Apache Corporation (APA) 2017年年度報告「NYSE」.pdf

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1、APACHE CORPFORM 10-K(Annual Report)Filed 02/23/18 for the Period Ending 12/31/17 Address2000 POST OAK BLVDSTE 100HOUSTON,TX,77056-4400Telephone7132966000CIK0000006769SymbolAPASIC Code1311-Crude Petroleum and Natural GasIndustryOil&Gas Exploration and ProductionSectorEnergyFiscal Year12/31http:/www.e

2、dgar- Copyright 2018,EDGAR Online,a division of Donnelley Financial Solutions.All Rights Reserved.Distribution and use of this document restricted under EDGAR Online,a division of Donnelley Financial Solutions,Terms of Use.UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K

3、(Mark One)XANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2017or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission file number 1-4300APACHE CORP

4、ORATION(Exact name of registrant as specified in its charter)Delaware 41-0747868(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)One Post Oak Central,2000 Post Oak Boulevard,Suite 100,Houston,Texas 77056-4400(Address of principal executive offices)Regi

5、strants telephone number,including area code(713)296-6000Securities registered pursuant to Section 12(b)of the Act:Title of each class Name of each exchangeon which registeredCommon Stock,$0.625 par value New York Stock Exchange,Chicago Stock Exchangeand NASDAQ Global Select Market7.75%Notes Due 202

6、9(assumed by Apache Corporation in 2017pursuant to notes issued by a subsidiaryand guaranteed by Apache Corporation)New York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:Common Stock,$0.625 par valueIndicate by check mark if the registrant is a well-known seasoned issuer,a

7、s defined in Rule 405 of the Securities Act.Yes X No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No XIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of

8、the Securities Exchange Act of 1934 during the preceding12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes X No Indicate by check mark whether the registrant has submitted electronica

9、lly and posted on its corporate Website,if any,every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submitand post such files).Yes X

10、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 registrantsknowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amend

11、ment to this Form 10-K.XIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or emerging growthcompany.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“em

12、erging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer X Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for

13、 complying with any new or revised financialaccounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act):Yes No XAggregate market value of the voting and non-voting common equ

14、ity held by non-affiliates of registrant as of June 30,2017$18,257,879,903Number of shares of registrants common stock outstanding as of January 31,2018381,447,822Documents Incorporated By ReferencePortions of registrants proxy statement relating to registrants 2018 annual meeting of stockholders ha

15、ve been incorporated by reference in Part II and Part III of this annualreport on Form 10-K.TABLE OF CONTENTSDESCRIPTION Item Page PART I 1.BUSINESS11A.RISK FACTORS141B.UNRESOLVED STAFF COMMENTS232.PROPERTIES13.LEGAL PROCEEDINGS234.MINE SAFETY DISCLOSURES23 PART II 5.MARKET FOR THE REGISTRANTS COMMO

16、N EQUITY,RELATED STOCKHOLDER MATTERS,AND ISSUERPURCHASES OF EQUITY SECURITIES246.SELECTED FINANCIAL DATA267.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS277A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK488.FINANCIAL STATEMENTS AND SUPPLEMENTARY DA

17、TA499.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE499A.CONTROLS AND PROCEDURES499B.OTHER INFORMATION49 PART III 10.DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE5011.EXECUTIVE COMPENSATION5012.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEME

18、NT AND RELATEDSTOCKHOLDER MATTERS5013.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,AND DIRECTOR INDEPENDENCE5014.PRINCIPAL ACCOUNTING FEES AND SERVICES50 PART IV 15.EXHIBITS,FINANCIAL STATEMENT SCHEDULES5116.FORM 10-K SUMMARY51 iFORWARD-LOOKING STATEMENTS AND RISKThis Annual Report on Form 10-K in

19、cludes“forward-looking statements”within the meaning of Section 27A of the Securities Act of 1933,as amended,andSection 21E of the Securities Exchange Act of 1934,as amended.All statements other than statements of historical facts included or incorporated by reference inthis report,including,without

20、 limitation,statements regarding our future financial position,business strategy,budgets,projected revenues,projected costs andplans,and objectives of management for future operations,are forward-looking statements.Such forward-looking statements are based on our examination ofhistorical operating t

21、rends,the information that was used to prepare our estimate of proved reserves as of December 31,2017,and other data in our possession oravailable from third parties.In addition,forward-looking statements generally can be identified by the use of forward-looking terminology such as“may,”“will,”“coul

22、d,”“expect,”“intend,”“project,”“estimate,”“anticipate,”“plan,”“believe,”or“continue”or similar terminology.Although we believe that the expectationsreflected in such forward-looking statements are reasonable,we can give no assurance that such expectations will prove to have been correct.Important fa

23、ctors thatcould cause actual results to differ materially from our expectations include,but are not limited to,our assumptions about:the market prices of oil,natural gas,NGLs,and other products or services;our commodity hedging arrangements;the supply and demand for oil,natural gas,NGLs,and other pr

24、oducts or services;production and reserve levels;drilling risks;economic and competitive conditions;the availability of capital resources;capital expenditure and other contractual obligations;currency exchange rates;weather conditions;inflation rates;the availability of goods and services;legislativ

25、e,regulatory,or policy changes;terrorism or cyber attacks;occurrence of property acquisitions or divestitures;the integration of acquisitions;the securities or capital markets and related risks such as general credit,liquidity,market,and interest-rate risks;andother factors disclosed under Items 1 a

26、nd 2Business and PropertiesEstimated Proved Reserves and Future Net Cash Flows,Item 1ARisk Factors,Item 7Managements Discussion and Analysis of Financial Condition and Results of Operations,Item 7AQuantitative and Qualitative DisclosuresAbout Market Risk and elsewhere in this Form 10-K.All subsequen

27、t written and oral forward-looking statements attributable to the Company,or persons acting on its behalf,are expressly qualified in theirentirety by the cautionary statements.Except as required by law,we assume no duty to update or revise our forward-looking statements based on changes ininternal e

28、stimates or expectations or otherwise.iiDEFINITIONSAll defined terms under Rule 4-10(a)of Regulation S-X shall have their statutorily prescribed meanings when used in this report.As used in this document:“3-D”means three-dimensional.“4-D”means four-dimensional.“b/d”means barrels of oil or natural ga

29、s liquids per day.“bbl”or“bbls”means barrel or barrels of oil or natural gas liquids.“bcf”means billion cubic feet of natural gas.“boe”means barrel of oil equivalent,determined by using the ratio of one barrel of oil or NGLs to six Mcf of gas.“boe/d”means boe per day.“Btu”means a British thermal uni

30、t,a measure of heating value.“Liquids”means oil and natural gas liquids.“LNG”means liquefied natural gas.“Mb/d”means Mbbls per day.“Mbbls”means thousand barrels of oil or natural gas liquids.“Mboe”means thousand boe.“Mboe/d”means Mboe per day.“Mcf”means thousand cubic feet of natural gas.“Mcf/d”mean

31、s Mcf per day.“MMbbls”means million barrels of oil or natural gas liquids.“MMboe”means million boe.“MMBtu”means million Btu.“MMBtu/d”means MMBtu per day.“MMcf”means million cubic feet of natural gas.“MMcf/d”means MMcf per day.“NGL”or“NGLs”means natural gas liquids,which are expressed in barrels.“NYM

32、EX”means New York Mercantile Exchange.“oil”includes crude oil and condensate.“PUD”means proved undeveloped.“SEC”means United States Securities and Exchange Commission.“Tcf”means trillion cubic feet of natural gas.“U.K.”means United Kingdom.“U.S.”means United States.References to“Apache,”the“Company,

33、”“we,”“us,”and“our”include Apache Corporation and its consolidated subsidiaries unless otherwise specificallystated.With respect to information relating to our working interest in wells or acreage,“net”oil and gas wells or acreage is determined by multiplying gross wells oracreage by our working int

34、erest therein.Unless otherwise specified,all references to wells and acres are gross.iiiPART IITEMS 1 and 2.BUSINESS AND PROPERTIESGeneralApache Corporation,a Delaware corporation formed in 1954,is an independent energy company that explores for,develops,and produces natural gas,crudeoil,and natural

35、 gas liquids.Apache currently has exploration and production operations in three geographic areas:the U.S.,Egypt,and offshore the U.K.in theNorth Sea(North Sea).Apache also has exploration interests in Suriname that may,over time,result in a reportable discovery and development opportunity.Our commo

36、n stock,par value$0.625 per share,has been listed on the New York Stock Exchange(NYSE)since 1969,on the Chicago Stock Exchange(CHX)since 1960,and on the NASDAQ Global Select Market(NASDAQ)since 2004.On May 18,2017,we filed certifications of our compliance with the listingstandards of the NYSE and th

37、e NASDAQ,including our principal executive officers certification of compliance with the NYSE standards.Through our website,you can access,free of charge,electronic copies of the charters of the committees of our Board of Directors,other documents related to ourcorporate governance(including our Cod

38、e of Business Conduct and Ethics and Apaches Corporate Governance Principles),and documents we file with the SEC,including our annual reports on Form 10-K,quarterly reports on Form 10-Q,and current reports on Form 8-K,as well as any amendments to these reports filed orfurnished pursuant to Section 1

39、3(a)or 15(d)of the Securities Exchange Act of 1934.Included in our annual and quarterly reports are the certifications of ourprincipal executive officer and our principal financial officer that are required by applicable laws and regulations.Access to these electronic filings is available assoon as

40、reasonably practicable after we file such material with,or furnish it to,the SEC.You may also request printed copies of our corporate charter,bylaws,committee charters,or other governance documents free of charge by writing to our corporate secretary at the address on the cover of this report.Our re

41、ports filedwith the SEC are made available to read and copy at the SECs Public Reference Room at 100 F Street,N.E.,Washington,D.C.,20549.You may obtaininformation about the Public Reference Room by contacting the SEC at 1-800-SEC-0330.Reports filed with the SEC are also made available on its website

42、 atwww.sec.gov.From time to time,we also post announcements,updates,and investor information on our website in addition to copies of all recent press releases.Information on our website or any other website is not incorporated by reference into,and does not constitute a part of,this Annual Report on

43、 Form 10-K.Properties to which we refer in this document may be held by subsidiaries of Apache Corporation.Business StrategyOur VISION is to be a premier exploration and production company.Our MISSION is to grow in an innovative,safe,environmentally responsible,and profitable manner for the long-ter

