of the Companys total natural gas sales at the end of 1997.Total Australian gas sales in 1997,including long-term contracts and spot sales averaged$1.78 per

99、 Mcf,a nine percent decrease from the 1996 average of$1.96 per Mcf.In Egypt,all oil production from the Khalda and Qarun Blocks is currently sold to EGPC on a spot basis at a Western Desert price,which is applied to virtually all production from the area and is announced from time to time by EGPC.In

100、 1997,the average price was$18.65 per barrel.Discussions with EGPC regarding the possibility of exporting Qarun oil production are continuing.Once gas sales from the Khalda Block commence,the gas is expected to be sold for a price which,on a Btu basis,is equivalent to 85 percent of the price of Suez

101、 Blend crude oil,FOB Mediterranean.Oil prices remained subject to unpredictable political and economic forces during 1997 experiencing fluctuations similar to those seen in natural gas prices for the year.Apache believes that oil prices will continue to fluctuate in response to changes in the polici

102、es of the Organization of Petroleum Exporting Countries(OPEC),events in the Middle East and other factors associated with the world political environment.As a result of the many uncertainties associated with levels of production maintained by OPEC and other oil producing countries,the availabilities

103、 of worldwide energy supplies and the competitive relationships and consumer perceptions of various energy sources,the Company is unable to predict what changes will occur in crude oil and natural gas prices.In 1997,Apaches realized worldwide crude oil price ranged from$24.17 per barrel in January t

104、o$16.71 per barrel in December.The average crude oil price of$19.20 per barrel in 1997 was down eight percent from the average price of$20.84 per barrel in 1996,but 12 percent higher than the average price of$17.09 per barrel in 1995.The Companys average crude oil price for its Australian production

105、 was$20.51 per barrel in 1997,eight percent less than the average price in 1996.Terms of the acquisition of MW from Amoco Production Company(Amoco)included an oil and gas price sharing provision under which certain price sharing payments may be payable to Amoco.Under this provision,to the extent tha

106、t oil prices exceed specified reference prices that rise to$33.12 per barrel over the 6 eight-year period ending June 30,1999,and to the extent that gas prices exceeded specified reference prices that rose to$2.68 per Mcf over the five-year period ended June 30,1996,Apache will share the excess pric

107、e realization with Amoco on a portion of the MW production.No price sharing payments were required in 1997.From time to time,Apache buys or sells contracts to hedge a limited portion of its future oil and gas production against exposure to spot market price changes.See Note 9 to the Companys consoli

108、dated financial statements under Item 8 below.The Companys business has been and will continue to be affected by future worldwide changes in oil and gas prices and the relationship between the prices of oil and gas.No assurance can be given as to the trend in,or level of,future oil and gas prices.FU

109、LL COST CEILING TEST Under the full cost accounting rules of the Securities and Exchange Commission(SEC),the Company reviews the carrying value of its oil and gas properties each quarter on a country-by-country basis.Under full cost accounting rules,capitalized costs of oil and gas properties may no

110、t exceed the present value of estimated future net revenues from proved reserves,discounted at 10 percent,plus the lower of cost or fair market value of unproved properties,as adjusted for related tax effects and deferred income taxes.Application of these rules generally requires pricing future prod

111、uction at the unescalated oil and gas prices in effect at the end of each fiscal quarter and requires a write-down if the ceiling is exceeded,even if prices declined for only a short period of time.The Company had no write-downs due to ceiling test limitations during 1997.Under current pricing there

112、 is the potential,while not a certainty,that a write-off may occur.If a write-down is required,the one-time charge to earnings would not impact cash flow from operating activities.EFFECT OF VOLATILE PRICES The Company continually analyzes,forecasts and updates its estimates of energy prices for its

113、internal use in planning,budgeting,and valuation and reserve estimates.The Companys future financial condition and results of operations will depend upon the prices received for the Companys oil and natural gas production and the costs of acquiring,finding,developing and producing reserves.Prices fo

114、r oil and natural gas are subject to fluctuations in response to relatively minor changes in supply,market uncertainty and a variety of additional factors that are beyond the control of the Company.These factors include worldwide political instability(especially in the Middle East and other oil-prod

115、ucing regions),the foreign supply of oil and gas,the price of foreign imports,the level of consumer product demand,government regulations and taxes,the price and availability of alternative fuels and the overall economic environment.A substantial or extended decline in oil and gas prices would have

116、a material adverse effect on the Companys financial position,results of operations,quantities of oil and gas that may be economically produced and access to capital.In addition,the sale of the Companys oil and gas production depends on a number of factors beyond the Companys control,including the av

117、ailability and capacity of transportation and processing facilities.Oil and natural gas prices have historically been and are likely to continue to be volatile.Such volatility makes it difficult to estimate the value of producing properties in acquisitions and to budget and project the return on exp

118、loration and development projects involving the Companys oil and gas properties.In addition,unusually volatile prices often disrupt the market for oil and gas properties,as buyers and sellers have more difficulty agreeing on the purchase price of properties.RESERVES;RATES OF PRODUCTION;DEVELOPMENT E

119、XPENDITURES;CASH FLOW There are numerous uncertainties inherent in estimating quantities of oil and natural gas reserves of any category and in projecting future rates of production and timing of development expenditures which underlie such reserve estimates,including many factors beyond the control

120、 of the Company.Reserve data represents only estimates.In addition,the estimates of future net cash flows from proved reserves of the Company and the present value thereof are based upon various assumptions about future production levels,prices and costs that may prove to be incorrect over time(see

121、below).Any significant variance from the assumptions could result in the actual quantity of the Companys reserves and future net cash flows therefrom being materially 7 different from the estimates.In addition,the Companys estimated reserves may be subject to downward or upward revision based upon p

122、roduction history,results of future exploration and development,prevailing oil and gas prices,operating and development costs and other factors.The rate of production from oil and gas properties declines as reserves are depleted.Except to the extent that the Company acquires additional properties co

123、ntaining proved reserves,conducts successful exploration and development activities or,through engineering studies,identifies additional behind-pipe zones or secondary recovery reserves,the proved reserves of the Company will decline materially as reserves are produced.Future oil and gas production

124、is,therefore,highly dependent upon the Companys level of success in acquiring or finding additional reserves.GOVERNMENT REGULATION OF THE OIL AND GAS INDUSTRY The Companys exploration,production and marketing operations are regulated extensively at the federal,state and local levels,as well as by ot

125、her countries in which the Company does business.Oil and gas exploration,development and production activities are subject to various laws and regulations governing a wide variety of matters.For example,hydrocarbon-producing states have statutes or regulations addressing conservation practices and t

126、he protection of correlative rights,and such regulations may affect Apaches operations and limit the quantity of hydrocarbons Apache may produce and sell.Other regulated matters include marketing,pricing,transportation,and valuation of royalty payments.At the U.S.federal level,the Federal Energy Reg

127、ulatory Commission(FERC)regulates interstate transportation of natural gas under the Natural Gas Act.Effective January 1,1993,the Natural Gas Wellhead Decontrol Act deregulated natural gas prices for all first sales of natural gas,which includes all sales by Apache of its own production.As a result,

128、all sales of the Companys natural gas produced in the U.S.may be sold at market prices,unless otherwise committed by contract.Apaches gas sales are affected by regulation of intrastate and interstate gas transportation.In an attempt to promote competition,the FERC has issued a series of orders which

129、 have altered significantly the marketing and transportation of natural gas.The effect of these orders has been to enable the Company to market its natural gas production to purchasers other than the interstate pipelines located in the vicinity of its producing properties.The Company believes that t

130、hese changes have generally improved the Companys access to transportation.To date,Apache has not experienced any material adverse effect on its gas marketing activities as a result of these FERC orders;however,the Company cannot predict what new regulations may be adopted by the FERC and other regu

131、latory authorities,or what effect subsequent regulations may have on its future gas marketing activities.ENVIRONMENTAL MATTERS Apache,as an owner or lessee and operator of oil and gas properties,is subject to various federal,provincial,state,local and foreign country laws and regulations relating to

132、 discharge of materials into,and protection of,the environment.These laws and regulations may,among other things,impose liability on the lessee under an oil and gas lease for the cost of pollution clean-up resulting from operations,subject the lessee to liability for pollution damages,and require su

133、spension or cessation of operations in affected areas.Apache maintains insurance coverage which it believes is customary in the industry,although it is not fully insured against all environmental risks.The Company is not aware of any environmental claims existing as of December 31,1997,which would h

134、ave a material impact upon the Companys financial position or results of operations.Apache has made and will continue to make expenditures in its efforts to comply with these requirements,which it believes are necessary business costs in the oil and gas industry.The Company has established policies

135、for continuing compliance with environmental laws and regulations,including regulations applicable to its operations in Canada,Australia and other countries.Apache also has established operational procedures and training programs designed to minimize the environmental impact of its field facilities.

