1、CHANGEISANNUAL REPORT 2011consTanTCHANGETHINGSTHESEWORLDWIDE RESERVES0500150025001000200030002002200320042005200620072008200920102011(MMboe)2011 NATURAL GAS PRODUCTION632,550 MCF/DAY2011 LIQUID HYDROCARBON PRODUCTION20,210 BARRELS/DAYPROVED RESERVES765 MMBOEGROSS ACREAGE7.5 MILLION2011 NATURAL GAS P
2、RODUCTION212,311 MCF/DAY2011 LIQUID HYDROCARBON PRODUCTION12,615 BARRELS/DAYPROVED RESERVES117 MMBOEGROSS ACREAGE3.7 MILLION2011 NATURAL GAS PRODUCTION365,418 MCF/DAY2011 LIQUID HYDROCARBON PRODUCTION103,961 BARRELS/DAYPROVED RESERVES292 MMBOEGROSS ACREAGE9.7 MILLION-1-1-2-2-3-3-4-4-5-5-6-6-7-7-8-8-
3、9-9-10-10-11-11-12-122011 NATURAL GAS PRODUCTION864,742 MCF/DAY2011 LIQUID HYDROCARBON PRODUCTION141,526 BARRELS/DAYPROVED RESERVES1,290 MMBOEGROSS ACREAGE10.3 MILLIONCANADAEGYPTUNITED STATESARGENTINAWORLDWIDE PRODUCTION01002003004005006007008002002200320042005200620072008200920102011(Mboe/d)2011 NA
4、TURAL GAS PRODUCTION185,079 MCF/DAY2011 LIQUID HYDROCARBON PRODUCTION38,228 BARRELS/DAYPROVED RESERVES329 MMBOEGROSS ACREAGE8.8 MILLION2011 NATURAL GAS PRODUCTION2,284 MCF/DAY2011 LIQUID HYDROCARBON PRODUCTION54,545 BARRELS/DAYPROVED RESERVES197 MMBOEGROSS ACREAGE786,000+1+1+2+2+3+3+4+4+5+5+6+6+7+7+
5、8+8+9+9+10+10+11+11+12+12NORTH SEAAUSTRALIA00TECHNOLOGYCAPTURING VALUESUSTAINABILITY10 CORE AREASMANAGEMENT SYSTEMSPEOPLEBALANCEGROWTHPROFITABILITYcuLTureREMAINTHINGSTHESE1In the 57 years since Apache was established,CHANGE HAS BEEN CONSTANT:Wide swings in commodity prices,unsettled politics,evolvin
6、g regulation and rapidly advancing technologies continually reshape the landscape of our industry.Confronting change without being swept away by it requires a fi rm foundation.At Apache,OUR FOUNDATION REMAINS THE SAME:our relentless pursuit of opportunity and dedication to our mission growing a prof
7、i table independent oil and gas company in a safe and environmentally responsible manner for the long-term benefi t of our shareholders.Our progress comes through a combination of balance,growth and profi tability.We have not linked Apaches future to a single play,region or commodity,but to a BALANC
8、ED PORTFOLIO of producing assets and large acreage positions in 10 core areas in six countries all in proven hydrocarbon basins.Our GROWTH comes by both capturing value on existing acreage and exploration in promising areas.The result is a sustained record of PROFITABILITY,enhanced by management sys
9、tems that focus our team on rate of return and maximizing production through incentives based on measured results.In 2011,Apache delivered new records in several key metrics:Production climbed 14 percent to 748,000 barrels of oil equivalent per day.We increased proved reserves to 3 billion boe,repla
10、cing 125 percent of production through drilling.Earnings increased 50 percent to$4.5 billion;earnings per share climbed 36 percent to$11.47 per diluted common share.Cash from operations before changes in operating assets and liabilities*surpassed$10 billion,up 39 percent.What enables Apaches continu
11、ed profi table growth is our team.OUR CULTURE empowers employees at every level of the organization to make decisions and achieve the companys goals.At Apache,people have a sense of ownership and the knowledge that no matter who comes up with ideas,the best answers win.From 3-D seismic to horizontal
12、 drilling and multi-stage well completions,Apache employs advanced technology to enhance the chances of exploration success and increase effi ciency of our drilling programs.Our commitment to sustainability includes high standards for safe operations,creative solutions that minimize the impact of ou
13、r operations on the environment,and support for the communities where we operate.*Cash from operations before changes in operating assets and liabilities is a non-GAAP measure.Please see reconciliations,page 11.feLLowsharehoLders,2PRODUCTIONREVENUEIntl GasN Amer GasIntl GasN Amer Gas22%28%31%33%17%1
14、5%6%48%Intl LiquidsN Amer LiquidsIntl LiquidsN Amer LiquidsPortfolio management has long been a key Apache characteristic.Over the course of the last two years,we have strengthened Apaches portfolio through transactions totaling$14 billion that added oil and gas producing assets and acreage in eight
15、 of our 10 operating regions and diversifi ed our production so that no single region contributes more than 22 percent of production.The most signifi cant changes were in our onshore U.S.regions and Canada,which now represent 38 percent of production.In addition to their immediate impact on producti
16、on and cash fl ow,these transactions also brought signifi cant new undeveloped acreage that will provide drilling opportunities for decades to come.Our portfolio balance has multiple dimensions:North America and international;50 percent of production from liquids and 50 percent from natural gas;conv
17、entional and unconventional resources;onshore and off shore;and fi elds with high initial production,rapid decline and early payout and others with long reserve life that will generate stable production and cash fl ow for many years.Today,Apache holds 41 million gross acres in 10 regions.Our experie
18、nce demonstrates that these large acreage positions will continue to bring new opportunities as diverse as the Granite Wash,Tonkawa,Cleveland and Marmaton in the Anadarko basin,multiple formations in the Permian Basin,and deeper zones in Egypts Western Desert.With solid core areas,we have opportunit
19、ies to employ our capital in areas that provide the highest returns.2011 COMMODITY MIXBALANCE3Since our inception in 1954,growth has been a part of Apaches DNA;2011 was our 31st year of production growth of the last 33 years.Throughout the history of oil and gas exploration and development,technolog
20、y has played a central role in accessing new resources.In the 1990s,3-D seismic revolutionized the hunt for oil and gas,and that technology continues to improve.In the last decade,the most signifi cant advance was the coupling of horizontal drilling with hydraulic fracturing techniques that enable o
21、ur industry to develop and produce resources otherwise trapped in shales and other low-permeability rocks.Apache is applying this technology worldwide.The combination of these two technologies has transformed the industry in the United States and Canada,unlocking more enormous natural gas resources.
22、For be?er or worse,this has created continuing downward pressure on North American gas prices.As a result,we are directing much of our capital toward horizontal drilling in areas where the targets are rich in higher-priced crude oil and natural gas liquids.For example,our Central Region Apaches oper
23、ations in Oklahoma and the Texas Panhandle has moved almost completely from vertical wells targeting dry gas to a technology-driven operation drilling horizontal,multi-stage fracture-stimulation wells that enable Apache to access oil and natural gas liquids(NGLs)trapped in tight rocks across the Ana
24、darko basin.The Cordillera Energy Partners III acquisition,which we announced in January 2012,will bring substantial operations that include approximately 254,000 net acres,doubling our position in this prolifi c fairway.With more than 14,000 identifi ed drilling locations,we plan to triple drilling
25、 activity in this area in 2012.With the completion of the Cordillera acquisition expected in the second quarter,Apaches Anadarko basin acreage is projected to total 1.6 million gross acres(837,000 net acres).Apache also acquired approximately 96,000 net acres in the Bivins Ranch area,a 200-square-mi
26、le block in the Whi?enburg basin in Hartley,Oldham,Po?er and Moore counties in the Texas Panhandle,immediately south of the prolifi c Panhandle Dolomite fi eld and north of two 25-well Canyon Wash fi elds.This acreage play GROWTH4ARGENTINAARGENTINANORTH SEANORTH SEAEGYPTEGYPTCANADACANADAAUSTRALIAAUS
27、TRALIAUNITED STATESUNITED STATES104.3129045.976560.229225.232920.019717.5117(million Boe)(million Boe)TOTAL 273.1TOTAL 29902011 PROVED RESERVES2011 PRODUCTIONis part of our program to explore in underdeveloped areas that can benefi t from our technical expertise and fi nancial capacity.Prior to Apac
28、hes entry in the area,just 21 wells had been drilled on the block located about 100 miles west of Apaches Anadarko basin properties.We were encouraged by our early drilling results fi ve oil producers from our fi rst six vertical wells,each producing from 100 to 1,000 barrels per day and we plan to
29、expand our program in 2012 to include horizontal drilling.In the Permian Region,we ramped up activity on an asset base that now encompasses 3 million gross acres(1.5 million net)the second-largest acreage position in the basin.We drilled and participated in 507 wells in 2011,and our currently identi
30、fi ed inventory includes more than 10,000 future drilling locations across nearly every play area.Experience brings new effi ciencies.We have cut drilling time in half at the Wolfcamp play in the Deadwood area in Glasscock County,Texas,enhancing the economics in a play encompassing 100,000 net acres
31、 that represents about half of Apaches Permian drilling activity.We have 30 rigs operating in the Permian,up from fi ve in 2010,and we are in the early phase of applying horizontal drilling techniques in one of the most prolifi c oil-producing basins on Earth.We are pu?ing horizontal drilling and co
32、mpletion technologies to work in Argentina,where Apache will continue to appraise an area in the Neuqun basin that is believed to be one of the largest shale resource basins outside North America.Apache is applying other technologies to enhance the search for oil and gas across our global portfolio,
33、including advanced seismic techniques that improve drilling results in mature basins.In the Gulf of Mexico Shelf and the Gulf Coast Onshore,new methods of processing 3-D seismic provide enhanced imaging and create many opportunities across Apaches acreage,including the largest position in Gulf water
34、s of 600 feet or less.In the North Sea,Apache is employing advanced seismic technology and reservoir modeling to identify high-impact drilling targets in the Forties Field.Our drilling program has been driven by 4-D seismic,which uses a sequence of 3-D surveys to gain an enhanced view of the movemen
35、t of oil through this prolifi c reservoir.Since acquiring Forties in 2003,Apache has invested$4 billion in drilling and new facilities to improve effi ciency.We have produced approximately 180 million barrels of oil equivalent(MMboe),which exceeds the estimated proved reserves at the time of the pur
36、chase by 25 percent.At year-end 2011,remaining estimated proved reserves were 131 MMboe.Production averaged 54,000 boe per day in 2011.The acquisition of ExxonMobils Mobil North Sea Limited,completed at year-end 2011,was the fi rst expansion of our North Sea position since 2003 and fortifi ed our op
37、erations beyond Forties to include operating interests in the Beryl,Nevis,Ness,Nevis South,Skene and Buckland fi elds,the Beryl/Brae gas pipeline and the SAGE 5 2011 2010 2009 2008 2007($billions)REVENUESgas plant.These are the best North Sea assets we have evaluated since acquiring Forties.The fi e
38、lds have signifi cant remaining life,high production effi ciency,quality reservoirs and a portfolio of exploitation projects.Our goal is to replicate our experience at Forties.As Apache has grown,two trends have emerged:More of our capital is directed to developments that will have signifi cant impa
39、ct but have longer lead times,and our global exploration activities are expanding.More than half of the capital we plan to spend in 2012 will go to projects that will contribute signifi cant production beginning in 2013 and beyond.We sanctioned the Chevron-operated Wheatstone liquefi ed natural gas(
40、LNG)project in Australia,which will enable Apache to sell natural gas from our large Julimar/Brunello discovery at LNG prices indexed to crude oil prices.We also have begun development of our Coniston and Balnaves oil discoveries and the Macedon natural gas discovery off shore Western Australia.In D
41、ecember 2011,we commenced production from Reindeer Field via the Devil Creek Gas Plant,an important addition to Western Australias ability to supply its booming economy with energy.We expect to realize prices for this new production that are substantially higher than our legacy contracts;the new pri
42、ce realizations will be evidenced in 2012 results.Working with our partners EOG Resources and EnCana,we achieved several milestones for our planned Kitimat LNG project in Canada.This planned facility on British Columbias Pacifi c coast is designed to export gas produced in the Horn River basin conta
43、ining one of North Americas top-quality gas shales to Asia at oil-indexed prices.Kitimat received the fi rst 20-year natural gas export license to be granted by Canadas National Energy Board,and we continue discussions with potential LNG off-takers interested in a new source of fuel in a stable poli
44、tical environment and a short sail from north Asian ports.Discovery of new oil and gas resources has long been a contributor to Apaches growth.We have built our Egypt and Australia regions into signifi cant businesses mainly through the drillbit,and we expect to continue on this path.16.912.18.612.4
45、10.06In Egypt,we continue to extend the western limits of the Faghur basin and also had success on development leases acquired from BP in November 2010;we completed 21 wells on these leases including three new fi eld discoveries and two new fi eld extensions.In 2012,we plan to advance important new