44、m benefit of our shareholders.Our STRATEGY is to deliver top-tier returns by maximizing recovery and minimizing costs through continuous improvement.Apaches long-termperspective is centered on the following core strategic components:optimization of returnsdisciplined financial structurerigorous port

45、folio managementOver the past several years,Apache entered into a series of transactions that upgraded its portfolio of assets,enhanced its capital allocation process to furtheroptimize returns and long-term shareholder value,and successfully completed a strategic shift from its historical acquisiti

46、on and exploitation focus to one ofinternally generated exploration with full-cycle,returns-focused growth.Rigorous management of the Companys asset portfolio plays a key role in optimizing shareholder value over the long term.Specifically,we reduced capitalinvestment in 2015 and 2016 to align with

47、cash flow in a lower commodity price environment and allowed production to decline rather than pursue growth in anunfavorable service cost environment.Additionally,the Company monetized certain capital-intensive investments that were not accretive to earnings in the nearterm and other non-strategic

48、assets.These divestitures included all of Apaches operations in Australia and Canada,including LNG facility investments,its interestin the Scottish Area Gas Evacuation system(SAGE)and pipeline in the North Sea,and various non-core leasehold positions in North America.The Companymade strategic decisi

49、ons to allocate the proceeds of these asset divestitures to more impactful development opportunities,including development of our AlpineHigh discovery in the Delaware Basin.These actions have enabled us to focus1our investments on improving long-term returns,maintain our dividend,and reduce debt wit

50、hout diluting shareholders through issuing equity.We now have a diversified portfolio that features strong free cash flow generating assets in Egypt and the North Sea,which benefit from premium Brentcrude oil pricing,and top-tier assets in the Permian Basin,the combination of which are the Companys

51、foundation for returns-focused growth.For a more in-depth discussion of the Companys 2017 results,divestitures,strategy,and its capital resources and liquidity,please see Part II,Item 7Managements Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-K.Geographic A

52、rea OverviewsApache has exploration and production operations in three geographic areas:the U.S.,Egypt,and the North Sea.Apache also has exploration interests inSuriname that may,over time,result in a reportable discovery and development opportunity.The following table sets out a brief comparative s

53、ummary of certain key 2017 data for each of Apaches operating areas.Additional data and discussion isprovided in Part II,Item 7Managements Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-K.Production Percentageof TotalProduction ProductionRevenue Year-EndEsti

54、matedProvedReserves Percentageof TotalEstimatedProvedReserves GrossWellsDrilled GrossProductiveWellsDrilled (In MMboe)(In millions)(In MMboe)United States 75.2 45%$2,271 811 69%242 234Canada(1)11.4 7 231 2 1Total North America 86.6 52 2,502 811 69 244 235Egypt(2)59.3 35 2,307 239 20 94 78North Sea(3

55、)21.0 13 1,078 125 11 14 10Other International 1 Total International 80.3 48 3,385 364 31 109 88Total 166.9 100%$5,887 1,175 100%353 323(1)During the third quarter of 2017,Apache completed the sale of its Canadian operations.(2)Apaches operations in Egypt,excluding a one-third noncontrolling interes

56、t,contributed 27 percent of 2017 production and accounted for 15 percent of year-end estimated proved reserves.(3)Sales volumes from the North Sea for 2017 were 21.2 MMboe.Sales volumes may vary from production volumes as a result of the timing of liftings in the Beryl field.North AmericaIn 2017,Apa

57、ches North American operations contributed approximately 52 percent of production and 69 percent of estimated year-end proved reserves.Apache has access to significant liquid hydrocarbons across its 6.7 million gross acres in North America,71 percent of which are undeveloped.In North America,Apache

58、has two onshore regions:The Permian region located in west Texas and New Mexico includes the Permian sub-basins,the Midland Basin,Central Basin Platform/NorthwestShelf,and Delaware Basin.Examples of shale plays within this region include the Woodford,Barnett,Pennsylvanian,Cline,Wolfcamp,Bone Spring,

59、and Spraberry.The Midcontinent/Gulf Coast region includes the Granite Wash,Tonkawa,Marmaton,Cleveland,and other formations of the West Anadarko Basin,theCanyon Lime formation in the Texas panhandle,the Woodford-SCOOP and Stack plays located in central Oklahoma,and the Eagle Ford shale in eastTexas.A

60、pache also has one offshore region in North America,the Gulf of Mexico region,which consists of both shallow and deep water exploration and productionactivities.Apache exited its Canadian operations in August 2017.2PermianRegionThe Permian region is one of Apaches core growth areas.Highlights of the

61、 Companys operations in the region include:Over 2.8 million gross acres with exposure to numerous plays focused primarily in the Midland Basin,the Central Basin Platform/Northwest Shelf,andthe Delaware Basin.Estimated proved reserves of 681 MMboe at year-end 2017,representing 58 percent of the Compa

62、nys worldwide proved reserves.Annual production of 157.8 Mboe/d declined only 2 percent from 2016.Fourth-quarter 2017 production increased 10 percent from the prior sequentialquarter,a reflection of the success of the Midland Basin drilling program and the continued production ramp up at Alpine High

63、,which first came onlinein May 2017.In 2017,the Permian region averaged 16 rigs and drilled or participated in 215 wells,158 of which were horizontal,with a 97 percent success rate.In September 2016,Apache announced the discovery of a significant new resource play,“Alpine High.”Apaches Alpine High a

64、creage lies in the southernportion of the Delaware Basin,primarily in Reeves County,Texas.The Company has an acreage position in the play of approximately 340,000 net acres.AlpineHigh contains a vertical column up to 6,000 feet encompassing five geologic formations,with multiple target zones spannin

65、g the hydrocarbon phase window fromdry gas to wet gas to oil.Apache has identified over 3,500 economic drilling locations in a wet gas play and over 1,000 locations in a dry gas play at Alpine High.The Company is also working to delineate an emerging oil play at Alpine High,with at least 500 locatio

66、ns already identified.During 2017,Apache drilled 45 wellsat Alpine High with a 91 percent success rate,including many concept test wells drilled to verify our understanding of the play.Using data collected from strategictesting and delineation drilling,the Company is now optimizing wells drilled in

67、Alpine High using customized targeting,larger fracs,and longer laterals.Combined with multi-well pad drilling and revenue uplift expected from oil and NGLs present in the wet gas play,Alpine High is anticipated to generate strongcash margins and a competitive recycle ratio when compared to other Per

68、mian operations.Apache began construction of infrastructure for Alpine High inNovember 2016 and delivered first gas sales from the field in May 2017.Through year-end 2017,the Company had invested$706 million on construction of thesemidstream assets.The Company will continue to expand gas processing

69、capacity with new installations,including cryogenic processing units,and expansions atexisting installations throughout 2018 and 2019.Apache continues to evaluate midstream monetization strategically,and multiple options are being considered.In addition to activity in Alpine High,the Permian region

70、drilled or participated in 170 wells in 2017,with a 99 percent success rate.Apache plans to continue this elevated level of activity in the Permian region during 2018,while continuing to balance capital investments between its largerdevelopment project at Alpine High and focused exploration and deve

71、lopment programs on other core assets in its Permian region.During 2018,the Companyexpects to average approximately 14 drilling rigs,which includes six to seven rigs at Alpine High focused on a combination of retention,development,anddelineation drilling.Approximately$1.6 billion,or roughly two-thir

72、ds,of the Companys 2018 capital upstream budget will be allocated to the Permian region.TheCompany anticipates investment of$500 million in the midstream development of Alpine High in 2018.Midcontinent/GulfCoastRegionApaches Midcontinent/Gulf Coast region includes 1.8 million gross acres and over 3,

73、100 producing wells primarily inwestern Oklahoma,the Texas Panhandle and the Eagle Ford shale in east Texas.In 2017,the region accounted for 9 percent of the Companys production andapproximately 10 percent of the Companys year-end estimated proved reserves.In 2017,Apache reduced capital activity in

74、the region and drilled only three operated wells during the year,which were all productive.The Company beganallocating additional capital to the region in the fourth quarter,focusing on retaining acreage.In 2018,Apache plans to run a targeted program,drilling additionalwells in the Woodford-SCOOP pl

75、ay.In addition,the region will continue its focus on high grading acreage and building its inventory of future drilling locations.GulfofMexicoRegionThe Gulf of Mexico region comprises assets in the offshore waters of the Gulf of Mexico and onshore Louisiana.In addition to itsinterest in several deep

76、water exploration and development offshore leases,when the Company sold in 2013 substantially all of its offshore assets in water depthsless than 1,000 feet,it retained a 50 percent ownership interest in all exploration blocks and in horizons below production in development blocks,and access toexist

77、ing infrastructure.Apaches offshore technical teams continue to focus on evaluating subsalt and other deeper exploration opportunities in water depths lessthan 1,000 feet,which have been relatively untested by the industry,where high-potential deep hydrocarbon plays may exist.During 2017,Apaches Gul

78、f ofMexico region contributed 6.1 Mboe/d to the Companys total production.3CanadaRegionOn June 30,2017,Apache completed the sale of its Canadian assets at Midale and House Mountain for cash proceeds of approximately$228million.In August 2017,Apache completed the sale of its remaining Canadian operat

79、ions for cash proceeds of approximately$478 million.The sale of ApachesCanadian operations further streamlines its portfolio,enabling the Company to allocate a higher percentage of capital to the Permian Basin.In 2017,the regionaccounted for 7 percent of the Companys production.NorthAmericaMarketing

80、In general,most of the Companys North American gas is sold at either monthly or daily index based prices.The tenor of theCompanys sales contracts span from daily to multi-year transactions.Natural gas is sold to a variety of customers that include local distribution,utility,andmidstream companies as

81、 well as end-users,marketers,and integrated major oil companies.Apache strives to maintain a diverse client portfolio,which is intendedto reduce the concentration of credit risk.In 2017,Apache began selling gas that was consumed in Mexico and to the only operational LNG export facility in theUS.In D

82、ecember 2017,Apache announced it had secured 500 MMcf/d of natural gas transport capacity via the Gulf Coast Express Pipeline Project(GCXProject).The GCX Project will connect the Waha Hub near Coyanosa,Texas in the Permian Basin to Agua Dulce,Texas near the Texas Gulf Coast and willprovide Apache ac

83、cess to domestic industrial and utility users as well as incremental demand for LNG exports and Mexico markets.As a significant shipper on theGCX line,Apache has also secured an option for up to a 15 percent equity stake in the pipeline.This takeaway capacity will allow greater flexibility and marke