136、The costs incurred by these policies and procedures are inextricably connected to normal operating expenses such that the Company is unable to separate the expenses related to environmental matters;however,the Company does not believe any such additional expenses are material to its financial positi

137、on or results of operations.8 Although environmental requirements have a substantial impact upon the energy industry,generally these requirements do not appear to affect Apache any differently,or to any greater or lesser extent,than other companies in the industry.Apache does not believe that compli

138、ance with federal,state,local or foreign country provisions regulating the discharge of materials into the environment,or otherwise relating to the protection of the environment,will have a material adverse effect upon the capital expenditures,earnings or competitive position of the Company or its s

139、ubsidiaries;however,there is no assurance that changes in or additions to laws or regulations regarding the protection of the environment will not have such an impact.COMPETITION The oil and gas industry is highly competitive.Because oil and gas are fungible commodities,the principal form of competi

140、tion with respect to product sales is price competition.Apache strives to maintain the lowest finding and production costs possible to maximize profits.As an independent oil and gas company,Apache frequently competes for reserve acquisitions,exploration leases,licenses,concessions and marketing agre

141、ements against companies with substantially larger financial and other resources than Apache possesses.Moreover,many competitors have established strategic long-term positions and maintain strong governmental relationships in countries in which the Company may seek new entry.Apache expects this high

142、 degree of competition to continue.INSURANCE Exploration for and production of oil and natural gas can be hazardous,involving unforeseen occurrences such as blowouts,cratering,fires and loss of well control,which can result in damage to or destruction of wells or production facilities,injury to pers

143、ons,loss of life or damage to property or the environment.The Company maintains insurance against certain losses or liabilities arising from its operations in accordance with customary industry practices and in amounts that management believes to be prudent;however,insurance is not available to the

144、Company against all operational risks.HEDGING To the extent that the Company engages in hedging activities,it may be prevented from realizing the benefits of price increases above the levels of the hedges.In addition,the Company is subject to basis risk when it engages in hedging transactions,partic

145、ularly where transportation constraints restrict the Companys ability to deliver oil and gas volumes to the delivery point to which the hedging transaction is indexed.ACQUISITION RISKS The Company from time to time acquires oil and gas properties.Although the Company performs a review of the acquire

146、d properties that it believes is consistent with industry practices,such reviews are inherently incomplete.It generally is not feasible to review in depth every individual property involved in each acquisition.Ordinarily the Company will focus its review efforts on the higher-value properties and wi

147、ll sample the remainder.However,even a detailed review of records and properties may not necessarily reveal existing or potential problems,nor will it permit a buyer to become sufficiently familiar with the properties to assess fully their deficiencies and potential.Inspections may not always be per

148、formed on every well,and environmental problems,such as ground water contamination,are not necessarily observable even when an inspection is undertaken.Even when problems are identified,the Company often assumes certain environmental and other risks and liabilities in connection with acquired proper

149、ties.There are numerous uncertainties inherent in estimating quantities of proved oil and gas reserves and actual future production rates and associated costs with respect to acquired properties,and actual results may vary substantially from those assumed in the estimates(see above).In addition,ther

150、e can be no assurance that acquisitions will not have an adverse effect upon the Companys operating results,particularly during the periods in which the operations of acquired businesses are being integrated into the Companys ongoing operations.9 GENERAL ECONOMIC CONDITIONS Virtually all of the Comp

151、anys operations are subject to the risks and uncertainties of general economic conditions(domestically,in specific regions of the United States and Canada,and internationally),the outcome of pending and/or potential legal or regulatory proceedings,changes in environmental,tax,labor and other laws an

152、d regulations to which the Company is subject,and the condition of the capital markets utilized by Company to finance its operations.RISKS OF NON-U.S.OPERATIONS The Companys non-U.S.oil and natural gas exploration,development and production activities are subject to political and economic uncertaint

153、ies(including but not limited to changes,sometimes frequent or marked,in governmental energy policies or the personnel administering them),expropriation of property,cancellation or modification of contract rights,foreign exchange restrictions,currency fluctuations,royalty and tax increases and other

154、 risks arising out of foreign governmental sovereignty over the areas in which the Companys operations are conducted,as well as risks of loss due to civil strife,acts of war,guerrilla activities and insurrection.These risks may be higher in the developing countries in which the Company conducts such

155、 activities.Consequently,the companys non-U.S.exploration,development and production activities may be substantially affected by factors beyond the Companys control,any of which could materially adversely affect the Companys financial position or results of operations.Furthermore,in the event of a d

156、ispute arising from non-U.S.operations,the Company may be subject to the exclusive jurisdiction of courts outside the U.S.or may not be successful in subjecting non-U.S.persons to the jurisdiction of the courts in the U.S.,which could adversely affect the outcome of such dispute.EMPLOYEES On Decembe

157、r 31,1997,Apache had 1,287 employees.OFFICES Apaches principal executive offices are located at One Post Oak Central,2000 Post Oak Boulevard,Suite 100,Houston,Texas 77056-4400.At year-end 1997,the Company maintained regional exploration and production offices in Tulsa,Oklahoma;Houston,Texas;Calgary,

158、Alberta;Cairo,Egypt;Perth,Western Australia;and Warsaw,Poland.10 ITEM 2.PROPERTIES OIL AND GAS EXPLORATION AND PRODUCTION PROPERTIES AND RESERVES ACREAGE The undeveloped and developed acreage including both domestic leases and international production and exploration rights that Apache held as of De

159、cember 31,1997,are as follows:11 UNDEVELOPED ACREAGE DEVELOPED ACREAGE -GROSS NET GROSS NET ACRES ACRES ACRES ACRES -OFFSHORE Louisiana.158,626 88,677 201,884 85,279 Texas.109,349 66,955 167,645 78,901 -TOTAL.267,975 155,632 369,529 164,180 -MIDCONTINENT Arkansas.2,296 1,774 4,625 3,350 Kansas.160 -

160、40 40 Louisiana.11,735 10,180 51,199 34,837 Michigan.2,693 2,090 -Oklahoma.127,874 49,505 484,911 192,394 Pennsylvania.-796 38 Texas.72,036 41,602 130,502 67,986 -TOTAL.216,794 105,151 672,073 298,645 -WESTERN Alaska.14,262 -Colorado.14,200 12,472 13,575 12,870 Illinois.140 56 -New Mexico.93,888 51,

161、726 98,628 50,746 Ohio.21 11 -Texas.136,871 69,789 255,948 192,563 Utah.3,101 2,462 6,707 6,235 Wyoming.58,912 43,065 15,591 7,275 -TOTAL.321,395 179,581 390,449 269,689 -GULF COAST Florida.162 23 -Louisiana.25,669 19,602 88,577 72,977 Mississippi.10,515 5,108 5,293 3,316 Texas.53,045 27,937 189,778