46、exploration plays across 10 million gross acres in Egypt,including stratigraphic traps,deeper horizons in the Paleozoic and unconventional resources.Like the Permian and Anadarko basins,the Western Desert provides multiple stacked-pay opportunities.We entered the Deepwater Gulf of Mexico in 2010 bec
47、ause it is one of the premier oil exploration plays remaining in the world.In 2011,Apache and our co-venturers decided to proceed with development of the Lucius project in the Keathley Canyon area of the deepwater Gulf of Mexico our fi rst major deepwater Gulf project.Located approximately 200 miles
48、 southeast of Houston in waters about 7,000 feet deep,Lucius will be developed using a truss spar fl oating production facility with production capacity of 80,000 barrels of oil and 450 million cubic feet of natural gas per day.Apache owns an 11.7-percent working interest in the unit.We plan to dril
49、l or participate in up to nine deepwater Gulf wells in 2012,including appraisals at Lucius and Heidelberg and six exploration prospects with potential resource of more than 600 million barrels and Apache working interests averaging 35 percent.We also are looking beyond Apaches current portfolio for
50、material exploration opportunities.We plan to drill our fi rst wells in Alaskas Cook Inlet,an oil exploration play where we are the largest acreage holder with more than 800,000 acres;off shore Kenya,where our fi rst major oil prospect holds resource potential of nearly 300 MMboe;and in New Zealand,
51、where we plan to drill four wells targeting underexplored onshore plays.7 2011 2010 2009 2008 2007($billions)Apaches balanced commodity mix provides a signifi cant competitive advantage:With the industry stampeding toward oil and liquids-rich exposure,Apache is already benefi?ing from it.Half of our
52、 volumes in 2011 were liquids,contributing nearly 80 percent of revenues because of the wide gap between global crude oil and North American natural gas prices.Apache also benefi ted from the price diff erentials between oil prices in basins linked to the West Texas Intermediate benchmark and higher
53、 prices for oil produced in the Gulf of Mexico,Egypt,Australia and the North Sea that represent three-fourths of our crude production.While North American gas prices languish,we continue to benefi t from rising international gas prices up 27 percent over 2010 levels.We expect this trend to continue
54、for the foreseeable future.Our LNG investments are targeted to oil-indexed gas markets in Asia.The cash-generating capacity of Apaches portfolio is the key to our ability to reinvest in our existing operations,fund long-lead-time projects,and act when the right acquisition opportunities emerge.In 20
55、11,record cash fl ow enabled Apache to fund our largest exploration and development capital budget,acquire assets for$2 billion in cash that provide a platform for continued profi table growth,and pay down$925 million in debt,ending the year with debt at 20 percent of capitalization.Over the last 25
56、 years,Apaches management systems have helped grow the company from a small producer with operations focused in the Anadarko basin to an international company with far-reaching operations,enabling good decisions through consistent evaluation of projects worldwide.This focuses our autonomous regional
57、 teams on rate of return,maximizing production and controlling costs.PROFITABILITYCASH FROM OPERATIONS BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES*6.27.45.07.410.2*Cash from operations before changes in operating assets and liabilities is a non-GAAP measure.Please see reconciliations,page 11.
58、8As we continue our pursuit of opportunity,we see overarching trends that create the context for our strategic decisions.The rising economies in the developing world where billions of people have expectations of a higher standard of living are increasing global demand for oil,natural gas and other r
59、esources.This is a positive trend for the energy industry,and Apaches global portfolio is well-positioned to benefi t.The universal desire for a be?er standard of living o?en is coupled with a yearning for more political freedom.During 2011,we were fi rst-hand observers of the eff orts of the Egypti
60、an people to embrace democracy and improve their living standard.Its diffi cult to predict the precise outcome of Egypts political struggle,but we believe our investments and technology will continue to improve their economic condition by providing jobs and energy resources.Apache operated without i
61、nterruption of production during the political turmoil of 2011.Technologies have revolutionized exploration and development of oil and natural gas.The realization that North America has a 100-year supply of natural gas has turned the perception that the nation is running out of gas upside down and h
62、as tremendous implications for future demand and the U.S.economy.Abundant supplies of natural gas in North America are pushing gas prices lower and helping make the case for increased use of natural gas in transportation and electric generation.Its cleaner,too.In 2011,we doubled the number of Apache
63、 fi eld vehicles using compressed natural gas(CNG)to 246 trucks,and we plan to convert 80 percent of our fl eet to run on CNG by the end of 2015.Nine new CNG fueling stations including fi ve that will be open to the public are under construction,supplementing seven Apache stations now in operation.R
64、ising investment in oil-and liquids-rich plays such as the Permian,Anadarko,Eagle Ford,Bakken and deepwater Gulf of Mexico is taking U.S.production to levels not seen in nearly a decade and changing the perception that North America is running out of oil.The resurgence of the oil and gas industry is
65、 providing employment in many areas and has profound potential to restore U.S.competitiveness by supplying energy to drive the growth of the U.S.economy.As the industrys activity increases,public awareness of environmental issues translates to more rigorous regulation both off shore and onshore.Apac
66、he has been at the forefront of the eff ort to increase transparency in operations,such as the disclosure of the composition of hydraulic fracturing fl uids on a public website,www.fracfocus.org.The industry has employed fracturing safely for 50 years;we believe fracturing is a manageable risk and i
67、s essential if we are going to realize the benefi ts of abundant energy resources.Apache is a member of two organizations the Marine Well Containment Corporation and the Helix Well Containment Group that were created by operators in the Deepwater Gulf of Mexico to provide expanded spill containment
68、capabilities in response to subsea well incidents like the Deepwater Horizon incident.IS CHANGETHE ONLY CONSTANT9The growth we have experienced over the last two years has brought many new faces to Apache:people who worked for companies we acquired,others we hired for our expanded exploration progra
69、m,and a number of very talented recent college graduates who will lead tomorrows Apache.What has not changed is our unique culture.We are very goal-oriented;we push responsibility and accountability throughout the organization.It gives Apaches a real sense of ownership,reinforced by share-based ince
70、ntive programs at all levels of the company.The heart of Apaches culture is in our fi eld teams.Every day,they demonstrate what we mean by our G.STEVEN FARRISChairman and Chief Executive Offi cerROGER B.PLANKPresident and Chief Corporate Offi cerRODNEY J.EICHLERPresident and Chief Operating Offi cer
71、MARCH 09 2012sense of urgency,commitment to safe and environmentally responsible operations,and the knowledge that the best ideas win.For 20 years,they have embraced AIM UP Apache Improvement Method through Understanding Performance which encourages them to take even greater ownership of their wells
72、 and develop ideas that increase production and reduce costs.The more people understand how they can impact their business,the be?er.Employees who know their business are more likely to fi nd ways to improve it.Apaches 2011 results demonstrate the eff ectiveness of empowering our 5,300 talented empl
73、oyees on your behalf.We thank you for your continuing support.CULTURE10201120102009FINANCIAL HIGHLIGHTSRevenues$16,888$12,092$8,615Income(loss)A?ributable to Common Stock4,5083,000(292)Diluted Net Income(loss)per Common Share11.478.46(0.87)Cash from Operations before Changes in Operating Assets and
74、Liabilities:*Net Cash Provided by Operating Activities9,9536,7264,224Changes in Operating Assets and Liabilities281642761Cash from Operations Before Changes in Operating Assets and Liabilities$10,234$7,368$4,985Total Assets$52,051$43,425$28,186Long-Term Debt6,7858,0954,950Shareholders Equity28,99324
75、,37715,779Cash Dividends paid per Common Share0.600.600.60OPERATIONAL HIGHLIGHTSTotal Capital Expenditures(including acquisitions,gas gathering,transmission and processing facilities and capitalized interest)$11,793$18,230$4,114Natural Gas Production(MMcf/d)2,2621,8891,759Oil and NGL Production(Mbbl
76、s/d)371343290Proved Reserves(MMboe)2,9902,9532,367Year Ended December 31(dollars in millions,except per-share data)*Non-GAAP Financial Measure:This annual report discusses Apaches cash from operations before changes in operating assets and liabilities.Management believes the information is useful fo
77、r investors because it is used internally and is widely accepted by those following the oil and gas industry as a fi nancial indicator of a companys ability to generate cash to internally fund exploration and development activities,fund dividend programs,and service debt.It is also used by research
78、analysts to value and compare oil and gas exploration and production companies,and is frequently included in published research when providing investment recommendations.Cash from operations before changes in operating assets and liabilities,therefore,is an additional measure of liquidity,but is not
79、 a measure of fi nancial performance under GAAP and should not be considered as an alternative to cash fl ows from operating,investing,or fi nancing activities.Cautionary Note to Investors:The United States Securities and Exchange Commission(“SEC”)permits oil and gas companies,in their fi lings with
80、 the SEC,to disclose only proved,probable,and possible reserves that meet the SECs defi nitions for such terms.Apache uses certain terms in this document,such as“potential”resources and similar terms that the SEC guidelines strictly prohibit Apache from including in fi lings with the SEC.Reserve“pot
81、ential”and other such terms do not take into account the certainty of resource recovery,which is contingent on exploration success,technical improvements in drilling access,commerciality and other factors,and are therefore not indicative of expected future resource recovery and should not be relied
82、upon.Investors are urged to consider carefully the disclosure in Apaches Annual Report on Form 10-K for the fi scal year ended December 31,2011,and amendments thereto,available from Apache at or by writing Apache at:2000 Post Oak Blvd.,Suite 100,Houston,Texas 77056(A?n:Corporate Secretary).You can a
83、lso obtain this report from the SEC by calling 1-800-SEC-0330 or from the SECs website at www.sec.gov.Forward-Looking Statements:This annual report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 19
84、34.Forward-looking statements can be identifi ed by words such as“anticipates,”“intends,”“plans,”“seeks,”“believes,”“estimates,”“expects”and similar references to future periods.These statements include,but are not limited to,statements about future plans,expectations,and objectives for Apaches oper
85、ations including statements about our drilling plans and LNG projects.While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances,whether actual results and developments will meet our expectations and predictions depend o
86、n a number of risks and uncertainties which could cause our actual results,performance,and fi nancial condition to diff er materially from our expectations.See“Risk Factors”in our 2011 Form 10-K,and amendments thereto,fi led with the Securities and Exchange Commission for a discussion of risk factor
87、s that aff ect our business.Any forward-looking statement made by us in this annual report speaks only as of the date on which it is made.Factors or events that could cause our actual results to diff er may emerge from time to time,and it is not possible for us to predict all of them.We undertake no
88、 obligation to publicly update any forward-looking statement,whether as a result of new information,future development,or otherwise,except as may be required by law.highLighTsperformance11IN A CHANGING ENVIRONMENTAPACHES 2011 SUSTAINABILITY REPORTAPACHECORP.COMIS AVAILABLE ON THE COMPANY WEBSITE ATS
89、ustainability is an evolving process.Here at Apache,we take this responsibility very seriously as we explore new ideas to change and improve for the future.As we advance,Apaches mission remains steadfast:Prosper in a safe and environmentally responsible manner for the long-term benefi t of our share
90、holders,employees and the communities where we do business.Apache empowers our employees to seek innovative solutions that create value to our operations and help drive economic growth while incorporating sustainability initiatives,including reducing greenhouse gas emissions,protecting biodiversity
91、in environmentally sensitive areas,providing a safe operating environment,and supporting the communities where we operate.Among the past years sustainability highlights,Apache and partner Encana received the 2011 Environmental Performance Award from the Canadian Association of Petroleum Producers fo
