Apache sees FY13 CapEx $10.5B, total production growth of 3%-5%

theflyonthewall.com

Says approximately $4B of capital will be invested in onshore U.S. where production should grow in excess of 20%, driven primarily by the company's Permian and central region drilling programs. Projects North American oil production to grow by 14% in 2013, up from 12% in 2012. Additionally, the 2013 plan calls for $2.2B of investments in 10 year-long infrastructure projects, which represents nearly 21% of the total 2013 capital budget. As a result of this capital allocation choice and taking into consideration production declines in certain regions, Apache (APA) expects total production to grow by 3%-5% in 2013. Management says it has a robust project pipeline in motion that will provide a stable base of free cash flow for decades and include broad exposure to quality resource and exploration opportunities around the world. The company plans to drill more wells in 2013 than 2012, with an estimated total of nearly 1,600. Almost two-thirds of all planned wells will be drilled in the Permian and Anadarko basins of the U.S. and are expected to generate fully loaded after-tax rates of return in excess of 20% at planned commodity prices. For 2013, Apache plans to continue to accelerate activity as it ramps up drilling across extensive acreage position in the Anadarko and Whitenburg basins. Management noted it expects Q1 production to be down sequentially due to weather related events in Australia, however that downtime has been incorporated into FY13 production guidance. Comments taken from the company's Q4 earnings conference call.

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