Company Quick10K Filing
Apache
Price25.52 EPS-2
Shares377 P/E-12
MCap9,621 P/FCF5
Net Debt8,249 EBIT53
TEV17,870 TEV/EBIT337
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-07
10-K 2020-12-31 Filed 2021-02-26
10-Q 2020-09-30 Filed 2020-11-05
10-Q 2020-06-30 Filed 2020-07-30
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-02-28
10-Q 2019-09-30 Filed 2019-10-31
10-Q 2019-06-30 Filed 2019-08-01
10-Q 2019-03-31 Filed 2019-05-03
10-K 2018-12-31 Filed 2019-03-01
10-Q 2018-09-30 Filed 2018-11-01
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-03
10-K 2017-12-31 Filed 2018-02-23
10-Q 2017-09-30 Filed 2017-11-03
10-Q 2017-06-30 Filed 2017-08-04
10-Q 2017-03-31 Filed 2017-05-05
10-K 2016-12-31 Filed 2017-02-24
10-Q 2016-09-30 Filed 2016-11-04
10-Q 2016-06-30 Filed 2016-08-04
10-Q 2016-03-31 Filed 2016-05-06
10-K 2015-12-31 Filed 2016-02-26
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-07
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-02-27
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-08
10-Q 2014-03-31 Filed 2014-05-09
10-K 2013-12-31 Filed 2014-02-28
10-Q 2013-09-30 Filed 2013-11-08
10-Q 2013-06-30 Filed 2013-08-06
10-Q 2013-03-31 Filed 2013-05-09
10-Q 2012-09-30 Filed 2012-11-07
10-Q 2012-06-30 Filed 2012-08-07
10-Q 2012-03-31 Filed 2012-05-08
10-K 2011-12-31 Filed 2012-02-29
10-Q 2011-09-30 Filed 2011-11-08
10-Q 2011-06-30 Filed 2011-08-08
10-Q 2011-03-31 Filed 2011-05-09
10-K 2010-12-31 Filed 2011-02-28
10-Q 2010-09-30 Filed 2010-11-09
10-Q 2010-06-30 Filed 2010-08-06
10-Q 2010-03-31 Filed 2010-05-07
10-K 2009-12-31 Filed 2010-02-26
8-K 2021-02-04 Officers
8-K 2021-01-04 Other Events, Exhibits
8-K 2020-11-04
8-K 2020-08-21
8-K 2020-08-03
8-K 2020-07-29
8-K 2020-05-26
8-K 2020-05-14
8-K 2020-05-06
8-K 2020-03-31
8-K 2020-03-04
8-K 2020-02-26
8-K 2019-12-04
8-K 2019-10-30
8-K 2019-07-31
8-K 2019-06-05
8-K 2019-05-23
8-K 2019-05-01
8-K 2019-02-27
8-K 2019-02-04
8-K 2019-01-03
8-K 2018-10-31
8-K 2018-08-14
8-K 2018-08-08
8-K 2018-08-01
8-K 2018-05-24
8-K 2018-05-02
8-K 2018-04-16
8-K 2018-03-14
8-K 2018-02-22
8-K 2018-02-08
8-K 2018-01-16

APA 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 apaq12021ex311.htm
EX-31.2 apaq12021ex312.htm
EX-32.1 apaq12021ex321.htm

Apache Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
655239261302012201420172020
Assets, Equity
2.01.51.00.60.1-0.42016201720182020
Rev, G Profit, Net Income
10.06.02.0-2.0-6.0-10.02012201420172020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 10-Q 
(Mark One)  
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File Number: 1-40144
APA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware86-1430562
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
One Post Oak Central, 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400
(Address of principal executive offices) (Zip Code)
(713296-6000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.625 par valueAPANasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer☐ Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
Number of shares of registrant’s common stock outstanding as of April 30, 2021
377,972,835 




TABLE OF CONTENTS

ItemPage
PART I - FINANCIAL INFORMATION
1.
2.
3.
4.
PART II - OTHER INFORMATION
1.
1A.
2.
6.