92、r developing infrastructure designed to reduce the environmental impact of natural gas development in British Columbias Horn River Basin.We continued to promote the use of compressed natural gas(CNG)as an alternate fuel source,resulting in a cleaner environment and fostering domestic development of
93、U.S.gas resources.In the United States,we have built seven CNG fueling stations and converted 246 fi eld vehicles to operate on CNG with the goal of converting 80 percent of our nearly 1,000 fi eld vehicles by year-end 2015.Apache also kicked off its“Give Where We Live”program,presenting$100,000 in
94、grants to non-profi t organizations in the Lafaye?e/Acadiana,La.,area.The popular Facebook campaign is a grassroots eff ort to unite Apache employees and their local communities.Taking a long-term view to fi nding sustainable answers to the challenges we face is part of Apaches culture.We have estab
95、lished high standards to ensure workers have the knowledge to do their jobs correctly,as well as comply with regulations and take environmental considerations into account.Apache is pleased to present our second Sustainability Report as we move forward in our journey to grow a profi table global exp
96、loration and production company and sustain a clean,safe and prosperous future.The full 2011 report is available on the companys redesigned website, printable version entitled“Living with the Land”is available in PDF format on the website.susTainabLesoLuTionsFORGING1212UNITED STATES SECURITIES AND E
97、XCHANGE COMMISSIONWashington,D.C.20549FORM 10-K(Mark One)XANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2011or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period f
98、romtoCommission file number 1-4300APACHE CORPORATION(Exact name of registrant as specified in its charter)Delaware41-0747868(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)One Post Oak Central,2000 Post Oak Boulevard,Suite 100,Houston,Texas 77056-4400
99、(Address of principal executive offices)Registrants telephone number,including area code(713)296-6000Securities registered pursuant to Section 12(b)of the Act:Title of each className of each exchangeon which registeredCommon Stock,$0.625 par valueNew York Stock Exchange,Chicago Stock Exchangeand NAS
100、DAQ National MarketPreferred Stock Purchase RightsNew York Stock Exchange and Chicago Stock ExchangeApache Finance Canada CorporationNew York Stock Exchange7.75%Notes Due 2029Irrevocably and UnconditionallyGuaranteed by Apache CorporationDepositary Shares Representing a 1/20thInterest in a Share of
101、6.00%MandatoryConvertible Preferred Stock,Series DNew York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:Common Stock,$0.625 par valueIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes X No Indicate by c
102、heck mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No XIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities ExchangeAct of 1934 during the preceding 12 months(
103、or for such shorter period that the registrant was required to file such reports),and(2)has beensubject to such filing requirements for the past 90 days.Yes X No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website,if any,every Interactive Da
104、taFile required to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(orfor such shorter period that the registrant was required to submit and post such files).Yes X No Indicate by check mark if disclosure of delinquent filers pursua
105、nt to Item 405 of Regulation S-K is not contained herein,and will not becontained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form10-K or any amendment to this Form 10-K.Indicate by check mark whether the registrant
106、 is a large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller reportingcompany.See the definitions of“large accelerated filer,”“accelerated filer”and“smaller reporting company”in Rule 12b-2 of the Exchange Act.Large accelerated filer X Accelerated filer Non-accelerated file
107、r Smaller reporting company Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act):Yes No XAggregate market value of the voting and non-voting common equity held by non-affiliates of registrant as ofJune 30,2011.$47,361,451,733Number of shares
108、of registrants common stock outstanding as of January 31,2012.384,321,970Documents Incorporated By ReferencePortions of registrants proxy statement relating to registrants 2012 annual meeting of stockholders have been incorporated by reference inPart II and Part III of this annual report on Form 10-
109、K.TABLE OF CONTENTSDESCRIPTIONItemPagePART I1.BUSINESS.11A.RISK FACTORS.231B.UNRESOLVED STAFF COMMENTS.342.PROPERTIES.13.LEGAL PROCEEDINGS.344.MINE SAFETY DISCLOSURES.34PART II5.MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATEDSTOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.356.SELE
110、CTED FINANCIAL DATA.377.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS.387A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.688.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.719.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING ANDFINANCIAL DIS
111、CLOSURE.719A.CONTROLS AND PROCEDURES.719B.OTHER INFORMATION.71PART III10.DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.7211.EXECUTIVE COMPENSATION.7212.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND RELATED STOCKHOLDER MATTERS.7213.CERTAIN RELATIONSHIPS AND RELATED TRANSAC
112、TIONS,AND DIRECTORINDEPENDENCE.7214.PRINCIPAL ACCOUNTING FEES AND SERVICES.72PART IV15.EXHIBITS,FINANCIAL STATEMENT SCHEDULES.73iDEFINITIONSAll defined terms under Rule 4-10(a)of Regulation S-X shall have their statutorily prescribed meaningswhen used in this report.As used in this document:“3-D”mea
113、ns three-dimensional.“4-D”means four-dimensional.“b/d”means barrels of oil or natural gas liquids per day.“bbl”or“bbls”means barrel or barrels of oil.“bcf”means billion cubic feet.“boe”means barrel of oil equivalent,determined by using the ratio of one barrel of oil or NGLs to six Mcfof gas.“boe/d”m
114、eans boe per day.“Btu”means a British thermal unit,a measure of heating value.“LIBOR”means London Interbank Offered Rate.“LNG”means liquefied natural gas.“Mb/d”means Mbbls per day.“Mbbls”means thousand barrels of oil.“Mboe”means thousand boe.“Mboe/d”means Mboe per day.“Mcf”means thousand cubic feet
115、of natural gas.“Mcf/d”means Mcf per day.“MMbbls”means million barrels of oil.“MMboe”means million boe.“MMBtu”means million Btu.“MMBtu/d”means MMBtu per day.“MMcf”means million cubic feet of natural gas.“MMcf/d”means MMcf per day.“NGL”or“NGLs”means natural gas liquids,which are expressed in barrels.“
116、NYMEX”means New York Mercantile Exchange.“oil”includes crude oil and condensate.“PUD”means proved undeveloped.“SEC”means United States Securities and Exchange Commission.“Tcf”means trillion cubic feet.“U.K.”means United Kingdom.“U.S.”means United States.With respect to information relating to our wo
117、rking interest in wells or acreage,“net”oil and gas wells oracreage is determined by multiplying gross wells or acreage by our working interest therein.Unless otherwisespecified,all references to wells and acres are gross.iiPART IITEMS 1 AND 2.BUSINESS AND PROPERTIESThis Annual Report on Form 10-K a
118、nd the documents incorporated herein by reference contain forward-looking statements based on expectations,estimates,and projections as of the date of this filing.Thesestatements by their nature are subject to risks,uncertainties,and assumptions and are influenced by variousfactors.As a consequence,
119、actual results may differ materially from those expressed in the forward-lookingstatements.See Part II,Item 7AQuantitative and Qualitative Disclosures About Market RiskForward-Looking Statements and Risk of this Form 10-K.GeneralApache Corporation,a Delaware corporation formed in 1954,is an independ
120、ent energy company thatexplores for,develops,and produces natural gas,crude oil,and natural gas liquids.We currently have explorationand production interests in six countries:the U.S.,Canada,Egypt,Australia,offshore the U.K.in the North Sea(North Sea),and Argentina.Apache also pursues exploration in
121、terests in other countries that may over time resultin reportable discoveries and development opportunities.We treat all operations as one line of business.Our common stock,par value$0.625 per share,has been listed on the New York Stock Exchange(NYSE)since 1969,on the Chicago Stock Exchange(CHX)sinc
122、e 1960,and on the NASDAQ National Market(NASDAQ)since 2004.On May 20,2011,we filed certifications of our compliance with the listing standards ofthe NYSE and the NASDAQ,including our principal executive officers certification of compliance with theNYSE standards.Through our website,you can access,fr
123、ee of charge,electronic copiesof the charters of the committees of our Board of Directors,other documents related to our corporate governance(including our Code of Business Conduct and Governance Principles)and documents we file with the SEC,including our annual reports on Form 10-K,quarterly report
124、s on Form 10-Q and current reports on Form 8-K,aswell as any amendments to these reports filed or furnished pursuant to Section 13(a)or 15(d)of the SecuritiesExchange Act of 1934.Included in our annual and quarterly reports are the certifications of our principalexecutive officer and our principal f
125、inancial officer that are required by applicable laws and regulations.Accessto these electronic filings is available as soon as reasonably practicable after we file such material with,orfurnish it to,the SEC.You may also request printed copies of our committee charters or other governancedocuments f
126、ree of charge by writing to our corporate secretary at the address on the cover of this report.Ourreports filed with the SEC are also made available to read and copy at the SECs Public Reference Room at 100 FStreet,N.E.,Washington,D.C.,20549.You may obtain information about the Public Reference Room
127、 bycontacting the SEC at 1-800-SEC-0330.Reports filed with the SEC are also made available on its website atwww.sec.gov.From time to time,we also post announcements,updates,and investor information on our websitein addition to copies of all recent press releases.Properties to which we refer in this
128、document may be held by subsidiaries of Apache Corporation.References to“Apache”or the“Company”include Apache Corporation and its consolidated subsidiaries unlessotherwise specifically stated.Growth StrategyApaches mission is to grow a profitable global exploration and production company in a safe a
129、ndenvironmentally responsible manner for the long-term benefit of our shareholders.Apaches long-termperspective has many dimensions,which are centered on the following core strategic components:balanced portfolio of core assetsconservative capital structurerate of return focus1Throughout the cycles
130、of our industry,these strategies have underpinned our ability to deliver long-termproduction and reserve growth and achieve competitive returns on invested capital for the benefit of ourshareholders.We have increased reserves 23 out of the last 26 years and production 31 out of the past 33 years,ate
131、stament to our consistency over the long-term.Apache pursues opportunities for growth through exploration and development drilling,supplemented bystrategic acquisitions.In 2011,we generated approximately$10 billion of cash flows from operations,whichenabled us to deliver on an aggressive capital bud
132、get investing approximately$8 billion across all of our regions,while paying down nearly$1 billion in debt.Approximately one-quarter of our global capital was spent onleasehold acreage,seismic data,gathering and processing facilities,long-lead development projects,andfront-end engineering and design
133、(FEED)studies tied to our LNG projects.Coupled with an active drillingprogram and an increasing new venture exploration effort,these longer-term investments secure a platform forcontinued long-term profitable growth.We have also been significantly active in the acquisition market for the past two ye
134、ars,having identifiedseveral opportunities that met our criteria for risk,reward,rate of return,and growth potential.As we head into2012,Apache continues to be active with recent acquisition announcements in Australia and the Anadarko basinof the central U.S.Each of our acquisitions fit well with ou
135、r long-term strategy of maintaining a balancedportfolio of core assets by adding high-quality properties with a diversity of geologic and geographic risk,product mix,and reserve life to nearly all of our regions.The properties are strategically positioned with ourexisting infrastructure and play to
136、the strengths that come with our operating experience.2012 AcquisitionsAustralian Burrup Holdings Limited acquisitionOn January 31,2012,a subsidiary of Apache EnergyLimited completed the acquisition of a 49-percent interest in Burrup Holdings Limited(BHL)for$439 million,including working capital adj
137、ustments.BHL is the owner of an ammonia fertilizer plant on the Burrup Peninsulaof Western Australia.Central Anadarko basin acquisitionApache announced in January 2012 that we agreed to acquireCordillera Energy Partners III LLC(Cordillera),a privately held company,for$2.2 billion in cash andapproxim
138、ately 6.3 million shares of Apache common stock.The merger is expected to close in the second quarterof 2012.2011 AcquisitionsNorth Sea acquisitionOn December 30,2011,Apache completed the acquisition of Mobil North SeaLimited(Mobil North Sea)from Exxon Mobil Corporation with cash consideration of$1.