162、 117,264 -TOTAL.89,391 52,670 283,648 193,557 -TOTAL UNITED STATES.895,555 493,034 1,715,699 926,071 -INTERNATIONAL Canada.191,454 108,224 338,527 209,300 Egypt.26,857,700 13,149,995 867,400 471,309 Australia.3,224,740 1,104,440 425,270 159,850 Poland.8,172,605 5,563,542 -China.41,580 20,790 7,100 1

163、,740 Ivory Coast.157,258 62,903 37,312 8,955 Indonesia.1,034,380 402,260 -TOTAL INTERNATIONAL.39,679,717 20,412,154 1,675,609 851,154 -TOTAL COMPANY.40,575,272 20,905,188 3,391,308 1,777,225 =PRODUCTIVE OIL AND GAS WELLS The number of productive oil and gas wells,operated and non-operated,in which A

164、pache had an interest as of December 31,1997,is set forth below.GROSS WELLS DRILLED The following table sets forth the number of gross exploratory and gross development wells drilled in the last three fiscal years in which the Company participated.The number of wells drilled refers to the number of

165、wells commenced at any time during the respective fiscal year.Productive wells are either producing wells or wells capable of commercial production.At December 31,1997,the Company was participating in 24 wells in the U.S.,nine Canadian wells,21 Egyptian wells and two Australian wells in the process

166、of drilling.12 GAS OIL -GROSS NET GROSS NET -Offshore.180 67 66 22 Midcontinent.1,630 617 515 152 Western.347 127 3,442 1,744 Gulf Coast.315 249 980 798 Canada.484 314 433 88 Egypt.10 4 108 54 Australia.7 3 15 7 -Total.2,973 1,381 5,559 2,865 =EXPLORATORY DEVELOPMENTAL -PRODUCTIVE DRY TOTAL PRODUCTI

167、VE DRY TOTAL -1997 United States.27 25 52 234 32 266 Canada.19 14 33 41 7 48 Egypt.7 19 26 23 4 27 Australia.3 6 9 6 1 7 Other International.1 2 3 1 -1 -Total.57 66 123 305 44 349 =1996 United States.28 33 61 201 31 232 Canada.23 25 48 27 2 29 Egypt.7 4 11 12 -12 Australia.4 6 10 1 1 2 Other Interna

168、tional.-1 1 -Total.62 69 131 241 34 275 =1995 United States.9 15 24 129 21 150 Canada.16 13 29 14 5 19 Egypt.4 2 6 3 -3 Australia.4 6 10 1 1 2 Other International.-4 4 -1 1 -Total.33 40 73 147 28 175 =NET WELLS DRILLED The following table sets forth,for each of the last three fiscal years,the number

169、 of net exploratory and net developmental wells drilled by Apache.PRODUCTION AND PRICING DATA The following table describes,for each of the last three fiscal years,oil,natural gas liquids(NGLs)and gas production for the Company,average production costs(excluding severance taxes)and average sales pri

170、ces.ESTIMATED RESERVES AND RESERVE VALUE INFORMATION The following information relating to estimated reserve quantities,reserve values and discounted future net revenues is derived from,and qualified in its entirety by reference to,the more complete reserve and revenue information and assumptions in

171、cluded in the Companys Supplemental Oil and Gas Disclosures under Item 8 below.The Companys estimates of proved reserve quantities of its U.S.,Canadian and international properties have been subject to review by Ryder Scott Company Petroleum Engineers.In 1996,the proved reserve quantities of certain

172、 of the Companys Egyptian properties were reviewed by Netherland,Sewell&Associates,Inc.There are numerous uncertainties inherent in estimating quantities of proved reserves and projecting future rates of production and timing of development expenditures.The following reserve 13 EXPLORATORY DEVELOPME

173、NTAL -PRODUCTIVE DRY TOTAL PRODUCTIVE DRY TOTAL -1997 United States.11.5 11.9 23.4 107.5 19.0 126.5 Canada.14.5 10.1 24.6 29.0 6.0 35.0 Egypt.3.7 12.3 16.0 14.4 2.0 16.4 Australia.1.0 1.0 2.0 1.8 .2 2.0 Other International.5 1.4 1.9 .5 -.5 -Total.31.2 36.7 67.9 153.2 27.2 180.4 =1996 United States.1

174、7.2 22.8 40.0 77.9 19.1 97.0 Canada.18.8 21.5 40.3 24.1 1.4 25.5 Egypt.3.2 3.0 6.2 9.0 -9.0 Australia.1.1 1.5 2.6 0.2 0.1 0.3 Other International.-0.4 0.4 -Total.40.3 49.2 89.5 111.2 20.6 131.8 =1995 United States.3.7 6.2 9.9 57.3 14.0 71.3 Canada.14.0 9.4 23.4 13.4 3.4 16.8 Egypt.1.0 0.5 1.5 0.6 -0

175、.6 Australia.1.4 1.8 3.2 0.2 0.7 0.9 Other International.-0.7 0.7 -0.7 0.7 -Total.20.1 18.6 38.7 71.5 18.8 90.3 =PRODUCTION AVERAGE SALES PRICE -AVERAGE -YEAR ENDED OIL NGLS GAS PRODUCTION OIL NGLS GAS DECEMBER 31,(MBBLS)(MBBLS)(MMCF)COST PER BOE (PER BBL)(PER BBL)(PER MCF)-1997.24,291 843 222,237$3

176、.07$19.20$14.08$2.28 1996.19,465 713 205,305 3.43 20.84 16.41 2.02 1995.18,324 763 210,632 3.34 17.09 12.05 1.57 information represents estimates only and should not be construed as being exact.See the Supplemental Oil and Gas Disclosures under Item 8 below.The following table sets forth the Company

177、s estimated proved developed and undeveloped reserves as of December 31,1997,1996 and 1995:The following table sets forth the estimated future value of all the Companys proved reserves,and proved developed reserves,as of December 31,1997,1996 and 1995.Future reserve values are based on year-end pric

178、es except in those instances where the sale of gas and oil is covered by contract terms providing for determinable escalations.Operating costs,production and ad valorem taxes,and future development costs are based on current costs with no escalations.At December 31,1997,estimated future net revenues

179、 expected to be received from all the Companys proved reserves and proved developed reserves were as follows:The Company believes that no major discovery or other favorable or adverse event has occurred since December 31,1997,which would cause a significant change in the estimated proved reserves re

180、ported herein.The estimates above are based on year-end pricing in accordance with the SEC guidelines and do not reflect current prices.Since January 1,1997,no oil or gas reserve information has been filed with,or included in any 14 OIL,NGLS NATURAL AND GAS CONDENSATE (BCF)(MMBBLS)-1997 Developed.1,

181、554.3 203.1 Undeveloped.317.5 70.7 -Total.1,871.8 273.8 =1996 Developed.1,435.3 183.2 Undeveloped.190.0 52.1 -Total.1,625.3 235.3 =1995 Developed.1,298.5 137.5 Undeveloped.203.4 32.8 -Total.1,501.9 170.3 =PRESENT VALUE OF ESTIMATED FUTURE NET REVENUES ESTIMATED FUTURE BEFORE INCOME TAXES NET REVENUE

182、S (DISCOUNTED AT 10 PERCENT)-PROVED PROVED DECEMBER 31,PROVED DEVELOPED PROVED DEVELOPED-(IN THOUSANDS)1997.$5,347,892$4,301,768$3,272,618$2,728,747 1996.7,936,924 6,713,252 4,568,475 4,041,065 1995.4,043,024 3,390,103 2,344,357 2,056,558 PROVED DECEMBER 31,PROVED DEVELOPED-(IN THOUSANDS)1998.$540,1

183、75$618,938 1999.711,613 623,300 2000.665,515 522,793 Thereafter.3,430,589 2,536,737 -Total.$5,347,892$4,301,768 =report to,any U.S.authority or agency other than the SEC and the Energy Information Administration(EIA).The basis of reporting reserves to the EIA for the Companys reserves is identical t

