1、FORM 10-K APACHE CORP(Annual Report)Filed 3/27/1996 For Period Ending 12/31/1995Address2000 POST OAK BLVD ONE POST OAK CENTER STE 100HOUSTON,Texas 77056-4400Telephone713-296-6000 CIK0000006769IndustryOil&Gas OperationsSectorEnergyFiscal Year12/31SECURITIES AND EXCHANGE COMMISSION WASHINGTON,D.C.2054
2、9 FORM 10-K MARK ONE ONE POST OAK CENTRAL 2000 POST OAK BOULEVARD,SUITE 100 HOUSTON,TEXAS 77056-4400 TELEPHONE NUMBER(713)296-6000 SECURITIES REGISTERED PURSUANT TO SECTION 12(B)OF THE ACT:SECURITIES REGISTERED PURSUANT TO SECTION 12(G)OF THE ACT:NONE Indicate by check mark whether the registrant(1)
3、has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes X No _
4、Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and will not be contained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any DOCUMEN
5、TS INCORPORATED BY REFERENCE:Portions of registrants proxy statement relating to registrants 1996 annual meeting of shareholders have been incorporated by reference into Part III hereof.X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE SECURITIES EXCHANGE ACT OF 1934 FEE REQUIRED FOR THE FISCAL
6、YEAR ENDED DECEMBER 31,1995,OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE SECURITIES EXCHANGE ACT OF 1934 NO FEE REQUIRED FOR THE TRANSITION PERIOD FROM _ TO _ COMMISSION FILE NUMBER 1-4300 APACHE CORPORATION A DELAWARE IRS EMPLOYER CORPORATION NO.41-0747868 NAME OF EACH EXCHANGE TITLE
7、OF EACH CLASS ON WHICH REGISTERED -Common Stock,$1.25 Par Value New York Stock Exchange Chicago Stock Exchange Preferred Stock Purchase Rights New York Stock Exchange Chicago Stock Exchange 9.25%Notes due 2002 New York Stock Exchange amendment to this Form 10-K.Aggregate market value of the voting s
8、tock held by non-affiliates of registrant as of February 29,1996$2,013,681,098 Number of shares of registrants common stock outstanding as of February 29,1996 77,449,273 TABLE OF CONTENTS DESCRIPTION All defined terms under Rule 4-10(a)of Regulation S-X shall have their statutorily-prescribed meanin
9、gs when used in this report.Quantities of natural gas are expressed in this report in terms of thousand cubic feet(Mcf),million cubic feet(MMcf)or billion cubic feet(Bcf).Oil is quantified in terms of barrels(bbls),thousands of barrels(Mbbls)and millions of barrels(MMbbls).Natural gas is compared to
10、 oil in terms of barrels of oil equivalent(boe)or million barrels of oil equivalent(MMboe).Oil and natural gas liquids are compared with natural gas in terms of million cubic feet equivalent(MMcfe)and billion cubic feet equivalent(Bcfe).One barrel of oil is the energy equivalent of six Mcf of natura
11、l gas.Daily oil and gas production is expressed in terms of barrels of oil per day(bopd)and thousands of cubic feet of gas per day(Mcfd)or millions of British thermal units per day(MMBtud),respectively.Gas sales volumes may be expressed in terms of one million British thermal units(MMBtu),which is a
12、pproximately equal to one Mcf.With respect to information relating to the Companys working interest in wells or acreage,net oil and gas wells or acreage is determined by multiplying gross wells or acreage by the Companys working interest therein.Unless otherwise specified,all references to wells and
13、 acres are gross.1 ITEM PAGE-PART I 1.BUSINESS .2 2.PROPERTIES .12 3.LEGAL PROCEEDINGS .16 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS .16 PART II 5.MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS .16 6.SELECTED FINANCIAL DATA .17 7.MANAGEMENTS DISCUSSION AND ANALY
14、SIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS .18 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA .27 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE .27 PART III 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT .28 11.EXECUTIVE COMPENSATION .28 12.SE
15、CURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT .28 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .28 PART IV 14.EXHIBITS,FINANCIAL STATEMENT SCHEDULES,AND REPORTS ON FORM 8-K .29 PART I ITEM 1.BUSINESS GENERAL Apache Corporation(Apache or the Company),a Delaware corporation formed
16、in 1954,is an independent energy company that explores for,develops,produces,gathers,processes and markets natural gas,crude oil and natural gas liquids.In North America,Apaches exploration and production interests are focused on the Gulf of Mexico,the Anadarko Basin,the Permian Basin,the Gulf Coast
17、,East Texas and the Western Sedimentary Basin of Canada.Outside of North America,Apache has exploration and production interests offshore Western Australia and in Egypt,and exploration interests in Indonesia,offshore China and offshore the Ivory Coast.Apaches common stock has been listed on the New
18、York Stock Exchange since 1969,and on the Chicago Stock Exchange since 1960.Apache holds interests in many of its U.S.,Canadian and international properties through operating subsidiaries,such as MW Petroleum Corporation(MW),DEK Energy Company(DEKALB,formerly known as DEKALB Energy Company),Apache E
19、nergy Limited(AEL,formerly known as Hadson Energy Limited),Apache International,Inc.and Apache Overseas,Inc.Properties referred to in this document may be held by those subsidiaries.Apache treats all operations as one segment of business.On May 17,1995,Apache acquired DEKALB,an oil and gas company e
20、ngaged in the exploration for,and the development of,crude oil and natural gas in Canada,through a merger which resulted in DEKALB becoming a wholly-owned subsidiary of Apache.The merger was accounted for as a pooling of interests for financial accounting purposes.As a result,this Form 10-K has been
21、 prepared to present information for 1995 and all preceding years on a combined basis using the pooling of interests method of accounting.1995 RESULTS In 1995,Apache had net income of$20.2 million,or$.28 per share,on total revenues of$750.7 million.Net cash provided by operating activities during 19
22、95 was$332.1 million.The year 1995 was Apaches 18th consecutive year of production growth and eighth consecutive year of oil and gas reserves growth.Apaches average daily production was approximately 50.2 Mbbls of oil and 577 MMcf of natural gas for the year.Giving effect to 1995 acquisitions and dr
23、illing activity,and$271.9 million in property dispositions,the Companys estimated proved reserves increased by 151.3 MMboe in 1995 over the prior year(prior to restatement for the DEKALB merger)to 420.6 MMboe,of which approximately 60 percent was natural gas.Based on 269.3 MMboe reported at year-end
24、 1994(which was increased to 330 MMboe when 1994 results were restated for the DEKALB merger),Apaches growth in reserves during the year reflects the replacement of 379 percent of the Companys 1995 production(267 percent based on the restated 1994 year-end reserves of 330 MMboe).In 1995,the Company
25、replaced approximately 100 percent of its production through drilling,revisions,recompletions,workovers and other production enhancement projects.Apaches active drilling and workover program yielded 168 new producing U.S.and Canadian wells out of 222 attempts,and involved 539 North American workover
26、 and recompletion projects during the year.At December 31,1995,Apache had interests in approximately 4,624 net oil and gas wells and 1,405,192 net developed acres of oil and gas properties.In addition,the Company had interests in 777,380 net undeveloped acres under U.S.and Canadian leases and 3,809,
27、558 net undeveloped acres under international exploration and production rights.APACHES GROWTH STRATEGY Apaches growth strategy is to increase oil and gas reserves,production,and cash flow through a combination of acquisitions,moderate-risk drilling and development of its inventory of existing proje
28、cts.The Company also emphasizes reducing operating costs per unit produced and selling marginal and non-strategic properties in order to increase its profit margins.2 For Apache,property acquisition is only one phase in a continuing cycle of business growth.Apaches aim is to follow each acquisition
29、cycle with a cycle of reserve enhancement,property consolidation and cash flow acceleration,facilitating asset growth and debt reduction.This approach requires well-planned and carefully executed property development and a commitment to a selective program of ongoing property dispositions.It motivat
30、es Apache to target acquisitions that have ascertainable additional reserve potential and to apply an active drilling,workover and recompletion program to realize the potential of the acquired undeveloped and partially developed properties.Apache prefers to operate its properties so that it can best
31、 influence their development;as a result,the Company operates properties accounting for over 75 percent of its production.Pursuing its acquire-and-develop strategy,Apache increased its total proved reserves by 383 MMboe,more than 10 fold in the last 10 years(before restatement of prior years as a re
32、sult of the DEKALB merger).In addition to its acquisition strategy,Apache continues to develop and exploit its existing inventory of workover,recompletion and other development projects to increase reserves and production.During 1995 Apache acquired$820.9 million of additional properties(not includi
33、ng the DEKALB merger)and replaced 100 percent of its U.S.production through its drilling,workover and recompletion program.Apaches international investments supplement its long-term growth strategy.Although international exploration is recognized as higher-risk than most of Apaches U.S.and Canadian
34、activities,it offers potential for greater rewards and significant reserve additions.Apache directed its international efforts in 1995 toward development of certain discoveries offshore Western Australia and in Egypt,and toward further exploration of its concessions in China,Indonesia,and the Ivory
35、Coast of western Africa,where it believes that reserve additions may be made through higher-risk exploration and through improved production practices and recovery techniques.RECENT ACQUISITIONS AND DISPOSITIONS In September,1995,the Company acquired substantially all of the oil and gas assets(the A
36、quila Assets)of Aquila Energy Resources Corporation(Aquila),a wholly owned,indirect subsidiary of UtiliCorp United Inc.,for approximately$210 million,subject to adjustment.The Aquila Assets include:proved reserves totaling an estimated 157 Bcf of gas equivalent;approximately 107,000 developed and 49
37、,000 undeveloped net acres located primarily in the Companys Anadarko-Basin and Gulf of Mexico core areas;a five-year,four-month premium gas contract effective September 1,1995;and non-operated interests in four gas processing plants.The gas contract calls for Aquila Energy Marketing Corporation to
38、purchase 20 to 25 MMcf of gas per day from the Company at a price of$2.70 per Mcf in 1996,escalating to$3.20 per Mcf in the year 2000.The Aquila Assets were accounted for under the purchase method of accounting.At the time of acquisition,the Aquila properties were producing approximately 67 MMcf of
39、gas and 2,900 barrels of oil per day,with approximately 77 percent of proved reserves concentrated in seven fields and 77 percent of the properties net production operated by the Company.Approximately$143 million of the consideration for the Aquila Assets was provided through deferred tax-free excha
40、nge of like-kind properties of qualifying use.The properties exchanged by the Company were primarily lower margin and non-strategic properties located in the Rocky Mountains that were previously selected for sale by the Company in connection with its ongoing program of selective property disposition
41、s.The remainder of the consideration for the Aquila Assets was provided by a portion of the proceeds from the sale of 7.45 million shares of the Companys common stock on September 27,1995.TRANSACTIONS IN EARLY 1995.On March 1,1995,Apache purchased certain U.S.oil and gas properties from Texaco Explo
42、ration and Production Inc.(Texaco)for an adjusted purchase price of$567 million.The Texaco properties comprised estimated proved reserves at the effective date of approximately 105 MMboe(after adjustment for the exercise of preferential rights and properties excluded following due diligence and usin
43、g unescalated prices),of which approximately 70 percent was oil.At the time of purchase,the daily production on the acquired properties was approximately 20 Mbbls of oil and 85 MMcf of gas.The Texaco properties are highly concentrated,with approximately two-thirds of the reserves located in 54 field
