Apco Reports Net Income for 2012

  Apco Reports Net Income for 2012

Business Wire

TULSA, Okla. -- March 7, 2013

Apco Oil and Gas International Inc. (NASDAQ:APAGF) today announced net income
attributable to Apco of $39.1 million in 2012, or $1.33 per share, compared
with net income of $31.7 million, or $1.08 per share in 2011.

The increase in net income for 2012 was primarily due to the favorable impacts
of higher average sales prices and increased volumes on operating income and
equity income from Argentine investment. These benefits were partially offset
by greater costs and operating expenses.

Initial sales revenues from Apco’s Colombian operations also contributed to
the increase in net income for 2012.

Total operating revenues increased by $28.5 million compared with 2011. Higher
average oil and natural gas sales prices drove a $19.5 million increase due to
prices in operating revenues for 2012. A 4 percent growth in sales volumes –
which resulted in 2.7 million barrels of oil equivalent (BOE) for the year
applicable to Apco’s consolidated interests – contributed $11 million to the
increase in operating revenues. A decrease in other operating revenues
partially offset these favorable variances.

Total costs and operating expenses for the year increased by $23.6 million,
primarily the result of higher production and lifting costs, selling and
administrative expense, depreciation expense, and higher exploration expense.

Exploration expense increased by $8 million due to greater exploration
activity in 2012 compared with 2011. During 2012, Apco incurred significant 3D
seismic costs in its Sur Río Deseado property in Argentina and in the Llanos
40 block in Colombia.

Apco also experienced higher equity income from its 40.72 percent interest in
Petrolera Entre Lomas S.A. (Petrolera). For 2012, the favorable impacts of
higher average oil and natural gas sales prices and greater sales volumes
contributed to an increase of $5.9 million in equity income from Argentine
investment compared with 2011.

Total sales volumes applicable to Apco’s equity interest in Petrolera were 2.2
million BOE in 2012 – an increase of 3 percent.

“Once again, our steady capital development program in our core properties in
Argentina produced meaningful results. For the tenth consecutive year, we
achieved higher sales volumes,” said Ralph Hill, Apco’s chief executive
officer.

“Although 2012 was a challenging year in Argentina, our operations were not
significantly impacted and we were able to increase earnings. We are hopeful
that the business and political climate will improve to provide the conditions
necessary to encourage further growth in Argentina,” Hill added.

2012 and 2013 Capital Program and Operational Update

For 2012, capital expenditures of $54.4 million attributable to Apco’s
consolidated interests were invested primarily in development and exploration
drilling in Neuquén basin properties and exploration drilling in Colombia.
During 2012, Apco participated in the drilling of 37 gross wells.

Apco’s 2013 oil and gas capital expenditure budget is approximately $66
million. The 2013 capital program will focus on development and exploration
drilling in Neuquén basin properties, unconventional exploration drilling in
the Neuquén basin, and continued exploration drilling and field development in
Colombia. Apco plans to participate in the drilling of 48 gross wells in 2013.

“We are pleased to see the results of our exploration activities in Colombia
with our first two wells resulting in discoveries in 2012. We hope to continue
that success in 2013 and beyond to further expand our diversification into
Colombia,” said Thomas Bueno, Apco’s chief operating officer.

“In Argentina, where progress was made in 2012 toward exploring the productive
potential of the Vaca Muerta shale, our results to date have yielded positive
but modest results that demonstrate this formation is capable of production.

“We plan to make further investments targeting Vaca Muerta during 2013 in our
Coirón Amargo block. Understanding the potential of this resource will take
persistence and perseverance by all companies currently exploring this
unconventional formation,” Bueno added.

Apco Oil and Gas International Inc.
Summary of Earnings
(In Thousands of Dollars Except Per Share Amounts)            
                                                     2012     2011
Three months ended December 31                                
Operating revenue                                     35,254   30,951
Costs and operating expenses                          31,365   25,065
Investment income                                     4,244    7,289
Net income attributable to Apco                       6,082    9,829
Per share                                             0.21     0.33
                                                                   
                                                     2012     2011
Twelve months ended December 31                               
Operating revenue                                     133,263  104,780
Costs and operating expenses                          107,192  83,556
Investment income                                     26,108   20,626
Net income attributable to Apco                       39,061   31,746
Per share                                             1.33     1.08
                                                                   

About Apco Oil and Gas International Inc. (NASDAQ: APAGF)

Apco Oil and Gas International Inc. is an international oil and gas
exploration and production company with interests in nine oil and gas
concessions and two exploration permits in Argentina, and three exploration
and production contracts in Colombia. More information is available at
www.apcooilandgas.com. Go to http://www.b2i.us/irpass.asp?BzID=1671&to=ea&s=0
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available to management and include, among others, statements regarding:

  *Amounts and nature of future capital expenditures;
  *Volumes of future oil, natural gas, and LPG production;
  *Expansion and growth of our business and operations;
  *Financial condition and liquidity;
  *Business strategy;
  *Estimates of proved gas and oil reserves;
  *Reserve potential;
  *Development drilling potential;
  *Cash flow from operations or results of operations;
  *Seasonality of natural gas demand; and
  *Oil and natural gas prices and demand.

Forward-looking statements are based on numerous assumptions, uncertainties
and risks that could cause future events or results to be materially different
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will determine these results are beyond our ability to control or predict.
Specific factors that could cause actual results to differ from results
contemplated by the forward-looking statements include, among others, the
following:

  *Availability of supplies (including the uncertainties inherent in
    assessing, estimating, acquiring and developing future oil and natural gas
    reserves), market demand, volatility of prices, and the availability and
    cost of capital;
  *Inflation, interest rates, fluctuation in foreign currency exchange rates,
    and general economic conditions (including future disruptions and
    volatility in the global credit markets and the impact of these events on
    our customers and suppliers);
  *The strength and financial resources of our competitors;
  *Development of alternative energy sources;
  *The impact of operational and development hazards;
  *Costs of, changes in, or the results of laws, government regulations
    (including climate change regulation and/or potential additional
    regulation of drilling and completion of wells), environmental liabilities
    and litigation;
  *Political conditions in Argentina, Colombia and other parts of the world;
  *The failure to renew participation in hydrocarbon concessions granted by
    the Argentine government on reasonable terms;
  *Risks related to strategy and financing, including restrictions stemming
    from our loan agreement and the availability and cost of credit;
  *Risks associated with future weather conditions, volcanic activity and
    earthquakes;
  *Acts of terrorism; and
  *Additional risks described in our filings with the Securities and Exchange
    Commission ("SEC").

Given the uncertainties and risk factors that could cause our actual results
to differ materially from those contained in any forward-looking statement, we
caution investors not to unduly rely on our forward-looking statements. We
disclaim any obligations to and do not intend to update the above list or to
announce publicly the result of any revisions to any of the forward-looking
statements to reflect future events or developments.

In addition to causing our actual results to differ, the factors listed above
may cause our intentions to change from those statements of intention set
forth in this announcement. Such changes in our intentions may also cause our
results to differ. We may change our intentions, at any time and without
notice, based upon changes in such factors, our assumptions, or otherwise.

Investors are urged to closely consider the disclosures and risk factors in
our most recent annual report on Form 10-K filed with the SEC and our
quarterly reports on Form 10-Q available from our offices or from our website
at www.apcooilandgas.com.

Contact:

Apco Oil and Gas International Inc.
Media Contact:
Kelly Swan, 539-573-4944
or
Investor Contact:
David Sullivan, 539-573-9360
 
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