184、o that set forth in the foregoing table.TITLE TO INTERESTS The Company believes that its title to the various interests set forth above is satisfactory and consistent with the standards generally accepted in the oil and gas industry,subject only to immaterial exceptions which do not detract substant

185、ially from the value of the interests or materially interfere with their use in the Companys operations.The interests owned by the Company may be subject to one or more royalty,overriding royalty and other outstanding interests customary in the industry.The interests may additionally be subject to o

186、bligations or duties under applicable laws,ordinances,rules,regulations and orders of arbitral or governmental authorities.In addition,the interests may be subject to burdens such as net profits interests,liens incident to operating agreements and current taxes,development obligations under oil and

187、gas leases and other encumbrances,easements and restrictions,none of which detract substantially from the value of the interests or materially interfere with their use in the Companys operations.ITEM 3.LEGAL PROCEEDINGS The information set forth under the caption Litigation in Note 10 to the Company

188、s financial statements under Item 8 below is incorporated herein by reference.ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted for a vote of security holders during the fourth quarter of 1997.PART II ITEM 5.MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOC

189、KHOLDER MATTERS Apaches common stock,par value$1.25 per share,is traded on the New York Stock Exchange and the Chicago Stock Exchange under the symbol APA.The table below provides certain information regarding Apache common stock for 1997 and 1996.Prices shown are from the New York Stock Exchange Co

190、mposite Transactions Reporting System.The closing price per share of Apache common stock,as reported on the New York Stock Exchange Composite Transactions Reporting System for February 27,1998,was$34.00.At December 31,1997,there were 93,304,541 shares of Apache common stock outstanding,held by appro

191、ximately 10,000 shareholders of record and 46,000 beneficial owners.Each share of Apache common stock also represents one preferred share purchase right which,when exercisable,would entitle the holder to purchase one ten-thousandth of a share of Series A Junior Participating Preferred Stock for a pu

192、rchase price of$100 and,under certain circumstances,would entitle the holder to acquire additional shares of Apache common stock.See Note 7 to the Companys financial statements under Item 8 below.The Company has paid cash dividends on its common stock for 124 consecutive quarters through December 31

193、,1997,and expects to continue the payment of dividends at current levels,although future 15 1997 1996 -PRICE RANGE PRICE RANGE -DIVIDENDS -DIVIDENDS HIGH LOW PER SHARE HIGH LOW PER SHARE -First Quarter.$39 3/8$31 1/4$.07$29 1/2$24 3/8$.07 Second Quarter.35 5/8 30 1/8$.07 33 1/2 26 3/8$.07 Third Quar

194、ter.42 7/8 32 1/16$.07 34 5/8 27 3/4$.07 Fourth Quarter.45 1/16 32 11/16$.07 37 7/8 29 1/2$.07 dividend payments will depend upon the Companys level of earnings,financial requirements and other relevant factors.ITEM 6.SELECTED FINANCIAL DATA The following table sets forth selected financial data of

195、the Company and its consolidated subsidiaries for each of the years in the five-year period ended December 31,1997,which information has been derived from the Companys audited financial statements.Apaches previously reported data for 1994 and 1993 has been restated to reflect the merger with DEKALB

196、in May 1995 under the pooling of interests method of accounting.This information should be read in connection with and is qualified in its entirety by the more detailed information in the Companys financial statements under Item 8 below.(1)Includes financial data for the Ampolex Group Transaction af

197、ter November 20,1997.(2)Includes financial data for Phoenix after May 20,1996.(3)Includes the results of the acquisitions of certain oil and gas properties from Texaco Exploration and Production,Inc.(Texaco)and Aquila Energy Resources Corporation(Aquila)after March 1,1995 and September 1995,respecti

198、vely,and the sale of a substantial portion of the Companys Rocky Mountain properties in September 1995.(4)Includes financial data for AERC after June 30,1993,and the results of the acquisition of certain oil and gas properties from Hall-Houston Oil Company(Hall-Houston)after July 31,1993.(5)Income p

199、er common share-continuing operations has been restated in accordance with Statement of Financial Accounting Standards No.128,Earnings per Share.(6)No cash dividends were paid on outstanding DEKALB common stock in 1995,1994 and 1993.For a discussion of significant acquisitions,reference is made to I

200、tem 7,MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS and to Note 2 to the Companys consolidated financial statements under Item 8 below.16 AT OR FOR THE YEAR ENDED DECEMBER 31,-1997(1)1996(2)1995(3)1994 1993(4)-(IN THOUSANDS,EXCEPT PER SHARE AMOUNTS)INCOME STATE

201、MENT DATA Total revenues.$1,176,273$977,151$750,702$592,626$512,632 Income from continuing operations.154,896 121,427 20,207 45,583 41,421 Income per common share-continuing operations(5)Basic.1.71 1.42 .28 .65 .67 Diluted.1.65 1.38 .28 .65 .67 Cash dividends per common share(6).28 .28 .28 .28 .28 B

202、ALANCE SHEET DATA Working capital(deficit).$4,546$(41,501)$(22,013)$(3,203)$(55,538)Total assets.4,138,633 3,432,430 2,681,450 2,036,627 1,759,203 Long-term debt.1,501,380 1,235,706 1,072,076 719,033 504,334 Shareholders equity.1,729,177 1,518,516 1,091,805 891,087 868,596 Common shares outstanding

203、at end of year.93,305 90,059 77,379 69,666 69,504 ITEM 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Apache achieved record earnings and cash flow on both an absolute and per share basis during 1997.Higher natural gas prices,while contributing to the

204、 years improvements,were partially offset by lower oil prices.More than product prices,the primary driver behind Apaches 1997 record performance was increased production volumes,characterized by moderate growth in North American gas production and substantial increases in oil volumes abroad.The year

205、s$154.9 million of earnings,coupled with a$75 million conversion of debt to equity in November and$611 million of cash provided before changes in working capital and other adjustments(cash flow from operations),enabled Apache to end 1997 with a debt-to-capitalization ratio of 46.8 percent,up from 44

206、.9 percent in 1996,despite$685.4 million invested in exploration and development activities and$225.9 million of property acquisitions.At year-end,approximately 69 percent of Apaches debt was locked in at fixed rates averaging 7.42 percent.Other specifics include:Increased production and higher gas

207、prices-Higher oil and gas production and natural gas prices contributed to record earnings and cash flow in 1997.Egyptian oil development,a full year of production from Egyptian properties acquired in 1996,and North American gas drilling drove the increased production for 1997.Apaches oil production

208、 increased 25 percent from 1996 to 1997,which added$92.6 million to revenues.Natural gas production increased nine percent from 1996 to 1997,which contributed$38.5 million to the increase in revenues.Apaches average realized natural gas price for 1997 was up 13 percent over 1996,favorably impacting

209、revenues by$51.3 million.Debt refinancing-In January 1997,the Company established a$300 million commercial paper program and expanded that program in June 1997 to$700 million.Apache also replaced its$1 billion global borrowing-base credit facility with a new$1 billion global corporate credit facilit

210、y in June 1997.Apache issued$150 million of senior unsecured 50 year,7.375-percent debentures in August 1997.Three of the Companys Egyptian subsidiaries entered into a$250 million secured,revolving credit facility in October 1997.Apaches Australian finance subsidiary issued,in December 1997,$170 mil

211、lion of 10 year,6.5-percent notes guaranteed by Apache.The Company also received a rating upgrade on its senior and subordinated long-term debt from Standard&Poors in January 1997.RESULTS OF OPERATIONS NET INCOME AND REVENUE Apache reported 1997 net income of$154.9 million,an increase of 28 percent

212、or$33.5 million over 1996.The increase is primarily due to higher oil and gas production,higher natural gas prices and lower operating costs per unit of production.Basic net income per common share rose to$1.71 compared to$1.42 in 1996;diluted net income per common share increased to$1.65 in 1997 fr