44、s,and are in producing regions where Apache has existing operations:the Permian Basin,the Gulf Coast of Texas and Louisiana,western Oklahoma,East Texas,the Rocky Mountains and the Gulf of Mexico.Apache operates approximately two-thirds of the production and owns an average working interest of 70 per
45、cent in the operated 3 properties.The Texaco transaction also included the acquisition of approximately 500,000 net mineral acres,as well as a substantial quantity of seismic data.On May 17,1995,Apache acquired DEKALB,an oil and gas company engaged in the exploration for,and the development of,crude
46、 oil and natural gas in Canada,through a merger which resulted in DEKALBs becoming a wholly owned subsidiary of Apache.Pursuant to the merger agreement,the Company issued 8.4 million shares of Apache Common Stock in exchange for all outstanding DEKALB capital stock and DEKALB employee stock options
47、outstanding at the time of the merger and tendered to Apache.The merger was accounted for as a pooling of interests for financial accounting purposes.Through the DEKALB merger,Apache acquired an estimated 290 Bcf of gas and 10 MMbbls of liquid hydrocarbons,together with interests in 14 gas processin
48、g plants,six of which it operates,and 150,000 net undeveloped acres primarily in the Western Sedimentary Basin of Alberta.The DEKALB merger provided Apache with the infrastructure to conduct Canadian operations and an inventory of drilling prospects in North Americas largest natural gas basin.The Ca
49、nadian region,based on the DEKALB properties,became one of Apaches core focus areas in 1995.In early 1995,Apache announced plans to upgrade its properties through the disposition of lower margin and non-strategic properties,including the disposition of a substantial portion of its Rocky Mountain pro
50、perties and non-strategic assets from its other regions.During 1995,Apache completed$271.9 million in property dispositions,including the disposition of$143 million of Rocky Mountain properties through a deferred tax-free,like-kind exchange in consideration for certain of the Aquila Assets.1994 ACQU
51、ISITIONS.On December 30,1994,Apache purchased substantially all of the U.S.oil and gas properties of Crystal Oil Company(Crystal)for approximately$95.8 million.The producing properties acquired from Crystal are located primarily along the Arkansas-Louisiana border and in southern Louisiana,and daily
52、 production at the time of acquisition was approximately 20 MMcf of gas and 2,700 bbls of oil.The acquisition also included approximately 32,000 net undeveloped mineral acres in southern Louisiana.Apache acquired an average 80-percent working interest in the properties overall,including a 97-percent
53、 working interest in two fields that account for approximately 60 percent of the value.During 1994,Apache also acquired approximately 16 MMboe of proved reserves through 90 smaller,tactical acquisitions for an aggregate consideration of$84.9 million.Apache also sold$19.6 million of its non-strategic
54、 properties during 1994.EXPLORATION AND PRODUCTION The Companys North American exploration and production activities are divided into five operating regions,the Gulf Coast,Gulf of Mexico,Midcontinent,Western and Canadian region.Approximately 95 percent of the Companys proved reserves are located in
55、the five North American regions.Apache conducts its Australian exploration and production and its Indonesian exploration through its Australian region,while all other international interests are directed by the Company through its principal offices in Houston,Texas.Information concerning the amount
56、of revenue,operating income and identifiable assets attributable to U.S.,Canadian and international operations,respectively,is set forth in the Supplemental Oil and Gas Disclosures under Item 8 below,and incorporated herein by reference.GULF COAST.The Gulf Coast region encompasses the Texas and Loui
57、siana coasts,central Texas and Mississippi.It was Apaches leading region in oil and gas sales in 1995,contributing approximately$158 million from production of 11.2 MMboe for the year.The region was one of the most prominent in the Company in the number of workover and recompletion projects complete
58、d and the number of wells drilled.The Company performed 327 workover and recompletion operations during 1995 in the Gulf Coast region and participated in 36 wells during the year,20 of which were completed as producers,including 10 Austin Chalk wells in Central Texas,eight of which were productive.A
59、s of December 31,1995,the region encompassed approximately 306,249 net acres,and accounted for 66.5 MMboe,or 16 percent,of the Companys year-end 1995 total proved reserves.4 GULF OF MEXICO.The Gulf of Mexico region includes all of Apaches interests in properties offshore Texas,Louisiana and Alabama.
60、It was Apaches leading region in production in 1995,producing approximately 12.7 MMboe and$129 million in revenue for the year.At December 31,1995,the Gulf of Mexico region encompassed 342,179 net acres,located in both state and federal waters,and accounted for 41.9 MMboe,or 10 percent,of the Compan
61、ys year-end 1995 reserves.Apaches operations in the Gulf of Mexico focused on workovers and recompletions,which totaled 59 in the region for 1995.Apache participated in 16 wells which were drilled in the region during the year,14 of which were completed as producers.At year-end,Apaches production in
62、 the Gulf of Mexico was approximately 187 MMcf of gas per day.MIDCONTINENT.Apaches Midcontinent region is known for its sizable position in the Anadarko Basin.Apache has drilled and operated in the Anadarko Basin for nearly four decades,developing an extensive database of geologic information and a
63、substantial acreage position.In 1995,Apache enhanced its position through the acquisition of the Aquila Assets and certain Texaco properties.The Midcontinent region produced approximately 10.9 MMboe for the year,creating$127 million in revenue for the Company.At December 31,1995 Apache held an inter
64、est in 410,379 net acres in the region,which accounted for approximately 100.5 MMboe,or 24 percent,of Apaches total proved reserves.Apache participated in drilling 57 wells in the Midcontinent region during the year,51 of which were completed as producing wells.The Company performed 40 workover and
65、recompletion operations in the region during 1995.WESTERN.The Western region includes the former Permian Basin region and assets in the Green River Basin of Colorado and Wyoming and in the San Juan Basin of New Mexico which were previously included in Apaches Rocky Mountain region.In connection with
66、 its property rationalization program,Apache disposed of a substantial portion of its Rocky mountain properties on September 1,1995,including 1,600 wells in six states with daily production of approximately 9 Mbls of oil and 9 MMcf of natural gas.See Recent Acquisitions and Dispositions above.As a r
67、esult,Apache closed its Rocky Mountain region office and redeployed those employees to provide support for its Canadian,Western and Gulf Coast operations.The Western region properties are important producers for Apache,producing approximately 8.8 MMboe and$125 million in oil and gas sales,19 percent
68、 of the Companys production revenues during 1995.At December 31,1995,the Company held 692,967 net acres in the region,which accounted for 134.3 MMboe,or 32 percent of the Companys total estimated proved reserves.The Western region was also active in workovers and recompletions,which totaled 76 for t
69、he year.Compared with 1994,Apache nearly doubled its drilling activity in the region during 1995,with 53 of the 65 wells drilled in the region completed as producers.CANADA.Exploration and development activity in the Canadian region is concentrated in the Provinces of Alberta and British Columbia.Th
70、e region produced approximately 4.8 MMboe,85 percent of which was natural gas,and generated$39 million in oil and gas sales,six percent of the Companys production revenues in 1995.Apache participated in 48 wells in this region during the year,30 of which were completed as producers.The Company perfo
71、rmed 28 workovers and recompletions on operated wells during 1995.At December 31,1995,the region encompassed approximately 415,943 net acres,and accounted for 57.9 MMboe,or 14 percent,of the Companys year-end 1995 total proved reserves.AUSTRALIA.The state of Western Australia became an important reg
72、ion for Apache following the completion of the AERC acquisition in November 1993.In 1995,the region generated four percent of the Companys production revenues for the year.Natural gas production in the region increased by 20 percent from the prior year to approximately 9.6 MMcfd in 1995.Average dail
73、y oil production decreased by 1.6 percent to approximately 3,080 bopd in 1995,primarily as a result of natural depletion.As of December 31,1995,Apache held 52,550 net developed acres and 2,954,562 net undeveloped acres in Western Australia.Apache acts as operator for most of its properties in Wester
74、n Australia through its wholly owned subsidiary,AEL.5 During 1995,Apaches proved reserves in Australia increased by 81 percent to 19.6 MMboe,five percent of the Companys total proved reserves at year end.The increase in Australian reserves was primarily attributable to natural gas reserves booked at
75、 the East Spar discovery which were recorded only after the Company had entered agreements for the sale and delivery of such gas.See Oil and Natural Gas Marketing.Through AEL and its subsidiaries,Apache also owns a 22.5-percent interest in and operates the Harriet Gas Gathering Project,a gas process
76、ing and compression facility with a throughput capacity of 80 MMcfd,and a 60-mile,12-inch offshore pipeline with a throughput capacity of 175 MMcfd.The gas processing and compression facilities are located on Varanus Island in close proximity to AELs producing properties offshore in the Carnarvon Ba
77、sin.In 1995,the Company and its partners commenced development of the East Spar field from which gas will be transported to the Varanus Island site and,by agreement with the Harriet Joint Venture,processed and transported to the mainland where it will be delivered to gas pipelines connecting to the
78、southwest and to the eastern goldfields of Western Australia.Apache also participated in the Wonnich discovery offshore Western Australia which tested at 27 MMcfd of gas and 1,375 bopd.The company holds a 22.5-percent interest in the Wonnich field and plans to drill appraisal wells during 1996 to de
79、termine the commercial potential of the discovery.Apache is operator of the appraisal program and is conducting a development feasibility study.In early 1994,operations for Indonesia were consolidated under AEL and directed from its offices in Perth,Western Australia.In 1995,tests were conducted on
80、two fields in the Bentu Segat Block in Central Sumatra,Indonesia,confirming proven reserves of approximately 20 Bcf net to Apache.Apache is operator of the Block,holding a working interest of 39 percent.OTHER INTERNATIONAL OPERATIONS.Outside of Australia and Indonesia,Apache currently has exploratio
81、n and production interests in Egypt and exploration interests in China and offshore the Ivory Coast.In 1995,Apache Overseas,Inc.,Apache International,Inc.and their subsidiaries(excluding Australia and Indonesia as discussed above)drilled seven gross exploratory wells,resulting in four producers,and
82、four development wells,all of which were productive.Apache holds a 25-percent interest in the two-million acre Qarun Block in the Western Desert of Egypt which is operated by Phoenix Resource Companies of Qarun.Development began at the Qarun field in 1995,with three exploratory and four development
83、wells drilled.During development of the field,approximately 6,500 bbls per day are being sold to the Egyptian General Petroleum Corporation under terms of an early production agreement.Field development is expected to be complete in late 1996 with production expected to exceed 30,000 bbls of oil per
84、 day.Reserves will be booked in the first quarter of 1996.In early 1996 Apache was awarded the Darag Block in the extreme north of the Gulf of Suez.Apache has a 50-percent interest and will act as operator of the 460,000-acre Darag Block.Also in early 1996,Apache agreed to participate as a 50-percen
