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Measuring Apache’s Stock Performance in the Last Year

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Apache’s stock performance

Apache (APA) stock was mostly in a falling trend in the second half of 2015. However, since the start of 2016, APA has been mostly on an uptrend, mirroring the rally in energy prices.

Year-over-year, Apache stock has risen ~11%. Meanwhile, crude oil prices (USO) have fallen ~10% in the same period, and natural gas prices (UNG) have fallen ~2.5% in the same period. The broader energy fund, the Energy Select Sector SPDR ETF (XLE), has fallen by 6%.

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Merger-acquisition speculation

Apache (APA) has recently been surrounded with rumors of a potential merger or acquisition. In November 2015, Anadarko Petroleum (APC) made an offer to merge with Apache, which was quickly rejected by Apache. In May 2016, rumors were rife again about a potential acquisition by Occidental Petroleum (OXY). However, these rumors were denied by OXY.

APA’s exposure to low-cost and prolific Permian is at the forefront of merger and acquisition talks surrounding the company.

Capital spending in 2016

APA has reduced its 2016 capital spending by ~60% from 2015. In addition to capex (capital expenditure) reduction, Apache has also been making efforts to reduce its rig counts. According to a presentation released on May 12, 2016, the company has cut 94 rigs worldwide since September 2014.

Another company that’s focusing on lower rigs this year is Anadarko Petroleum (APC). Both APA and APC make up 2% of the iShares Global Energy ETF (IXC).

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