Apache Reports First-Quarter Profit of $705 Million After Oil Prices Jump

Apache Corp., the largest independent U.S. oil company by market value, reported a first- quarter profit of $705 million on new production from Australian projects and higher crude prices.

Net income was $2.08 a share, compared with a net loss of $1.76 billion, or $5.25, a year earlier, Houston-based Apache said today in a statement. Profit excluding foreign-currency fluctuation was $2.10 a share, 10 cents less than the average of 23 analysts’ estimates compiled by Bloomberg.

Oil prices jumped 82 percent to an average of $78.88 a barrel during the first quarter, compared with the same period a year earlier. Apache’s costs were 5 percent lower than the expectation of Leo Mariani, an analyst at RBC Capital Markets in Austin, who rates the shares a “sector perform” and owns none.

“From our perspective, they did a good job containing costs,” Mariani said. Overall cash flow per share was 3 percent higher than the $4.43 he expected.

Daily production rose 7 percent to the equivalent of 585,877 barrels of oil, boosted by first output at the Van Gogh and Pyrenees projects in Australia. Total company revenue climbed 64 percent to $2.67 billion.

Apache was paid an average of $74.55 a barrel for its oil, up 75 percent from a year earlier. The company’s average gas price rose 20 percent to $4.60 per thousand cubic feet.

Apache’s exploration and production business last year was evenly split between oil and natural gas. Oil and natural-gas liquids accounted for 51 percent of output in the first quarter.

“They’re in the position that a lot of other E&Ps would like to be, with this balance between oil and gas,” said Philip Dodge, an analyst at Tuohy Brothers in New York who doesn’t rate the shares and owns none. “There are some others that would like to raise that oil portion and are trying to do that.”

Apache fell $3.66 to $102.92 at 4:16 p.m. in composite trading on the New York Stock Exchange. The shares, which have 14 buy ratings from analysts, 9 holds and 1 sell, fell 1.6 percent during the first quarter.

To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net.

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