84、toptionality for Apaches Permian production,including increasing volumes from Alpine High.The GCX pipeline is a joint project of Kinder Morgan TexasPipeline LLC,a subsidiary of Kinder Morgan,Inc.,DCP Midstream,LP,and an affiliate of Targa Resources Corp.The project is expected to be in service inOct

85、ober 2019,pending the receipt of necessary regulatory approvals.Apache primarily markets its North American crude oil to integrated major oil companies,marketing and transportation companies,and refiners based on aWest Texas Intermediate(WTI)price,adjusted for quality,transportation,and a market-ref

86、lective differential.In the U.S.,Apaches objective is to maximize the value of crude oil sold by identifying the best markets and most economical transportation routes availableto move the product.Sales contracts are generally 30-day evergreen contracts that renew automatically until canceled by eit

87、her party.These contracts provide forsales that are priced daily at prevailing market prices.Also,from time to time,the Company will enter into physical term sales contracts for durations up to fiveyears.These term contracts typically have a firm transportation commitment and often provide for the h

88、igher of prevailing market prices from multiple markethubs.Apaches NGL production is sold under contracts with prices based on local supply and demand conditions,less the costs for transportation andfractionation,or on a weighted-average sales price received by the purchaser.InternationalIn 2017,int

89、ernational assets contributed 48 percent of Apaches production and 57 percent of oil and gas revenues.Approximately 31 percent of estimatedproved reserves at year-end were located outside North America.Apache has two international regions:The Egypt region includes onshore conventional assets in Egyp

90、ts Western Desert.The North Sea region includes offshore assets based in the United Kingdom.The Company also has an offshore exploration program in Suriname.EgyptApaches Egypt operations are conducted pursuant to production sharing contracts(PSCs).Under the terms of the Companys PSCs,the contractorp

91、artner(Contractor)bears the risk and cost of exploration,development,and production activities.In return,if exploration is successful,the Contractor receivesentitlement to variable physical volumes of hydrocarbons,representing recovery of the costs incurred and a stipulated share of production after

92、 cost recovery.Additionally,the Contractors income taxes,which remain the liability of the Contractor under domestic law,are paid by Egyptian General Petroleum Corporation(EGPC)on behalf of the Contractor out of EGPCs production entitlement.Income taxes paid to the Arab Republic of Egypt on behalf o

93、f the Contractor arerecognized as oil and gas sales revenue and income tax expense and reflected as production and estimated reserves.Because Contractor cost recovery entitlementand income taxes paid on its behalf are determined as a monetary amount,the quantities of production entitlement and estim

94、ated reserves attributable to thesemonetary amounts will fluctuate with commodity prices.In addition,because the Contractor income taxes are paid by EGPC,the amount of the income tax has noeconomic impact on Apaches Egypt operations despite impacting Apaches production and reserves.4Apache has 22 ye

95、ars of exploration,development and operations experience in Egypt and is one of the largest acreage holders in Egypts Western Desert.Atyear-end 2017,the Company held 5.6 million gross acres in 25 separate concessions.Development leases within concessions currently have expiration datesranging from 4

96、 to 20 years,with extensions possible for additional commercial discoveries or on a negotiated basis.Approximately 69 percent of the Companysgross acreage in Egypt is undeveloped,providing us with considerable exploration and development opportunities for the future.During 2017,Apache receivedfinal

97、approval of the NW Razzak and South Alam El Shawish concession blocks.Combined,the two concessions added approximately 1.6 million net undevelopedacres in Egypt.The Companys estimated proved reserves in Egypt are reported under the economic interest method and exclude the host countrys share of rese

98、rves.Inaddition,Sinopec International Petroleum Exploration and Production Corporation(Sinopec)holds a one-third minority participation interest in Apaches oil andgas operations in Egypt.The Egypt region,including the one-third noncontrolling interest,contributed 35 percent of 2017 production,20 per

99、cent of year-endestimated proved reserves,and 33 percent of estimated discounted future net cash flows.Excluding the noncontrolling interest,Egypt contributed 27 percent of2017 production,15 percent of year-end estimated proved reserves,and 25 percent of estimated discounted future net cash flows.In

100、 2017,the region drilled 67 development and 27 exploration wells.Approximately 52 percent of the exploration wells were successful,further expandingApaches presence in the westernmost concessions and unlocking additional opportunities in existing plays.A key component of the regions success has been

101、 theability to acquire and evaluate 3-D seismic surveys that enable Apaches technical teams to consistently high-grade existing prospects and identify new targetsacross multiple pay horizons in the Cretaceous,Jurassic,and deeper Paleozoic formations.In September 2017,Apache began shooting high-resol

102、ution 3-D seismicsurveys in the West Kalabsha concession,the first of its kind in the Western Desert.The Company will ultimately expand the shoot to cover the majority of itsacreage in Egypt.The program will provide newer vintage,higher resolution imaging of the substrata across Apaches Western Dese

103、rt position,allowing theCompany to build and high-grade its drilling inventory.EgyptMarketing Apaches gas production in Egypt is sold to EGPC primarily under an industry-pricing formula,a sliding scale based on Dated Brent crudeoil with a minimum of$1.50 per MMBtu and a maximum of$2.65 per MMBtu,plu

104、s an upward adjustment for liquids content.The region averaged$2.80 per Mcfin 2017.Oil production is sold to third parties in the export market or to EGPC when called upon to supply domestic demand.Oil production sold to third parties isexported from or sold at one of two terminals on the northern c

105、oast of Egypt.Oil production sold to EGPC is sold at prices equivalent to the export market.NorthSeaApache has interests in approximately 362,000 gross acres in the U.K.North Sea.The region contributed 13 percent of Apaches 2017 productionand approximately 11 percent of year-end estimated proved res

106、erves.Apache entered the North Sea in 2003 after acquiring an approximate 97 percent working interest in the Forties field(Forties).Since acquiring Forties,Apache has actively invested in the region and has established a large inventory of drilling prospects through successful exploration programs a

107、nd the interpretationof acquired 3-D and 4-D seismic data.Building upon its success in Forties,in 2011 Apache acquired Mobil North Sea Limited,providing the region with additionalexploration and development opportunities across numerous fields,including operated interests in the Beryl,Nevis,Nevis So

108、uth,Skene,and Buckland fields and anon-operated interest in the Maclure field.Apache also has a non-operated interest in the Nelson field.The Beryl field,which is a geologically complex area withmultiple fields and stacked pay potential,provides for significant exploration opportunity.The North Sea

109、region plays a strategic role in Apaches portfolio byproviding competitive investment opportunities and potential reserve upside with high-impact exploration potential.During 2017,the region drilled 10 development wells with a 90 percent success rate:four at Forties,four at Beryl,and two at Callater

110、.In addition,it drilledor participated in four exploration wells with a 25 percent success rate.Exploration success over the past three years has averaged 50 percent.Apache progressed on the 2015 Callater exploration discovery in the Beryl area,with first production commencing in the second half of

111、2017.Apachecurrently has two highly productive wells at Callater,with a current oil cut of approximately 70 percent.Apache holds a 55 percent working interest in Callater andoperates the field.Appraisal and development plans continue to be finalized on the Seagull and Corona discoveries,while the mo

112、re recent Storr discoverycontinues to be evaluated.Apache holds a 35,100,and 55 percent interest in the Seagull,Corona and Storr discoveries,respectively.The Company plans to average three rigs in the North Sea for 2018,with two platform rigs(one at Forties and one at Beryl)and a semi-submersible ri

113、g.5NorthSeaMarketing Apache has traditionally sold its North Sea crude oil under term contracts,with a market-based index price plus a premium,whichreflects the higher market value for term arrangements.Natural gas from the Beryl field is processed through the SAGE gas plant.The gas is sold to a thi

114、rd party at the St.Fergus entry point of the national grid ona National Balancing Point index price basis.The condensate mix from the SAGE plant is processed further downstream.The split streams of propane and butaneare sold on a monthly entitlement basis,and condensate is sold on a spot basis at th

115、e Braefoot Bay terminal using index pricing less transportation.As a result ofthe recent SAGE divestiture,Apache expects to incur additional tariffs in its North Sea region ranging from$7 million to$10 million annually.AustraliaDuring the second quarter of 2015,Apache completed the sale of its Austr

116、alian LNG business and oil and gas assets.Results of operations andconsolidated cash flows for the divested Australia assets are reflected as discontinued operations in the Companys financial statements for all periods presented inthis Annual Report on Form 10-K.Other ExplorationNewVenturesApaches g

117、lobal New Ventures team provides exposure to new growth opportunities by looking outside of the Companys traditional coreareas and targeting higher-risk,higher-reward exploration opportunities located in frontier basins as well as new plays in more mature basins.Apache drilled anexploration well in

118、the first half of 2017 in offshore Suriname,which was unsuccessful.Plans for 2018 include continued analysis and review of the Companysdeepwater prospects offshore Suriname.Delivery CommitmentsApache has certain long-term contracts with fixed minimum sales volume commitments for natural gas in the P

119、ermian Basin.These contracts require Apacheto deliver approximately 144 bcf for the period from 2018 through 2020.We expect to fulfill the majority of these delivery commitments with production from our proved reserves.Any remaining commitments may be fulfilledwith production from continued developm

120、ent and/or spot market purchases as necessary.We have not experienced any significant constraints in satisfying thecommitted quantities required by our sales commitments.Major CustomersFor the years ended 2017,2016,and 2015,the customers,including their subsidiaries,that represented more than 10 per

121、cent of the Companys worldwideoil and gas production revenues were as follows:For the Year Ended December 31,2017 2016 2015BP plc 12%9%8%China Petroleum&Chemical Corporation 16%21%12%Egyptian General Petroleum Corporation 11%12%11%Royal Dutch Shell plc 6%5%11%6Drilling StatisticsWorldwide in 2017,Ap

122、ache participated in drilling 353 gross wells,with 323(92 percent)completed as producers.Historically,Apaches drilling activitiesin the U.S.have generally concentrated on exploitation and extension of existing producing fields rather than exploration.As a general matter,Apaches operationsoutside of

123、North America focus on a mix of exploration and development wells.In addition to Apaches completed wells,at year-end a number of wells had not yetreached completion:126 gross(95.8 net)in the U.S.,18 gross(15.7 net)in Egypt,and 1 gross(0.5 net)in the North Sea.The following table shows the results of

124、 the oil and gas wells drilled and completed for each of the last three fiscal years:Net Exploratory Net Development Total Net Wells Productive Dry Total Productive Dry Total Productive Dry Total2017 United States 42.9 4.3 47.2 101.5 1.0 102.5 144.4 5.3 149.7Canada 1.0 1.0 0.2 0.2 0.2 1.0 1.2Egypt 1

125、3.7 12.0 25.7 59.3 3.0 62.3 73.0 15.0 88.0North Sea 0.6 1.9 2.5 6.4 1.0 7.4 7.0 2.9 9.9Other International 0.5 0.5 0.5 0.5Total 57.2 19.7 76.9 167.4 5.0 172.4 224.6 24.7 249.32016 United States 18.9 5.0 23.9 79.5 1.9 81.4 98.4 6.9 105.3Canada 2.0 2.0 10.2 10.2 10.2 2.0 12.2Egypt 7.3 5.1 12.4 40.5 1.