FORWARD-LOOKING STATEMENTS AND RISKS
This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding the Company’s future financial position, business strategy, budgets, projected revenues, projected costs, and plans and objectives of management for future operations, are forward-looking statements. Such forward-looking statements are based on the Company’s examination of historical operating trends, the information that was used to prepare its estimate of proved reserves as of December 31, 2020, and other data in the Company’s possession or available from third parties. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “could,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “continue,” “seek,” “guidance,” “might,” “outlook,” “possibly,” “potential,” “prospect,” “should,” “would,” or similar terminology, but the absence of these words does not mean that a statement is not forward looking. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable under the circumstances, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, its assumptions about:
 
the scope, duration, and reoccurrence of any epidemics or pandemics (including, specifically, the coronavirus disease 2019 (COVID-19) pandemic) and the actions taken by third parties, including, but not limited to, governmental authorities, customers, contractors, and suppliers, in response to such epidemics or pandemics;
the availability and effectiveness of vaccine programs and therapeutics related to the treatment of COVID-19;
the market prices of oil, natural gas, natural gas liquids (NGLs), and other products or services;
the Company’s commodity hedging arrangements;
the supply and demand for oil, natural gas, NGLs, and other products or services;
production and reserve levels;
drilling risks;
economic and competitive conditions;
the availability of capital resources;
capital expenditures and other contractual obligations;
currency exchange rates;
weather conditions;
inflation rates;
the availability of goods and services;
legislative, regulatory, or policy changes, including initiatives addressing the impact of global climate change or further regulating hydraulic fracturing, methane emissions, flaring, or water disposal;
the Company’s performance on environmental, social, and governance measures;
terrorism or cyberattacks;
the occurrence of property acquisitions or divestitures;
the integration of acquisitions;
the Company’s ability to access the capital markets;
market-related risks, such as general credit, liquidity, and interest-rate risks;
the Company’s expectations with respect to the new operating structure implemented pursuant to the Holding Company Reorganization (as defined in the Notes to the Company’s Consolidated Financial Statements set forth in Part I, Item 1—Financial Statements of this Quarterly Report on Form 10-Q) and the associated disclosure implications;



other factors disclosed under Items 1 and 2—Business and Properties—Estimated Proved Reserves and Future Net Cash Flows, Item 1A—Risk Factors, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 7A—Quantitative and Qualitative Disclosures About Market Risk and elsewhere in the Annual Report on Form 10-K of Apache Corporation, the Company’s predecessor registrant, for the fiscal year ended December 31, 2020;
other risks and uncertainties disclosed in the Company’s first-quarter 2021 earnings release;
other factors disclosed under Part II, Item 1A—Risk Factors of this Quarterly Report on Form 10-Q; and
other factors disclosed in the other filings that the Company makes with the Securities and Exchange Commission.
Other factors or events that could cause the Company’s actual results to differ materially from the Company’s expectations may emerge from time to time, and it is not possible for the Company to predict all such factors or events. All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements. All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, the Company disclaims any obligation to update or revise these statements, whether based on changes in internal estimates or expectations, new information, future developments, or otherwise.



DEFINITIONS
All defined terms under Rule 4-10(a) of Regulation S-X shall have their statutorily prescribed meanings when used in this Quarterly Report on Form 10-Q. As used herein:
“3-D” means three-dimensional.
“4-D” means four-dimensional.
“b/d” means barrels of oil or natural gas liquids per day.
“bbl” or “bbls” means barrel or barrels of oil or natural gas liquids.
“bcf” means billion cubic feet of natural gas.
“bcf/d” means one bcf per day.
“boe” means barrel of oil equivalent, determined by using the ratio of one barrel of oil or NGLs to six Mcf of gas.
“boe/d” means boe per day.
“Btu” means a British thermal unit, a measure of heating value.
“Liquids” means oil and natural gas liquids.
“LNG” means liquefied natural gas.
“Mb/d” means Mbbls per day.
“Mbbls” means thousand barrels of oil or natural gas liquids.
“Mboe” means thousand boe.
“Mboe/d” means Mboe per day.
“Mcf” means thousand cubic feet of natural gas.
“Mcf/d” means Mcf per day.
“MMbbls” means million barrels of oil or natural gas liquids.
“MMboe” means million boe.
“MMBtu” means million Btu.
“MMBtu/d” means MMBtu per day.
“MMcf” means million cubic feet of natural gas.
“MMcf/d” means MMcf per day.
“NGL” or “NGLs” means natural gas liquids, which are expressed in barrels.
“NYMEX” means New York Mercantile Exchange.
“oil” includes crude oil and condensate.
“PUD” means proved undeveloped.
“SEC” means United States Securities and Exchange Commission.
“Tcf” means trillion cubic feet of natural gas.
“U.K.” means United Kingdom.
“U.S.” means United States.
With respect to information relating to our working interest in wells or acreage, “net” oil and gas wells or acreage is determined by multiplying gross wells or acreage by our working interest therein. Unless otherwise specified, all references to wells and acres are gross.
References to “APA,” the “Company,” “we,” “us,” and “our” refer to APA Corporation and its consolidated subsidiaries, including Apache Corporation, unless otherwise specifically stated. References to “Apache” refer to Apache Corporation, the Company’s wholly-owned subsidiary, and its consolidated subsidiaries, unless otherwise specifically stated.