85、t interest holder in the East Beni Suef Block,a 6.8-million-acre concession in the Western Desert of Egypt adjoining the Qarun Block to the south.In 1995,Apache became the operator of the Zhao Dong Block in the Bohai Bay,offshore the Peoples Republic of China,where Apache increased its interest to 5
86、0 percent in a concession containing approximately 48,677 undeveloped acres.In 1994,a discovery well tested at a rate of over 2,000 bbls per day and was confirmed by an appraisal well which tested 4,000 bbls per day.In 1995,a second discovery well tested on pump at rates up to 1,300 bbls per day.The
87、 Company has elected to proceed with the second phase of exploration,commencing in May 1996,which involves a commitment to drill two additional exploratory wells.The Company is currently evaluating the discovery areas for commercial potential.OIL AND NATURAL GAS MARKETING During 1995,Apache sold app
88、roximately 85 percent of its U.S.natural gas on the spot market through Natural Gas Clearinghouse(NGC)or through market responsive contracts with other parties;the remaining 15 percent was sold through long-term,premium-priced contracts.Sales to NGC accounted for 27 percent of the Companys oil and g
89、as revenues in 1995.On September 30,1995,the Companys contract with NGC terminated and the Company began to 6 market all of its own natural gas,including the natural gas previously marketed by NGC.The Company believes the prices that it obtains through its own natural gas marketing activities are no
90、t substantially different from the prices that would have been received in marketing through NGC.On October 27,1995,wholly-owned affiliates of each of Apache,Oryx Energy Company and Parker&Parsley Petroleum Company formed Producers Energy Marketing,LLC,a Delaware limited liability company(ProEnergy)
91、.Until operations of ProEnergy begin,the Company will continue to market its own natural gas.Once fully operational(which is expected to occur in the second quarter of 1996),ProEnergy will market substantially all of its members domestic natural gas and natural gas liquids pursuant to member gas pur
92、chase agreements having an initial term of 10 years,subject to early termination following specified events.The price of gas purchased by ProEnergy from its members will be based upon agreed indexes.ProEnergy will also provide certain contract administration and other services.ProEnergys limited lia
93、bility company agreement provides that capital funding obligations,allocations of profit and loss and voting rights are calculated based upon the members respective throughputs of natural gas sold to,or whose sales are managed by,ProEnergy.Each members liability with respect to future capital fundin
94、g obligations is subject to certain limitations.Natural gas throughputs will be calculated,profit distributed,and/or capital called on a quarterly basis.As of December 31,1995,the Company was the holder of a majority interest in ProEnergy.Apache is delivering natural gas under several long-term supp
95、ly contracts.In connection with the acquisition of the Aquila Assets in September 1995,the Company entered into a five-year,four-month premium-price gas contract under which Aquila Energy Marketing Corporation will purchase 20 to 25 MMcf of gas per day from Apache at a price of$2.70 per Mcf in 1996
96、escalating to$3.20 per Mcf in the year 2000.In August 1994,Apache signed a long-term gas supply agreement with a cogeneration company under which Apache will supply a minimum of 51.1 Bcf over 10 years for use in electric power generation from a cogeneration facility located in northeast Texas.Under
97、the agreement,deliveries of approximately 20 MMcfd are scheduled to begin in early 1997.In December 1994,the Company signed a long-term gas contract under which Apache received an advance payment of$67.4 million.Apache will supply the purchaser with approximately 43 Bcf of gas over a six year period
98、 which began in January 1995,with volumes averaging 20 MMcfd.Apache assumed its own U.S.crude oil marketing operations in 1992.Most of Apaches crude oil production is sold through lease-level marketing to refiners,traders and transporters,generally under 30-day contracts that renew automatically unt
99、il canceled.Oil produced from Canadian properties is sold to crude oil purchasers or refiners at market prices which depend on worldwide crude prices adjusted for location and quality of the oil.Natural gas produced from Canadian properties is sold to major aggregators of natural gas,gas marketers a
100、nd direct users under long and short-term contracts.The oil and gas contracts provide for sales at specified prices,or at prices which are subject to change due to market conditions.The Company diversifies the markets for its Canadian gas production by selling directly or indirectly to customers thr
101、ough aggregators and brokers in the United States and Canada.The Company transports natural gas via the Companys firm transportation contracts to California(12 MMcfd)and to the Province of Ontario,Canada(four MMcfd)through end-users firm transportation contracts.In 1994,the Company contracted for th
102、e sale of five MMcfd of natural gas to the Hermiston Cogeneration Project,located in the Pacific Northwest of the United States.The Hermiston Project is expected to commence purchases of natural gas in the third quarter of 1996.In Australia,the Company entered into two contracts to deliver 32 Bcf of
103、 gas from the East Spar field for industrial uses,including mining operations,a power station and a nickel refinery.The contracts provide for an average daily rate of 15 MMcfd net to the Company.To provide deliveries under the contracts while the East Spar development is under construction,the Harri
104、et and East Spar joint ventures entered into a gas sales agreement under which the Harriet Joint Venture is supplying 42 MMcf of gas per day to East Spars industrial customers.Apache operates the Harriet joint venture and acts as contractor for the East Spar Joint Venture,holding a 22.5-percent inte
105、rest in Harriet and a 20-percent interest in East Spar.7 In 1995,the Harriet Joint Venture entered into a take-or-pay contract to supply natural gas under which AEL has committed 14 Bcf of reserves for delivery over a 10 year period.Approximately 20 Bcf of AELs proved gas reserves are dedicated to t
106、he Gas Corporation of Western Australia,a corporation owned by the government of Western Australia doing business as AlintaGas,under a long-term contract with a remaining period of 6-1/2 years.The agreement contains take-or-pay provisions that require AlintaGas to purchase a minimum of 35 MMcfd(appr
107、oximately eight MMcfd net to AEL)through the remainder of the contract term.Payments received under this contract are in Australian dollars.AEL markets all oil and natural gas liquids produced from its interests in the Harriet field through a contract with Marubeni International Petroleum(Singapore)
108、Pte Limited(Marubeni),which was extended in 1995.Pricing under the contract in 1995 represented a fixed premium to the quoted market prices of Tapis crude oil,with payment made in U.S.dollars.In 1995,production sold under this contract realized an average price of$18.59 per barrel(exclusive of the i
109、mpact of hedging activities).The Company believes that if this contract were terminated,it would not have a material adverse effect on the Company due to the demand for Australian crude oil and the existence of alternative purchasers.OIL AND NATURAL GAS PRICES Natural gas prices remained volatile in
110、 1995 with spot-market prices during the year ranging from$1.25 per Mcf in July to$2.07 per Mcf in December.Fluctuations are largely due to natural gas supply and demand perceptions.Apaches average realized gas price of$1.57 per Mcf for 1995 declined 12 percent from the prior-year average of$1.78 pe
111、r Mcf.Apaches 1994 average realized natural gas price declined eight percent from the 1993 average of$1.94 per Mcf.Due to minimum price contracts which escalate at an average of 80%of the Australian consumer price index,AELs natural gas production in Western Australia is not subject to the same degr
112、ee of price volatility as is its domestic Apaches U.S.and Canadian gas production;however,natural gas sales under such Australian minimum price contracts represent only about two percent of the Companys total natural gas sales at year end.Total Australian gas sales in 1995,including long-term contra
113、cts and spot sales averaged$1.86 per Mcf,two percent below the 1994 average of$1.90 per Mcf.Oil prices remained vulnerable to unpredictable political and economic forces during 1995,but did not experience the wide fluctuations seen in natural gas prices during the year.Management believes that oil p
114、rices will continue to fluctuate in response to changes in the policies of the Organization of Petroleum Exporting Countries(OPEC),events in the Middle East and other factors associated with the world political environment.As a result of the many uncertainties associated with levels of production ma
115、intained by OPEC and other oil producing countries,the availabilities of world-wide energy supplies and the competitive relationships and consumer perceptions of various energy sources,management is unable to predict what changes will occur in crude oil and natural gas prices.Apaches world-wide crud
116、e oil price averaged$17.09 per barrel in 1995,up nine percent from the average price of$15.65 per barrel in 1994,and two percent higher than the average price of$16.74 per barrel in 1993.Apaches average crude oil price for its Australian production,including production sold under the Marubeni contra
117、ct,was$18.59 per barrel in 1995,three percent higher than the average price in 1994.Terms of the acquisition of MW from Amoco Production Company(Amoco)included an oil and gas price sharing provision under which certain price sharing payments may be payable to Amoco.Pursuant to this provision,to the
118、extent that oil prices exceed specified reference prices that rise to$33.12 per barrel over the eight-year period ending June 30,1999,and to the extent that gas prices exceed specified reference prices that rise to$2.68 per Mcf over the five-year period ending June 30,1996,Apache will share the exce
119、ss price realization with Amoco on a portion of the MW production.From time to time,Apache buys or sells contracts to hedge a limited portion of its future oil and gas production against exposure to spot market price changes.See Note 9 to the Companys financial statements under Item 8 below.8 The Co
120、mpanys business has been and will continue to be affected by future world-wide changes in oil and gas prices and the relationship between the prices of oil and gas.No assurance can be given as to the trend in,or level of,future oil and gas prices.RESERVE VALUE CEILING TEST Under the Securities and E
121、xchange Commissions(SECs)full cost accounting rules,the Company reviews the carrying value of its oil and gas properties each quarter on a country-by-country basis.Under full cost accounting rules,capitalized costs of oil and gas properties may not exceed the present value of estimated future net re
122、venues from proved reserves,discounted at 10 percent,plus the lower of cost or fair market value of unproved properties,as adjusted for related tax effects and deferred tax reserves.Application of this rule generally requires pricing future production at the unescalated oil and gas prices in effect
123、at the end of each fiscal quarter and requires a write-down if the ceiling is exceeded,even if prices declined for only a short period of time.If a write-down is required,the one-time charge to earnings would not impact cash flow from operating activities.The Company had no write-downs due to ceilin
124、g test limitations during 1995.The SECs rules permit the exclusion of capitalized costs and present value of recently acquired properties in performing ceiling test calculations.Pursuant to these rules,Apache has requested waivers and the SEC has granted separate one-year waivers with respect to the
125、 properties acquired from Texaco and Aquila,effective from the date of closing,the last of which will expire in the third quarter of 1996.Under these waivers,if the ceiling is exceeded on all U.S.properties,Apache is permitted to perform an additional ceiling test excluding the capitalized costs and
126、 present value of the properties acquired from Texaco and Aquila and would be required to record a write-down of carrying value if the ceiling is still exceeded.If a write-down is required,it would result in a one-time charge to earnings but would not impact net cash flow from operating activities.G