126、0 41.5 47.8 6.1 53.9North Sea 0.9 0.9 8.2 1.6 9.8 8.2 2.5 10.7Total 26.2 13.0 39.2 138.4 4.5142.9164.6 17.5 182.12015 United States 14.7 8.0 22.7 289.0 5.3 294.3 303.7 13.3 317.0Canada 4.0 4.0 16.7 16.7 20.7 20.7Egypt 13.4 8.6 22.0 82.3 3.0 85.3 95.7 11.6 107.3North Sea 1.6 0.7 2.3 15.9 3.5 19.4 17.

127、5 4.2 21.7Other International 0.5 0.5 0.5 0.5Total 33.7 17.8 51.5 403.9 11.8 415.7 437.6 29.6 467.2Productive Oil and Gas WellsThe number of productive oil and gas wells,operated and non-operated,in which the Company had an interest as of December 31,2017,is set forth below:Oil Gas Total Gross Net G

128、ross Net Gross NetUnited States 13,260 8,600 3,090 1,555 16,350 10,155Egypt 1,145 1,075 130 120 1,275 1,195North Sea 165 123 20 12 185 135Total 14,570 9,798 3,240 1,687 17,810 11,485 Domestic 13,260 8,600 3,090 1,555 16,350 10,155Foreign 1,310 1,198 150 132 1,460 1,330Total 14,570 9,798 3,240 1,687

129、17,810 11,485Gross natural gas and crude oil wells include 570 wells with multiple completions.7Production,Pricing,and Lease Operating Cost DataThe following table describes,for each of the last three fiscal years,oil,NGL,and gas production volumes,average lease operating costs per boe(includingtran

130、sportation costs but excluding severance and other taxes),and average sales prices for each of the countries where the Company has operations:Production Average LeaseOperating Cost per Boe Average Sales Price Oil NGL Gas Oil NGL GasYear Ended December 31,(MMbbls)(MMbbls)(Bcf)(Per bbl)(Per bbl)(Per M

131、cf)2017 United States 33.4 17.8 143.9$8.92$48.40$16.14$2.56Canada(1)2.4 1.0 48.0 12.01 45.25 16.39 2.17Egypt(2)35.5 0.3 141.0 6.85 53.57 36.79 2.80North Sea(3)17.9 0.4 16.6 17.21 53.81 36.22 5.54Total 89.2 19.5 349.5 9.45 51.46 16.90 2.742016 United States 38.0 19.8 145.0$7.72$39.43$9.28$2.17Canada

132、4.8 2.1 88.8 11.52 37.62 8.15 1.64Egypt(2)37.9 0.4 143.4 7.86 43.66 28.68 2.71North Sea(3)20.0 0.6 26.3 13.14 42.93 24.20 4.51Total 100.7 22.9 403.5 8.90 41.63 9.92 2.402015 United States 45.1 19.7 160.6$8.81$45.71$9.72$2.38Canada 5.8 2.2 100.3 13.46 42.33 5.52 2.41Egypt(2)33.1 0.4 134.8 10.11 50.97

133、 30.97 2.91North Sea 21.7 0.4 23.7 13.74 51.26 26.53 6.73Total 105.7 22.7 419.4 10.40 48.31 9.98 2.80(1)During the third quarter of 2017,Apache completed the sale of its Canadian operations.(2)Includes production volumes attributable to a one-third noncontrolling interest in Egypt.(3)Sales volumes f

134、rom the North Sea for 2017 and 2016 were 21.2 MMboe and 24.5 MMboe,respectively.Sales volumes may vary from production volumes as a result of the timing ofliftings in the Beryl field.Gross and Net Undeveloped and Developed AcreageThe following table sets out Apaches gross and net acreage position as

135、 of December 31,2017,in each country where the Company has operations:Undeveloped Acreage Developed Acreage Gross Acres Net Acres Gross Acres Net Acres (in thousands)United States 4,734 2,341 1,935 1,095Egypt 3,842 3,450 1,756 1,655North Sea 209 118 153 117Other International 2,308 1,831 Total 11,09

136、3 7,740 3,844 2,867As of December 31,2017,39 percent of U.S.net undeveloped acreage was held by production.As of December 31,2017,Apache had 608,000 net undeveloped acres scheduled to expire by year-end 2018 if production is not established or Apache takesno other action to extend the terms.Addition

137、ally,Apache has 806,000 and 2.1 million net undeveloped acres set to expire in 2019 and 2020,respectively.TheCompany strives to extend the terms of many of these licenses8and concession areas through operational or administrative actions,but cannot assure that such extensions can be achieved on an e

138、conomic basis or otherwise onterms agreeable to both the Company and third parties,including governments.Exploration concessions in Apaches Egypt region comprise a significant portion of Apaches net undeveloped acreage expiring over the next three years.Apache has 354,000 net undeveloped acres expir

139、ing in Egypt during 2018.Approximately 615,000 and 118,000 net undeveloped acres are set to expire in 2019and 2020,respectively.There were no reserves recorded on this undeveloped acreage.Apache will continue to pursue acreage extensions and access to newconcessions in areas in which it believes exp

140、loration opportunities exist.During 2017,Apache received final approval of the NW Razzak and South Alam ElShawish concession blocks.Combined,the two concessions added approximately 1.6 million net undeveloped acres in Egypt.Additionally,Apache has exploration interests in Suriname consisting of 1.8

141、million net undeveloped acres in two offshore blocks.Apache has acquired 3-Dseismic surveys over all the acreage.No reserves have been booked on this undeveloped acreage.Estimated Proved Reserves and Future Net Cash FlowsProved oil and gas reserves are those quantities of natural gas,crude oil,conde

142、nsate,and NGLs,which by analysis of geoscience and engineering data,canbe estimated with reasonable certainty to be economically producible from a given date forward,from known reservoirs,and under existing economic conditions,operating methods,and government regulations.Estimated proved developed o

143、il and gas reserves can be expected to be recovered through existing wells withexisting equipment and operating methods.The Company reports all estimated proved reserves held under production-sharing arrangements utilizing the“economic interest”method,which excludes the host countrys share of reserv

144、es.Estimated reserves that can be produced economically through application of improved recovery techniques are included in the“proved”classification whensuccessful testing by a pilot project or the operation of an active,improved recovery program using reliable technology establishes the reasonable

145、 certainty for theengineering analysis on which the project or program is based.Economically producible means a resource that generates revenue that exceeds,or is reasonablyexpected to exceed,the costs of the operation.Reasonable certainty means a high degree of confidence that the quantities will b

146、e recovered.Reliable technology isa grouping of one or more technologies(including computational methods)that has been field-tested and has been demonstrated to provide reasonably certainresults with consistency and repeatability in the formation being evaluated or in an analogous formation.In estim

147、ating its proved reserves,Apache uses severaldifferent traditional methods that can be classified in three general categories:(1)performance-based methods;(2)volumetric-based methods;and(3)analogy withsimilar properties.Apache will,at times,utilize additional technical analysis,such as computer rese

148、rvoir models,petrophysical techniques,and proprietary 3-Dseismic interpretation methods,to provide additional support for more complex reservoirs.Information from this additional analysis is combined with traditionalmethods outlined above to enhance the certainty of the Companys reserve estimates.Pr

149、oved undeveloped reserves include those reserves that are expected to be recovered from new wells on undrilled acreage,or from existing wells where arelatively major expenditure is required for recompletion.Undeveloped reserves may be classified as proved reserves on undrilled acreage directly offse

150、ttingdevelopment areas that are reasonably certain of production when drilled,or where reliable technology provides reasonable certainty of economic producibility.Undrilled locations may be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are

151、 scheduled to be drilledwithin five years,unless specific circumstances justify a longer time period.9The following table shows proved oil,NGL,and gas reserves as of December 31,2017,based on average commodity prices in effect on the first day of eachmonth in 2017,held flat for the life of the produ

152、ction,except where future oil and gas sales are covered by physical contract terms.This table shows reserves on aboe basis in which natural gas is converted to an equivalent barrel of oil based on a ratio of 6 Mcf to 1 bbl.This ratio is not reflective of the current price ratiobetween the two produc

153、ts.Oil NGL Gas Total (MMbbls)(MMbbls)(Bcf)(MMboe)Proved Developed:United States 304 171 1,347 700Egypt(1)124 1 541 215North Sea 93 2 83 109Total Proved Developed 521 174 1,971 1,024Proved Undeveloped:United States 32 30 297 111Egypt(1)16 47 24North Sea 14 11 16Total Proved Undeveloped 62 30 355 151T

154、OTAL PROVED 583 204 2,326 1,175(1)Includes total proved developed and total proved undeveloped reserves of 72 MMboe and 8 MMboe,respectively,attributable to a one-third noncontrolling interest in Egypt.As of December 31,2017,Apache had total estimated proved reserves of 583 MMbbls of crude oil,204 M

155、Mbbls of NGLs,and 2.3 Tcf of natural gas.Combined,these total estimated proved reserves are the volume equivalent of 1.2 billion barrels of oil or 7.0 Tcf of natural gas,of which oil represents 50 percent.As of December 31,2017,the Companys proved developed reserves totaled 1,024 MMboe and estimated

156、 PUD reserves totaled 151 MMboe,or approximately 13percent of worldwide total proved reserves.Apache has elected not to disclose probable or possible reserves in this filing.During 2017,Apache added 230 MMboe of proved reserves through exploration and development activity and 2 MMboe through purchas

157、es of minerals in-place.Apache sold a combined 212 MMboe primarily through divestitures transactions in Canada.During 2017,Apache also had combined upward revisions ofpreviously estimated reserves of 10 MMboe.Changes in product prices accounted for 32 MMboe,offset by engineering and performance down