PART I – FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS
APA CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED OPERATIONS
(Unaudited)
For the Quarter Ended
March 31,
2021
2020
 (In millions, except share data)
REVENUES AND OTHER:
Oil, natural gas, and natural gas liquids production revenues$1,431 $1,236 
Purchased oil and gas sales440 108 
Total revenues1,871 1,344 
Derivative instrument gains (losses), net158 (103)
Gain on divestitures, net2 25 
Other, net61 13 
2,092 1,279 
OPERATING EXPENSES:
Lease operating expenses264 335 
Gathering, processing, and transmission58 71 
Purchased oil and gas costs494 86 
Taxes other than income44 33 
Exploration49 57 
General and administrative83 68 
Transaction, reorganization, and separation 27 
Depreciation, depletion, and amortization342 566 
Asset retirement obligation accretion28 27 
Impairments 4,472 
Financing costs, net110 103 
1,472 5,845 
NET INCOME (LOSS) BEFORE INCOME TAXES620 (4,566)
Current income tax provision149 89 
Deferred income tax provision (benefit)21 (33)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS450 (4,622)
Net income (loss) attributable to noncontrolling interest - Egypt42 (151)
Net income (loss) attributable to noncontrolling interest - Altus1 (9)
Net income attributable to Altus Preferred Unit limited partners19 18 
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK$388 $(4,480)
NET INCOME (LOSS) PER COMMON SHARE:
Basic$1.02 $(11.86)
Diluted$1.02 $(11.86)
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic378 378 
Diluted379 378 
The accompanying notes to consolidated financial statements are an integral part of this statement.
1


APA CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
(Unaudited)
 
For the Quarter Ended
March 31,
 20212020
 (In millions)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS$450 $(4,622)
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Share of equity method interests other comprehensive income (loss)1 (1)
COMPREHENSIVE INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS451 (4,623)
Comprehensive income (loss) attributable to noncontrolling interest - Egypt42 (151)
Comprehensive income (loss) attributable to noncontrolling interest - Altus1 (9)
Comprehensive income attributable to Altus Preferred Unit limited partners19 18 
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK$389 $(4,481)
The accompanying notes to consolidated financial statements are an integral part of this statement.
2


APA CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
 
For the Three Months Ended
March 31,
 20212020
 (In millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) including noncontrolling interests$450 $(4,622)
Adjustments to reconcile net loss to net cash provided by operating activities:
Unrealized derivative instrument losses (gains), net(10)103 
Gain on divestitures, net(2)(25)
Exploratory dry hole expense and unproved leasehold impairments37 43 
Depreciation, depletion, and amortization342 566 
Asset retirement obligation accretion28 27 
Impairments 4,472 
Provision for (benefit from) deferred income taxes21 (33)
Other(20)(8)
Changes in operating assets and liabilities:
Receivables(168)221 
Inventories(3)30 
Drilling advances and other current assets10 (26)
Deferred charges and other long-term assets(10)(7)
Accounts payable75 (80)
Accrued expenses(66)(173)
Deferred credits and noncurrent liabilities(13)14 
NET CASH PROVIDED BY OPERATING ACTIVITIES671 502 
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to upstream oil and gas property(253)(511)
Additions to Altus gathering, processing, and transmission (GPT) facilities(1)(19)
Leasehold and property acquisitions(2)(1)
Contributions to Altus equity method interests(21)(83)
Proceeds from sale of oil and gas properties3 126 
Other, net7 (21)
NET CASH USED IN INVESTING ACTIVITIES(267)(509)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payments on) Apache credit facility, net(85)250 
Proceeds from Altus credit facility, net33 72 
Payments on Apache fixed-rate debt(6) 
Distributions to noncontrolling interest - Egypt(40)(32)
Distributions to Altus Preferred Unit limited partners(11) 
Dividends paid(9)(94)
Other(10)(8)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES(128)188 
NET INCREASE IN CASH AND CASH EQUIVALENTS276 181 
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR262 247 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$538 $428 
SUPPLEMENTARY CASH FLOW DATA:
Interest paid, net of capitalized interest$113 $126 
Income taxes paid, net of refunds124 98 
The accompanying notes to consolidated financial statements are an integral part of this statement.
3