213、om$1.38 in 1996.Net income of$121.4 million for 1996 rose from$20.2 million in 1995.Basic net income per common share increased five-fold in 1996 from$.28 in 1995;diluted net income per common share was also$.28 in 1995.The increase was attributed to higher oil and gas prices and increased oil produ

214、ction.Revenues increased 20 percent to$1.2 billion in 1997.Oil and natural gas production revenues increased 18 percent,primarily due to increased oil and gas production and natural gas prices.Crude oil,including natural gas liquids,and natural gas contributed 49 percent and 51 percent,respectively,

215、of total oil and gas production revenues during 1997.Revenues increased 30 percent in 1996 to$977.2 million.Revenues for 1995 were$750.7 million.In 1996,crude oil,including natural gas liquids,contributed 50 percent and natural gas contributed 50 percent of total oil and gas production revenues.17 T

216、he table below presents,for the years indicated,the revenues,production and average prices received from sales of natural gas,oil and natural gas liquids.Natural gas revenues increased by 22 percent from 1996 to 1997 due to increased natural gas prices and increased production.The average price rece

217、ived in 1997 was$.26 per Mcf,or 13 percent,higher than 1996.The Company periodically engages in hedging activities,including fixed-price physical contracts and financial contracts.Apache realized gains from open hedging positions favorably impacting the gas price by$.06 per Mcf.Losses under long-ter

218、m fixed-price physical contracts negated the hedging gains reducing the gas price by$.06 per Mcf.The higher prices in 1997 were the result of favorable North American market conditions.Natural gas prices in Australia declined in 1997 due to the effect of exchange rates on fixed Australian dollar-18

219、FOR THE YEAR ENDED DECEMBER 31,-1997 1996 1995 -Revenues(in thousands):Natural gas.$505,604$415,736$330,737 Oil.466,291 405,724 313,214 Natural gas liquids.11,878 11,704 9,193 -Total.$983,773$833,164$653,144 =Natural Gas Volume-Mcf per day:United States.492,594 472,171 500,441 Canada.89,699 74,598 6

220、7,083 Egypt.563 302 -Australia.26,016 13,869 9,551 -Total.608,872 560,940 577,075 =Average Natural Gas price-Per Mcf:United States.$2.47$2.17$1.64 Canada.1.33 1.09 1.00 Egypt.2.94 3.21 -Australia.1.78 1.96 1.86 Total.2.28 2.02 1.57 Oil Volume-Barrels per day:United States.40,638 40,600 45,084 Canada

221、.2,120 1,969 1,999 Egypt.19,372 8,295 -Australia.4,417 2,318 3,120 -Total.66,547 53,182 50,203 =Average Oil Price-Per barrel:United States.$19.31$20.67$17.00 Canada.19.27 20.84 16.90 Egypt.18.65 21.29 -Australia.20.51 22.33 18.56 Total.19.20 20.84 17.09 Natural Gas Liquids(NGL)Volume-Barrels per day

222、:United States.1,684 1,308 1,521 Canada.627 641 569 -Total.2,311 1,949 2,090 =Average NGL Price-Per barrel:United States.$14.50$17.23$12.83 Canada.12.98 14.73 9.96 Total.14.08 16.41 12.05 denominated gas contracts.Natural gas production for the United States increased four percent from 1996 to 1997

223、due to drilling results in the Midcontinent and Offshore regions.Canadian natural gas production increased 20 percent due to acquisition and drilling activity.Natural gas production from Australia increased 88 percent from 1996 to 1997.Australian production increases resulted primarily from a full y

224、ear of production from the Companys East Spar properties,which came on line in November 1996,and properties acquired in the Ampolex Group Transaction.Natural gas revenues increased 26 percent from 1995 to 1996.Average natural gas prices were$.45 per Mcf,or 29 percent,higher in 1996 than 1995.The Com

225、panys net hedging activity,including fixed-price physical contracts and financial contracts reduced the reported prices by$.09 per Mcf in 1996,compared to a$.07 per Mcf gain in 1995.Natural gas production declined three percent from 1995 to 1996,primarily due to the natural decline of older properti

226、es in the Companys Offshore and Gulf Coast regions and the sale of producing properties in late 1995.Oil revenues increased 15 percent from 1996 to 1997.Egyptian oil production more than doubled from 1997 due to development activity and the first full year of production from the Companys Egyptian pr

227、operties acquired in 1996.Australian oil production increased 90 percent from 1996 to 1997 due to the Agincourt prospect.These production increases were partially offset by a decrease of eight percent in average oil prices received during 1997 due to poor market conditions.Oil revenues increased 30

228、percent from 1995 to 1996,primarily due to properties acquired in connection with the Phoenix merger and new Egyptian production from the Companys Qarun field.Decreases in domestic production due to United States property sales in late 1995,partially offset the impact of Egyptian production.The aver

229、age oil price increased 22 percent from 1995 to 1996.NGL revenues were slightly higher in 1997 than in 1996.NGL production increased 19 percent from 1996 to 1997,which was offset by a 14 percent decrease in average prices.NGL revenues increased 27 percent from 1995 to 1996.Average prices in 1996 wer

230、e 36 percent higher than in 1995 due to improved market conditions.The increase in prices was partially offset by a seven percent decline in production.OTHER REVENUES AND OPERATING EXPENSES Gas gathering,processing and marketing revenues increased 38 percent to$197.0 million in 1997 from 1996.Increa

231、sed gas volumes and higher gas prices in 1997 drove this increase.Correspondingly,gas gathering,processing and marketing costs increased in 1997 by 40 percent to$194.3 million.Thus,lower margins were realized in 1997.Lower crude oil trading margins and lower pipeline gathering fees were mitigated by

232、 higher gas purchase and resale margins in 1997.During 1996,gas gathering,processing and marketing revenues increased 47 percent to$142.9 million from$97.2 million in 1995.Lower margins were also realized in 1996 as compared to 1995.Equity in income(loss)of affiliates represents Apaches share of Pro

233、Energy losses.Equity in loss of affiliate was$1.7 million and$.3 million in 1997 and 1996,respectively.Other revenue for 1997 was a loss of$2.8 million.This amount includes$4.8 million in foreign currency transaction losses on Canadian dollars and$1.2 million in foreign currency transaction losses o

234、n Australian dollars.Canadian royalty credits of$1.0 million and proceeds received from settlements of$1.8 million partially mitigated these losses.For 1996,other revenue of$1.4 million included a gain on the sale of stock held for investment of$.8 million and Canadian royalty credits of$1.2 million

235、.Currency transaction losses on Canadian dollars of$.9 million partially offset these revenues.Other revenue for 1995 was$.4 million.This amount included$4.3 million in proceeds received from settlements,$2.2 million in gains from the sales of non-oil and gas assets,$1.1 million of Canadian royalty

236、credits and$2.1 million of other income.Losses from the decoupling of NYMEX and wellhead gas prices of$9.3 million offset these revenues.The Companys depreciation,depletion and amortization(DD&A)expense increased to$381.4 million in 1997 from$315.1 million in 1996.On an equivalent barrel basis,full

237、cost DD&A expense increased$.33 per boe,from$5.44 per boe in 1996 to$5.77 per boe in 1997.Reserve revisions due to price declines during the 19 first part of 1997 and an increased cost environment in North America negatively impacted the 1997 rate.Full cost DD&A expense increased in 1996 from$288.4

238、million,or$5.32 per boe,in 1995.Apaches operating costs increased three percent to$231.4 million in 1997 from$225.5 million in 1996.Lease operating expense(LOE),excluding severance taxes,increased from$186.4 million in 1996 to$190.8 million in 1997.LOE increased as a result of Egyptian oil productio

239、n enhancements and North American gas production gains.On an equivalent barrel basis,LOE for 1997 averaged$3.07 per boe,a$.36 decline from$3.43 per boe in 1996.Production increased with a lower incremental LOE than the 1996 average per unit cost.Specifically,North American gas production and Egyptia