158、ward revisionstotaling 22 MMboe.The Companys estimates of proved reserves,proved developed reserves,and PUD reserves as of December 31,2017,2016,and 2015,changes inestimated proved reserves during the last three years,and estimates of future net cash flows from proved reserves are contained in Note

159、15Supplemental Oil andGas Disclosures in the Notes to Consolidated Financial Statements set forth in Part IV,Item 15 of this Form 10-K.Estimated future net cash flows were calculatedusing a discount rate of 10 percent per annum,end of period costs,and an unweighted arithmetic average of commodity pr

160、ices in effect on the first day of each ofthe previous 12 months,held flat for the life of the production,except where prices are defined by contractual arrangements.Proved Undeveloped ReservesThe Companys total estimated PUD reserves of 151 MMboe as of December 31,2017,increased by 14 MMboe from 13

161、7 MMboe of PUD reservesreported at the end of 2016.During the year,Apache converted 60 MMboe of PUD reserves to proved developed reserves through development drilling activity.In North America,Apache converted 39 MMboe,with the remaining 21 MMboe in Apaches international areas.Apache sold 42 MMboe a

162、nd acquired 1 MMboeof PUD reserves during the year.Apache added 126 MMboe of new PUD reserves through extensions and discoveries.Apache recognized a 17 MMboe downwardengineering revision in proved undeveloped reserves during the year,a 3 MMboe upward revision associated with product prices,and a 3 M

163、Mboe upward revisionassociated with interest revisions.During the year,a total of approximately$369 million was spent on projects associated with reserves that were carried as PUD reserves at the end of 2016.A portion of Apaches costs incurred each year relate to development projects that will be co

164、nverted to proved developed reserves in future years.Apache spentapproximately$201 million on PUD reserve development activity in North America and$168 million in the international areas.As of December 31,2017,Apachehad no material amounts of proved undeveloped reserves scheduled to be developed bey

165、ond five years from initial disclosure.10Preparation of Oil and Gas Reserve InformationApaches reported reserves are reasonably certain estimates which,by their very nature,are subject to revision.These estimates are reviewed throughout theyear and revised either upward or downward,as warranted.Apac

166、hes proved reserves are estimated at the property level and compiled for reporting purposes by a centralized group of experienced reservoir engineersthat is independent of the operating groups.These engineers interact with engineering and geoscience personnel in each of Apaches operating areas and w

167、ithaccounting and marketing employees to obtain the necessary data for projecting future production,costs,net revenues,and ultimate recoverable reserves.Allrelevant data is compiled in a computer database application,to which only authorized personnel are given security access rights consistent with

168、 their assigned jobfunction.Reserves are reviewed internally with senior management and presented to Apaches Board of Directors in summary form on a quarterly basis.Annually,each property is reviewed in detail by our corporate and operating region engineers to ensure forecasts of operating expenses,

169、netback prices,production trends,and development timing are reasonable.Apaches Executive Vice President of Corporate Reservoir Engineering is the person primarily responsible for overseeing the preparation of our internalreserve estimates and for coordinating any reserves audits conducted by a third

170、-party engineering firm.He has a Bachelor of Science degree in PetroleumEngineering and over 37 years of industry experience with positions of increasing responsibility within Apaches corporate reservoir engineering department.TheExecutive Vice President of Corporate Reservoir Engineering reports di

171、rectly to our Chief Executive Officer.The estimate of reserves disclosed in this Annual Report on Form 10-K is prepared by the Companys internal staff,and the Company is responsible for theadequacy and accuracy of those estimates.However,the Company engages Ryder Scott Company,L.P.Petroleum Consulta

172、nts(Ryder Scott)to review ourprocesses and the reasonableness of our estimates of proved hydrocarbon liquid and gas reserves.The Company selects the properties for review by Ryder Scottbased primarily on relative reserve value.The Company also considers other factors such as geographic location,new

173、wells drilled during the year and reservesvolume.During 2017,the properties selected for each country ranged from 87 to 100 percent of the total future net cash flows discounted at 10 percent.Theseproperties also accounted for over 98 percent of the reserves value of our international proved reserve

174、s and 88 percent of the new wells drilled in each country.Inaddition,all fields containing five percent or more of the Companys total proved reserves volume were included in Ryder Scotts review.The review covered 84percent of total proved reserves by volume.During 2017,2016,and 2015,Ryder Scotts rev

175、iew covered 92,92,and 90 percent,respectively,of the Companys worldwide estimated proved reservesvalue and 84,83,and 83 percent,respectively,of the Companys total proved reserves volume.Ryder Scotts review of 2017 covered 84 percent of U.S.,85percent of Egypt,and 81 percent of the U.K.s total proved

176、 reserves.Ryder Scotts review of 2016 covered 81 percent of U.S.,81 percent of Canada,85 percent of Egypt,and 92 percent of the U.K.s total proved reserves.Ryder Scotts review of 2015 covered 81 percent of U.S.,81 percent of Canada,86 percent of Egypt,and 88 percent of the U.K.s total proved reserve

177、s.The Company has filed Ryder Scotts independent report as an exhibit to this Form 10-K.According to Ryder Scotts opinion,based on their review,including the data,technical processes,and interpretations presented by Apache,the overallprocedures and methodologies utilized by Apache in determining the

178、 proved reserves comply with the current SEC regulations,and the overall proved reserves forthe reviewed properties as estimated by Apache are,in aggregate,reasonable within the established audit tolerance guidelines as set forth in the Society ofPetroleum Engineers auditing standards.EmployeesOn De

179、cember 31,2017,the Company had 3,356 employees.11OfficesOur principal executive offices are located at One Post Oak Central,2000 Post Oak Boulevard,Suite 100,Houston,Texas 77056-4400.At year-end 2017,the Company maintained regional exploration and/or production offices in Midland,Texas;San Antonio,T

180、exas;Houston,Texas;Cairo,Egypt;and Aberdeen,Scotland.Apache leases all of its primary office space.The current lease on our principal executive offices runs through December 31,2024.The Company has anoption to extend the lease through 2029.For information regarding the Companys obligations under its

181、 office leases,please see Part II,Item 7ManagementsDiscussion and Analysis of Financial Condition and Results of OperationsCapital Resources and LiquidityContractual Obligations and Note 9Commitmentsand Contingencies in the Notes to Consolidated Financial Statements set forth in Part IV,Item 15 of t

182、his Form 10-K.Title to InterestsAs is customary in our industry,a preliminary review of title records,which may include opinions or reports of appropriate professionals or counsel,is madeat the time we acquire properties.We believe that our title to all of the various interests set forth above is sa

183、tisfactory and consistent with the standards generallyaccepted in the oil and gas industry,subject only to immaterial exceptions that do not detract substantially from the value of the interests or materially interferewith their use in our operations.The interests owned by us may be subject to one o

184、r more royalty,overriding royalty,or other outstanding interests(includingdisputes related to such interests)customary in the industry.The interests may additionally be subject to obligations or duties under applicable laws,ordinances,rules,regulations,and orders of arbitral or governmental authorit

185、ies.In addition,the interests may be subject to burdens such as production payments,net profitsinterests,liens incident to operating agreements and current taxes,development obligations under oil and gas leases,and other encumbrances,easements,andrestrictions,none of which detract substantially from

186、 the value of the interests or materially interfere with their use in our operations.Additional Information about ApacheResponse Plans and Available ResourcesApache and its wholly owned subsidiary,Apache Deepwater LLC(ADW),developed Oil Spill Response Plans(the Plans)for their respective Gulf ofMexi

187、co operations and offshore operations in the North Sea and Suriname.These plans ensure rapid and effective responses to spill events that may occur on suchentities operated properties.Annually,drills are conducted to measure and maintain the effectiveness of the Plans.Apache is a member of Oil Spill

188、 Response Limited(OSRL),a large international oil spill response cooperative,which entitles any Apache entity worldwideto access OSRLs services.Apache also has a contract for global response resources and services with National Response Corporation(NRC).NRC is the worldslargest commercial Oil Spill

189、Response Organization and is the global leader in providing end-to-end environmental,industrial,and emergency response solutionswith operating bases in 13 countries.In the event of a spill in the Gulf of Mexico,Clean Gulf Associates(CGA)is the primary oil spill response association available to Apac

190、he and ADW.BothApache and ADW are members of CGA,a not-for-profit association of producing and pipeline companies operating in the Gulf of Mexico.CGA was created toprovide a means of effectively staging response equipment and providing immediate spill response for its member companies operations in

191、the Gulf of Mexico.Inthe event of a spill,CGAs equipment,which is positioned at various staging points around the Gulf,is ready to be mobilized.In addition,ADW is a member ofMarine Spill Response Corporation(MSRC),and their equipment and resources are also available to ADW for its deepwater Gulf of

192、Mexico and new ventureoperations.An Apache subsidiary is also a member of the Marine Well Containment Company (MWCC)to help the Company fulfill the governments permitrequirements for containment and oil spill response plans in deepwater Gulf of Mexico operations.MWCC is a not-for-profit,stand-alone

193、organization whose goalis to improve capabilities for containing an underwater well control incident in the U.S.Gulf of Mexico.Members and their affiliates have access to MWCCsextensive containment network and systems.As of December 31,2017,Apaches investment in MWCC totaled$150 million and is refle

194、cted in“Deferred chargesand other”in the Companys consolidated balance sheet.12Competitive ConditionsThe oil and gas business is highly competitive in the exploration for and acquisitions of reserves,the acquisition of oil and gas leases,equipment andpersonnel required to find and produce reserves,a

195、nd the gathering and marketing of oil,gas,and natural gas liquids.Our competitors include national oilcompanies,major integrated oil and gas companies,other independent oil and gas companies,and participants in other industries supplying energy and fuel toindustrial,commercial,and individual consume

196、rs.Certain of our competitors may possess financial or other resources substantially larger than we possess or have established strategic long-term positions andmaintain strong governmental relationships in countries in which we may seek new entry.As a consequence,we may be at a competitive disadvan

197、tage in biddingfor leases or drilling rights.However,we believe our diversified portfolio of core assets,which comprises large acreage positions and well-established production bases across threegeographic areas,our balanced production mix between oil and gas,our management and incentive systems,and

198、 our experienced personnel give us a strongcompetitive position relative to many of our competitors who do not possess similar geographic and production diversity.Our global position provides a largeinventory of geologic and geographic opportunities in the geographic areas in which we have producing

