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Apache Announces Supplemental Information on Q4 Performance

Zacks Equity Research

Apache Corporation APA recently provided a brief peek into its fourth-quarter 2018 operations. The company is set to report fourth-quarter and full-year 2018 results on Feb 27, after market close. The upstream energy company stated that the fourth-quarter results will incorporate its ownership in Altus Midstream Company ALTM, a pure-play Permian Basin midstream firm created last year. The firm’s operations will be reflected in a separate business segment in Apache’s future filings. 

Let’s delve deeper to analyse the brief supplemental information provided by the company.

Q4 Realized Prices

United States: The company estimates crude price in the United States to average $51.85 per barrel. Moreover, it expects the price of natural gas liquids (NGL) to average $23.81 per barrel and natural gas price to average $2.03 per thousand cubic feet (Mcf).

International: The company expects oil price to average $63.69 per barrel, higher than the year-ago period’s $61.71. Apache estimates NGL price to average $39.77 per barrel, lower than the year-ago quarter’s $46.42. The company anticipates natural gas price to average $3.65 per Mcf, higher than $3.31 in fourth-quarter 2017.

Others

Apache’s realized gain on oil and gas price derivatives (before tax) is expected at $14 million, whereas unrealized gain is estimated to be $15 million. In the to-be-reported quarter, dry hole costs before tax are expected in the range of $80-$85 million, which incorporate around $54 million of historical exploration investment in the North Sea in the United Kingdom, where the company has no plans to develop any further. It also anticipates Egypt tax barrels in the range of 23,000-25,000 barrels of oil equivalent per day.

What Can We Expect From Apache in Q4?

Over the past 30 days, one analyst has increased earnings estimates for the fourth quarter, while seven have downwardly revised the same. Owing to the net effect of this, the Zacks Consensus Estimate for the fourth quarter has decreased from 48 cents per share to 34 cents in the said period. However, the figure is more than 3% higher than the fourth-quarter 2017 level.

Price Performance

Houston, TX-based Apache has lost 30.4% in the past six months compared with 33.4% fall of its industry.

 

 

Zacks Rank and Stocks to Consider

Currently, Apache has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks as given below.

Fort Worth, TX-based Approach Resources, Inc. AREX is an oil and gas exploration and production company. For 2018, its bottom line is expected to grow more than 33% year over year. The company currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Denver, CO-based Bonanza Creek Energy, Inc. BCEI is an upstream energy company. The company delivered average positive earnings surprise of 12.9% in the trailing four quarters. For full-year 2019, its earnings are expected to rise 57.3% from a year ago. The stock currently has a Zacks Rank #2.

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