127、OVERNMENT REGULATION OF THE OIL AND GAS INDUSTRY The Companys exploration,production and marketing operations are regulated extensively at the federal,state and local levels,as well as by other countries in which the Company does business.Oil and gas exploration,development and production activities
128、 are subject to various laws and regulations governing a wide variety of matters.For example,hydrocarbon-producing states have statutes or regulations addressing conservation practices and the protection of correlative rights,and such regulations may affect Apaches operations and limit the quantity
129、of hydrocarbons Apache may produce and sell.Other regulated matters include marketing,pricing,transportation,and valuation of royalty payments.At the U.S.federal level,the Federal Energy Regulatory Commission(FERC)regulates interstate transportation of natural gas under the Natural Gas Act.Effective
130、 January 1,1993,the Natural Gas Wellhead Decontrol Act deregulated natural gas prices for all first sales of natural gas,which includes all sales by Apache of its own production.As a result,all sales of the Companys natural gas produced in the U.S.may be sold at market prices,unless otherwise commit
131、ted by contract.Apaches gas sales are affected by regulation of intrastate and interstate gas transportation.In an attempt to promote competition,the FERC has issued a series of orders which have altered significantly the marketing and transportation of natural gas.The effect of these orders has bee
132、n to enable the Company to market its natural gas production to purchasers other than the interstate pipelines located in the vicinity of its producing properties.The Company believes that these changes have generally improved the Companys access to transportation and have enhanced the marketability
133、 of its natural gas production.To date,Apache has not experienced any material adverse effect on gas marketing as a result of these FERC orders;however,the Company cannot predict what new regulations may be adopted by the FERC and other regulatory authorities,or what effect subsequent regulations ma
134、y have on its future gas marketing.9 ENVIRONMENTAL MATTERS Apache,as an owner or lessee and operator of oil and gas properties,is subject to various federal,provincial,state,local and foreign country laws and regulations relating to discharge of materials into,and protection of,the environment.These
135、 laws and regulations may,among other things,impose liability on the lessee under an oil and gas lease for the cost of pollution clean-up resulting from operations,subject the lessee to liability for pollution damages,require suspension or cessation of operations in affected areas.Apache maintains i
136、nsurance coverage which it believes is customary in the industry,although it is not fully insured against all environmental risks.The Company is not aware of any environmental claims existing as of December 31,1995,which would have a material impact upon the Companys financial position or results of
137、 operations.Apache has made and will continue to make expenditures in its efforts to comply with these requirements,which it believes are necessary business costs in the oil and gas industry.Apache has established policies for continuing compliance with environmental laws and regulations,including r
138、egulations applicable to its operations in Canada,Australia and other countries.Apache has also established operational procedures designed to limit the environmental impact of its field facilities.The costs incurred by these policies and procedures are inextricably connected to normal operating exp
139、enses such that the Company is unable to separate the expenses related to environmental matters;however,the Company does not believe any such additional expenses are material to its financial position or results of operations.Although environmental requirements do have a substantial impact upon the
140、energy industry,generally these requirements do not appear to affect Apache any differently,or to any greater or lesser extent,than other companies in the industry.Apache does not believe that compliance with federal,state,local or foreign country provisions regulating the discharge of materials int
141、o the environment,or otherwise relating to the protection of the environment,will have a material adverse effect upon the capital expenditures,earnings or competitive position of the Company or its subsidiaries,but there is no assurance that changes in or additions to laws or regulations regarding t
142、he protection of the environment will not have such an impact.COMPETITION The oil and gas industry is highly competitive.Because oil and gas are fungible commodities,the principal form of competition with respect to product sales is price competition.Apache strives to maintain the lowest finding and
143、 production costs possible to maximize profits.As an independent oil and gas company,Apache frequently competes for reserve acquisitions,exploration leases,licenses,concessions and marketing agreements against companies with substantially larger financial and other resources than Apache possesses.Mo
144、reover,many competitors have established strategic long-term positions and maintain strong governmental relationships in countries in which the Company may seek new entry.Apache expects this high degree of competition to continue.EMPLOYEES On December 31,1995,Apache had 1,285 full-time employees.OFF
145、ICES Apaches principal executive offices are located at One Post Oak Central,2000 Post Oak Boulevard,Suite 100,Houston,Texas 77056-4400.At year-end 1995,the Company maintained regional exploration and production offices in Tulsa,Oklahoma;Houston,Texas;Calgary,Alberta;and Perth,Western Australia.In 1
146、995,the Company closed its Denver,Colorado office and redeployed those employees to its remaining region offices in connection with the sale of a substantial portion of the Companys Rocky Mountain properties and the reorganization of the Rocky Mountain and Permian Basin regions as Apaches Western re
147、gion.10 ITEM 2.PROPERTIES OIL AND GAS EXPLORATION AND PRODUCTION PROPERTIES AND RESERVES ACREAGE The developed and undeveloped acreage,including both domestic leases and international production and exploration rights that Apache held as of December 31,1995,are as follows:11 Undeveloped Acreage Deve
148、loped Acreage -Gross Net Gross Net Acres Acres Acres Acres -GULF COAST.Alabama.7,789 1,375 -Florida.162 14 -Louisiana.15,850 11,929 129,020 99,533 Mississippi.3,921 498 4,850 2,354 Texas.106,242 47,842 291,635 142,704 -Total.133,964 61,658 425,505 244,591 -GULF OF MEXICO Alabama.-34,560 9,457 Louisi
149、ana.96,433 48,613 294,855 128,377 Texas.90,783 57,759 233,334 97,973 -Total.187,216 106,372 562,749 235,807 -MIDCONTINENT Arkansas.699 327 5,548 3,667 Kansas.160 56 -Louisiana.6,750 4,505 49,394 34,112 Oklahoma.137,051 55,414 532,359 248,162 Pennsylvania.-796 38 Texas.25,301 14,335 136,372 49,763 -T
150、otal.169,961 74,637 724,469 335,742 -WESTERN Colorado.41,299 36,181 18,938 19,387 Michigan.200 16 -New Mexico.100,357 51,699 122,406 58,936 North Dakota.100 50 197 197 Texas.130,242 66,986 282,377 210,799 Utah.2,797 1,091 4,647 4,432 Wyoming.433,154 226,321 34,820 16,872 -Total.708,149 382,344 463,3
151、85 310,623 -TOTAL UNITED STATES 1,199,290 625,011 2,176,108 1,126,763 -PRODUCTIVE OIL AND GAS WELLS The number of productive oil and gas wells,operated and non-operated,in which Apache had an interest as of December 31,1995,is set forth below.GROSS WELLS DRILLED The following table sets forth the nu
152、mber of gross exploratory and gross development wells drilled in the last three fiscal years in which the Company participated.The number of wells drilled refers to the number of wells commenced at any time during the respective fiscal year.Productive wells are either producing wells or wells capabl
153、e of commercial production.At December 31,1995,the Company was participating in 35 wells in the U.S.,six Canadian wells and three international wells in the process of drilling.12 Undeveloped Acreage Developed Acreage -Gross Net Gross Net Acres Acres Acres Acres -INTERNATIONAL Australia.8,312,100 2,
154、954,562 280,460 52,550 Canada.246,391 156,862 389,903 259,081 China.48,677 24,339 -Egypt.1,909,080 447,270 18,300 4,575 Indonesia.722,290 280,890 -Ivory Coast.256,243 102,497 -TOTAL INTERNATIONAL.11,494,781 3,966,420 688,663 316,206 -TOTAL COMPANY.12,694,071 4,591,431 2,864,771 1,442,969 =Gas Oil -G
155、ross Net Gross Net -Gulf of Mexico .227 76 66 24 Midcontinent .1,478 534 1,465 364 Western .250 125 3,977 1,982 Gulf Coast .328 262 1,083 866 Canada .437 301 649 85 Other International.5 1 22 4 -Total.2,725 1,299 7,262 3,325 =Exploratory Developmental -Productive Dry Total Productive Dry Total -1995
156、 -United States.9 15 24 129 21 150 Canada .16 13 29 14 5 19 International.8 12 20 4 2 6 -Total .33 40 73 147 28 175 =1994 -United States.20 17 37 223 39 262 Canada .18 12 30 35 3 38 International.7 8 15 2 -2 Total .45 37 82 260 42 302 =1993 -United States.12 19 31 198 37 235 Canada .11 15 26 13 1 14
157、 International.3 5 8 -Total.26 39 65 211 38 249 =NET WELLS DRILLED The following table sets forth,for each of the last three fiscal years,the number of net exploratory and net developmental wells drilled by Apache.PRODUCTION AND PRICING DATA The following table describes,for each of the last three f
158、iscal years,oil,natural gas liquids(NGLs)and gas production for the Company,average production costs and average sales prices.ESTIMATED RESERVES AND RESERVE VALUE INFORMATION The following information relating to estimated reserve quantities,reserve values and discounted future net revenues is deriv
159、ed from,and qualified in its entirety by reference to,the more complete reserve and revenue information and assumptions included in the Companys financial statements under Item 8 below.The Companys estimates of proved reserve quantities of its U.S.,Canadian and certain international properties have
160、been subject to review by Ryder Scott Company Petroleum Engineers.There are numerous uncertainties inherent in estimating quantities of proved reserves and projecting future rates of production and timing of development expenditures.The following reserve information represents estimates only and sho
161、uld not be construed as being exact.See the Supplemental Oil and Gas Disclosures under Item 8 below.13 Exploratory Developmental -Productive Dry Total Productive Dry Total -1995 -United States.3.7 6.2 9.9 57.3 14.0 71.3 Canada .14.0 9.4 23.4 13.4 3.4 16.8 International.2.4 3.0 5.4 0.8 1.4 2.2 -Total
162、.20.1 18.6 38.7 71.5 18.8 90.3 =1994 -United States.10.7 10.4 21.1 100.1 27.0 127.1 Canada .13.0 7.0 20.0 28.0 2.0 30.0 International.2.3 2.4 4.7 0.4 -0.4 -Total.26.0 19.8 45.8 128.5 29.0 157.5 =1993 -United States.4.2 10.4 14.6 90.4 22.2 112.6 Canada .8.0 11.0 19.0 6.0 1.0 7.0 International.0.6 1.3
163、 1.9 -Total.12.8 22.7 35.5 96.4 23.2 119.6 =Production Average Sales Price -Average -Year Ended Oil NGLs Gas Production Oil NGLs Gas December 31,(Mbbls)(Mbbls)(MMcf)Cost per boe (per bbl)(per bbl)(per Mcf)-1995 .18,324 763 210,632$3.91$17.09$12.05$1.57 1994 .13,815 724 176,396 3.40 15.65 11.28 1.78
164、1993 .13,036 733 131,591 3.94 16.74 11.55 1.94 The following table sets forth the Companys estimated proved developed and undeveloped reserves as of December 31,1995,1994 and 1993:The following table sets forth the estimated future value of all proved reserves of the Company,and proved developed res
165、erves of the Company,as of December 31,1995,1994 and 1993.Future reserve values are based on year-end prices except in those instances where the sale of gas and oil is covered by contract terms providing for determinable escalations.Operating costs,production and ad valorem taxes,and future developm
166、ent costs are based on current costs with no escalations.At December 31,1995,estimated future net revenues expected to be received from all proved reserves of the Company,and from proved developed reserves of the Company,were as follows:The Company believes that no major discovery or other favorable
167、 or adverse event has occurred since December 31,1995,which would cause a significant change in the estimated proved reserves reported herein.The estimates above are based on year-end pricing in accordance with the SEC guidelines and do not reflect current prices.Since January 1,1995,no oil or gas r