199、 operations to which we can reallocate capital investmentsin response to changes in commodity prices,local business environments,and markets.It also reduces the risk that we will be materially impacted by an event in aspecific area or country.Environmental ComplianceAs an owner or lessee and operato

200、r of oil and gas properties and facilities,we are subject to numerous federal,provincial,state,local,and foreign countrylaws and regulations relating to discharge of materials into,and protection of,the environment.These laws and regulations may,among other things,imposeliability on the lessee under

201、 an oil and gas lease for the cost of pollution clean-up resulting from operations,subject the lessee to liability for pollution damages andrequire suspension or cessation of operations in affected areas.Although environmental requirements have a substantial impact upon the energy industry as awhole

202、,we do not believe that these requirements affect us differently,to any material degree,than other companies in our industry.We have made and will continue to make expenditures in our efforts to comply with these requirements,which we believe are necessary business costs in theoil and gas industry.W

203、e have established policies for continuing compliance with environmental laws and regulations,including regulations applicable to ouroperations in all countries in which we do business.We have established operating procedures and training programs designed to limit the environmental impact ofour fie

204、ld facilities and identify and comply with changes in existing laws and regulations.The costs incurred under these policies and procedures are inextricablyconnected to normal operating expenses such that we are unable to separate expenses related to environmental matters;however,we do not believe ex

205、pensesrelated to training and compliance with regulations and laws that have been adopted or enacted to regulate the discharge of materials into the environment will havea material impact on our capital expenditures,earnings,or competitive position.13ITEM 1A.RISK FACTORS Our business activities and

206、the value of our securities are subject to significant hazards and risks,including those described below.If any of such eventsshould occur,our business,financial condition,liquidity,and/or results of operations could be materially harmed,and holders and purchasers of our securitiescould lose part or

207、 all of their investments.Additional risks relating to our securities may be included in the prospectuses for securities we issue in the future.Crude oil,natural gas,and NGL price volatility could adversely affect our operating results and the price of our common stock.Our revenues,operating results

208、,and future rate of growth depend highly upon the prices we receive for our crude oil,natural gas,and NGL production.Historically,the markets for these commodities have been volatile and are likely to continue to be volatile in the future.For example,the NYMEX daily settlementprice for the prompt mo

209、nth oil contract in 2017 ranged from a high of$60.42 per barrel to a low of$42.53 per barrel.The NYMEX daily settlement price for theprompt month natural gas contract in 2017 ranged from a high of$3.50 per MMBtu to a low of$2.56 per MMBtu.The market prices for crude oil,natural gas,andNGLs depend on

210、 factors beyond our control.These factors include demand,which fluctuates with changes in market and economic conditions,and other factors,including:worldwide and domestic supplies of crude oil,natural gas,and NGLs;actions taken by foreign oil and gas producing nations,including the Organization of

211、the Petroleum Exporting Countries(OPEC);political conditions and events(including instability,changes in governments,or armed conflict)in oil and gas producing regions;the level of global crude oil and natural gas inventories;the price and level of imported foreign crude oil,natural gas,and NGLs;the

212、 price and availability of alternative fuels,including coal and biofuels;the availability of pipeline capacity and infrastructure;the availability of crude oil transportation and refining capacity;weather conditions;domestic and foreign governmental regulations and taxes;andthe overall economic envi

213、ronment.Our results of operations,as well as the carrying value of our oil and gas properties,are substantially dependent upon the prices of oil and natural gas,whichhave declined significantly since June 2014.Despite slight increases in oil and natural gas prices in 2017,prices have remained signif

214、icantly lower than levels seenin recent years,which has adversely affected our revenues,operating income,cash flow,and proved reserves.Continued low prices could have a material adverseimpact on our operations and limit our ability to fund capital expenditures.Without the ability to fund capital exp

215、enditures,we would be unable to replace reservesand production.Sustained low prices of crude oil,natural gas,and NGLs may further adversely impact our business as follows:limiting our financial condition,liquidity,and/or ability to fund planned capital expenditures and operations;reducing the amount

216、 of crude oil,natural gas,and NGLs that we can produce economically;causing us to delay or postpone some of our capital projects;reducing our revenues,operating income,and cash flows;limiting our access to sources of capital,such as equity and long-term debt;reducing the carrying value of our oil an

217、d gas properties,resulting in additional non-cash impairments;reducing the carrying value of our gathering,transmission,and processing facilities,resulting in additional impairments;orreducing the carrying value of goodwill.14Our ability to sell crude oil,natural gas,or NGLs and/or receive market pr

218、ices for these commodities may be adversely affected by pipeline and gatheringsystem capacity constraints and various transportation interruptions.A portion of our crude oil,natural gas,and NGL production in any region may be interrupted,limited,or shut in,from time to time for numerous reasons,incl

219、uding as a result of weather conditions,accidents,loss of pipeline or gathering system access,field labor issues or strikes,or capital constraints that limit theability of third parties to construct gathering systems,processing facilities,or interstate pipelines to transport our production,or we mig

220、ht voluntarily curtailproduction in response to market conditions.If a substantial amount of our production is interrupted at the same time,it could temporarily adversely affect our cashflows.Future economic conditions in the U.S.and certain international markets may materially adversely impact our

221、operating results.Current global market conditions,and uncertainty,including economic instability in Europe and certain emerging markets,is likely to have significant long-term effects.Global economic growth drives demand for energy from all sources,including fossil fuels.A lower future economic gro

222、wth rate could result indecreased demand growth for our oil and gas production as well as lower commodity prices,which would reduce our cash flows from operations and ourprofitability.Weather and climate may have a significant adverse impact on our revenues and production.Demand for oil and gas are,

223、to a degree,dependent on weather and climate,which impact the price we receive for the commodities we produce.In addition,our exploration and development activities and equipment can be adversely affected by severe weather,such as freezing temperatures,hurricanes in the Gulf ofMexico or storms in th

224、e North Sea,which may cause a loss of production from temporary cessation of activity or lost or damaged equipment.Our planning fornormal climatic variation,insurance programs,and emergency recovery plans may inadequately mitigate the effects of such weather conditions,and not all sucheffects can be

225、 predicted,eliminated,or insured against.Our operations involve a high degree of operational risk,particularly risk of personal injury,damage,or loss of equipment,and environmental accidents.Our operations are subject to hazards and risks inherent in the drilling,production,and transportation of cru

226、de oil,natural gas,and NGLs,including:well blowouts,explosions,and cratering;pipeline or other facility ruptures and spills;fires;formations with abnormal pressures;equipment malfunctions;hurricanes,storms,and/or cyclones,which could affect our operations in areas such as on and offshore the Gulf Co

227、ast and North Sea and other naturaldisasters and weather conditions;andsurface spillage and surface or ground water contamination from petroleum constituents,saltwater,or hydraulic fracturing chemical additives.Failure or loss of equipment as the result of equipment malfunctions,cyber attacks,or nat

228、ural disasters such as hurricanes,could result in property damages,personal injury,environmental pollution and other damages for which we could be liable.Litigation arising from a catastrophic occurrence,such as a well blowout,explosion,or fire at a location where our equipment and services are used

229、,or ground water contamination from hydraulic fracturing chemical additives may resultin substantial claims for damages.Ineffective containment of a drilling well blowout or pipeline rupture,or surface spillage and surface or ground watercontamination from petroleum constituents or hydraulic fractur

230、ing chemical additives could result in extensive environmental pollution and substantial remediationexpenses.If a significant amount of our production is interrupted,our containment efforts prove to be ineffective or litigation arises as the result of a catastrophicoccurrence,our cash flows,and,in t

231、urn,our results of operations could be materially and adversely affected.15Cyber attacks targeting systems and infrastructure used by the oil and gas industry may adversely impact our operations.Our business has become increasingly dependent on digital technologies to conduct certain exploration,dev

232、elopment,and production activities.We dependon digital technology to estimate quantities of oil and gas reserves,process and record financial and operating data,analyze seismic and drilling information,communicate with our employees and third party partners,and conduct many of our activities.Unautho

233、rized access to our digital technology could lead tooperational disruption,data corruption or exposure,communication interruption,loss of intellectual property,loss of confidential and fiduciary data,and loss orcorruption of reserves or other proprietary information.Also,external digital technologie

234、s control nearly all of the oil and gas distribution and refining systems inthe United States and abroad,which are necessary to transport and market our production.A cyber attack directed at oil and gas distribution systems could damagecritical distribution and storage assets or the environment,dela

235、y or prevent delivery of production to markets,and make it difficult or impossible to accuratelyaccount for production and settle transactions.While we have experienced cyber attacks in the past,we have not suffered any material losses as a result of such attacks;however,there is no assurance thatwe

236、 will not suffer such losses in the future.Further,as cyber attacks continue to evolve,we may be required to expend significant additional resources to continueto modify or enhance our protective measures or to investigate and remediate any vulnerabilities to cyber attacks.Our commodity price risk m

237、anagement and trading activities may prevent us from benefiting fully from price increases and may expose us to other risks.To the extent that we engage in price risk management activities to protect ourselves from commodity price declines,we may be prevented from realizing thebenefits of price incr

238、eases above the levels of the derivative instruments used to manage price risk.In addition,our hedging arrangements may expose us to the riskof financial loss in certain circumstances,including instances in which:our production falls short of the hedged volumes;there is a widening of price-basis dif

239、ferentials between delivery points for our production and the delivery point assumed in the hedge arrangement;the counterparties to our hedging or other price risk management contracts fail to perform under those arrangements;oran unexpected event materially impacts commodity prices.The credit risk

240、of financial institutions could adversely affect us.We have exposure to different counterparties,and we have entered into transactions with counterparties in the financial services industry,includingcommercial banks,investment banks,insurance companies,other investment funds,and other institutions.T

241、hese transactions expose us to credit risk in the eventof default of our counterparty.Deterioration in the credit or financial markets may impact the credit ratings of our current and potential counterparties and affecttheir ability to fulfill their existing obligations to us and their willingness t

242、o enter into future transactions with us.We may also have exposure to financialinstitutions in the form of derivative transactions in connection with any hedges.We also have exposure to insurance companies in the form of claims under ourpolicies.In addition,if any lender under our credit facilities

243、is unable to fund its commitment,our liquidity will be reduced by an amount up to the aggregateamount of such lenders commitment under our credit facilities.We are exposed to a risk of financial loss if a counterparty fails to perform under a derivative contract.This risk of counterparty non-perform