APA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
March 31,
2021
December 31,
2020
(In millions, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($51 and $24 related to Altus VIE)
$538 $262 
Receivables, net of allowance of $98 and $95
1,071 908 
Other current assets (Note 5) ($12 and $5 related to Altus VIE)
736 676 
2,345 1,846 
PROPERTY AND EQUIPMENT:
Oil and gas properties42,054 41,819 
Gathering, processing, and transmission facilities ($206 and $206 related to Altus VIE)
671 670 
Other ($3 and $3 related to Altus VIE)
1,139 1,140 
Less: Accumulated depreciation, depletion, and amortization ($16 and $13 related to Altus VIE)
(35,146)(34,810)
8,718 8,819 
OTHER ASSETS:
Equity method interests (Note 6) ($1,567 and $1,555 related to Altus VIE)
1,567 1,555 
Deferred charges and other ($6 and $5 related to Altus VIE)
497 526 
$13,127 $12,746 
LIABILITIES, NONCONTROLLING INTEREST, AND EQUITY
CURRENT LIABILITIES:
Accounts payable$524 $444 
Current debt2 2 
Other current liabilities (Note 7) ($8 and $4 related to Altus VIE)
812 862 
1,338 1,308 
LONG-TERM DEBT (Note 9) ($657 and $624 related to Altus VIE)
8,713 8,770 
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Income taxes237 215 
Asset retirement obligation (Note 8) ($65 and $64 related to Altus VIE)
1,914 1,888 
Other ($161 and $144 related to Altus VIE)
581 602 
2,732 2,705 
REDEEMABLE NONCONTROLLING INTEREST - ALTUS PREFERRED UNIT LIMITED PARTNERS (Note 12)
605 608 
EQUITY (DEFICIT):
Common stock, $0.625 par, 860,000,000 shares authorized, 418,917,594 and 418,429,375 shares issued, respectively
262 262 
Paid-in capital11,727 11,735 
Accumulated deficit(10,073)(10,461)
Treasury stock, at cost, 40,944,759 and 40,946,745 shares, respectively
(3,189)(3,189)
Accumulated other comprehensive income15 14 
APA SHAREHOLDERS’ DEFICIT(1,258)(1,639)
Noncontrolling interest - Egypt927 925 
Noncontrolling interest - Altus70 69 
TOTAL DEFICIT(261)(645)
$13,127 $12,746 
The accompanying notes to consolidated financial statements are an integral part of this statement.
4