168、eserve information has been filed with,or included in any report to,any U.S.authority or agency 14 Oil,NGLs and Natural Gas Condensate (Bcf)(MMbbls)-1995 -Developed .1,298.5 137.5 Undeveloped .203.4 32.8 -Total .1,501.9 170.3 =1994 -Developed .1,184.9 100.0 Undeveloped .131.3 10.6 -Total .1,316.2 11
169、0.6 =1993 -Developed .983.7 92.6 Undeveloped .141.9 10.4 -Total .1,125.6 103.0 =Present Value of Estimated Future Net Revenues Estimated Future Before Income Taxes Net Revenues (Discounted at 10 Percent)-Proved Proved Proved Developed Proved Developed -(In thousands)December 31,-1995 .$4,043,024$3,3
170、90,103$2,344,357$2,056,558 1994 .2,581,459 2,390,126 1,600,927 1,512,305 1993 .2,591,290 2,289,172 1,626,096 1,450,669 Proved Proved Developed -(In thousands)December 31,-1996 .$457,946$481,326 1997 .441,549 418,612 1998 .413,937 345,572 Thereafter .2,729,592 2,144,593 -Total .$4,043,024$3,390,103 =
171、other than the SEC and the Energy Information Administration(EIA).The basis of reporting reserves to the EIA for the Companys reserves is identical to that set forth in the foregoing table.TITLE TO INTERESTS The Company believes that its title to the various interests set forth above is satisfactory
172、 and consistent with the standards generally accepted in the oil and gas industry,subject only to immaterial exceptions which do not detract substantially from the value of the interests or materially interfere with their use in the Companys operations.The interests owned by the Company may be subje
173、ct to one or more royalty,overriding royalty and other outstanding 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 authorities.In addition,the interests ma
174、y be subject to burdens such as net profits interests,liens incident to operating agreements and current taxes,development obligations under oil and gas leases and other encumbrances,easements and restrictions,none of which detract substantially from the value of the interests or materially interfer
175、e with their use in the Companys operations.ITEM 3.LEGAL PROCEEDINGS The information set forth under the caption Litigation in Note 10 to the Companys financial statements under Item 8 below is incorporated herein by reference.ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters wer
176、e submitted for a vote of security holders during the fourth quarter of 1995.15 PART II ITEM 5.MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Apaches common stock,par value$1.25 per share,is traded on the New York Stock Exchange and the Chicago Stock Exchange under the symb
177、ol APA.The table below provides certain information regarding Apache common stock for 1995 and 1994.Prices shown are from the New York Stock Exchange Composite Transactions Reporting System.The closing price per share of Apache common stock,as reported on the New York Stock Exchange Composite Transa
178、ctions Reporting System for February 29,1996,was$26.00.At December 31,1995,there were 77,378,958 shares of Apache common stock outstanding,held by approximately 12,000 shareholders of record and 30,000 beneficial owners.Each share of Apache common stock also represents one preferred share purchase r
179、ight which,when exercisable,would entitle the holder to purchase one ten-thousandth of a share of Series A Junior Participating Preferred Stock for a purchase price of$100 and,under certain circumstances,would entitle the holder to acquire additional shares of Apache common stock.See Note 7 to the C
180、ompanys financial statements under Item 8 below.The Company has paid cash dividends on its common stock for 116 consecutive quarters through December 31,1995,and intends to continue the payment of dividends at current levels,although future dividend payments will depend upon the Companys level of ea
181、rnings,financial requirements and other relevant factors.16 1995 1994 -Price Range Price Range -Dividends -Dividends High Low per Share High Low per Share -First Quarter.$27 3/8$22 1/4$.07$26 7/8$22 1/2$.07 Second Quarter .31 25 3/8$.07 29 1/4 22 1/4$.07 Third Quarter.30 1/4 25 3/4$.07 29 1/4 23$.07
182、 Fourth Quarter .29 5/8 23 1/8$.07 28 7/8 23 5/8$.07 ITEM 6.SELECTED FINANCIAL DATA The following table sets forth selected financial data of the Company and its consolidated subsidiaries for each of the years in the five-year period ended December 31,1995,which information has been derived from the
183、 Companys audited financial statements.Apaches previously reported data for 1995 and prior years has been restated to reflect the merger with DEKALB under the pooling of interests method of accounting.This information should be read in connection with and is qualified in its entirety by the more det
184、ailed information in the Companys financial statements under Item 8 below.(a)Includes financial data for Hadson Energy Resources Corporation(subsequently Apache Energy Resources Corporation)after June 30,1993,and for Hall-Houston Oil Company after July 31,1993.See Note 1 to the Companys financial st
185、atements under Item 8 below.(b)The net loss in 1992 resulted from the sale of substantially all of DEKALBs U.S.assets for a loss of$25.6 million after-tax.DEKALB also reported Canadian ceiling test write-downs of$15.9 million after-tax and U.S.ceiling test write-downs of$24.7 million after-tax.(c)In
186、cludes financial data for MW after June 30,1991.The net loss in 1991 resulted from DEKALB reporting U.S.ceiling test write-downs of$66 million after-tax.(d)No cash dividends were paid on outstanding DEKALB common stock in 1995,1994,1993 and 1992.Cash dividends paid on DEKALB common stock totaled$.8
187、million in 1991.Reference is made to Item 7,MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,for a discussion of significant acquisitions and to Note 2 to the Companys financial statements under Item 8 below.17 At or for the Year Ended December 31,-1995 1994 1993(
188、a)1992(b)1991(c)-(In thousands,except per share amounts)INCOME STATEMENT DATA Total revenues$750,702$592,626$512,632$517,403$457,872 Income(loss)from continuing operations 20,207 45,583 41,421 (14,632)(35,216)Income(loss)per common share-continuing operations .28 .65 .67 (.26)(.65)Cash dividends per
189、 common share(d).28 .28 .28 .28 .28 BALANCE SHEET DATA Working capital(deficit)$(22,013)$(3,203)$(55,538)$(32,775)$(57,593)Total assets 2,681,450 2,036,627 1,759,203 1,774,767 1,597,633 Long-term debt 1,072,076 719,033 504,334 524,098 658,395 Shareholders equity 1,091,805 891,087 868,596 554,524 601
190、,181 Common shares outstanding at end of year 77,379 69,666 69,504 55,361 55,305 ITEM 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Apaches results of operations and financial position during 1995 were significantly impacted by the following factors:
191、PROPERTY ACQUISITIONS-Acquisitions continued to be a significant part of Apaches growth strategy in 1995,with the Company adding over 156 MMboe of proved reserves during the year through purchases.Led by the addition of interests from Texaco Exploration and Production Inc.(Texaco)and Aquila Energy R
192、esources Corporation(Aquila),Apache spent$820.9 million on the acquisition of oil and gas properties during 1995.Acquisitions were a major force behind Apache posting its 18th consecutive year of production growth and record year-end reserves of 420.6 MMboe.The Texaco and Aquila properties,combined
193、with properties acquired from Crystal Oil Company(Crystal)in late 1994,boosted Apaches 1995 production by nearly 92 MMcf/d of natural gas and 17 Mb/d of oil.DEKALB MERGER-On May 17,1995,Apache acquired DEKALB Energy Company(DEKALB,now known as DEK Energy Company)through a merger which resulted in DE
194、KALB becoming a wholly-owned subsidiary of Apache.Pursuant to the merger agreement,Apache issued 8.4 million shares of its common stock in exchange for outstanding DEKALB stock and DEKALB employee stock options that remained outstanding at the time of the merger.The merger was accounted for as a poo
195、ling of interests.As a result,Apaches financial information for all preceding periods and the following management discussion have been prepared on a combined basis using the pooling of interests method of accounting.Apaches earnings for 1995 were reduced by a non-recurring pre-tax charge of approxi
196、mately$10 million for investment banking fees,severance payments and other costs associated with the merger.The merger costs,which are largely non-deductible for income tax purposes,reduced Apaches 1995 net income by$8.7 million,or$.12 per share.COMMODITY PRICES-During 1995,natural gas spot prices r
197、emained volatile,fluctuating from a low of$1.25 per Mcf in July to a high of$2.07 per Mcf in December.Domestic spot prices during the first eight months of 1995 lagged behind comparable prices in 1994,then rebounded above 1994 levels during the last four months of the year.As a result,Apaches averag
198、e gas price for 1995 was down 12 percent from a year ago,negatively impacting earnings by approximately$26 million.A nine-percent increase in the Companys average oil price from 1994 offset nearly$16 million of the impact of lower gas prices.On an equivalent basis,prices negatively impacted earnings
199、 by$.15 per share.HEDGING LOSS-In December 1995,Apache recorded a pre-tax hedging loss of$9.3 million resulting from the decoupling of New York Mercantile Exchange(NYMEX)natural gas futures prices and actual cash prices received by producers for natural gas delivered throughout most of the United St
200、ates.The loss,which stems from contracts for January through March,1996 deliveries,reduced Apaches 1995 net income by$5.9 million,or$.08 per share.RESULTS OF OPERATIONS NET INCOME AND REVENUE Apache reported 1995 net income of$20.2 million,or$.28 per share,compared with$45.6 million,or$.65 per share
201、 in 1994.The decline was due to the lower natural gas realizations and the non-recurring charges noted above.Absent one-time charges for the merger costs and hedging loss,1995 earnings would have totaled$.48 per share.18 Revenues for 1995 totaled$750.7 million,an increase of 27 percent from a year a
202、go.Apaches oil and gas production revenues,boosted by record levels of oil and gas production and a$1.44 per barrel increase in Apaches average realized oil price,rose 21 percent from 1994.A 12 percent decline in the Companys average realized gas price dampened further improvement in Apaches oil and
203、 gas production revenues.Also during 1995,Apache more than doubled its gathering,processing and marketing revenues to$97.2 million.Volume and price information concerning the Companys oil and gas production is summarized below:Natural gas sales contributed$330.7 million to 1995 revenues,up five perc
204、ent from 1994 as production gains from acquisitions and drilling more than offset the impact of a$.21 per Mcf decline in the Companys average realized gas price.Acquisitions boosted Apaches 1995 gas production by approximately 92 MMcf/d,while drilling additions outpaced the impact of property divest
205、itures and natural depletion.Apache realized production gains in each of its three operating areas;the United States,Canada and Australia.In addition to production gains from drilling,the Australian sales benefited from new markets for its natural gas.The Companys average realized natural gas price
206、declined 12 percent from 1994,negatively impacting sales by approximately$44 million.Reflecting an increase in both production and prices,oil sales jumped 45 percent in 1995 to$313.2 million.Apaches oil production rose 12.4 Mb/d,or 33 percent,from a year ago as property divestitures and natural depl
207、etion partially offset the 17 Mb/d of production added through acquisitions.The Companys average realized oil price increased nine percent in 1995 to$17.09 per barrel.Revenues from the sale of natural gas liquids totaled$9.2 million in 1995,up 13 percent from a year ago due to higher prices and a sl
208、ight increase in volumes.19 Selected Oil and Gas Operating Statistics 1995 1994 1993-Natural Gas Volume-Mcf per day:United States .500,441 419,161 299,486 Canada.67,083 56,142 57,449 International .9,551 7,975 3,589 -Total .577,075 483,278 360,524 =Average Natural Gas Price-Per Mcf .$1.57$1.78$1.94
209、Oil Volume-Barrels per day:United States .45,084 32,669 31,809 Canada.1,999 2,003 2,033 International .3,120 3,177 1,874 -Total .50,203 37,849 35,716 =Average Oil Price-Per barrel .$17.09$15.65$16.74 Natural Gas Liquids(NGL)-Barrels per day:.2,090 1,985 2,008 Average NGL Price-Per barrel .$12.05$11.