244、ance is ofparticular concern given the recent volatility of the financial markets and significant decline in commodity prices,which could lead to sudden changes in acounterpartys liquidity and impair its ability to perform under the terms of the derivative contract.We are unable to predict sudden ch

245、anges in a counterpartyscreditworthiness or ability to perform.Even if we do accurately predict sudden changes,our ability to negate the risk may be limited depending upon marketconditions.Furthermore,the bankruptcy of one or more of our hedge providers,or some other similar proceeding or liquidity

246、constraint,might make it unlikely thatwe would be able to collect all or a significant portion of amounts owed to us by the distressed entity or entities.During periods of falling commodity prices ourhedge receivable positions increase,which increases our exposure.If the creditworthiness of our coun

247、terparties deteriorates and results in their nonperformance,wecould incur a significant loss.16The distressed financial conditions of our purchasers and partners could have an adverse impact on us in the event they are unable to pay us for theproducts or services we provide or to reimburse us for th

248、eir share of costs.Concerns about global economic conditions and the volatility of oil,natural gas,and NGL prices have had a significant adverse impact on the oil and gasindustry.We are exposed to risk of financial loss from trade,joint venture,joint interest billing,and other receivables.We sell ou

249、r crude oil,natural gas,and NGLsto a variety of purchasers.As operator,we pay expenses and bill our non-operating partners for their respective shares of costs.As a result of current economicconditions and the severe decline in commodity prices,some of our customers and non-operating partners may ex

250、perience severe financial problems that may havea significant impact on their creditworthiness.We cannot provide assurance that one or more of our financially distressed customers or non-operating partners willnot default on their obligations to us or that such a default or defaults will not have a

251、material adverse effect on our business,financial position,future results ofoperations,or future cash flows.Furthermore,the bankruptcy of one or more of our customers or non-operating partners,or some other similar proceeding orliquidity constraint,might make it unlikely that we would be able to col

252、lect all or a significant portion of amounts owed by the distressed entity or entities.Nonperformance by a trade creditor or non-operating partner could result in significant financial losses.A downgrade in our credit rating could negatively impact our cost of and ability to access capital.We receiv

253、e debt ratings from the major credit rating agencies in the United States.Factors that may impact our credit ratings include debt levels,plannedasset purchases or sales,and near-term and long-term production growth opportunities.Liquidity,asset quality,cost structure,product mix,and commodity pricin

254、glevels and others are also considered by the rating agencies.A ratings downgrade could adversely impact our ability to access debt markets in the future andincrease the cost of future debt;past ratings downgrades have,and any future downgrades may require us to post letters of credit or other forms

255、 of collateral forcertain obligations.Throughout 2017,our credit rating remained unchanged by Moodys at Baa3/Stable and Standard and Poors at BBB/Stable.Any futuredowngrades could result in additional postings of collateral ranging from approximately$500 million to$1.4 billion,depending upon timing

256、and availability of taxrelief.Market conditions may restrict our ability to obtain funds for future development and working capital needs,which may limit our financial flexibility.The financial markets are subject to fluctuation and are vulnerable to unpredictable shocks.We have a significant develo

257、pment project inventory and anextensive exploration portfolio,which will require substantial future investment.We and/or our partners may need to seek financing in order to fund these or otherfuture activities.Our future access to capital,as well as that of our partners and contractors,could be limi

258、ted if the debt or equity markets are constrained.Thiscould significantly delay development of our property interests.Our ability to declare and pay dividends is subject to limitations.The payment of future dividends on our capital stock is subject to the discretion of our board of directors,which c

259、onsiders,among other factors,ouroperating results,overall financial condition,credit-risk considerations,and capital requirements,as well as general business and market conditions.Our board ofdirectors is not required to declare dividends on our common stock and may decide not to declare dividends.A

260、ny indentures and other financing agreements that we enter into in the future may limit our ability to pay cash dividends on our capital stock,includingcommon stock.In addition,under Delaware law,dividends on capital stock may only be paid from“surplus,”which is the amount by which the fair value of

261、 ourtotal assets exceeds the sum of our total liabilities,including contingent liabilities,and the amount of our capital;if there is no surplus,cash dividends on capitalstock may only be paid from our net profits for the then current and/or the preceding fiscal year.Further,even if we are permitted

262、under our contractual obligationsand Delaware law to pay cash dividends on common stock,we may not have sufficient cash to pay dividends in cash on our common stock.Discoveries or acquisitions of additional reserves are needed to avoid a material decline in reserves and production.The production rat

263、e from oil and gas properties generally declines as reserves are depleted,while related per-unit production costs generally increase as aresult of decreasing reservoir pressures and other factors.Therefore,unless we add reserves through exploration and development activities or,through engineeringst

264、udies,identify additional behind-pipe zones,secondary recovery reserves,or tertiary recovery reserves,or acquire additional properties containing provedreserves,our estimated proved reserves will decline materially as reserves are produced.Future oil and gas production is,therefore,highly dependent

265、upon ourlevel of success in acquiring or finding additional reserves on an economic basis.Furthermore,if oil or gas prices increase,our cost for additional reserves couldalso increase.17We may not realize an adequate return on wells that we drill.Drilling for oil and gas involves numerous risks,incl

266、uding the risk that we will not encounter commercially productive oil or gas reservoirs.The wells wedrill or participate in may not be productive,and we may not recover all or any portion of our investment in those wells.The seismic data and other technologieswe use do not allow us to know conclusiv

267、ely prior to drilling a well that crude or natural gas is present or may be produced economically.The costs of drilling,completing,and operating wells are often uncertain,and drilling operations may be curtailed,delayed,or canceled as a result of a variety of factors including,butnot limited to:unex

268、pected drilling conditions;pressure or irregularities in formations;equipment failures or accidents;fires,explosions,blowouts,and surface cratering;marine risks such as capsizing,collisions,and hurricanes;other adverse weather conditions;andincreases in the cost of,or shortages or delays in the avai

269、lability of,drilling rigs and equipment.Future drilling activities may not be successful,and,if unsuccessful,this failure could have an adverse effect on our future results of operations and financialcondition.While all drilling,whether developmental or exploratory,involves these risks,exploratory d

270、rilling involves greater risks of dry holes or failure to findcommercial quantities of hydrocarbons.Material differences between the estimated and actual timing of critical events or costs may affect the completion and commencement of production fromdevelopment projects.We are involved in several la

271、rge development projects and the completion of these projects may be delayed beyond our anticipated completion dates.Ourprojects may be delayed by project approvals from joint venture partners,timely issuances of permits and licenses by governmental agencies,weather conditions,manufacturing and deli

272、very schedules of critical equipment,and other unforeseen events.Delays and differences between estimated and actual timing of criticalevents may adversely affect our large development projects and our ability to participate in large-scale development projects in the future.In addition,ourestimates

273、of future development costs are based on current expectation of prices and other costs of equipment and personnel we will need to implement suchprojects.Our actual future development costs may be significantly higher than we currently estimate.If costs become too high,our development projects maybec

274、ome uneconomic to us,and we may be forced to abandon such development projects.We may fail to fully identify potential problems related to acquired reserves or to properly estimate those reserves.Although we perform a review of properties that we acquire that we believe is consistent with industry p

275、ractices,such reviews are inherently incomplete.Itgenerally is not feasible to review in-depth every individual property involved in each acquisition.Ordinarily,we will focus our review efforts on the higher-valueproperties and will sample the remainder.However,even a detailed review of records and

276、properties may not necessarily reveal existing or potential problems,norwill it permit us as a buyer to become sufficiently familiar with the properties to assess fully and accurately their deficiencies and potential.Inspections may notalways be performed on every well,and environmental problems,suc

277、h as groundwater contamination,are not necessarily observable even when an inspection isundertaken.Even when problems are identified,we often assume certain environmental and other risks and liabilities in connection with acquired properties.Thereare numerous uncertainties inherent in estimating qua

278、ntities of proved oil and gas reserves and future production rates and costs with respect to acquired properties,and actual results may vary substantially from those assumed in the estimates.In addition,there can be no assurance that acquisitions will not have an adverseeffect upon our operating res

279、ults,particularly during the periods in which the operations of acquired businesses are being integrated into our ongoing operations.Our liabilities could be adversely affected in the event one or more of our transaction counterparties become the subject of a bankruptcy case.From time to time we hav

280、e divested noncore or nonstrategic domestic and international assets.The agreements relating to these transactions containprovisions pursuant to which liabilities related to past and future operations have been allocated between the parties by means of liability assumptions,indemnities,escrows,trust

281、s,and similar arrangements.One of the most significant of these liabilities involves the decommissioning of wells and facilities previously owned byus.One or more of the counterparties18in these transactions could fail to perform its obligations under these agreements as a result of financial distre

282、ss.In the event that any such counterparty were tobecome the subject of a case or proceeding under Title 11 of the United States Code or any other relevant insolvency law or similar law(which we collectivelyrefer to as Insolvency Laws),the counterparty may not perform its obligations under the agree

283、ments related to these transactions.In that case,our remedy in theproceeding would be a claim for damages for the breach of the contractual arrangements,which may be either a secured claim or an unsecured claim depending onwhether or not we have collateral from the counterparty for the performance o

284、f the obligations.Resolution of our claim for damages in such a proceeding may bedelayed,and we may be forced to use available cash to cover the costs of the obligations assumed by the counterparties under such agreements should they arise.Despite the provisions in our agreements requiring purchaser

285、s of our state or federal leasehold interests to assume certain liabilities and obligations related tosuch interests,if a purchaser of such interests becomes the subject of a case or proceeding under relevant Insolvency Laws or becomes unable financially toperform such liabilities or obligations,we

286、would expect the relevant governmental authorities to require us to perform,and hold us responsible for,such liabilitiesand obligations.In such event,we may be forced to use available cash to cover the costs of such liabilities and obligations should they arise.If a court or a governmental authority

287、 were to make any of the foregoing determinations or take any of the foregoing actions,or any similar determination oraction,it could adversely impact our cash flows,operations,or financial condition.Crude oil,natural gas,and NGL reserves are estimates,and actual recoveries may vary significantly.Th

288、ere are numerous uncertainties inherent in estimating crude oil,natural gas,and NGL reserves and their value.Reservoir engineering is a subjectiveprocess of estimating underground accumulations of crude oil,natural gas,and NGLs that cannot be measured in an exact manner.Because of the high degree of