139、25 billion.2010 AcquisitionsGulf of Mexico Shelf acquisitionOn June 9,2010,Apache completed the acquisition of oil and gas assetsin the Gulf of Mexico shelf from Devon Energy Corporation for$1.05 billion.Mariner mergerOn November 10,2010,Apache completed the acquisition of Mariner Energy,Inc.(Marine
140、r)for stock and cash consideration totaling$2.7 billion.We also assumed approximately$1.7 billion ofMariners debt with the merger.Permian acquisitionOn August 10,2010,we completed the acquisition of BP plcs(BP)oil and gasoperations,acreage,and infrastructure in the Permian Basin for$2.5 billion,net
141、of preferential rights to purchase.Canadian acquisitionOn October 8,2010,we completed the acquisition of substantially all of BPsupstream natural gas business in western Alberta and British Columbia for$3.25 billion.2Egyptian acquisitionOn November 4,2010,we completed the acquisition of BPs assets i
142、n EgyptsWestern Desert for$650 million.In the midst of our heightened exploration,development drilling,and acquisition activity,we have remainedcommitted to our core strategies of maintaining a balanced portfolio,conservative capital structure,and rate ofreturn focus.Balanced Portfolio of Core Asset
143、sA cornerstone of our long-term strategy is balancing our portfolio of assets through diversity of geologicrisk,geographic risk,hydrocarbon mix(crude oil versus natural gas),and reserve life in order to achieveconsistency in results.Our portfolio of geographic locations provides variation of all of
144、these factors.We haveexploration and production operations in six countries,through ten distinct regions:the Gulf of Mexico Shelf,Gulf of Mexico Deepwater,Gulf Coast Onshore,Permian,and Central regions of the U.S.,Canada,Egypt,theU.K.North Sea,Australia,and Argentina.Each of our regions has achieved
145、 an economy of scale providing a vehicle for cost-effective base productionand a combination of low-and medium-risk drilling opportunities.The net cash provided by operating activities(cash flows)generated by our current production base funds our worldwide exploitation and drilling program anddevelo
146、pment capital for prior exploration discoveries.In addition,a portion of our cash flows generated eachyear is allocated to pursue new exploration targets over our 28 million gross undeveloped acres and new areasaround the globe.Our continued diligence on allocating capital across multiple regions an
147、d various projects hasproduced a balanced portfolio of assets that consistently delivers positive cash flows and has become afoundation for future growth opportunities.In 2011:No single region contributed more than 22 percent of our equivalent production or 29 percent ofrevenue.No single region held
148、 more than 26 percent of our year-end estimated proved reserves.The mixture of reserve life(estimated reserves divided by annual production)in our regions,whichoffers a balance in timing of investment returns,ranges from five years to 22 years.Our balanced product mix provides a measure of protectio
149、n against price deterioration in a givenproduct while retaining upside potential in the event of a significant increase in the commodity pricefor either product.In 2011,crude oil and liquids provided 50 percent of our production and 79 percentof our revenue.International Dated Brent crudes and sweet
150、 crude from the Gulf Coast,which represent 76 percent ofour crude oil production,continue to be priced at a significant premium to West Texas Intermediate(WTI)-based prices.Our international gas portfolio,which accounted for 34 percent of our 2011 worldwide natural gasproduction,positions us to take
151、 advantage of increasing prices in Argentina and Australia while NorthAmerican gas prices continue to languish.Conservative Capital StructureMaintaining a strong balance sheet and the financial flexibility it provides is a core component of our long-term strategy and we believe one of our most impor
152、tant strategic assets.This approach underpins our ability toweather commodity price volatility and has enabled us to deliver long-term production and reserves growththroughout the cycles of our industry.It is also key in positioning us to pursue value-creating acquisitions whenopportunities arise.3D
153、uring 2011,we met our objectives to fund our exploration and development capital with operating cash flowsand to reduce the Companys debt to$7.2 billion.Specifically,we exited the year with a debt-to-capitalization ratioof 20 percent,down from 25 percent at year-end 2010.In addition,as of December 3
154、1,2011,we had access to$3.3billion of available committed borrowing capacity,up from$2.4 billion at year-end 2010.Rate of Return FocusAnother core component to our long-term strategy is focusing on rate of return.We do so through centralizedmanagement and incentive systems,decentralized decision mak
155、ing,cost control focus,and the creative application oftechnology.Our centralized management and incentive systems provide a uniform process of measuring success acrossApache and has instilled a rate-of-return focus into our culture.Our organizational structure incentivizes highrate-of-return activit
156、ies but allows for appropriate risk-taking to drive future growth and monetize reserves.Results ofoperations and rate of return on invested capital are measured monthly,reviewed with management quarterly,andutilized to determine annual performance awards.We review capital allocations,at least quarte
157、rly,utilizing estimatesof internally generated cash flows.We do this through a disciplined and focused process that includes analyzingcurrent economic conditions,projected rate of return on internally generated drilling prospects,opportunities fortactical acquisitions,land positions with additional
158、drilling prospects and occasionally,new core areas that couldenhance our portfolio.We also use technology to reduce risk,decrease time and costs,and maximize recoveries from reservoirs.Apache scientists and engineers have been granted numerous patents for a range of inventions,from systems used fori
159、nterpreting seismic data and processing well logs to improvements in drilling and completion techniques.For a more in-depth discussion of our 2011 results and the Companys capital resources and liquidity,please seePart II,Item 7Managements Discussion and Analysis of Financial Condition and Results o
160、f Operations of thisForm 10-K.Geographic Area OverviewsWe currently have exploration and production interests in six countries:the U.S.,Canada,Egypt,Australia,offshore the U.K.in the North Sea,and Argentina.The following table sets out a brief comparative summary of certain key 2011 data for each of
161、 our operatingareas.Additional data and discussion is provided in Part II,Item 7 of this Form 10-K.2011ProductionPercentageof Total2011Production2011ProductionRevenue12/31/11EstimatedProvedReservesPercentageof TotalEstimatedProvedReserves2011GrossWellsDrilled2011GrossProductiveWellsDrilled(In MMboe)
162、(In millions)(In MMboe)United States.104.338%$6,1041,29043%702671Canada.45.9171,61776426143131Total North America.150.2557,7212,05469845802Egypt.60.2224,79129210177147Australia.25.291,7343301195North Sea.20.072,09119761411Argentina.17.5747311744240Total International.122.9459,08993631242203Total.273
163、.1100%$16,8102,990100%1,0871,0054North AmericaApaches North American asset base primarily comprises operations in the Permian Basin,the central U.S.,the Gulf Coast areas of the U.S.and operations in Western Canada.In 2011,our North America assetscontributed 55 percent of our production and 46 percen
164、t of our oil and gas production revenues.At year-end2011,69 percent of our estimated proved reserves were located in North America.United StatesOverviewWe have 10.3 million gross acres across the U.S.,approximately half of which is undeveloped.As a result of recent acquisitions and a diversity of gr
165、owth and opportunity profiles,we divided our U.S.assetsinto five regions:Permian,Central,Gulf of Mexico Shelf,Gulf of Mexico Deepwater,and Gulf Coast Onshore.We also have leasehold acreage holdings in Alaska.Our holdings in the U.S.provide a balance of hydrocarbonmix and reserve life and an opportun
166、ity for continued exploration.In 2011,50 percent of our U.S.production and62 percent of our U.S.year-end reserves were oil and liquids.In addition,the reserve life of our U.S.regionsranged from five to 22 years with the Gulf of Mexico offshore regions shorter-lived reserves balancing longer-lived re
167、serves in the Central and Permian regions.In 2011,38 percent of Apaches equivalent production and 43percent of Apaches total year-end reserves were in the U.S.Gulf Coast RegionsOur Gulf Coast assets are primarily located in and along the Gulf of Mexico,in theareas onshore and offshore Texas,Louisian
168、a,Alabama,and Mississippi.Recent acquisitions have significantlyincreased Apaches presence in the area and have bolstered an already deep inventory of projects with additionaldevelopment and exploration opportunities for multiple years.The area is divided into three regions,whichinclude the Gulf of
169、Mexico Shelf,Gulf of Mexico Deepwater,and Gulf Coast Onshore.In water less than 500 feet deep,which constitutes most of our Gulf of Mexico Shelf region,Apache iscurrently the largest producer and has been the largest offshore held-by-production acreage owner since 2004.The Gulf of Mexico Shelf regio
170、n has approximately 3 million gross acres covering 622 offshore blocks withnearly 80 percent of the blocks held-by-production.The region contributed 14 percent of our worldwideproduction and 15 percent of worldwide revenue during 2011.With prolific wells,strong cash flows,and astrategic position nea
171、r the petrochemical-industrial complex on the U.S.Gulf Coast,the region has consistentlygenerated high rates of return allowing the region to play a vital role in funding investments in other regions.Although regulations issued in 2010 have slowed the issuance of drilling permits for all operators,d
172、uring 2011the region drilled or participated in 35 wells with a 71-percent success rate.We drilled 36 wells in 2010 and 20wells in 2009.In water greater than 500 feet deep,the Gulf of Mexico Deepwater region is a relatively underexplored andoil prone area that provides exposure to significant reserv
173、e and production potential.Apaches strategic presencein the area was gained through the 2010 Mariner merger,and the Company now owns approximately 750,000gross acres across 148 blocks as of the end of 2011.The Deepwater region contributed approximately twopercent of Apaches worldwide production;howe
174、ver,there are multiple projects underway.The Bushwood,Wide Berth,and Mandy development projects are projected to begin production in the second quarter of 2012with combined net initial production of 12 Mboe/d.In addition,the larger scale non-operated Lucius project wassanctioned in the fourth quarte
175、r of 2011.Apache has an 11.7-percent working interest in this development withfirst production projected for 2014.The region is also increasing its exploration activity,having recently beenawarded four deepwater exploration plans.We expect to drill or participate in drilling nine wells during 2012co
176、mpared to two wells drilled in the current year.Apaches Gulf Coast Onshore region was established in August 2010 to more fully exploit the opportunitiesbuilt over the years in onshore areas of Texas,Louisiana,and Mississippi.The region has a significant acreageposition of approximately 1.4 million g
