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Apache (APA) Shares Fall After Q1 Earnings Miss Estimate

Shares of Apache Corp.APA dived nearly 5% in early trade after the U.S. energy firm reported first-quarter earnings per share - excluding one-time items - of 8 cents, lower than the Zacks Consensus Estimate of 16 cents. The underperformance stems from a dip in output due to a conservative capital budget over the past two years.

However, the bottom line improved from the year-ago loss amid and higher realizations.

Revenues of $1,878 million were above the Zacks Consensus Estimate of $1,486 million and the first-quarter 2016 sales of $1,083 million.

Operational Performance

The production of oil and natural gas (excluding divested assets and non-controlling interests) averaged 397,792 oil-equivalent barrels per day (BOE/d) (65% liquids), down 16% from last year. Apache's production for oil and natural gas liquids (NGLs) was 257,534 barrels per day (Bbl/d), while natural gas output came in at 841.5 million cubic feet per day (MMcf/d).

The average realized crude oil price during the first quarter was $51.20 per barrel, representing an increase of 62% from the year-ago realization of $31.62. Moreover, the average realized natural gas price during the Mar quarter of 2017 was $2.74 per thousand cubic feet (Mcf), up 28% from the year-ago period.

Apache Corporation Price, Consensus and EPS Surprise

Apache Corporation Price, Consensus and EPS Surprise | Apache Corporation Quote

Balance Sheet, Capital Spending & Lease Operating Expenses

As of Mar 31, 2017, Apache had approximately $1,521 million in cash and cash equivalents. The Zacks Rank #4 (Sell) company had a long-term debt of $8,327 million, representing a debt-to-capitalization ratio of 56.6%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

During Jan-Mar period, Apache's exploration and development investments totaled $513 million, 8% higher than the $476 million incurred a year ago. This is in keeping with the company's planned shift in strategic objective.

During the oil rout, Apache- like many other oil and gas players including ConocoPhillips COP , Chesapeake Energy Corp. CHK and Marathon Oil Corp. MRO - aligned its spending plans with the low-price environment.

But Apache is now looking to increase its capital investment after achieving cost rationalization. With returns-focused growth in mind, Apache announced a 2017 capital budget of $3.1 billion, representing a 60% increase over its 2016 spend.

Apache's first quarter lease operating expenses totaled $336 million, down 11% from the year-ago quarter. Total costs and expenses fell 9% from the first quarter of 2016 to $1,340 million.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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