289、judgment involved,the accuracy of any reserve estimate is inherently imprecise,and a function of the quality of available data and the engineering and geologicalinterpretation.Our reserves estimates are based on 12-month average prices,except where contractual arrangements exist;therefore,reserves q

290、uantities will changewhen actual prices increase or decrease.In addition,results of drilling,testing,and production may substantially change the reserve estimates for a given reservoirover time.The estimates of our proved reserves and estimated future net revenues also depend on a number of factors

291、and assumptions that may vary considerablyfrom actual results,including:historical production from the area compared with production from other areas;the effects of regulations by governmental agencies,including changes to severance and excise taxes;future operating costs and capital expenditures;an

292、dworkover and remediation costs.For these reasons,estimates of the economically recoverable quantities of crude oil,natural gas,and NGLs attributable to any particular group of properties,classifications of those reserves and estimates of the future net cash flows expected from them prepared by diff

293、erent engineers or by the same engineers but atdifferent times may vary substantially.Accordingly,reserves estimates may be subject to upward or downward adjustment,and actual production,revenue andexpenditures with respect to our reserves likely will vary,possibly materially,from estimates.Addition

294、ally,because some of our reserves estimates are calculated using volumetric analysis,those estimates are less reliable than the estimates based on alengthy production history.Volumetric analysis involves estimating the volume of a reservoir based on the net feet of pay of the structure and an estima

295、tion of thearea covered by the structure.In addition,realization or recognition of proved undeveloped reserves will depend on our development schedule and plans.A changein future development plans for proved undeveloped reserves could cause the discontinuation of the classification of these reserves

296、 as proved.Certain of our undeveloped leasehold acreage is subject to leases that will expire over the next several years unless production is established on unitscontaining the acreage.A sizeable portion of our acreage is currently undeveloped.Unless production in paying quantities is established o

297、n units containing certain of these leasesduring their terms,the leases will expire.If our leases expire,we will lose our right to develop the related properties.Our drilling plans for these areas are subjectto change based upon various factors,including drilling results,commodity prices,the availab

298、ility and cost of capital,drilling,and production costs,availability ofdrilling services and equipment,gathering system and pipeline transportation constraints,and regulatory approvals.19We may incur significant costs related to environmental matters.As an owner or lessee and operator of oil and gas

299、 properties,we are subject to various federal,provincial,state,local,and foreign country laws andregulations relating to discharge of materials into,and protection of,the environment.These laws and regulations may,among other things,impose liability on thelessee under an oil and gas lease for the co

300、st of pollution clean-up and other remediation activities resulting from operations,subject the lessee to liability forpollution and other damages,limit or constrain operations in affected areas,and require suspension or cessation of operations in affected areas.Our efforts to limitour exposure to s

301、uch liability and cost may prove inadequate and result in significant adverse effects to our results of operations.In addition,it is possible that theincreasingly strict requirements imposed by environmental laws and enforcement policies could require us to make significant capital expenditures.Such

302、 capitalexpenditures could adversely impact our cash flows and our financial condition.Our North American operations are subject to governmental risks.Our North American operations have been,and at times in the future may be,affected by political developments and by federal,state,and local laws andr

303、egulations such as restrictions on production,changes in taxes,royalties and other amounts payable to governments or governmental agencies,price or gatheringrate controls,and environmental protection laws and regulations.In response to the Deepwater Horizon incident in the U.S.Gulf of Mexico in Apri

304、l 2010,and as directed by the Secretary of the U.S.Department of theInterior,the Bureau of Ocean Energy Management(BOEM)and the Bureau of Safety and Environmental Enforcement(BSEE)issued guidelines and regulationsregarding safety,environmental matters,drilling equipment,and decommissioning applicabl

305、e to drilling in the Gulf of Mexico.These regulations imposedadditional requirements and caused delays with respect to development and production activities in the Gulf of Mexico.With respect to oil and gas operations in the Gulf of Mexico,the BOEM has issued a Notice to Lessees(NTL No.2016-N01)sign

306、ificantly revising theobligations of companies operating in the Gulf of Mexico to provide supplemental assurances of performance with respect to plugging,abandonment,anddecommissioning obligations associated with wells,platforms,structures,and facilities located upon or used in connection with such

307、companies oil and gasleases.While requirements under the NTL have not yet been fully implemented by BOEM,the NTL will likely require that Apache provide additional security toBOEM with respect to plugging,abandonment,and decommissioning obligations relating to Apaches current ownership interests in

308、various Gulf of Mexicoleases.We are working closely with BOEM to make arrangements for the provision of such additional required security,if such security becomes necessary underthe NTL.Additionally,we are not able to predict the effect that these changes might have on counterparties to which Apache

309、 has sold Gulf of Mexico assets orwith whom Apache has joint ownership.Such changes could cause the bonding obligations of such parties to increase substantially,thereby causing a significantimpact on the counterparties solvency and ability to continue as a going concern.New political developments,l

310、aws,and the enactment of new or stricter regulations in the Gulf of Mexico or otherwise impacting our North Americanoperations,and increased liability for companies operating in this sector may adversely impact our results of operations.Changes to existing regulations related to emissions and the im

311、pact of any changes in climate could adversely impact our business.Certain countries where we operate,including the United Kingdom,either tax or assess some form of greenhouse gas(GHG)related fees on our operations.Exposure has not been material to date,although a change in existing regulations coul

312、d adversely affect our cash flows and results of operations.In the event the predictions for rising temperatures and sea levels suggested by reports of the United Nations Intergovernmental Panel on Climate Change dotranspire,we do not believe those events by themselves are likely to impact our asset

313、s or operations.However,any increase in severe weather could have a materialadverse effect on our assets and operations.The present U.S.federal and state income tax laws affecting oil and gas exploration,development,and extraction may be modified by administrative,legislative,or judicial interpretat

314、ion at any time.Future legislation may result in the elimination of certain U.S.federal income tax deductions currentlyavailable with respect to oil and gas exploration and development.On December 22,2017,the Tax Cuts and Jobs Act(the Act)was signed into law.In addition to reducing the U.S.corporate

315、 income tax rate from 35 percentto 21 percent effective January 1,2018,certain provisions in the Act move the U.S.away from a worldwide tax system and closer to a territorial system forearnings of foreign corporations,establishing a participation exemption20system for taxation of foreign income.The

316、new law includes a transition rule to effect this participation exemption regime.The Act also includes provisions whichcould impact or limit the Companys ability to deduct interest expense or utilize net operating losses beginning in 2018.The Company continues to assess otherprovisions of the Act in

317、cluding,among other items,the interaction between the deemed repatriation of foreign earnings and 2017 net operating losses as well as theapplicability of new taxes on certain future foreign earnings.The U.S.federal and state income tax laws affecting oil and gas exploration,development,and extracti

318、on may be further modified by administrative,legislative,or judicial interpretation at any time.Previous legislative proposals,if enacted into law,could make significant changes to such laws,including theelimination of certain key U.S.federal income tax incentives currently available to oil and gas

319、exploration and production companies.These changes include,butare not limited to,(i)the repeal of the percentage depletion allowance for oil and gas properties,(ii)the elimination of current deductions for intangible drilling anddevelopment costs,and(iii)an extension of the amortization period for c

320、ertain geological and geophysical expenditures.The passage or adoption of these changes,or similar changes,could eliminate or postpone certain tax deductions that are currently available with respect to oil and gas exploration and development.We areunable to predict whether any of these changes or o

321、ther proposals will be enacted.Any such changes could adversely affect our business,financial condition,andresults of operations.Proposed federal,state,or local regulation regarding hydraulic fracturing could increase our operating and capital costs.Several proposals are before the U.S.Congress that

322、,if implemented,would either prohibit or restrict the practice of hydraulic fracturing or subject theprocess to regulation under the Safe Drinking Water Act.Several states are considering legislation to regulate hydraulic fracturing practices that could impose morestringent permitting,transparency,a

323、nd well construction requirements on hydraulic-fracturing operations or otherwise seek to ban fracturing activities altogether.Hydraulic fracturing of wells and subsurface water disposal are also under public and governmental scrutiny due to potential environmental and physical impacts,including pos

324、sible contamination of groundwater and drinking water and possible links to earthquakes.In addition,some municipalities have significantly limitedor prohibited drilling activities and/or hydraulic fracturing,or are considering doing so.We routinely use fracturing techniques in the U.S.and other regi

325、ons toexpand the available space for natural gas and oil to migrate toward the wellbore.It is typically done at substantial depths in formations with low permeability.Although it is not possible at this time to predict the final outcome of the legislation regarding hydraulic fracturing,any new feder

326、al,state,or localrestrictions on hydraulic fracturing that may be imposed in areas in which we conduct business could result in increased compliance costs or additional operatingrestrictions in the U.S.International operations have uncertain political,economic,and other risks.Our operations outside

327、North America are based primarily in Egypt and the United Kingdom.On a barrel equivalent basis,approximately 48 percent of our2017 production was outside North America,and approximately 31 percent of our estimated proved oil and gas reserves on December 31,2017,were locatedoutside North America.As a

328、 result,a significant portion of our production and resources are subject to the increased political and economic risks and other factorsassociated with international operations including,but not limited to:general strikes and civil unrest;the risk of war,acts of terrorism,expropriation and resource

329、 nationalization,forced renegotiation or modification of existing contracts;import and export regulations;taxation policies,including royalty and tax increases and retroactive tax claims,and investment restrictions;price control;transportation regulations and tariffs;constrained natural gas markets

330、dependent on demand in a single or limited geographical area;exchange controls,currency fluctuations,devaluation,or other activities that limit or disrupt markets and restrict payments or the movement of funds;laws and policies of the United States affecting foreign trade,including trade sanctions;t

331、he possibility of being subject to exclusive jurisdiction of foreign courts in connection with legal disputes relating to licenses to operate and concessionrights in countries where we currently operate;21the possible inability to subject foreign persons,especially foreign oil ministries and nationa

332、l oil companies,to the jurisdiction of courts in the UnitedStates;anddifficulties in enforcing our rights against a governmental agency because of the doctrine of sovereign immunity and foreign sovereignty overinternational operations.Foreign countries have occasionally asserted rights to oil and ga

333、s properties through border disputes.If a country claims superior rights to oil and gas leasesor concessions granted to us by another country,our interests could decrease in value or be lost.Even our smaller international assets may affect our overallbusiness and results of operations by distracting managements attention from our more significant assets.Certain regions of the world in which we op