177、ross acres,including 330,000 mineral fee acres.During the year,theregion focused on drilling shallow and moderate depth targets,increasing acreage holdings,and expanding our5regional 3-D seismic databases.We are also evaluating several unconventional resource opportunities.Theregion drilled or parti
178、cipated in drilling 50 wells during 2011 and projects drilling approximately 40 wells in2012,including increased activity in unconventional and deeper exploitation.In 2012,the Company plans to invest approximately$1.0 billion,$500 million,and$350 million in the Gulfof Mexico Shelf,Gulf of Mexico Dee
179、pwater,and Gulf Coast Onshore regions,respectively.The capital will bespent on drilling,recompletion,and development projects,equipment upgrades,production enhancementprojects,seismic acquisitions,and plugging and abandonment of wells and platforms.We spent$363 million onabandonment activities in 20
180、11 over the entire Gulf Coast area.Central RegionThe Central region includes more than 2,500 producing wells and controls over onemillion gross acres primarily in western Oklahoma and the Texas panhandle.Most of the regions acreage isheld-by-production.The regions reserves and production are primari
181、ly natural gas;however,a transformationfrom vertical to horizontal drilling has evolved over the last two years,and the region is now targeting oil andliquids-rich gas plays given the continued price disparity between oil and gas.The result of focusing on oil andliquid plays was evident during 2011
182、with oil production nearly doubling and NGL production up 244 percentcompared to the prior year.Total region production was up 14 percent as we drilled or participated in drilling 108wells,94 percent being completed as producers.The regions year-end 2011 estimated proved reservesrepresented five per
183、cent of Apaches worldwide total.The primary target for the regions liquids-focused objective has been in the Anadarko basins Granite Washplay,with 50 wells brought on production during 2011.Thirty-three of these were operated wells that hadaverage 30-day gross rates of approximately 500 b/d and 4.5
184、MMcf/d.The Granite Wash consists of a series ofthick,multi-layered formations of low-permeability and liquids-rich sandstones.We have operated in this areafor 50 years drilling vertical wells,but the play has recently re-emerged as a horizontal drilling play with multi-staged fracturing technology.W
185、e drilled our first operated horizontal well in the Granite Wash in 2009 and havecontinued to pursue cost efficiencies and reduce drilling time.The region has also increased its focus on oil plays in the Anadarko shelf Cherokee formation and the TexasPanhandle Cleveland formation.In 2011,we drilled
186、12 wells in the Cherokee formation and 10 wells in theCleveland formation with an average 30-day gross production rate of 350 b/d and 500 Mcf/d.With its growing success in oil and liquids-rich gas plays,the region has been active on the acquisition anddivestiture front.In March 2011,Apache acquired
187、92,400 net acres in the Whittenburg basin of Oldham County,Texas,which is emerging as a potential new oil play for Apache.The acreage is immediately south of thePanhandle Dolomite field and directly north of two 25-well Canyon Wash fields.For 2012,the region plans toincrease its Whittenburg activity
188、 level to include horizontal drilling and has recently completed the acquisition of244 square miles of 3-D seismic data.Separately,in 2011 the region divested its natural gas properties in eastTexas.The divestiture,which was completed in December 2011,included dry gas wells that were producingapprox
189、imately 31 MMcf/d net to Apache.In January 2012,the Company announced entry into a merger agreement to acquire Cordillera,a privatelyheld company with approximately 254,000 net acres in the Granite Wash play,nearly 18 Mboe/d of currentproduction,and estimated proved reserves of 71.5 MMboe.This doubl
190、es Apaches acreage in the Granite Washarea and adds a robust drilling inventory that will be immediately integrated into our existing plans.The mergeris expected to be completed in the second quarter of 2012 and allows for Cordillera to acquire up to$100 millionin additional leasehold acreage in the
191、 Granite Wash and other plays through closing.With the recent completed and pending acquisitions,the region plans to double its activity in 2012.Theregion plans to invest approximately$800 million in drilling,recompletions,equipment upgrades,productionenhancement projects,and lease acquisitions.6Per
192、mian RegionOur Permian region controls over three million gross acres with exposure across thePermian Basin.The regions property and acreage base increased substantially after completing the 2010 BPacquisition and Mariner merger,and integrating these assets was a key focus during 2011.Apache is now
193、one ofthe largest operators in the Permian Basin,operating more than 12,000 wells in 152 fields,including 45waterfloods and six CO2 floods.Total region production was up over 38 percent sequentially as a result of theprior-year acquisitions and a drilling program that is continuing to ramp up.We ave
194、raged running 25 rigs duringthe year,drilling or participating in 507 wells.Only two dry holes were drilled,including a non-operated well.The Permian regions year-end 2011 estimated proved reserves were 751 MMboe and represent 25 percent ofApaches total proved reserves.The key focus areas of our act
195、ivity during the year continued to be the horizontal redevelopment of legacywaterflood units and the multi-zone development of the Deadwood area.Deadwood is the most active of ourplays in the Permian Basin where we ran an average of 11 rigs and drilled 195 wells.Gross oil production inDeadwood excee
196、ded 8 Mb/d and 17 MMcf/d at the end of the year,which compares with 2 Mb/d and 6 MMcf/dat the beginning of the year.Our gas volumes plateaued in this area in the fourth quarter because of midstreamconstraints.In order to increase capacity in 2012,the region began construction in the third-quarter 20
197、11 on anatural gas processing facility in a 50-percent joint venture with Crosstex Energy,L.P.We expect to drill over300 wells in Deadwood during 2012,and we have an inventory of approximately 1,000 additional verticallocations across multiple formations and stacked pay zones on 20-acre spacing.Apac
198、he continued horizontal redevelopment of its waterflood units during 2011 with the drilling of 38operated horizontal wells.Seven fields were tested with a 100-percent success rate.Three of these fields areunder full horizontal development with the remaining fields in the testing phase.The region has
199、 identified anadditional 23 major waterflood units and fields to be developed horizontally.The Permian region is building a large inventory of other horizontal opportunities based on success achievedduring 2011 along with the continued integration of the prior year BP acquisition and Mariner merger.
200、As wehead into 2012,the Company continues to advance several plays,including Bone Springs,Wolfcamp Shale,Cline Shale,and off-structure Grayburg formations.Given a current inventory of over 10,000 locations,theregion has a strong portfolio of drilling opportunities for multiple years.For 2012,the Per
201、mian region plans toinvest approximately$1.7 billion in drilling,recompletion projects,equipment upgrades,expansion of existingfacilities and equipment,and leasing new acreage.U.S.MarketingIn general,most of our U.S.gas is sold at either monthly or daily market prices.Ournatural gas is sold primaril
202、y to local distribution companies(LDCs),utilities,end-users,and integrated major oilcompanies.We maintain a diverse client portfolio,which is intended to reduce the concentration of credit risk.Apache primarily markets its U.S.crude oil to integrated major oil companies,marketing and transportationc
203、ompanies,and refiners.The objective is to maximize the value of crude oil sold by identifying the best marketsand most economical transportation routes available to move the product.Sales contracts are generally 30-dayevergreen contracts that renew automatically until canceled by either party.These
204、contracts provide for sales thatare priced daily at prevailing market prices.Apaches NGL production is sold under contracts with prices based on market indices,less the costs fortransportation and fractionation,or on a weighted-average sales price received by the purchaser.CanadaOverviewApache has 7
205、.5 million gross acres across the provinces of British Columbia,Alberta,andSaskatchewan.Our acreage base provides a significant inventory of both low-risk development drillingopportunities in and around a number of Apache fields and higher-risk,higher-reward exploration opportunities.At year-end 201
206、1,our Canadian region represented approximately 26 percent of our estimated proved reserves.In 2011,we drilled or participated in 143 wells in Canada.7Our conventional oil assets comprise a wide variety of opportunities from Southeast Saskatchewan toNorthwest Alberta.An increased focus on these asse
207、ts during 2011 resulted in drilling 70 wells,enabling us totake advantage of current strong oil price realizations.We utilized advanced reservoir modeling and horizontaldrilling technology to identify and exploit unswept oil in existing waterflood projects in the House Mountain,Leduc,Snipe Lake,and
208、Provost areas.Additionally,we continued efforts on our enhanced oil recovery project atMidale with expansion of CO2 injection and assessment of new seismic data.In the Kaybob and West 5 areas,the region continues to have success in the development of liquids-richnatural gas plays.These areas have fo
209、cused primarily on the Bluesky,Montney,and Glauconite formationsthrough horizontal drilling and multi-stage fracture completions.In addition,drilling costs have been drivendown throughout the year.Horizontal oil plays in the Viking,Dunvegan,and Cardium formations are emerging,and we expect to furthe
210、r develop these opportunities as part of our 2012 drilling program.The regions near-term natural gas drilling activity will likely be focused in three large growth plays inBritish Colombia:shale gas in the Horn River basin,Cadomin conglomerates and sands in the Noel area,andfractured reservoirs in t
211、he Ojay area.Drilling activity focused on natural gas will be driven by investmentdecisions surrounding Apaches ownership in the Kitimat LNG facility.Apache Canada Ltd.,EncanaCorporation,and EOG Resources Canada,Inc.plan to build the Kitimat LNG facility on Bish Cove near the Portof Kitimat,400 mile
212、s north of Vancouver,British Columbia.The facility is planned for an initial minimumcapacity of 700 MMcf/d,or approximately five million metric tons of LNG per year,of which Apache hasreserved 40 percent.A proposed 287-mile pipeline will also be constructed that will originate in Summit Lake,British
213、 Columbia,and is designed to link the Kitimat LNG facility to the pipeline system currently servicingwestern Canadas natural gas producing regions.Significant progress was made throughout the year to advancethe LNG project.In October 2011,Apache and its partners in the Kitimat LNG project announced
214、that theNational Energy Board granted the project a 20-year export license to ship LNG from Canada to internationalmarkets.This export approval represents a major milestone for Kitimat LNG and its partners.In addition,theCompany progressed with the FEED study and continued efforts to secure firm sal
215、es commitments and requiredpermits necessary to make a final investment decision on the LNG project.In 2012,the Canadian region plans to drill 170 wells,investing approximately$700 million in drilling anddevelopment projects,equipment upgrades,production enhancement projects,and seismic acquisition.
