OREANDA-NEWS. Apache Corporation (NYSE, Nasdaq: APA) today announced a first-quarter 2015 net loss of \$4.7 billion or \$12.34 per diluted common share, which includes an after-tax ceiling-test write down of \$4.7 billion, as a result of substantially lower commodity prices. When adjusted for certain items that impact the comparability of results, Apache's first-quarter loss totaled \$139 million or \$0.37 per share. Net cash provided by operating activities was approximately \$650 million in the first quarter of 2015 and cash from operations, before changes in working capital, totaled \$900 million.
"During the quarter, we significantly reduced our drilling activity and cost structure in response to the rapid oil-price downturn. Drilling and completion costs across all of our key plays in North America onshore are down between 20 and 40 percent from those we provided in our North American Update last November. Operationally, I am pleased to report that North American onshore production exceeded our first quarter guidance despite a substantial reduction in well completions and the adverse impacts of severe winter weather in the Permian and Anadarko Basins. Internationally, production in both Egypt and the North Sea is tracking ahead of our initial expectations," said

John J. Christmann, IV, Apache's chief executive officer and president.

Portfolio rebalancing update

During 2014, Apache conducted a review of its international portfolio with the goal of best positioning its asset base for the long-term benefit of its shareholders. This review resulted in several key divestitures during the past 12 months. In the first half of April, the company closed the previously announced sale of its Wheatstone and Kitimat LNG projects to Woodside Petroleum for \$3.7 billion of net proceeds. On April 8, Apache also announced the sale of its remaining oil and gas assets in Australia for \$2.1 billion, subject to customary post-closing adjustments.

The company's acquisition and divestiture transactions over the last several years have streamlined its portfolio and resulted in greater leverage to onshore North America. When adjusted for the recently announced sale in Australia, pro forma onshore North America now represents nearly two-thirds of total company production.

"Apache's portfolio now consists of an onshore North American position with a robust inventory of drilling opportunities, complemented by free-cash-flow-generating assets in the North Sea and Egypt. Our international assets benefit from attractive Brent-linked oil prices and also offer a significant inventory of exploration and development opportunities. We are very excited to move forward with a strengthened balance sheet and three key operating areas that offer excellent potential for sustainable long-term growth and capital-allocation flexibility," Christmann noted.

2015 capital spending and production update

During the quarter, Apache's capital expenditures before LNG, capitalized interest and Egypt's minority interest was \$1.3 billion, which was in-line with expectations. Spending on LNG facilities during the quarter was \$239 million, all of which was reimbursed with the closing of the LNG asset sales. As noted last quarter, management expected the 2015 capital program to be front-end loaded as the drilling program continued to ramp down through the first quarter.

Apache remains on track to meet its 2015 capital-spending guidance for North America of \$2.1 billion to \$2.3 billion and continues to project relatively flat pro forma production volumes in North America compared to 2014.

The company is lowering its 2015 international capital-spending guidance to between \$1.3 billion and \$1.6 billion.  This reflects a \$150-million reduction from the midpoint of the prior range driven by the pending Australian asset sale expected at mid-year.  Apache anticipates combined production from Egypt and the North Sea will increase slightly year over year, which is essentially unchanged from its prior international production guidance.