APA CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CHANGES IN EQUITY (DEFICIT) AND NONCONTROLLING INTEREST
(Unaudited)
Redeemable Noncontrolling Interest - Altus Preferred Unit Limited PartnersCommon
Stock
Paid-In
Capital
Accumulated DeficitTreasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
APA SHAREHOLDERS’
EQUITY (DEFICIT)
Noncontrolling
Interests
TOTAL
EQUITY (DEFICIT)
(In millions)
For the Quarter Ended March 31, 2020
Balance at December 31, 2019$555 $261 $11,769 $(5,601)$(3,190)$16 $3,255 $1,210 $4,465 
Net loss attributable to common stock— — — (4,480)— — (4,480)— (4,480)
Net loss attributable to noncontrolling interest - Egypt— — — — — — — (151)(151)
Net loss attributable to noncontrolling interest - Altus— — — — — — — (9)(9)
Net income attributable to Altus Preferred Unit holders18 — — — — — — — — 
Distributions to noncontrolling interest - Egypt— — — — — — — (32)(32)
Common dividends ($0.025 per share)
— — (10)— — — (10)— (10)
Other— 1 (12)— 1 (1)(11)— (11)
Balance at March 31, 2020
$573 $262 $11,747 $(10,081)$(3,189)$15 $(1,246)$1,018 $(228)
For the Quarter Ended March 31, 2021
Balance at December 31, 2020
$608 $262 $11,735 $(10,461)$(3,189)$14 $(1,639)$994 $(645)
Net income attributable to common stock— — — 388 — — 388 — 388 
Net income attributable to noncontrolling interest - Egypt— — — — — — — 42 42 
Net income attributable to noncontrolling interest - Altus— — — — — — — 1 1 
Net income attributable to Altus Preferred Unit limited partners19 — — — — — — — — 
Distributions payable to Altus Preferred Unit limited partners(11)— — — — — — — — 
Distributions paid to Altus Preferred Unit limited partners(11)— — — — — — — — 
Distributions to noncontrolling interest - Egypt— — — — — — — (40)(40)
Common dividends ($0.025 per share)
— — (9)— — — (9)— (9)
Other— — 1 — — 1 2 — 2 
Balance at March 31, 2021
$605 $262 $11,727 $(10,073)$(3,189)$15 $(1,258)$997 $(261)
The accompanying notes to consolidated financial statements are an integral part of this statement.
5


APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
These consolidated financial statements have been prepared by APA Corporation (APA or the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). They reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods, on a basis consistent with the annual audited financial statements, with the exception of recently adopted accounting pronouncements discussed below. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10-Q should be read along with the Annual Report on Form 10-K of Apache Corporation, the Company’s predecessor registrant, for the fiscal year ended December 31, 2020, which contains a summary of the Company’s significant accounting policies and other disclosures.
On January 4, 2021, Apache Corporation announced plans to implement a holding company reorganization (the Holding Company Reorganization), which was thereafter completed on March 1, 2021. In connection with the Holding Company Reorganization, Apache Corporation became a direct, wholly-owned subsidiary of APA Corporation, and all of Apache Corporation’s outstanding shares were automatically converted into equivalent corresponding shares of APA. Pursuant to the Holding Company Reorganization, APA became the successor issuer to Apache Corporation pursuant to Rule 12g-3(a) under the Exchange Act and replaced Apache Corporation as the public company trading on the Nasdaq Global Select Market under the ticker symbol “APA.” The holding company structure modernized the Company’s operating and legal structure to more closely align with its growing international presence, making it more consistent with other companies that have subsidiaries operating around the globe.
1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
As of March 31, 2021, the Company's significant accounting policies are consistent with those discussed in Note 1—Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in Apache Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The Company’s financial statements for prior periods include reclassifications that were made to conform to the current-year presentation.
Principles of Consolidation
The implementation of the Holding Company Reorganization was accounted for as a merger under common control. APA recognized the assets and liabilities of Apache at carryover basis. The consolidated financial statements of APA present comparative information for prior years on a combined basis, as if both APA and Apache were under common control for all periods presented.
The accompanying consolidated financial statements include the accounts of APA and its subsidiaries after elimination of intercompany balances and transactions. The Company’s undivided interests in oil and gas exploration and production ventures and partnerships are proportionately consolidated.
The Company consolidates all other investments in which, either through direct or indirect ownership, it has more than a 50 percent voting interest or controls the financial and operating decisions. Noncontrolling interests represent third-party ownership in the net assets of a consolidated subsidiary of APA and are reflected separately in the Company’s financial statements.
Sinopec International Petroleum Exploration and Production Corporation (Sinopec) owns a one-third minority participation in the Company’s Egypt oil and gas business as a noncontrolling interest, which is reflected as a separate noncontrolling interest component of equity in the Company’s consolidated balance sheet. Additionally, third-party investors own a minority interest of approximately 21 percent of Altus Midstream Company (ALTM), which is reflected as a separate noncontrolling interest component of equity in the Company’s consolidated balance sheet. ALTM qualifies as a variable interest entity under GAAP, for which APA consolidates because a wholly-owned subsidiary of APA has a controlling financial interest and was determined to be the primary beneficiary.
6