216、MarketingOur Canadian natural gas marketing activities focus on sales to LDCs,utilities,end-users,integrated major oil companies,supply aggregators,and marketers.We maintain a diverse client portfolio,whichis intended to reduce our concentration of credit risk in our portfolio.To diversify our marke
217、t exposure,wetransport natural gas via firm transportation contracts to California and the Chicago area.We sell the majority ofour Canadian gas on a monthly basis at either first-of-the-month or daily prices.Canadian crude oil production is sold to integrated major companies,refiners,and marketing c
218、ompaniesbased on a WTI price,adjusted for quality,transportation,and a market-reflective negotiated differential.Wemaximize the value of our condensate and heavier crudes by determining whether to blend the condensate intoour own crude production or sell it in the market as a segregated product.The
219、crude is transported from WesternCanada to the market hubs in Alberta and Manitoba,which allows for a more diversified group of purchasers anda higher netback price.The regions NGL production is sold under contracts with prices based on market indices,less the costs fortransportation and fractionati
220、on,or on a weighted-average sales price received by the purchaser.InternationalApaches international assets are located in Egypt,Australia,offshore the U.K.in the North Sea,andArgentina.In 2011,international assets contributed 45 percent of our production and 54 percent of our oil andgas revenues.At
221、 year-end 2011,31 percent of our estimated proved reserves were located outside NorthAmerica.8EgyptOverviewOur commitment to Egypt began in 1994 with our first Qarun discovery well.Today we control9.7 million gross acres making Apache the largest acreage holder in Egypts Western Desert.Only 18 perce
222、nt ofour gross acreage in Egypt has been developed,with gross production of 217 Mb/d and 865 MMcf/d in 2011,or104 Mb/d and 365 MMcf/d net to Apache.We believe this makes Apache the largest producer of liquidhydrocarbons and natural gas in the Western Desert and the third largest in all of Egypt.The
223、remaining 82percent of our acreage is undeveloped,providing us with considerable exploration and development opportunitiesfor the future.We have 3-D seismic covering over 12,000 square miles,or 78 percent of our acreage.In 2011,theregion contributed 29 percent of Apaches worldwide production revenue
224、,22 percent of our worldwideproduction,and 10 percent of our year-end 2011 estimated proved reserves.Our estimated proved reserves inEgypt are reported under the economic interest method and exclude the host country share reserves.Our operations in Egypt are conducted pursuant to production-sharing
225、agreements in 24 separateconcessions,under which the contractor partner pays all operating and capital expenditure costs for explorationand development.Development leases within concessions generally have a 25-year life,with extensions possiblefor additional commercial discoveries or on a negotiated
226、 basis,and currently have expiration dates ranging fromfive to 25 years.A percentage of the production on development leases,usually up to 40 percent,is available tothe contractor partners to recover operating and capital expenditure costs,with the balance generally allocatedbetween the contractor p
227、artners and Egyptian General Petroleum Corporation(EGPC)on a contractually definedbasis.Apaches Egyptian operations continue to expand further into the Western Desert and achieved a record forannual production in 2011.Compared to the prior year,gross daily production was up 12 percent,and net dailyp
228、roduction was up two percent.Throughout 2011,we maintained an active drilling and development program,drilling 221 exploration,development,and injector wells,resulting in 33 new field discoveries.Most notably,wedrilled the first Paleozoic discovery at Tayim West,which test-flowed at 3,600 b/d.This P
229、aleozoic discoveryopens a new play deeper than previous discoveries in the Western Desert and provides for continued explorationopportunities.We also made our first discovery in the Siwa Concession,our westernmost concession in Egypt,with the Siwa D-1X well that test-flowed at 4,490 b/d and 8 MMcf/d
230、.Building on prior year discoveries,we continued our drilling success in the Faghur basin having ten newfield discoveries in the year that tested in aggregate over 33 Mb/d and 25 MMcf/d.These wells are the mostrecent in a series of oil discoveries in the Alam El Buieb(AEB),Safa,and now Paleozoic res
231、ervoirs that supportthe multi-pay potential of the oil prone basin.We also started to actively drill on acreage acquired in the 2010 BPacquisition.We drilled 21 successful wells on this acreage and have increased gross production by over 7 Mb/dand 39 MMcf/d.In addition to the increased drilling acti
232、vity,we continue to assess opportunities to leverageexisting processing and transportation infrastructure at the BP-acquired Abu Gharadig field complex and expandour processing facilities in the Faghur and Matruh basins.Maintaining and increasing infrastructure capacity is acritical component to our
233、 growth goals in the Western Desert.Heading into 2012,the region plans to invest approximately$1.0 billion for drilling,recompletion projects,development projects,equipment upgrades,production enhancement projects,and seismic acquisition.Ourdrilling program includes a combination of development and
234、exploration wells with current plans to drillapproximately 20 percent more wells than in 2011.Egypt political unrestIn February 2011,former Egyptian president Hosni Mubarak stepped down,and theEgyptian Supreme Council of the Armed Forces took power.In November 2011,Egypt held its first round ofparli
235、amentary elections.Despite the Muslim Brotherhoods Freedom and Justice Partys victory in theparliamentary elections,Egypt remains under martial law.Although Egypts first post-revolutionary parliamentconvened on January 23,2012,the new Parliament remains subordinate to the Egyptian Supreme Council of
236、 theArmed Forces,which has stated its intention to turn over power to civilians following the presidential election9expected in June 2012.Apaches operations,located in remote locations in the Western Desert,have continueduninterrupted;however,a deterioration in the political,economic,and social cond
237、itions or other relevant policiesof the Egyptian government,such as changes in laws or regulations,export restrictions,expropriation of ourassets or resource nationalization,and/or forced renegotiation or modification of our existing contracts withEGPC could materially and adversely affect our busin
238、ess,financial condition,and results of operations.Apache purchases multi-year political risk insurance from the Overseas Private Investment Corporation(OPIC)and other highly rated international insurers covering its investments in Egypt.In the aggregate,thesepolicies,subject to the policy terms and
239、conditions,provide approximately$1 billion of coverage to Apache forlosses arising from confiscation,nationalization,and expropriation risks,with a$237.5 million sub-limit forcurrency inconvertibility.In addition,the Company has a separate policy with OPIC,which provides$225million of coverage,inclu
240、ding a self-insured retention of$37.5 million,for losses arising from(1)non-paymentby EGPC of arbitral awards covering amounts owed Apache on past due invoices and(2)expropriation ofexportable petroleum when actions taken by the government of Egypt prevent Apache from exporting our shareof productio
241、n.MarketingOur gas production is sold to EGPC primarily under an industry-pricing formula,a sliding scalebased on Dated Brent crude oil with a minimum of$1.50 per MMBtu and a maximum of$2.65 per MMBtu,which corresponds to a Dated Brent price of$21.00 per barrel.Generally,this industry-pricing formul
242、a applies toall new gas discovered and produced.In exchange for extension of the Khalda Concession lease in July 2004,Apache agreed to accept the industry-pricing formula on a majority of gas sold,but retained the previousgas-price formula(without an oil price cap)until the end of 2012 for up to 100
243、 MMcf/d gross.The regionaveraged$4.66 per Mcf in 2011.Oil from the Khalda Concession,the Qarun Concession and other nearby Western Desert blocks is soldprimarily to third parties in the Mediterranean market or to EGPC when called upon to supply domestic demand.Oil sales are made either directly into
244、 the Egyptian oil pipeline grid,sold to non-governmental third partiesincluding those supplying the Middle East Oil Refinery located in northern Egypt,or exported from or sold atone of two terminals on the northern coast of Egypt.Oil production that is presently sold to EGPC is sold on aspot basis p
245、riced at Brent with a monthly EGPC official differential applied.AustraliaOverviewApaches holdings in Australia are focused offshore Western Australia in the Carnarvon basin,where we have operated since acquiring the gas processing facilities on Varanus Island and adjacent producingproperties in 199
246、3,in the Exmouth basin and in the Browse basin.Production operations are located in theCarnarvon and Exmouth basins.In total,we control approximately 8.8 million gross acres in Australia through35 exploration permits,16 production licenses,and 10 retention leases.Approximately 90 percent of our acre
247、ageis undeveloped.During 2011,the region had net production of 38 Mb/d of oil and 185 MMcf/d of natural gas,contributing10 percent of Apaches worldwide production revenue,9 percent of worldwide production and 11 percent ofyear-end estimated proved reserves.Production compared to the prior year was 1
248、3 percent lower as a result ofnumerous tropical cyclones,repairs to the Floating Production Storage and Offloading vessel(FPSO)thatservices our Van Gogh oil field,and natural decline in the Pyrenees and Van Gogh oil fields.Offsetting production declines was the start-up of two new developments offsh
249、ore Western Australia.InJune 2011,Apaches Halyard-1 gas discovery well commenced production into the domestic gas market.TheHalyard development,which largely utilized existing Apache-operated pipelines and facilities,was completedahead of schedule and set the stage for further development of our nea
250、rby Spar field.The region also completeddevelopment of the Reindeer gas field and construction of the Devil Creek Gas Plant in December.This plant is10Western Australias third domestic natural gas processing hub and the first new hub to be constructed in morethan 15 years.Gas from the development ha
251、s been sold to a number of customers in Western Australias growingmining and minerals processing sectors at prices significantly higher than current realizations.The region also drilled several significant exploration and development wells in 2011.We participated indrilling nine wells during 2011,of
252、 which five were productive.Ongoing exploration activity at Apaches Julimarand Brunello complex resulted in the discovery of a deeper Mungaroo gas pool encountering 362 feet of net pay.This 65-percent working interest Balnaves Deep well is associated with continuing field development efforts andaugm
253、ents previous discoveries.Separately,the Zola-1 natural gas discovery logged 410 feet of net pay and is ontrend with the Gorgon gas field 16 miles to the north and near both existing and developing infrastructure.Theevaluation of this 30-percent working interest discovery,including the planning of f
254、uture appraisal drilling,iscurrently underway.In addition,the region has a pipeline of projects that are expected to contribute to production growth as theyare brought on-stream over coming years.The 2010 Spar-2 discovery is projected to commence production in 2013 through an extension of theHalyard
255、 subsea infrastructure,which will also allow for the tie-in of future wells.First production is also projected in 2013 from four completed gas wells in the Macedon gas field.We havea 29-percent non-operating working interest in the field.Gas will be delivered via a 60-mile pipeline to a 200MMcf/d ga
256、s plant to be built at Ashburton North in Western Australia.The project,approved in 2010,iscurrently underway.Apache has successfully marketed nearly all of its proved reserves in the Macedon fieldunder long-term contracts.In 2011,the Coniston oil field project,which lies just north of the Van Gogh
257、field,was sanctioned fordevelopment.First production is projected for 2013.The field will be produced via subsea completions tied backto the FPSO at Van Gogh.To more effectively control the Van Gogh and Coniston field operations,development,and maintenance efforts,this FPSO(the Ningaloo Vision)was p
258、urchased from the lessor inJanuary 2012.The region will also proceed with development of the offshore Balnaves field,an oil accumulation locatednear the Brunello gas field offshore Western Australia.The project is expected to deliver initial gross productionof 30 Mb/d in 2014 utilizing a leased FPSO
259、 vessel.Apache has a 65-percent working interest in the project.During 2011,the Company and its partners announced they will proceed with the Chevron-operatedWheatstone LNG development project(Wheatstone)in Western Australia.The first phase of the Wheatstoneproject will comprise two LNG processing t