210、28$11.55 Gathering,processing and marketing revenues in 1995 more than doubled from a year ago to$97.2 million.The revenue increase primarily reflects additional volumes sold under crude oil and natural gas contracts,an activity that typically has low margins.Apaches gross margin from gathering,proc
211、essing and marketing activities declined seven percent from a year ago due to the sale of the Companys interest in the Little Knife gas plant as part of Apaches divestiture of Rocky Mountain properties,reduced gathering volumes,and a lower per-barrel crude-oil margin resulting from a higher mix of l
212、ow-margin sour-grade oil.Other revenues in 1995 of$.4 million reflects$4.3 million of contract settlement income,$2.2 million in gains from the sales of non-oil-and-gas assets,$1.1 million of Canadian royalty credits and$2.1 million of other income,offset by the$9.3 million hedging loss from the dec
213、oupling of NYMEX and wellhead prices.COSTS AND EXPENSES Operating costs increased$62.3 million,or 42 percent,in 1995 due to the impact of Apaches acquisitions.Based on an equivalent unit of production,operating costs increased$.51 per barrel to$3.91 per barrel for 1995.The 15-percent increase in uni
214、t cost reflects the high percentage of oil properties comprising the Texaco acquisition,as oil properties typically have a higher per-unit cost than gas properties.Depreciation,depletion and amortization(DD&A)expense rose 15 percent from a year ago due to the increase in oil and gas production.On a
215、per unit basis,DD&A expense declined six percent to$5.49 per boe.Apaches full cost amortization rates fell in the United States,Canada and Australia due to the favorable impact of reserve additions and revisions.Administrative,selling and other costs declined$2.2 million,or six percent,in 1995 due p
216、rimarily to the elimination of duplicate administrative functions following the merger of DEKALB into Apache.Apache integrated its 1995 acquisitions with minimal increases in administrative staff.On an equivalent unit of production basis,administrative,selling and other costs declined 24 percent fro
217、m 1994 to$.67 per boe.Net financing costs of$70.6 million were slightly more than double the 1994 amount due to increased debt levels from acquisitions and due to higher interest rates.Apaches average interest rate increased from 6.3 percent in 1994 to 7.4 percent in 1995 due to higher market rates
218、and Apaches higher debt to total capitalization rate following the acquisition of properties from Texaco.HEDGING ACTIVITY The Company periodically enters into hedging activities with respect to a portion of its projected oil and natural gas production through a variety of financial arrangements inte
219、nded to support oil and natural gas prices at targeted levels and to minimize the impact of price fluctuations.Apache uses swaps,puts,collars and fixed-price contracts to hedge its commodity prices.As noted in the Companys significant accounting policies,normal recurring gains or losses on these act
220、ivities are recognized in oil and gas production revenues when the hedged volumes are produced.In 1995,Apache recognized net recurring gains from hedging activities which boosted oil and gas production revenues by approximately$1.5 million and$3.5 million,respectively.These gains increased the Compa
221、nys average realized oil and natural gas prices in 1995 by$.08 per barrel and$.02 per Mcf,respectively.Also in 1995,the Company realized$4.8 million of gains from hedging activities that relate to future production periods.These gains will be recognized in oil and gas production revenues over period
222、s ranging from one to 60 months based on physical production.During the fourth quarter of 1995,Apache entered into swap agreements for January,February and March 1996 production under which the Company will receive a fixed price averaging$1.98 per Mcf on approximately 300 MMcf/d.The hedges,which cov
223、ered approximately one-half of Apaches expected natural gas production,will limit the upside potential from the physical sale of Apaches natural gas during the first quarter of 1996.20 In addition to limiting first quarter 1996 gas prices,the hedges on the 1996 production resulted in a charge to cur
224、rent year earnings.In late 1995,a marketing anomaly developed in which NYMEX natural gas futures prices,commonly used as the reference price in hedge agreements,lost their correlation to wellhead prices.Due to frigid temperatures in the northeastern United States and pipeline constraints in the nati
225、ons gas transportation system,NYMEX natural gas prices rose substantially higher than prices received by producers west of the Mississippi River.Producers,such as Apache,with large volumes of production in Texas and Oklahoma were unable to realize the record increases in NYMEX prices.As a result of
226、this significant decoupling of NYMEX and wellhead prices,Apache recognized a pre-tax hedging loss of$9.3 million in 1995 which was reported as a reduction of Other Revenues on the Companys Statement of Consolidated Income.Effective with contracts covering April 1996 and subsequent deliveries,Apache
227、has limited its hedges to production volumes deliverable to the northeastern United States.PRIOR YEAR COMPARATIVE INFORMATION Apache reported net income for 1994 of$45.6 million,a three-percent decrease from 1993 earnings of$46.8 million.The Companys 1993 net income included a one-time benefit of$5.
228、3 million,or$.08 per share,for the cumulative effects of a change in accounting principle related to the adoption of the liability method of accounting for income taxes under Statement of Financial Accounting Standards(SFAS)No.109.Significant factors contributing to the higher income from continuing
229、 operations were increased oil production and substantially increased natural gas production,partially offset by decreases in oil and natural gas prices.Revenues for 1994 totaled$592.6 million,or 16 percent higher than in 1993.Oil and gas production revenues in 1994 totaled$538.4 million,an increase
230、 of 12 percent over oil and gas production revenues of$481.8 million in the prior year.Oil and gas production revenues in 1994 were influenced by record natural gas production,declining natural gas prices,increased oil production and lower average oil prices for the year.In addition,Apaches gatherin
231、g,processing and marketing revenues increased 71 percent to$44.3 million in 1994 from$25.9 million in 1993.Natural gas sales contributed$314 million to revenues,up 23 percent from 1993,the result of higher annual production partially offset by lower prices during 1994.Gas production for the year ave
232、raged 483 MMcf/d,up 34 percent from 1993,positively affecting gas sales by$87 million.This increase is principally the result of production increases from developmental drilling and the contribution of 12 months of operations from properties acquired in 1993,the most significant of which were the of
233、fshore properties acquired from Hall-Houston Oil Company(Hall-Houston)and the properties added through Apaches mid-1993 merger with Hadson Energy Resources Corporation(subsequently known as Apache Energy Resources Corporation or AERC).Acquisitions added approximately 50 MMcf/d of production increase
234、s for the year,whereas developmental drilling and recompletions accounted for nearly 73 MMcf/d.Apaches average realized price for its natural gas was$1.78 per Mcf during 1994,eight percent lower than the average price of$1.94 per Mcf during 1993,which negatively affected natural gas sales by$28.2 mi
235、llion.Natural gas prices remained depressed during the second half of 1994 due to warmer than usual weather in the northeastern United States and higher volumes of gas held in inventory by utilities and gas storage facilities.Hedging activities increased Apaches 1994 natural gas price by$.02 per Mcf
236、($3 million in sales)compared to a$.04 per Mcf decrease($5.4 million in sales)in 1993.The impact of increased oil production was offset by lower oil prices in 1994.Oil production contributed$216.2 million to revenues during 1994,less than one percent below Apaches oil sales in 1993.Average daily oil
237、 production of approximately 37.9 Mbbls reflected a six percent increase over the prior year,positively affecting oil sales by$13 million,as acquisitions offset the effects of natural depletion.Oil sales represented 40 percent of total oil and gas production revenues in 1994 compared to 45 percent o
238、f total oil and gas production revenues in 1993.21 The Companys average realized oil price for 1994 of$15.65 per barrel declined seven percent from 1993,negatively affecting oil sales by$15 million.Apaches average realized oil prices in 1994 ranged from$12.64 per barrel in March to$17.84 per barrel
239、in July.Hedging activities increased Apaches average realized oil price by$.20 per barrel($2.7 million in sales)as compared to a$.37 per barrel increase($4.8 million in sales)in 1993.The 1994 hedges were in the form of floating for fixed price swap agreements with respect to the sale of oil,whereas
240、1993 sales hedges were due to the price support hedging agreement with Amoco Production Company.Revenues from the sale of natural gas liquids decreased four percent from 1993,to$8.2 million in 1994.Revenues from gas gathering,processing and marketing were$44.3 million in 1994,up 71 percent from 1993
241、.The revenue increase primarily reflects additional volumes sold under crude oil and natural gas contracts,an activity that generally creates relatively low margins.Gross margins from gathering,processing and marketing were$6.4 million in 1994,an increase of 32 percent from 1993.Other revenues incre
242、ased to$9.5 million in 1994,up from$4.3 million in 1993.Non-recurring revenues in 1994 included$4 million from the favorable resolution of take-or-pay contract issues,$2.2 million in gains from the sale of stock held for investment and$3.3 million of other income.Operating costs per equivalent unit
243、of production declined 14 percent in 1994,as a 23-percent increase in production volumes more than offset a six-percent increase in operating costs.Aggregate operating costs increased from$140.6 million in 1993 to$149.5 million in 1994.On an equivalent unit of production basis,operating costs in 199
244、4 declined to$3.40 per boe,down from$3.94 per boe in 1993.Apaches declining costs per boe reflect increasing natural gas production and lower production costs.DD&A expense rose 30 percent year-over-year to$257.8 million due to increased oil and natural gas production and a higher U.S.amortization ra
245、te expressed on a boe basis.Apaches U.S.amortization rate increased from$5.61 per boe in 1993 to$5.88 per boe in 1994 due to higher finding costs during the last two years.Recurring international DD&A expense increased as higher Australian production more than offset the impact of lower Canadian pro
246、duction.Although Apache increased its international exploration activity in 1994,international impairments declined to$7.3 million in 1994 from$23.2 million in 1993,reflecting the Companys successful international exploration efforts in China,Egypt and Indonesia during 1994.Administrative,selling an
247、d other costs increased$2.1 million in 1994,or six percent from 1993.These costs,on an equivalent unit of production basis,declined 15 percent from the prior year to$.88 per boe in 1994 from$1.03 per boe in 1993,reflecting the increase in production over the prior year and results of the Companys co
248、ntinuing efforts to contain costs.The Company integrated AERC and the Hall-Houston properties with minimal increases in administrative staff.Net financing costs of$34.7 million were 13 percent higher than 1993,primarily a result of increasing interest rates and increased debt from acquisitions.Effec
249、tive interest rates on Apaches floating rate debt,which includes all advances under its bank credit facility,increased approximately 59 percent over year-end 1993,as market rates increased at six different times during the year.22 CASH FLOW,LIQUIDITY AND CAPITAL RESOURCES CAPITAL COMMITMENTS Apaches
250、 primary needs for cash are for exploration,development and acquisition of oil and gas properties,repayment of principal and interest on outstanding debt,payment of dividends,and capital obligations for affiliated ventures.The Company generally funds its exploration and development activities throug
