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Apache’s 4Q16 Earnings Disappoint

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Apache’s 4Q16 revenue

Apache Corporation (APA) reported its 4Q16 earnings on February 23, 2017, before the markets opened. Its 4Q16 revenue was ~$1.45 billion compared to an estimated $1.5 billion. Its 4Q15 revenue was ~$1.48 billion. In 3Q16, it was ~$1.44 billion.

Unlike the previous two quarters, APA’s 4Q16 revenue was slightly lower than expected. For fiscal 2016, revenue was ~$5.4 billion, compared to revenue of ~$6.9 billion in fiscal 2015.

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Apache’s 4Q16 earnings

Apache reported adjusted EPS (earnings per share) of -$0.06. Wall Street analysts’ consensus estimate was $0.1. As you can see in the graph above, Apache’s earnings—like its revenue—came in less than analysts had expected.

Peer comparison

Whiting Petroleum (WLL) announced 4Q16 EPS of -$0.28 while Concho Resources (CXO) reported 4Q16 EPS of $0.20.

You can read more about 4Q16 performance in Whiting Petroleum Reported Upbeat 4Q16 Earnings and Revenue and 4Q16 Insights: Acquisitions Could Drive Concho’s 2017 Production.

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Key management comments and 4Q16 highlights

John Christmann, APA’s CEO, said during the company’s 4Q16 earnings release, “2016 was a very successful year and an important step in Apache’s transformation. We protected our balance sheet in a volatile price environment, remained focused on costs, and allocated our capital to high-return projects and strategic testing opportunities. This strategy resulted in an expanded economic drilling inventory, meaningful improvements in Permian Basin well performance, a more streamlined portfolio, and lower overhead and operating costs.”

He continued, “We also discovered and announced the Alpine High, a sizeable new resource play in the Delaware Basin, which brings significant drilling inventory and puts Apache in one of the most exciting and competitive positions in the industry.”

On September 7, 2016, Apache announced a major oil discovery in the Delaware Basin, Texas: Alpine High, located in the southern portion of the Delaware Basin. APA estimates that its acreage holds around 3 billion barrels of oil in the Barnett and Woodford regions and about 75 Tcf (trillion cubic feet) of rich gas.

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