260、rains with a combined capacity of approximately 8.9 million metrictons per annum(mtpa),a domestic gas plant,and associated infrastructure.Apache has a 13-percent interest inthe project and expects to invest approximately$4 billion over five years for the field and LNG facilitydevelopment.Apache will
261、 supply gas to Wheatstone from its operated Julimar and Brunello complex.The65-percent interest Julimar development project is expected to generate average net sales to Apache ofapproximately 140 MMcf/d of gas(equivalent to 1.07 million mtpa of LNG)at prices pegged to world oilmarkets,22 MMcf/d of s
262、ales gas into the domestic market,and 3,250 barrels of condensate per day.Firstproduction is projected for 2016.These development projects require significant capital investments above traditional drilling programs.During 2012,the region plans to invest approximately$1.8 billion for drilling,recompl
263、etion projects,development projects,equipment upgrades,production enhancement projects,and seismic acquisition.Approximately 75 percent of the 2012 investment will be for development and processing facilities in connectionwith the projects discussed above.11In February 2012,a subsidiary closed on th
264、e acquisition of a 49-percent interest in Burrup HoldingsLimited,which owns an ammonia plant on the Burrup Peninsula of Western Australia.Apache has beensupplying natural gas to this plant since it commenced operations in 2006.This acquisition allowed Apache tostabilize the overall plant project,whi
265、ch was in receivership.The plant,which has been rebranded Yara Pilbara,has a production capacity of 760,000 mtpa and is one of the worlds largest ammonia production facilities.MarketingWestern Australia has historically had a local market for natural gas with a limited number ofbuyers and sellers re
266、sulting in sales under mostly long-term,fixed-price contracts,many of which containperiodic price revision clauses based on either the Australian consumer price index or a commodity linkage.Asof December 31,2011,Apache had 22 active gas contracts in Australia with expiration dates ranging fromNovemb
267、er 2012 to December 2026.Recent increases in demand and higher development costs have increasedthe supply prices required from the local market in order to support the development of new supplies.As a result,market prices negotiated on recent contracts are substantially higher than historical levels
268、.We directly market all of our Australian crude oil production into Australian domestic and internationalmarkets at prices generally indexed to Dated Brent benchmark crude oil prices plus premiums,which typicallyresult in sales well above NYMEX oil prices.North SeaOverviewApache entered the North Se
269、a in 2003 after acquiring an approximate 97-percent workinginterest in the Forties field(Forties).Since acquiring Forties,Apache has actively invested in the region havingproduced and sold oil volumes in excess of the proved reserves initially recorded.Forties,which Apacheacquired with 45 producing
270、wells,now has 75 producing wells with a substantial inventory of future drillinglocations.In 2011,the North Sea region produced 20 MMboe of which approximately 99 percent was crude oil.Theregion represents seven percent of our total worldwide production and 13 percent of Apaches oil and gasproductio
271、n revenues.In 2011,the regions production decreased four percent compared to the prior year asnatural well decline and unplanned maintenance downtime exceeded gains from drilling.The drilling program,however,was successful and benefited greatly from a new 4-D seismic interpretation derived from the
272、latest 3-Dseismic survey acquired over Forties in 2010.The data highlighted many areas of bypassed oil in the reservoirand provided better definition of existing targets.In 2011,14 wells were drilled in Forties,of which 11 wereproductive.Two of the highest producing wells were the Charlie 4-3 well,w
273、hich commenced production in Juneat a rate of 12.6 Mb/d,and the Charlie 2-2 well,which was completed in March with an initial rate of 11.9 Mb/d.These rates were some of the highest in the Forties since 1990.In addition,the region acquired an 11.5 percent non-operated interest in the Nelson field in
274、early 2011,andon December 30,2011,closed on the acquisition of Mobil North Sea Limited from Exxon Mobil Corporation.The assets acquired include operated interests in the Beryl,Nevis,Nevis South,Skene,and Buckland fields;operated interest in the Beryl/Brae gas pipeline and the SAGE gas plant;non-oper
275、ated interests in the Maclure,Scott,and Telford fields;and Benbecula(west of Shetlands)exploration acreage.These major legacy assets bringthe region quality reservoirs with significant remaining reserve life,high production efficiency,and a portfolio oflow-risk exploitation projects.Beginning in 201
276、2,production from the former Mobil North Sea fields will add tothe percentage of Apaches current output that is indexed to the premium Brent crude oil benchmark price.Theseacquisitions expand Apaches presence in the North Sea and increase its portfolio of future drilling locations.Estimated proved r
277、eserves recorded at the end of the year for the acquired properties totaled 61 MMboe,bringing Apaches total estimated proved reserves at year-end 2011 to 197 MMbbls of crude oil in this region,orapproximately seven percent of our worldwide year-end estimated proved reserves.12In 2012,the region will
278、 invest approximately$950 million on a diverse set of capital projects.Forties willsee another year of active drilling with two platform rigs operating the entire year along with a partial year ofjack-up drilling at the Echo platform.Construction of the Forties Alpha Satellite Platform is underway a
279、nd isprojected to be complete by the third quarter of 2012.This platform will sit adjacent to the main Alpha platformand provide an additional 18 drilling slots along with power generation,fluid separation,gas lift compression,and oil export pumping.The region will also work to integrate the acquire
280、d Mobil North Sea properties and plansto drill three wells on these properties during the year along with well recompletions and workovers.MarketingWe have traditionally sold our Forties crude under both term contracts and spot cargoes.Theterm sales are composed of a market-based index prices plus a
281、 premium,which reflects the higher market valuefor term arrangements.The prices received for spot cargoes are market driven and can trade at a premium ordiscount to the market-based index.All 2012 production from Forties will be sold under a term contract with aper-barrel premium to the Dated Brent
282、index.Production from the former Mobil North Sea fields will also beindexed to the premium Brent crude oil benchmark price.ArgentinaOverviewWe have had a continuous presence in Argentina since 2001,which was expanded substantiallyby two acquisitions in 2006.We currently have operations in the Provin
283、ces of Neuqun,Rio Negro,Tierra delFuego,and Mendoza.We have interests in 34 concessions,exploration permits,and other interests totaling3.7 million gross acres in four of the main Argentine hydrocarbon basins:Neuqun,Austral,Cuyo,and Noroeste.Our concessions have varying expiration dates ranging from
284、 three years to over 15 years remaining,subject topotential extensions.In 2011,Argentina produced six percent of our worldwide production and held four percentof our estimated proved reserves at year-end.In 2011,the region achieved record production of 48 Mboe/d and drilled 36 gross wells pursuant t
285、o adevelopment drilling program that achieved a 97 percent success rate by focusing on unconventional premiumgas and shallow oil targets.Our exploration program included drilling six gross wells in 2011.We are continuingto test two vertical wells targeting the Vaca Muerta formation in the Huacalera
286、and Cortadera areas and aretargeting oil in two recent exploration wells drilled in the Cuyo basin.During the year,Apaches first horizontal well in the Anticlinal Campamento field in the Neuqun basinbegan producing at a rate over 10 MMcf/d.The well was a test of horizontal drilling and multi-stage h
287、ydraulicfracturing in the low-permeability pre-Cuyo formation.In the third quarter,we completed the first horizontalmulti-stage hydraulically fractured shale gas well drilled and completed in South America.The region willcontinue to evaluate the use of horizontal drilling techniques on tight and unc
288、onventional gas resources in thepre-Cuyo,Los Molles,and Vaca Muerta formations of the Neuqun basin,as these formations receive the benefitof higher gas prices under the Gas Plus program,as defined below.Apache added acreage during the year in the Neuqun and Noroeste basins,increasing the regionsunco
289、nventional oil and gas potential.We also began negotiations for extensions of concessions in the Tierra delFuego and Rio Negro Provinces,which are scheduled to expire between 2015 and 2017.Future investment byApache in the Tierra del Fuego and Rio Negro Provinces will be significantly influenced by
290、the ability to extendthe present concessions.During 2012,the region plans to invest approximately$250 million for drilling,recompletion projects,development projects,equipment upgrades,production enhancement projects,and seismic acquisition.13MarketingNatural GasApache sells its natural gas through
291、three pricing structures:Gas Plus program:This program was instituted by the Argentine government in 2008 to encourage newgas supplies through the development of conventional and unconventional(tight sands)reserves.Underthis program,Apache is allowed to sell gas from qualifying projects at prices th
292、at are above theregulated rates.During 2011,the average Gas Plus volume sold by Apache was 55.1 MMcf/d at anaverage price of$4.89 per Mcf.In addition,Apache signed or extended Gas Plus contracts withindustrial consumers totaling gross rates of 15.5 MMcf/d at$4.28 per Mcf through December 31,2012.Gov
293、ernment-regulated pricing:The volumes we are required to sell at regulated prices are set by theArgentine government and vary with seasonal factors and industry category.During 2011,we realizedan average price of$1.06 per Mcf on government-regulated sales.Unregulated market:The majority of our remai
294、ning volumes are sold into the unregulated market.In2011,realizations averaged$3.14 per Mcf.Crude OilOur crude oil is subject to an export tax,which effectively limits the prices buyers are willing topay for domestic sales.Domestic oil prices are currently based on$42 per barrel,plus quality adjustm
295、ents andlocal premiums,and producers realize a gradual increase or decrease as market prices deviate from the baseprice.In Tierra del Fuego,similar pricing formulas exist;however,Apache retains the value-added tax collectedfrom buyers,effectively increasing realized prices by 21 percent.As a result,
296、2011 oil prices realized from Tierradel Fuego oil production averaged$76.51 per barrel as compared to our Neuqun basin production,whichaveraged$64.16 per barrel.Other ExplorationNew VenturesApache continues to pursue numerous exploration opportunities in new areas across the globe.In CookInlet,Alask
297、a,where we are currently the largest acreage holder with approximately 800,000 gross acres,we planto conduct a seismic survey and drill a well within the next 12 months.During 2012,we also plan to drill a wellin deepwater Kenya,where we hold a 50-percent working interest and are the operator.In the
298、East Coast basin ofNew Zealand,where we have entered into a farm-in agreement to explore and potentially develop about1.7 million gross acres,we expect to commence seismic operations and drill our first four wells targeting newonshore unconventional oil plays during 2012.Apache will earn a 50-percen
299、t interest in the New Zealandexploration permits upon completing the seismic and drilling program planned for the next four years.During 2012,we plan to invest approximately$450 million to pursue exploration opportunities in new areaswhere Apache has yet to establish an operating region.ChileIn Nove
300、mber 2007,Apache was awarded exploration rights on two blocks comprising approximately onemillion net acres on the Chilean side of Tierra del Fuego.Upon careful evaluation of the exploration potentialand economics of the blocks,we determined that these blocks are no longer prospective to Apache.As s
301、uch,inthe fourth quarter of 2011,we relinquished this acreage and recorded a$60 million non-cash write-off of thecarrying value of our oil and gas property balance in Chile.14Major CustomersIn 2011,2010,and 2009,purchases by Royal Dutch Shell plc and its subsidiaries accounted for 11 percent,15perce
302、nt,and 18 percent,respectively,of the Companys worldwide oil and gas production revenues.In 2011,purchases by the Vitol Group accounted for 13 percent of the Companys worldwide oil and gas production revenues.Drilling StatisticsWorldwide in 2011 we participated in drilling 1,087 gross wells,with 1,0
303、05(92 percent)completed asproducers.Historically,our drilling activities in the U.S.have generally concentrated on exploitation andextension of existing producing fields rather than exploration.As a general matter,our operations outside of theU.S.focus on a mix of exploration and exploitation wells.