240、n oil production carry much lower per unit costs than the 1996 property profile.The divestiture of marginal properties in the U.S.also favorably impacted LOE per boe in 1997.Operating costs increased seven percent in 1996 from$211.7 million in 1995.LOE,excluding severance taxes,increased three perce

241、nt in 1996 from$181.1 million in 1995.LOE per boe increased three percent in 1996 from$3.34 per boe in 1995.The increase was driven by a flat domestic cost structure with declining production in the Gulf Coast region.The Phoenix acquisition in 1995 also increased LOE per boe.Mitigating these increas

242、es was decreased LOE per boe in the Midcontinent region due to incremental production added through the drillbit.Administrative,selling and other costs increased$2.3 million,or six percent,from 1996 to 1997.Under a new bonus plan initiated in 1997,Apache provided incentive compensation to all employ

243、ees based on the achievement of targeted performance,which was the primary reason for the increase.On an equivalent barrel basis,general and administrative(G&A)expense declined from$.66 per boe in 1996 to$.62 per boe in 1997.Production increases were not met with rising administrative costs.Administ

244、rative,selling and other costs were lower in 1996 than in 1995 due to the Companys continuing efforts to control costs.On an equivalent barrel basis,G&A expense declined two percent in 1996 from$.67 per boe in 1995.Net financing costs for 1997 increased$10.7 million,or 17 percent,over 1996.Gross int

245、erest expense increased by$15.3 million due to higher average aggregate debt outstanding at higher average interest rates,which resulted from the extension of Apaches debt maturities.Average aggregate debt outstanding and average interest rates increased to$1.4 billion and 7.69 percent,respectively,

246、from$1.2 billion and 7.40 percent in 1996.In 1997,Apache wrote off$1.2 million in deferred loan costs related to cancellation of two secured credit facilities with the International Finance Corporation(IFC).Additional capitalized interest of$5.8 million in 1997 mitigated these increases.Capitalized

247、interest is based on the carrying value of unproved properties.Higher international unevaluated costs caused the increase in 1997.Net financing costs for 1996 decreased$9.0 million,or 13 percent,from the prior year due to higher amounts of capitalized interest,partially offset by higher gross intere

248、st costs.Capitalized interest increased$11.7 million for 1996 due to an increase in the unproved property base resulting from acquisitions made in 1995 and 1996.Gross interest expense increased$1.8 million for 1996 as compared to 1995.Average outstanding debt increased$78.8 million compared to 1995.

249、Offsetting this increase was a decline of.36 percent in Apaches weighted average interest rate.MARKET RISK COMMODITY RISK The Companys major market risk exposure is in the pricing applicable to its oil and gas production.Realized pricing is primarily driven by the prevailing worldwide price for crud

250、e oil and spot prices applicable to its United States and Canadian natural gas production.Historically,prices received for oil and gas production have been volatile and unpredictable.Pricing volatility is expected to continue.Gas price realizations ranged from a monthly low of$1.78 per Mcf to a mont

251、hly high of$3.38 per Mcf during 1997.Oil prices ranged from a low of$16.71 per barrel to a high of$24.17 per barrel during the same period.The Company periodically enters into hedging activities with respect to a portion of its projected oil and natural gas production through a variety of financial

252、and physical arrangements intended to support oil and natural gas prices at targeted levels and to manage its exposure to oil and gas price fluctuations.Apache may use futures contracts,swaps,options and fixed-price physical contracts to hedge its commodity prices.Realized gains or losses from the C

253、ompanys price risk management activities are recognized in oil and gas 20 production revenues when the associated production occurs.Apache does not hold or issue derivative instruments for trading purposes.In 1997,Apache recognized a net gain of$1.4 million from hedging activities that increased oil

254、 and gas production revenues.The net gain in 1997 includes$14.5 million in derivative income and$13.1 million in losses on fixed price physical gas contracts.In 1996,Apache recognized a net loss from hedging activities of$23.8 million.Gains or losses on natural gas derivative contracts are expected

255、to be offset by sales at the spot market price or to preserve the margin on existing physical contracts.A 10 percent improvement in year-end spot market prices would increase the fair value of derivative contracts in effect at December 31,1997 by$21 million,while a 10 percent fall in spot prices wou

256、ld decrease the fair value of these instruments by$21 million.Hedging activity relative to oil production resulted in a$.1 million gain in 1997.The Company did not have any open positions with respect to crude oil hedging at December 31,1997.INTEREST RATE RISK The Company considers its interest rate

257、 risk exposure minimal as a result of fixing interest rates on over two-thirds of the Companys debt.Total debt at December 31,1997,included about$473 million of floating-rate debt.As a result,Apaches annual interest costs in 1998 will fluctuate based on short-term interest rates on approximately 31

258、percent of its total debt outstanding at December 31,1997.The impact on annual cash flow of a 10 percent change in the floating rate(approximately 64 basis points)would be$3 million.FOREIGN CURRENCY RISK The Companys cash flow stream relating to certain international operations is based on the U.S.d

259、ollar equivalent of cash flows measured in foreign currencies.Australia gas production is sold under fixed-price Australian dollar contracts and substantially all capital expenditures and operating costs are paid in Australian dollars.Revenue and disbursement transactions denominated in Australian d

260、ollars are converted to U.S.dollar equivalents based on the exchange rate on the transaction date.Reported cash flow relating to Canadian operations is based on cash flows measured in Canadian dollars converted to the U.S.dollar equivalent based on the average of the Canadian and U.S.dollar exchange

261、 rates for the period reported.Substantially all of the Companys international transactions,outside of Canada and Australia,are denominated in U.S.dollars.The Companys Canadian and Australian subsidiaries have net financial obligations that are denominated in a currency other than the functional rep

262、orting currency of the subsidiaries.A decrease in value of 10 percent in the Australian and Canadian dollars relative to the U.S.dollar from the year-end exchange rates would result in a foreign currency loss of approximately$11 million,based on December 31,1997 amounts.The Company considers its cur

263、rent risk exposure to exchange rate movements,based on net cash flows,to be immaterial.The Company did not have any open derivative contracts relating to foreign currencies at December 31,1997.CASH FLOW,LIQUIDITY AND CAPITAL RESOURCES CAPITAL COMMITMENTS Apaches primary needs for cash are for explor

264、ation,development and acquisition of oil and gas properties,repayment of principal and interest on outstanding debt,payment of dividends,and capital obligations for affiliated ventures.The Company funds its exploration and development activities through internally generated cash flows.Apache budgets

265、 its capital expenditures based upon projected cash flows.The Company routinely adjusts its capital expenditures in response to changes in oil and natural gas prices and cash flow.The Company cannot predict future product prices.21 Capital Expenditures-Apaches oil and gas capital expenditures over t

266、he last three years are summarized below:Expenditures for exploration and development totaled$685.4 million in 1997 compared to$493.7 million in 1996.Apaches drilling program in 1997 added 113.5 MMboe of reserves(including revisions)and replaced 183 percent of production.In the United States,Apache

267、completed 261 gross wells as producers out of 318 gross wells drilled during the year,compared with 229 gross producers out of 293 gross wells drilled in 1996.In Canada,Apache completed 60 gross wells as producers out of 81 gross wells drilled during the year,compared with 50 gross producers out of

268、77 gross wells drilled in 1996.Internationally,the Company completed 41 gross producers out of 73 gross wells drilled in 1997,compared to 24 gross producers out of 36 gross wells in 1996.The international wells drilled in 1997 included 30 successful wells in Egypt and nine successful wells in Austra

269、lia.The total capital expenditures budget for 1998 is$523.2 million.This includes$274.0 million for North America.Estimated U.S.exploration and development expenditures for 1998 are$227.8 million,which includes$122.6 million in the Gulf region,$70.0 million in the Midcontinent region and$35.2 millio

270、n in the Western region.Apache expects to spend$46.2 million in Canada in 1998.The Company expects its other international exploration and development expenditures in 1998,exclusive of facilities,to total approximately$249.2 million.On November 20,1997,the Company,acquired all the capital stock of t