251、h internally generated cash flows.Apache budgets its capital expenditures based upon projected cash flows and routinely adjusts its capital expenditures in response to changes in oil and natural gas prices and corresponding changes in cash flow.CAPITAL EXPENDITURES-A summary of oil and gas capital e
252、xpenditures over the last three years is presented below:Expenditures for exploration and development totaled$312.2 million in 1995 compared to$344.1 million in 1994.Apaches drilling program in 1995 added 54 MMboe of reserves(including revisions),replacing 100 percent of production.In the U.S.,Apach
253、e completed 138 gross wells as producers out of 174 gross wells drilled during the year compared with 210 gross producers out of 299 gross wells drilled in 1994.With DEKALBs merger into Apache in 1995 and a higher level of funds spent on acquisitions,the number of wells drilled in Canada declined fr
254、om 68 gross wells in 1994 to 48 gross wells in 1995.Internationally,the Company had discoveries from 12 of 26 wells drilled in 1995 compared to nine of 17 wells in 1994.The international wells drilled in 1995 included six successful wells in Egypt,from which full production is expected to commence b
255、y mid 1996,and two wells with oil and gas shows in the Peoples Republic of China.Since 1994,Apache has spent approximately$25 million on exploratory wells in the Zhao Dong Block in China,with three successful wells.Apache,which recently announced plans to proceed with the second exploration phase un
256、der its contract with the Peoples Republic of China,is continuing to appraise the field.U.S.and Canadian expenditures for exploration and development in 1996,including workover and recompletion operations,are expected to be comparable to the 1995 expenditure level.The Company expects its other inter
257、national exploration and development expenditures in 1996 to total approximately$120 million.Cash expenditures for acquisitions of oil and gas properties during 1995 totaled$820.9 million as the Company added 156 MMboe of oil and gas reserves through purchases.The most significant of the 59 transact
258、ions Apache completed during 1995 were the Companys acquisition of properties from Texaco and Aquila.23 1995 1994 1993 -(In thousands)Exploration and Development:United States .$216,430$270,588$200,924 Canada .27,788 41,595 18,901 Other International .67,950 31,942 18,006 -Total .$312,168$344,125$23
259、7,831 =Acquisitions of Oil and Gas Properties$820,918$180,742$326,676 =On March 1,1995,Apache purchased certain U.S.oil and gas properties from Texaco for approximately$567 million in cash,subject to adjustment.Apache delivered a$25 million deposit,representing a portion of the purchase price,upon e
260、xecution of the purchase and sale agreement with Texaco in December 1994,and delivered the balance,in cash,at closing.Funds for the Texaco transaction were obtained from several sources,including increased borrowing capacity under the Companys bank credit facility and proceeds of Apaches$172.5 milli
261、on 6-percent Convertible Subordinated Debentures due 2002(6-percent debentures),which were issued on January 4,1995.In September 1995,Apache acquired substantially all of the oil and gas assets of Aquila for approximately$210 million.The oil and gas properties included approximately 107,000 develope
262、d and 49,000 undeveloped net acres located primarily in Apaches Anadarko Basin and Gulf of Mexico core areas.Also included in the transaction was the purchase of a five-year,four-month premium-gas contract and interests in four gas processing plants.Cash expenditures for acquisitions,excluding AERC,
263、totaled$180.7 million in 1994 compared to$192.3 million in 1993.The most significant acquisition that Apache closed during 1994 was the purchase of substantially all of the U.S.oil and gas properties of Crystal for$95.8 million.Apache also acquired approximately$84.9 million of other oil and gas pro
264、perties through a number of separate transactions during 1994.Funds for the 1994 acquisitions were obtained principally from borrowings under the Companys revolving bank credit facility.The aggregate cost of acquisitions in 1993,including the value of the shares issued and liabilities added through
265、the acquisition of AERC,totaled$326.7 million.Apaches most significant transactions during 1993 were its acquisitions of oil and gas properties from Hall-Houston for$113.7 million in cash and the acquisition of AERC for approximately$98 million in cash and the issuance of 307,977 shares of Apache co
266、mmon stock.Apache also acquired more than$78.6 million of other properties during 1993,primarily representing purchases of additional working interests in properties in which Apache already held an interest.Other capital expenditures for 1993 include the purchase of Natural Gas Clearinghouses(NGC)in
267、terest in a gas gathering system in Oklahoma,which Apache sold in March 1993,as described under Capital Resources and Liquidity below.DEBT AND INTEREST COMMITMENTS-At December 31,1995,Apache had outstanding$620 million under its revolving bank credit facility and an aggregate of$455.1 million in pri
268、ncipal amount of other debt,comprised principally of notes and debentures maturing in the years 1997 through 2002.Apache made cash payments on debt totaling$500.6 million in 1995,of which less than$1 million was scheduled under the Companys debt obligations.The 1995 payments on debt reflect the redu
269、ction of amounts outstanding on the Companys revolving credit facility after issuing$172.5 million of 6-percent debentures in January 1995,and the reduction of debt through property sales to achieve the Companys stated goal of maintaining a debt level below 50 percent of total capitalization.Interes
270、t payments on the Companys outstanding debt obligations during 1996 are projected(using weighted average balances for floating rate obligations)to be approximately$82 million,while scheduled principal payments for 1996 currently total$3 million.DIVIDEND PAYMENTS-Dividends paid during 1995 totaled$18
271、.9 million,up 10 percent from 1994,primarily due to the issuance of 7.45 million shares of the Companys common stock in connection with the September 1995 common stock offering.The Companys dividend policy currently provides for the payment of regular quarterly dividends at the rate of$.28 per share
272、 annually,subject to the Companys cash requirements,applicable debt covenants and other factors deemed relevant by the Board of Directors.24 CAPITAL RESOURCES AND LIQUIDITY The Companys primary capital resources are net cash provided by operating activities,proceeds from financing activities and pro
273、ceeds from sales of non-strategic assets.NET CASH PROVIDED BY OPERATING ACTIVITIES-Apaches net cash provided by operating activities during 1995 totaled$332.1 million,down$25.6 million from 1994.The prior-year cash flow included a$67.4 million advance on future gas deliveries related to the Companys
274、 sale of approximately 43.8 Bcf of natural gas for delivery over a six-year period.Eliminating the effects of the forward sale transaction,net cash provided by operating activities in 1995 increased by five percent over 1994,reflecting the results of increased production partially offset by lower ga
275、s prices and non-recurring charges.Net cash provided by operating activities in 1994 was up$101.8 million from 1993 primarily due to increased natural gas production and the$67.4 million forward sale of gas.LONG-TERM BORROWINGS-On January 4,1995,Apache completed the issuance of$172.5 million princip
276、al amount of its 6-percent debentures to reduce bank debt,provide funding for acquisitions and for general corporate purposes.The debentures are convertible at the option of the holder into Apache common stock at a conversion price of$30.68 per share.Costs associated with the issue of these debentur
277、es totaled$4.4 million.On March 1,1995,in connection with the acquisition of certain oil and gas properties from Texaco,lenders increased the size of Apaches revolving credit facility from$700 million to$1 billion,subject to borrowing base availability.The borrowing base is the estimated loan value
278、of the Companys oil and gas reserves,not including reserves outside the United States and subject to certain other exclusions,based upon forecast rates of production,as periodically redetermined by the lenders.Under terms of the credit agreement at December 31,1995,the Company must (i)maintain a min
279、imum consolidated tangible net worth of$816 million,which is adjusted quarterly for subsequent earnings and securities transactions,and (ii)maintain a ratio of(a)earnings before interest expense,state and federal taxes,and depreciation,depletion and amortization to(b)consolidated interest expense,of
280、 not less than 3.7:1.Restrictive covenants under the facility include certain limitations on indebtedness and contingent obligations,as well as certain restrictions on liens.The Company has complied with its financial ratios and restrictive covenants at all times since the inception of the revolving
281、 credit facility in July 1991.The facility matures on March 1,2000,and may be extended in one-year increments with the lenders consent.On February 27,1996,Apache completed its offering of$100 million principal amount of unsecured 7.7%notes due March 15,2026.Proceeds from the notes will be used to re
282、duce amounts outstanding under the Companys revolving bank credit facility.STOCK TRANSACTIONS-On September 27,1995,Apache closed an equity offering of 7.45 million shares of Apache common stock.Net proceeds of approximately$195.5 million were used to repay existing indebtedness under the Companys re
283、volving bank credit facility,to finance the Aquila transaction and for general corporate purposes.In March 1993,Apache completed the public offering of approximately 5.8 million shares of Apache common stock for net proceeds of$131.8 million.Net proceeds of the offering were used to repay outstandin
284、g debt under Apaches revolving bank credit facility.In September 1993,Apache completed the conversion of its 7 1/2-percent convertible subordinated debentures due 2000,resulting in the issuance of approximately 7.8 million shares of Apache common stock.In addition to the public offerings,Apache issu
285、ed 307,977 shares of Apache common stock in conjunction with its mid-1993 acquisition of AERC.25 ASSET SALES-In early 1995,Apache announced plans to accelerate the disposition of lower-margin and non-strategic properties,including the sale of a substantial portion of its Rocky Mountain properties.Du
286、ring 1995,Apache received$271.9 million from the sale of such properties,utilizing the proceeds to reduce bank debt.Apache received$19.5 million and$10.3 million from the sale of non-strategic oil and gas properties during 1994 and 1993,respectively.In March 1993,Apache and NGC completed the sale of
287、 their respective interests in a gathering system located in western Oklahoma.Apache received gross cash proceeds of approximately$32.2 million in the transaction,of which$16.4 million was attributable to NGCs interest in the system.LIQUIDITY-The Company had$13.6 million in cash and cash equivalents
288、 on hand at December 31,1995,down from$30 million at the end of 1994.Apache utilized available cash in 1995 to reduce its bank debt and resulting debt to total capitalization ratio,achieving a reduction in the Companys interest rates.Apaches ratio of current assets to current liabilities at year end
289、 of.90:1 declined slightly from a ratio of.98:1 at December 31,1994.Management believes that cash on hand at year end,net cash generated from operations and available borrowing capacity under its revolving bank credit facility will be adequate to satisfy the Companys financial obligations to meet fu
290、ture liquidity needs for at least the next two fiscal years.FUTURE TRENDS Apaches growth strategy is to increase oil and gas reserves,production and cash flow through a combination of acquisitions,moderate-risk drilling and development of its inventory of existing properties.An emerging aspect of Ap
291、aches strategy is its exploration and development activity in the international arena where there are generally larger reserve targets than in North America.In 1996,Apache expects domestic exploration and development outlays to be comparable to those reported in 1995 as the Company focuses on reserv
292、e enhancement and cash flow acceleration on recently acquired properties.Internationally,the Company projects capital expenditures to nearly double from 1995 as Apache continues to exploit its concessions in Western Australia,Egypt,China and Indonesia.Proposed exploration and development expenditure