Investments in which the Company has significant influence, but not control, are accounted for under the equity method of accounting. These investments are recorded separately as “Equity method interests” in the Company’s consolidated balance sheet. The Company’s proportionate share of the results of operations generated by the equity method interests are recorded as a component of “Other, net” under “Revenues and Other” in the Company’s statement of consolidated operations. Refer to Note 6—Equity Method Interests for further detail.
Use of Estimates
Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of the Company’s financial statements and changes in these estimates are recorded when known.
Significant estimates with regard to these financial statements include the estimates of fair value for long-lived assets (refer to “Fair Value Measurements” and “Property and Equipment” sections in this Note 1 below), the fair value determination of acquired assets and liabilities (refer to Note 2—Acquisitions and Divestitures), the assessment of asset retirement obligations (refer to Note 8—Asset Retirement Obligation), the estimate of income taxes (refer to Note 10—Income Taxes), and the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom.
Fair Value Measurements
Certain assets and liabilities are reported at fair value on a recurring basis in the Company’s consolidated balance sheet. The Company determines fair value measurements in accordance with Accounting Standards Codification (ASC) 820-10-35, “Fair Value Measurement” (ASC 820), which provides a hierarchy that prioritizes and defines the types of inputs used to base fair value measurements. The fair value hierarchy gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority.
The valuation techniques that may be used to measure fair value include a market approach, an income approach, and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models, and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).
Refer to Note 4—Derivative Instruments and Hedging Activities, Note 9—Debt and Financing Costs, and Note 12—Redeemable Noncontrolling Interest - Altus for further detail regarding the Company’s fair value measurements recorded on a recurring basis.
Fair value measurements are recorded on a nonrecurring basis when certain qualitative assessments of the Company’s assets indicate potential impairment. Asset impairments recorded in connection with fair value assessments were as follows:
For the Quarter Ended
March 31,
20212020
(In millions)
Oil and gas proved property$ $4,299 
Gathering, processing, and transmission facilities 68 
Goodwill 87 
Inventory and other 18 
Total Impairments$ $4,472 
During the first quarter of 2021, the Company recorded no asset impairments in connection with fair value assessments.
7