271、hree companies owning interests in certain oil and gas properties(including 31.9 MMboe of proved oil and natural gas reserves)and production facilities offshore Western Australia for approximately$300 million pursuant to three agreements with subsidiaries of Mobil.Funds for the Ampolex Group Transac

272、tion were obtained principally from borrowings under the Companys global credit facility.The Ampolex Group Transaction,net of the sale of certain properties to Hardy Petroleum Limited(Hardy),increased the Companys interest to 47.5 percent from 22.5 percent in the Carnarvon Basins Harriet area,which

273、includes the Varanus Island pipeline,processing and production complex and eight existing oil and gas fields.In addition,the Companys interest in the East Spar field,which produces through the Varanus Island facilities,increased to 45 percent from 20 percent.Apache operates the Harriet/East Spar Pro

274、perties.In conjunction with the closing of the Ampolex Group Transaction on December 9,1997,the Company entered into an agreement with Hardy under which Hardy agreed to purchase a 10 percent interest in the Companys East Spar gas field and related production facilities in Western Australia.The trans

275、action closed on January 28,1998 with a total sales price of approximately$63 million in cash.In 1997,the Company also completed 45 tactical regional acquisitions for cash consideration totaling$33.6 million.These acquisitions added approximately 6.6 MMboe to the Companys reserves.Cash expenditures

276、for acquisitions of proved oil and gas properties during 1996 totaled$446.2 million compared to$820.9 million in 1995.The Company added 52 MMboe of proved oil and gas reserves through 22 1997 1996 1995 -(IN THOUSANDS)Exploration and Development:United States.$375,015$302,494$216,430 Canada.57,669 58

277、,768 27,788 Egypt.152,564 63,597 11,852 Australia.70,802 46,838 32,373 Ivory Coast.1,077 7,914 1,287 Other International.28,293 14,084 22,438 -Total.$685,420$493,695$312,168 =Acquisitions of Oil and Gas Properties.$225,934$446,205$820,918 =purchases in 1996.The most significant transaction completed

278、 in 1996 was the merger with Phoenix.Apache acquired oil and gas properties totaling$331.2 million from Phoenix.Apache also acquired$115.0 million of other oil and gas properties located primarily in the Companys existing focus areas.This amount included the purchase of certain oil and gas propertie

279、s from Hall-Houston for$46 million in cash.Funds for the acquisitions were obtained principally from borrowings under the Companys revolving bank credit facility.On March 1,1995,Apache purchased certain United States oil and gas properties from Texaco for approximately$567 million in cash,subject to

280、 adjustment.Funds for the Texaco transaction were obtained from several sources,including increased borrowing capacity under the Companys revolving bank credit facility and proceeds of Apaches$172.5 million 6-percent convertible subordinated debentures due 2002(6-percent debentures),which were issue

281、d on January 4,1995.In September 1995,Apache acquired substantially all of the oil and natural gas assets of Aquila for approximately$210 million.The oil and gas properties included approximately 107,000 developed and 49,000 undeveloped net acres located primarily in Apaches Anadarko Basin and Gulf

282、of Mexico core areas.Also included in the transaction was the purchase of a five-year,four-month premium-price gas contract and interests in four gas processing plants.Debt and Interest Commitments-At December 31,1997,Apache had outstanding debt of$255 million under its global credit facility and an

283、 aggregate of$1,263.6 million of other debt.This other debt included notes and debentures maturing in the years 2000 through 2096.Debt outstanding at December 31,1997 of$1.5 billion was up 23 percent over the$1.2 billion outstanding at December 31,1996.The increase reflects the Ampolex Group Transac

284、tion and other 1997 property acquisitions.The Companys debt-to-capitalization ratio increased from 44.9 percent at December 31,1996 to 46.8 percent at December 31,1997.Apaches debt-to-capitalization ratio for January 1998 fell below 42 percent due in part to the conversion of 90 percent of the$172.5

285、 million 6-percent debentures into approximately 5.1 million shares of Apache common stock.Interest payments on the Companys debt for 1998 are projected to be$116.2 million(using weighted average balances for floating rate obligations).Scheduled principal payments for 1998 total$17.2 million.Dividen

286、d Payments-Dividends paid during 1997 totaled$25.3 million,up eight percent from 1996,due to the increased number of shares outstanding.The Company has paid cash dividends on its common stock for 124 consecutive quarters through December 31,1997,and expects to continue payment of dividends at curren

287、t levels.Future dividend payments will depend on the Companys level of earnings,financial requirements and other relevant factors.CAPITAL RESOURCES AND LIQUIDITY The Companys primary capital resources are net cash provided by operating activities,proceeds from financing activities and proceeds from

288、sales of non-strategic assets.Net Cash Provided by Operating Activities-Apaches net cash provided by operating activities during 1997 totaled$723.8 million,an increase of 48 percent from the$490.5 million provided in 1996.This increase was due primarily to higher oil and gas production and higher ga

289、s prices in 1997.The receipt of$115.2 million from a purchaser as an advance also impacted 1997 net cash provided by operating activities.This advance was for future natural gas deliveries of 20,000 MMbtu per day over a ten-year period commencing September 1997.Net cash provided by operating activit

290、ies in 1996 rose$158.4 million from 1995 primarily due to higher product prices.Long-Term Borrowings-In January 1997,the Company established a$300 million commercial paper program that allows Apache to borrow funds for up to 270 days at competitive interest rates.The commercial paper program is supp

291、orted by availability under the U.S.portion of Apaches global credit facility.In June 1997,the Company expanded its commercial paper program to$700 million from$300 million to provide access to additional low-cost,short-term funds.Since its inception in January 1997,the commercial paper program has

292、been rated A-2,Prime-2 and D-1-(D-One-Minus)by Standard&Poors(S&P),Moodys and Duff and Phelps,respectively.23 Also in January 1997,S&P upgraded the Companys senior long-term debt rating from BBB to BBB+and subordinated long-term debt rating from BBB-to BBB.Apache was also named to the S&P 500 in 199

293、7.In June 1997,the Company replaced its$1 billion global borrowing-base credit facility with a new$1 billion global credit facility that provides Apache with greater borrowing capacity,increased financial flexibility and less restrictive covenants,while lowering its all-in borrowing cost by 7 1/2 ba

294、sis points.The global credit facility consists of three separate bank facilities:a$700 million facility in the U.S.;a$175 million facility in Australia;and a$125 million facility in Canada.The global credit facility enables Apache to draw on the entire$1 billion facility without restrictions tied to

295、 periodic revaluation of the Companys oil and gas reserves.In August 1997,Apache issued$150 million principal amount,$148 million net of discount,of senior unsecured 7.375-percent debentures maturing on August 15,2047.The proceeds from this issuance were used to reduce the Companys outstanding comme

296、rcial paper obligations and for general corporate purposes.The Company terminated two secured credit facilities with the IFC in October 1997.This financing was replaced with a secured,revolving credit facility that provides total commitments of$250 million and an initial borrowing base of$150 millio

297、n.This borrowing base will be redetermined semi-annually.The total amount of commitments under the facility is currently scheduled to be reduced by set increments every six months,beginning two and one-half years after the effective date of the facility.The facility is scheduled to mature on January

298、 3,2003.In December 1997,Apache Finance Pty Ltd,an Australian finance subsidiary,issued$170 million principal amount,$168.7 million net of discount,of 6.5 percent notes due on December 15,2007.Apache irrevocably and unconditionally guaranteed the notes,and has the right to redeem the notes prior to

299、maturity,subject to certain conditions.The proceeds from this issuance were used to repay funds borrowed for the Ampolex Group Transaction and general corporate purposes.In February 1998,Apache issued$150 million principal amount,$148.2 million net of discount,of senior unsecured 7-percent notes mat

300、uring on February 1,2018.The notes are not redeemable prior to maturity.Net proceeds from the sale were used to reduce existing short-term obligations and for general corporate purposes.Stock Transactions-In November 1997,all the Companys 3.93-percent convertible notes were converted into approximat