293、s in 1996 will be reviewed at least quarterly in light of fluctuating product prices and Apaches objective to fund operations through internally generated cash flow.NATURAL GAS MARKETING On September 30,1995,the Companys contract with NGC terminated,and Apache began to market all of its own natural
294、gas.The Company believes the prices that it obtains through its own marketing activities are not substantially different from the prices that would have been received through NGC.In October 1995,subsidiaries of Apache,Oryx Energy Company and Parker&Parsley Petroleum Company announced their formation
295、 of Producers Energy Marketing,LLC(ProEnergy),a natural gas marketing company organized to create a direct link between natural gas producers and purchasers.ProEnergy is designed to purchase and sell producer-owned gas directly into the marketplace at index prices substantially equivalent to spot ma
296、rket prices and provide expanded value to its customers.Until ProEnergy is fully operational,which is expected to occur in the second quarter of 1996,Apache will continue to market its own natural gas.Apache and other members of ProEnergy have agreed to fund the reasonably anticipated capital needs
297、of ProEnergy.In January 1996,Apache paid$5.8 million to ProEnergy for Apaches share of capital-funding obligations for the start-up of ProEnergy.26 ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements and supplementary financial information required to be filed under this item
298、 are presented on pages F-1 through F-34 of this Form 10-K,and are incorporated herein by reference.ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.27 PART III ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information set forth under
299、the captions Information About Nominees for Election as Directors,Continuing Directors,Executive Officers of the Company,and Voting Securities and Principal Holders in the Companys proxy statement relating to the Companys 1996 annual meeting of shareholders(the Proxy Statement)is incorporated herein
300、 by reference.ITEM 11.EXECUTIVE COMPENSATION The information set forth under the captions Summary Compensation Table,Option/SAR Grants Table,Option/SAR Exercises and Year-End Value Table,Employment Contracts and Termination of Employment and Change-in-Control Arrangements,and Director Compensation i
301、n the Proxy Statement is incorporated herein by reference.ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information set forth under the caption Voting Securities and Principal Holders in the Proxy Statement is incorporated herein by reference.ITEM 13.CERTAIN RELATIONSHIP
302、S AND RELATED TRANSACTIONS The information set forth under the caption Certain Business Relationships and Transactions in the Proxy Statement is incorporated herein by reference.28 PART IV ITEM 14.EXHIBITS,FINANCIAL STATEMENT SCHEDULES,AND REPORTS ON FORM 8-K (a)Documents included in this report:1.F
303、inancial Statements 2.Financial Statement Schedules Financial statement schedules have been omitted because they are either not required,not applicable or the information required to be presented is included in the Companys financial statements and related notes.29 Report of independent public accou
304、ntants.F-1 Auditors report.F-2 Report of management.F-3 Statement of consolidated income for each of the three years in the period ended December 31,1995 .F-4 Statement of consolidated cash flows for each of the three years in the period ended December 31,1995 .F-5 Consolidated balance sheet as of D
305、ecember 31,1995 and 1994 .F-6 Statement of consolidated shareholders equity for each of the three years in the period ended December 31,1995 .F-8 Notes to consolidated financial statements.F-9 Supplemental oil and gas disclosures.F-28 Supplemental quarterly financial data .F-34 3.Exhibits 30 Exhibit
306、 No.Description-2.1-Stock Purchase Agreement,dated July 1,1991,between Registrant and Amoco Production Company (incorporated by reference to Exhibit 10.1 to Registrants Current Report on Form 8-K,dated July 1,1991,SEC File No.1-4300,filed July 19,1991).2.2 -Purchase and Sale Agreement between Hall-H
307、ouston Oil Company,as seller,and Registrant,as buyer,dated as of June 2,1993(incorporated by reference to Exhibit 10.1 to Registrants Current Report on Form 8-K,dated August 31,1993,SEC File No.1-4300,filed September 7,1993).2.3 -Purchase and Sale Agreement between Hall-Houston Oil Company,as seller
308、,and Registrant,as buyer,dated as of August 13,1993(incorporated by reference to Exhibit 10.2 to Registrants Current Report on Form 8-K,dated August 31,1993,SEC File No.1-4300,filed September 7,1993).2.4 -Form of Acquisition Agreement between Registrant,HERC Acquisition Corporation and Hadson Energy
309、 Resources Corporation,dated August 26,1993,and amended September 28,1993(incorporated by reference to Exhibit 2.1 to Registrants Registration Statement on Form S-4,Registration No.33-67954,filed September 29,1993).2.5 -Purchase and Sale Agreement by and between Texaco Exploration and Production Inc
310、.,as seller,and Registrant,as buyer,dated December 22,1994(incorporated by reference to Exhibit 99.3 to Registrants Current Report on Form 8-K,dated November 29,1994,SEC File No.1-4300,filed December 29,1994).2.6 -Amended and Restated Agreement and Plan of Merger among Registrant,XPX Acquisitions,In
311、c.and DEKALB Energy Company,dated December 21,1994(incorporated by reference to Exhibit 2.1 to Amendment No.3 to Registrants Registration Statement on Form S-4,Registration No.33-57321,filed April 14,1995).2.7 -Matagorda Island 681 Field Purchase and Sale Agreement with Option to Exchange,dated Nove
312、mber 24,1992,between Shell Offshore Inc.,SOI Royalties Inc.,and Registrant(incorporated by reference to Exhibit 10.7 to Apache Offshore Investment Partnerships Annual Report on Form 10-K for year ended December 31,1992,SEC File No.0-13546).3.1 -Restated Certificate of Incorporation of Registrant,dat
313、ed December 1,1993,as filed with the Secretary of State of Delaware on December 16,1993(incorporated by reference to Exhibit 3.1 to Registrants Annual Report on Form 10-K for year ended December 31,1993,SEC File No.1-4300).*3.2 -Certificate of Ownership and Merger Merging Apache Energy Resources Cor
314、poration into Registrant,effective December 31,1995,as filed with the Secretary of State of Delaware on December 21,1995.31 Exhibit No.Description -*3.3 -Certificate of Designations,Preferences and Rights of Series A Junior Participating Preferred Stock of Registrant,effective January 31,1996,as fil
315、ed with the Secretary of State of Delaware on January 22,1996.*3.4 -Bylaws of Registrant,dated as of February 9,1996.*4.1 -Form of Registrants common stock certificate.4.2 -Rights Agreement,dated as of January 10,1986,between Registrant and First Trust Company,Inc.,rights agent,relating to the decla
316、ration of a rights dividend to Registrants common shareholders of record on January 24,1986(incorporated by reference to Exhibit 4.9 to Registrants Annual Report on Form 10-K for year ended December 31,1985,SEC File No.1-4300).4.3 -Rights Agreement,dated as of January 31,1996,between Registrant and
317、Norwest Bank Minnesota,N.A.,rights agent,relating to the declaration of a rights dividend to Registrants common shareholders of record on January 31,1996(incorporated by reference to Exhibit(a)to Registrants Registration Statement on Form 8-A,dated January 24,1996,SEC File No.1-4300).10.1 -Second Am
318、ended and Restated Credit Agreement,dated April 30,1994,among Registrant,the lenders named therein,and the First National Bank of Chicago and Chemical Bank,as Agents(incorporated by reference to Exhibit 10.1 to Registrants Quarterly Report on Form 10-Q for quarter ended June 30,1994,SEC File No.1-43
319、00).10.2 -Third Amended and Restated Credit Agreement,dated March 1,1995,among Registrant,the lenders named therein,and the First National Bank of Chicago,as Administrative Agent and Arranger,and Chemical Bank,as Co-Agent and Arranger(incorporated by reference to Exhibit 10.2 to Registrants Annual R
320、eport on Form 10-K for year ended December 31,1994,SEC File No.1-4300).10.3 -First Amendment to Third Amended and Restated Credit Agreement,dated April 14,1995,among Registrant,the lenders named therein,and the First National Bank of Chicago,as Administrative Agent and Arranger,and Chemical Bank,as
321、Co-Agent and Arranger(incorporated by reference to Exhibit 99.3 to Registrants Registration Statement on Form S-3,Registration No.33-63923,filed November 2,1995).10.4 -Second Amendment to Third Amended and Restated Credit Agreement,dated October 23,1995,among Registrant,the lenders names therein,and
322、 the First National Bank of Chicago,as Administrative Agent and Arranger,and Chemical Bank,as Co-Agent and Arranger(incorporated by reference to Exhibit 99.4 to Registrants Registration Statement on Form S-3,Registration No.33-63923,filed November 2,1995).*10.5 -Third Amendment to Third Amended and
323、Restated Credit Agreement,dated December 18,1995,among Registrant,the lenders named therein,and the First National Bank of Chicago,as Administrative Agent and Arranger,and Chemical Bank,as Co-Agent and Arranger.*10.6 -Fourth Amendment to Third Amended and Restated Credit Agreement,dated December 22,
324、1995,among Registrant,the lenders named therein,and the First National Bank of Chicago,as Administrative Agent and Arranger,and Chemical Bank,as Co-Agent and Arranger.32 Exhibit No.Description-*10.7 -Fifth Amendment to Third Amended and Restated Credit Agreement,dated January 22,1996,among Registran
325、t,the lenders named therein,and the First National Bank of Chicago,as Administrative Agent and Arranger,and Chemical Bank,as Co-Agent and Arranger.10.8 -Fiscal Agency Agreement,dated as of January 4,1995,between Registrant and Chemical Bank,as fiscal agent(incorporated by reference to Exhibit 99.2 t
326、o Registrants Current Report on Form 8-K,dated December 6,1994,SEC File No.1-4300,filed January 11,1995.)+10.9 -1982 Employee Stock Option Plan,as updated in January 1987 to conform to the Tax Reform Act of 1986(incorporated by reference to Exhibit 10.7 to Registrants Annual Report on Form 10-K for
327、year ended December 31,1990,SEC File No.1-4300).+10.10-Apache Corporation Corporate Administrative Group Incentive Plan,effective as of January 1,1989 (incorporated by reference to Exhibit 10.8 to Registrants Annual Report on Form 10-K for year ended December 31,1990,SEC File No.1-4300).+10.11-First
328、 Amendment to Apache Corporation Corporate Administrative Group Incentive Plan,effective January 1,1990(incorporated by reference to Exhibit 10.14 to Registrants Annual Report on Form 10-K for year ended December 31,1993,SEC File No.1-4300).+10.12-Apache Corporation Retirement/401(k)Savings Plan,dat
329、ed December 22,1994,effective January 1,1995(incorporated by reference to Exhibit 10.7 to Registrants Annual Report on Form 10-K for year ended December 31,1994,SEC File No 1-4300).+10.13-Amendments to the Apache Corporation Retirement/401(k)Savings Plan,each dated April 19,1995 (incorporated by ref
330、erence to Exhibit 4.6 to Registrants Registration Statement on Form S-8,Registration No.33-63817,filed October 31,1995).+*10.14-Amendments to the Apache Corporation Retirement/401(k)Savings Plan,effective May 4,1995 and May 17,1995.+*10.15-Non-Qualified Retirement/Savings Plan of Apache Corporation,
331、dated November 16,1989.+*10.16-First Amendment to the Non-Qualified Retirement/Savings Plan of Apache Corporation,dated October 24,1995.+10.17-Apache International,Inc.Common Stock Award Plan,dated February 12,1990(incorporated by reference to Exhibit 10.13 to Registrants Annual Report on Form 10-K
332、for year ended December 31,1989,SEC File No.1-4300).+10.18-Apache Corporation 1990 Phantom Stock Appreciation Plan,dated as of September 28,1990 (incorporated by reference to Exhibit 10.17 to Registrants Annual Report on Form 10-K for year ended December 31,1990,SEC File No.1-4300).+*10.19-Apache Co
333、rporation 1990 Stock Incentive Plan,as amended and restated February 9,1996.33 Exhibit No.Description-+*10.20-Apache Corporation 1995 Stock Option Plan,as amended and restated February 9,1996.+10.21-Apache Corporation Income Continuance Plan,as amended and restated February 24,1988 (incorporated by reference to Exhibit 10.19 to Registrants Annual Report on Form 10-K for year ended December 31,1990
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