During the first quarter of 2020, the Company recorded asset impairments totaling $4.5 billion in connection with fair value assessments. Given the crude oil price collapse on lower demand and economic activity resulting from the coronavirus disease 2019 (COVID-19) global pandemic and related governmental actions, the Company assessed its oil and gas property and gathering, processing, and transmission (GPT) facilities for impairment based on the net book value of its assets as of March 31, 2020. The Company recognized proved property impairments totaling $3.9 billion, $354 million, and $7 million in the U.S., Egypt, and North Sea, respectively, to reduce the carrying value of its oil and gas properties to the estimated fair values as a result of lower forecasted commodity prices, changes to planned development activity, and increasing market uncertainty. Impairments totaling $68 million were similarly recorded for GPT facilities in Egypt. These impairments are discussed in further detail below in “Property and Equipment - Oil and Gas Property” and “Property and Equipment - Gathering, Processing, and Transmission Facilities.”
During the first quarter of 2020, the Company also recognized impairments of $13 million for the early termination of drilling rig leases and $5 million for inventory revaluations, both in the U.S.
During the first quarter of 2020, the Company performed an interim impairment analysis of the goodwill related to its Egypt reporting segment. Reductions in the estimated net present value of expected future cash flows from oil and gas properties resulted in fair values below the carrying values of the Company’s Egypt reporting unit. As a result of these assessments, the Company recognized non-cash impairments of the entire amount of recorded goodwill in the Egypt reporting unit of $87 million.
Property and Equipment
The carrying value of the Company’s property and equipment represents the cost incurred to acquire the property and equipment, including capitalized interest, net of any impairments. For business combinations, property and equipment cost is based on the fair values at the acquisition date.
Oil and Gas Property
The Company follows the successful efforts method of accounting for its oil and gas property. Under this method of accounting, exploration costs, such as exploratory geological and geophysical costs, delay rentals, and exploration overhead, are expensed as incurred. All costs related to production, general corporate overhead, and similar activities are expensed as incurred. If an exploratory well provides evidence to justify potential development of reserves, drilling costs associated with the well are initially capitalized, or suspended, pending a determination as to whether a commercially sufficient quantity of proved reserves can be attributed to the area as a result of drilling. This determination may take longer than one year in certain areas depending on, among other things, the amount of hydrocarbons discovered, the outcome of planned geological and engineering studies, the need for additional appraisal drilling activities to determine whether the discovery is sufficient to support an economic development plan, and government sanctioning of development activities in certain international locations. At the end of each quarter, management reviews the status of all suspended exploratory well costs in light of ongoing exploration activities; in particular, whether the Company is making sufficient progress in its ongoing exploration and appraisal efforts or, in the case of discoveries requiring government sanctioning, whether development negotiations are underway and proceeding as planned. If management determines that future appraisal drilling or development activities are unlikely to occur, associated suspended exploratory well costs are expensed.
Acquisition costs of unproved properties are assessed for impairment at least annually and are transferred to proved oil and gas properties to the extent the costs are associated with successful exploration activities. Significant undeveloped leases are assessed individually for impairment based on the Company’s current exploration plans. Unproved oil and gas properties with individually insignificant lease acquisition costs are amortized on a group basis over the average lease term at rates that provide for full amortization of unsuccessful leases upon lease expiration or abandonment. Costs of expired or abandoned leases are charged to exploration expense, while costs of productive leases are transferred to proved oil and gas properties. Costs of maintaining and retaining unproved properties, as well as amortization of individually insignificant leases and impairment of unsuccessful leases, are included in exploration costs in the statement of consolidated operations.
Costs to develop proved reserves, including the costs of all development wells and related equipment used in the production of crude oil and natural gas, are capitalized. Depreciation of the cost of proved oil and gas properties is calculated using the unit-of-production (UOP) method. The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the carrying value of associated proved oil and gas properties. The reserve base used to calculate depreciation for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. The reserve base used to calculate the depreciation for capitalized well costs is the sum of proved developed reserves only. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are included in the depreciable cost.
8


Oil and gas properties are grouped for depreciation in accordance with ASC 932 “Extractive Activities—Oil and Gas.” The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field.
When circumstances indicate that the carrying value of proved oil and gas properties may not be recoverable, the Company compares unamortized capitalized costs to the expected undiscounted pre-tax future cash flows for the associated assets grouped at the lowest level for which identifiable cash flows are independent of cash flows of other assets. If the expected undiscounted pre-tax future cash flows, based on the Company’s estimate of future crude oil and natural gas prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally estimated using the income approach described in ASC 820. The expected future cash flows used for impairment reviews and related fair value calculations are typically based on judgmental assessments, a Level 3 fair value measurement.
The significant decline in crude oil and natural gas prices, as well as longer-term commodity price outlooks, related to reduced demand for oil and natural gas as a result of the COVID-19 pandemic and related governmental actions indicated possible impairment of the Company’s proved and unproved oil and gas properties in early 2020. In addition to estimating risk-adjusted reserves and future production volumes, estimated future commodity prices are the largest driver in variability of undiscounted pre-tax cash flows. Expected cash flows were estimated based on management’s views of published West Texas Intermediate (WTI), Brent, and Henry Hub forward pricing as of the balance sheet dates. Other significant assumptions and inputs used to calculate estimated future cash flows include estimates for future development activity, exploration plans and remaining lease terms. A 10 percent discount rate, based on a market-based weighted-average cost of capital estimate, was applied to the undiscounted cash flow estimate to value all of the Company’s asset groups that were subject to impairment charges in the first quarter of 2020.
The following table represents non-cash impairment charges of the carrying value of the Company’s proved and unproved properties:
For the Quarter Ended
March 31,
20212020
(In millions)
Proved Properties:
U.S.$ $3,938 
Egypt 354 
North Sea 7 
Total proved properties$ $4,299 
Unproved Properties:
U.S.$16 $17 
Egypt2 2 
Total unproved properties$18 $19 
Proved properties impaired during the first quarter of 2020 had an aggregate fair value of $1.9 billion as of March 31, 2020.
Unproved leasehold impairments are typically recorded as a component of “Exploration” expense in the Company’s statement of consolidated operations. Gains and losses on divestitures of the Company’s oil and gas properties are recognized in the statement of consolidated operations upon closing of the transaction. Refer to Note 2—Acquisitions and Divestitures for more detail.
Gathering, Processing, and Transmission Facilities
GPT facilities totaled $671 million and $670 million at March 31, 2021 and December 31, 2020, respectively, with accumulated depreciation for these assets totaling $342 million and $323 million for the respective periods. GPT facilities are depreciated on a straight-line basis over the estimated useful lives of the assets. The estimation of useful life takes into consideration anticipated production lives from the fields serviced by the GPT assets, whether APA-operated or third party-operated, as well as potential development plans by the Company for undeveloped acreage within, or close to, those fields.
9