301、ely 2.8 million shares of Apache common stock.The notes were converted at a rate of 37.04 shares of common stock per$1,000 principal amount.In January 1998,approximately 90 percent,or$155.6 million,of the Companys 6 percent debentures were converted into 5.1 million shares of Apache common stock at

302、a conversion rate of approximately 32.59 shares of common stock per$1,000 principal amount.The remaining$16.9 million principal amount was redeemed for$17.4 million in cash,plus accrued and unpaid interest.Asset Sales-Apache received$30.1 million in both 1997 and 1996 from the sale of non-strategic

303、oil and gas properties in a number of separate transactions.In January 1998,Apache closed the sale of a 10 percent interest in Apaches East Spar gas field and related production facilities in Western Australia for approximately$63 million in cash.Apache used the proceeds to reduce outstanding loans

304、under the Australian portion of the global credit facility.Liquidity-The Company had$9.7 million in cash and cash equivalents on hand at December 31,1997,down from$13.2 million at December 31,1996.Apaches ratio of current assets to current liabilities increased from.87:1 at December 31,1996,to 1.01:

305、1 at December 31,1997.Management believes that cash on hand,net cash generated from operations and unused committed borrowing capacity under its global credit facility will be adequate to satisfy the Companys financial obligations to meet future liquidity needs for at least the next two fiscal years

306、.As of December 31,1997,Apaches available borrowing capacity under its global credit facility was$694.2 million.24 IMPACT OF THE YEAR 2000 ISSUE The Year 2000 Issue is the result of computer software being written using two digits rather than four to define the applicable year.Any of the Companys co

307、mputer programs that have date-sensitive software may recognize a date using 00 as the year 1900 rather than the year 2000.If left unremediated,this could result in a system failure or miscalculations causing disruptions of operations,including,among other things,a temporary inability to process tra

308、nsactions,send oil and gas revenue disbursement checks,or engage in similar normal business activities.The Company is in the process of replacing significant portions of its software to more effectively and efficiently meet its business needs.Replacement computer systems selected by the Company will

309、 properly recognize dates beyond December 31,1999.The Company presently believes that with conversions to new software,the Year 2000 Issue will be eliminated.However,if such conversions are not made,or are not completed timely,the Year 2000 Issue could have a material impact on the operations of the

310、 Company.The Company plans to replace substantially all of its existing systems within 15 months or not later than March 31,1999.The date on which the Company plans to complete installation of its new system is based on managements best estimates,which were derived using numerous assumptions of futu

311、re events including the continued availability of certain resources.However,there can be no guarantee that these estimates will be achieved and actual results could differ materially from those plans.Specific factors that might cause such material differences include,but are not limited to,the avail

312、ability and cost of personnel trained in this area,and similar uncertainties.FUTURE TRENDS Apaches strategy is to increase its oil and gas reserves,production and cash flow by continuing to explore on and develop its inventory of existing projects and making carefully targeted acquisitions of new as

313、sets.Robust oil and gas prices early in 1997 gave way to weaker prices later in the year and on into 1998.Crude oil prices have fallen near their lowest level of the 1990s.While lower prices are expected to negatively impact Apaches 1998 earnings and cash from operations(see,Market Risk-Commodity Ri

314、sk above and Item 1.Business-Oil and Natural Gas Prices,Full Cost Center Ceiling Test,Reserves;Rates of Production;Development Expenditures;Cash Flow,and Effect of Volatile Prices),Apache has taken steps to improve its financial liquidity for the purpose of better positioning the company to fund pot

315、ential opportunities that might result from industry adversity.Specific actions that may be or have been taken which should impact the Companys activities in 1998 and beyond include:(1)Selling and trading non-strategic properties to upgrade the Companys property portfolio and reduce debt.(2)Curtaili

316、ng projected exploration and development expenditures to remain within cash from operations.(3)Calling for redemption of$175 million of debentures of which 90 percent or$156 million were converted to equity in January 1998.The above steps should strengthen Apaches financial position and add liquidit

317、y.Should property acquisition prices fall from the premium price commanded in 1997 to what management believes to be more reasonable levels,Apache may seek to undertake a significant acquisition.Alternatively,if drilling costs retreat further from the levels to which they rose in 1997,Apache may exp

318、and its drilling activity.In either event,Apache expects to review the level of its capital expenditures quarterly in light of financial results,product prices,drilling costs and prevailing industry conditions.Even at a reduced capital expenditure level,Apache expects to remain an active operator in

319、 North America drilling moderate-risk wells.Apaches international properties should continue to grow in importance with respect to Apaches financial results and future growth prospects.Apaches international efforts in the coming year will be focused on development of its discoveries in Egypt,offshor

320、e Western Australia,offshore The Peoples Republic of China and offshore the Ivory Coast,and exploration efforts on the Companys concessions in Egypt and its new properties in Poland.While international exploration is recognized as higher risk than Apaches North 25 American activities,the Company bel

321、ieves it offers potential for greater rewards and significant reserve additions.Apache also believes that reserve additions in these international areas may be made through higher risk exploration and through improved production practices and recovery techniques.FORWARD-LOOKING STATEMENTS AND RISK C

322、ertain statements in this report,including statements of the future plans,objectives,and expected performance of the Company,are forward-looking statements that are dependent on certain events,risks and uncertainties that may be outside the Companys control which could cause actual results to differ

323、 materially from those anticipated.Some of these include,but are not limited to,economic and competitive conditions,inflation rates,legislative and regulatory changes,financial market conditions,political and economic uncertainties of foreign governments,future business decisions,and other uncertain

324、ties,all of which are difficult to predict.There are numerous uncertainties inherent in estimating quantities of proved oil and gas reserves and in projecting future rates of production and timing of development expenditures.The total amount or timing of actual future production may vary significant

325、ly from reserves and production estimates.The drilling of exploratory wells can involve significant risks including those related to timing,success rates and cost overruns.Lease and rig availability,complex geology and other factors can affect these risks.Future oil and gas prices also could affect

326、results of operations and cash flows.Although Apache makes use of futures contracts,swaps,options and fixed-price physical contracts to mitigate risk,fluctuations in oil and gas prices may affect the Companys financial position and results of operations.ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY

327、DATA The financial statements and supplementary financial information required to be filed under this item are presented on pages F-1 through F-34 of this Form 10-K,and are incorporated herein by reference.ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE No

328、ne.PART III ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information set forth under the captions Information About Nominees for Election as Directors,Information About Continuing Directors,Executive Officers of the Company,and Voting Securities and Principal Holders in the proxy s

329、tatement relating to the Companys 1998 annual meeting of shareholders(the Proxy Statement)is incorporated herein by reference.ITEM 11.EXECUTIVE COMPENSATION The information set forth under the captions Summary Compensation Table,Option/SAR Grants Table,Option/SAR Exercises and Year-End Value Table,E

330、mployment Contracts and Termination of Employment and Change-in-Control Arrangements,and Director Compensation in the Proxy Statement is incorporated herein by reference.ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information set forth under the caption Voting Securiti

331、es and Principal Holders in the Proxy Statement is incorporated herein by reference.ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information set forth under the caption Certain Business Relationships and Transactions in the Proxy Statement is incorporated herein by reference.26 PART IV

332、 ITEM 14.EXHIBITS,FINANCIAL STATEMENT SCHEDULES,AND REPORTS ON FORM 8-K (a)Documents included in this report:1.Financial Statements 2.Financial Statement Schedules Financial statement schedules have been omitted because they are either not required,not applicable or the information required to be pr

333、esented is included in the Companys financial statements and related notes.3.Exhibits 27 Report of independent public accountants.F-1 Report of management.F-2 Statement of consolidated income for each of the three years in the period ended December 31,1997.F-3 Statement of consolidated cash flows for each of the three years in the period ended December 31,1997.F-4 Consolidated balance sheet as of