304、In addition to our completed wells,at year-end severalwells had not yet reached completion:39 in the U.S.(28.44 net);50 in Canada(42.69 net);23 in Egypt(21.75net);6 in the North Sea(4.91 net);1 in Australia(0.33 net);and 3 in Argentina(3.00 net).The following table shows the results of the oil and g
305、as wells drilled and completed for each of the last threefiscal years:Net ExploratoryNet DevelopmentTotal Net WellsProductiveDryTotalProductiveDryTotalProductiveDryTotal2011United States.12.45.017.4522.017.0539.0534.422.0556.4Canada.4.05.09.077.25.082.281.210.091.2Egypt.28.219.848.0112.66.0118.6140.
306、825.8166.6Australia.1.02.33.31.00.01.02.02.34.3North Sea.0.00.30.310.71.912.610.72.212.9Argentina.4.01.05.029.40.329.733.41.334.7Total.49.633.483.0752.930.2783.1802.563.6866.12010United States.3.72.25.9309.212.7321.9312.914.9327.8Canada.6.51.58.0122.35.7128.0128.87.2136.0Egypt.19.418.537.9144.85.515
307、0.3164.224.0188.2Australia.5.53.48.94.51.35.810.04.714.7North Sea.1.01.22.210.75.816.511.77.018.7Argentina.1.82.74.543.30.343.645.13.048.1Total.37.929.567.4634.831.3666.1672.760.8733.52009United States.5.62.58.1107.68.5116.1113.211.0124.2Canada.3.03.0136.812.8149.6139.812.8152.6Egypt.8.610.419.0126.
308、44.0130.4135.014.4149.4Australia.6.93.810.74.74.711.63.815.4North Sea.1.01.012.62.915.513.62.916.5Argentina.3.40.74.125.525.528.90.729.6Other International.2.02.02.02.0Total.30.517.447.9413.628.2441.8444.145.6489.7Productive Oil and Gas WellsThe number of productive oil and gas wells,operated and no
309、n-operated,in which we had an interest as ofDecember 31,2011,is set forth below:OilGasTotalGrossNetGrossNetGrossNetUnited States.12,6678,4654,9362,89917,60311,364Canada.2,2101,0159,3908,01511,6009,030Egypt.8808398076960915Australia.44201275627North Sea.147972411171108Argentina.465390470440935830Tota
310、l.16,41310,82614,91211,44831,32522,27415Gross natural gas and crude oil wells include 1,675 wells with multiple completions.Production,Pricing,and Lease Operating Cost DataThe following table describes,for each of the last three fiscal years,oil,NGL,and gas production volumes,average lease operating
311、 expenses per boe(including transportation costs but excluding severance and othertaxes),and average sales prices for each of the countries where we have operations:ProductionAverage LeaseOperatingCost per BoeAverage Sales PriceYear Ended December 31,Oil(MMbbls)NGLs(MMbbls)Gas(Bcf)Oil(Per bbl)NGLs(P
312、er bbl)Gas(Per Mcf)2011United States.43.68.1315.6$11.80$95.51$48.42$4.91Canada.5.22.2230.913.8693.1945.724.47Egypt.37.9133.47.19109.9266.364.66Australia.14.067.67.80111.2265.452.69North Sea.19.90.811.61104.0922.25Argentina.3.51.177.59.8368.0227.902.64Total.124.111.4825.810.62102.1945.954.372010Unite
313、d States.35.35.0266.8$11.40$76.13$41.45$5.28Canada.5.31.1144.513.4672.8336.614.48Egypt.36.2136.85.5679.4569.753.62Australia.16.772.96.4177.322.24North Sea.20.80.99.2376.6618.64Argentina.3.61.267.57.9757.4727.081.96Total.117.97.3689.49.2076.6938.584.152009United States.32.52.2243.1$10.59$59.06$33.02$
314、4.34Canada.5.50.8131.111.4656.1625.544.17Egypt.33.6132.35.1761.343.70Australia.3.667.06.8464.421.99North Sea.22.31.08.1960.9113.15Argentina.4.21.267.46.7849.4218.761.96Total.101.74.2641.98.4859.8527.633.69Gross and Net Undeveloped and Developed AcreageThe following table sets out our gross and net a
315、creage position in each country where we have operations:Undeveloped AcreageDeveloped AcreageGross AcresNet AcresGross AcresNet AcresUnited States.5,323,4943,057,3344,975,5562,555,355Canada.3,084,7892,640,3894,433,5573,355,367Egypt.7,944,4595,151,9271,784,6301,661,556Australia.7,945,0044,684,742861,
316、400488,470North Sea.598,091251,525187,46285,904Argentina.3,519,9062,872,880220,840188,226Total.28,415,74318,658,79712,463,4458,334,878As of December 31,2011,we had 4,198,666,3,772,074,and 1,885,448 net acres scheduled to expire byDecember 31,2012,2013,and 2014,respectively,if production is not estab
317、lished or we take no other action toextend the terms.We plan to continue the terms of many of these licenses and concession areas throughoperational or administrative actions and do not project a significant portion of our net acreage position to expirebefore such actions occur.As of December 31,201
318、1,34 percent of U.S.net undeveloped acreage and 40 percent of Canadianundeveloped acreage was held by production.16Estimated Proved Reserves and Future Net Cash FlowsProved oil and gas reserves are the estimated quantities of natural gas,crude oil,condensate,and NGLs thatgeological and engineering d
319、ata demonstrate with reasonable certainty to be recoverable in future years fromknown reservoirs under existing conditions,operating conditions,and government regulations.Estimated proveddeveloped oil and gas reserves can be expected to be recovered through existing wells with existing equipmentand
320、operating methods.The Company reports all estimated proved reserves held under production-sharingarrangements utilizing the“economic interest”method,which excludes the host countrys share of reserves.Estimated reserves that can be produced economically through application of improved recovery techni
321、quesare included in the“proved”classification when successful testing by a pilot project or the operation of an active,improved recovery program using reliable technology establishes the reasonable certainty for the engineeringanalysis on which the project or program is based.Economically producible
322、 means a resource that generatesrevenue that exceeds,or is reasonably expected to exceed,the costs of the operation.Reasonable certainty meansa high degree of confidence that the quantities will be recovered.Reliable technology is a grouping of one ormore technologies(including computational methods
323、)that has been field-tested and has been demonstrated toprovide reasonably certain results with consistency and repeatability in the formation being evaluated or in ananalogous formation.In estimating its proved reserves,Apache uses several different traditional methods that canbe classified in thre
324、e general categories:1)performance-based methods;2)volumetric-based methods;and 3)analogy with similar properties.Apache will,at times,utilize additional technical analysis,such as computerreservoir models,petrophysical techniques,and proprietary 3-D seismic interpretation methods,to provideaddition
325、al support for more complex reservoirs.Information from this additional analysis is combined withtraditional methods outlined above to enhance the certainty of our reserve estimates.PUD reserves include those reserves that are expected to be recovered from new wells on undrilled acreage,or from exis
326、ting wells where a relatively major expenditure is required for recompletion.Undeveloped reservesmay be classified as proved reserves on undrilled acreage directly offsetting development areas that arereasonably certain of production when drilled,or where reliable technology provides reasonable cert
327、ainty ofeconomic producibility.Undrilled locations may be classified as having undeveloped reserves only if adevelopment plan has been adopted indicating that they are scheduled to be drilled within five years,unlessspecific circumstances justify a longer time period.The following table shows proved
328、 oil,NGL,and gas reserves as of December 31,2011,based on averagecommodity prices in effect on the first day of each month in 2011,held flat for the life of the production,exceptwhere future oil and gas sales are covered by physical contract terms.This table shows reserves on a boe basis inwhich nat
329、ural gas is converted to an equivalent barrel of oil based on a 6:1 energy equivalent ratio.This ratio isnot reflective of the current price ratio between the two products.Oil(MMbbls)NGL(MMbbls)Gas(Bcf)Total(MMboe)Proved Developed:United States.4281072,216905Canada.82232,109457Egypt.106701223Austral
330、ia.36676148North Sea.1379105163Argentina.16644796Proved Undeveloped:United States.20653760385Canada.6081,439308Egypt.2228269Australia.32894181North Sea.321334Argentina.519021TOTAL PROVED.1,1622089,7222,99017As of December 31,2011,Apache had total estimated proved reserves of 1,370 MMbbls of crude oi
331、l,condensate,and NGLs and 9.7 Tcf of natural gas.Combined,these total estimated proved reserves are the energyequivalent of 3.0 billion barrels of oil or 17.9 Tcf of natural gas,of which oil represents 39 percent.As ofDecember 31,2011,the Companys proved developed reserves totaled 1,992 MMboe and es
332、timated PUDreserves totaled 998 MMboe,or approximately 33 percent of worldwide total proved reserves.Apache haselected not to disclose probable or possible reserves in this filing.The Companys estimates of proved reserves,proved developed reserves and PUD reserves as ofDecember 31,2011,2010,and 2009
333、,changes in estimated proved reserves during the last three years,andestimates of future net cash flows from proved reserves are contained in Note 14Supplemental Oil and GasDisclosures in the Notes to Consolidated Financial Statements set forth in Part IV,Item 15 of this Form 10-K.Estimated future net cash flows as of December 31,2011 and 2010,were calculated using a discount rate of 10percent pe
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