Apco Reports Second-Quarter Results
TULSA, Okla. -- August 6, 2013
Apco Oil and Gas International Inc. (NASDAQ:APAGF) today announced that for
the three and six-month periods ended June 30, 2013, it generated unaudited
net income attributable to Apco of $13.5 million and $23.5 million, or $0.46
and $0.80 per share, compared with net income of $12.7 million and $22.8
million, or $0.43 and $0.77 per share for the same periods in 2012.
Net income for the quarter and year-to-date periods was higher than the same
periods in 2012 as the benefits of higher operating revenues were partially
offset by the combination of greater costs and operating expenses, lower
equity income from Argentine investment, and higher income tax expense.
Total operating revenues increased by $8.8 million and $14.0 million during
the second quarter and first six months of 2013 compared with the same periods
in 2012. Sales revenues from Apco’s Colombian operations and benefits realized
from the Oil Plus hydrocarbon subsidy program in Argentina were the primary
drivers of higher operating revenues experienced in 2013.
Total sales volumes applicable to Apco’s consolidated interest on a barrel of
oil equivalent (BOE) basis were 4 percent higher than second-quarter 2012 and
2 percent higher than the first six months of 2012.
Total costs and operating expenses for the quarter and the six months
increased by $6.6 million and $8.9 million, respectively, primarily the result
of higher production and lifting costs, depreciation expense, selling and
administrative expense, and higher foreign exchange losses. The year-to-date
period also benefited from lower exploration expense compared with 2012.
The second quarters of 2013 and 2012 benefited from one-time credits to other
income attributable to farm-outs of part of the company’s working interests in
properties in Colombia and Argentina.
Apco also experienced lower equity income from its 40.72 percent interest in
Petrolera Entre Lomas S.A. (Petrolera). During the second quarter and first
six months of 2013, the impact of lower operating revenues and higher
operating costs contributed to a decrease of $1.4 million and $4.3 million in
equity income from Argentine investment compared with the comparable periods
2013 Capital Program and Operational Update
During the first six months of 2013, capital expenditures of $27.6 million
attributable to Apco’s consolidated interests were invested primarily in
development and exploration drilling in Neuquén basin properties and
exploration drilling in Colombia.
Apco participated in the drilling of 13 development wells and two exploration
wells in the Neuquén basin in the first six months of the year. An additional
four wells were in various stages of drilling and completion at the end of the
In Colombia, Apco participated in the drilling of two wells in the Llanos 32
block. The Bandola-1 well was put on production in April and had a favorable
impact on revenues in the second quarter. The second well was determined to be
Additional activities in the first six months included the acquisition of 3D
seismic information in the Coirón Amargo block in Argentina and the Llanos 32
block in Colombia.
In July of 2013, Apco received the remaining governmental approval of its
agreements with the province of Tierra del Fuego to extend the term of the
company’s three concessions by the ten years provided for by Argentine
hydrocarbon law. The ten-year extensions for all three concessions run through
August 17, 2026.
Under the extensions, Apco and its partners agreed to pay a total bonus of $5
million and spend $49 million for future exploitation and exploration. In
addition, the provincial production tax increases from the current level of 12
percent to 15 percent and could increase up to a maximum of 17.5 percent
depending on future increases in product price realizations.
“We are pleased to announce approval of our extension agreements for our
properties in the province of Tierra del Fuego,” said Michael Kyle, Apco’s
president and chief operating officer.
“The extension agreements extend the reserve life of our properties and allow
for a continued stream of investments while supporting future employment for
local residents. Negotiations for the extension of the portion of the Entre
Lomas concession in the province of Río Negro are advancing and we hope to
have an approved agreement this year,” Kyle added.
Apco Oil and Gas International Inc.
Summary of Earnings
(In Thousands of Dollars Except Per Share Amounts)
Three months ended June 30
Operating revenue 41,790 32,967
Costs and operating expenses 29,855 23,249
Investment income 6,122 7,163
Net income attributable to Apco 13,520 12,680
Per share 0.46 0.43
Six months ended June 30
Operating revenue 77,069 63,043
Costs and operating expenses 57,126 48,275
Investment income 11,587 15,501
Net income attributable to Apco 23,453 22,756
Per share 0.80 0.77
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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*Amounts and nature of future capital expenditures;
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*Financial condition and liquidity;
*Estimates of proved gas and oil reserves;
*Development drilling potential;
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*Seasonality of natural gas demand; and
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contemplated by the forward-looking statements include, among others, the
*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);
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(including climate change regulation and/or potential additional
regulation of drilling and completion of wells), environmental liabilities
*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;
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from our loan agreement and the availability and cost of credit;
*Risks associated with future weather conditions, volcanic activity and
*Acts of terrorism; and
*Additional risks described in our filings with the Securities and Exchange
Given the uncertainties and risk factors that could cause our actual results
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caution investors not to unduly rely on our forward-looking statements. We
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may cause our intentions to change from those statements of intention set
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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
Apco Oil and Gas International Inc.
Kelly Swan, 539-573-4944
David Sullivan, 539-573-9360
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