The Company assesses the carrying amount of its GPT facilities whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of these facilities is more than the sum of the undiscounted cash flows, an impairment loss is recognized for the excess of the carrying value over its fair value.
The Company assessed its long-lived infrastructure assets for impairment at March 31, 2020, and recorded an impairment of $68 million on its GPT facilities in Egypt during the first quarter of 2020. The fair values of the impaired assets, which were determined to be $46 million, were estimated using the income approach, which considers internal estimates based on future throughput volumes from applicable development concessions in Egypt and estimated costs to operate. These assumptions were applied based on throughput assumptions developed in relation to the oil and gas proved property impairment assessment, as discussed above, to develop future cash flow projections that were then discounted to estimated fair value, using a 10 percent discount rate, based on a market-based weighted-average cost of capital estimate. The Company has classified these non-recurring fair value measurements as Level 3 in the fair value hierarchy.
Revenue Recognition
There have been no significant changes to the Company’s contracts with customers during the three months ended March 31, 2021 and 2020.
Payments under all contracts with customers are typically due and received within a short-term period of one year or less after physical delivery of the product or service has been rendered. Receivables from contracts with customers, net of allowance for credit losses, totaled $957 million and $670 million as of March 31, 2021 and December 31, 2020, respectively.
Oil and gas production revenues from non-customers were $106 million and $48 million during the first quarter of 2021 and 2020, respectively, and represent income taxes paid to the Arab Republic of Egypt by Egyptian General Petroleum Corporation on behalf of the Company. Revenue and associated expenses related to such tax volumes are recorded as “Oil, natural gas, and natural gas liquids production revenues” and “Current income tax provision,” respectively, in the Company’s statement of consolidated operations. Refer to Note 14—Business Segment Information for a disaggregation of revenue by product and reporting segment.
In accordance with the provisions of ASC 606, “Revenue from Contracts with Customers,” variable market prices for each short-term commodity sale are allocated entirely to each performance obligation as the terms of payment relate specifically to the Company’s efforts to satisfy its obligations. As such, the Company has elected the practical expedients available under the standard to not disclose the aggregate transaction price allocated to unsatisfied, or partially unsatisfied, performance obligations as of the end of the reporting period.
Transaction, Reorganization, and Separation (TRS)
In recent years, the Company streamlined its portfolio through strategic divestitures and centralized certain operational activities in an effort to capture greater efficiencies and cost savings through shared services. In light of the continued streamlining of the Company’s asset portfolio through divestitures and strategic transactions, in late 2019 management initiated a comprehensive redesign of the Company’s organizational structure and operations. Efforts related to this reorganization were substantially completed during 2020. The Company incurred and paid a cumulative total of $79 million of reorganization costs through December 31, 2020.
The Company recorded $27 million of TRS costs during the first quarter of 2020. TRS costs incurred in the first three months of 2020 related to $25 million of separation costs associated with the reorganization and $2 million for transaction consulting fees.
2.    ACQUISITIONS AND DIVESTITURES
2021 Activity
During the first quarter of 2021, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $2 million. The Company also completed the sale of certain non-core assets and leasehold, primarily in the Permian Basin, in multiple transactions for total cash proceeds of $3 million. The Company recognized a gain of approximately $2 million upon closing of these transactions during the first quarter of 2021.
10


2020 Activity
During the first quarter of 2020, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $1 million. The Company also completed the sale of certain non-core assets and leasehold, primarily in the Permian Basin, in multiple transactions for total cash proceeds of $45 million. The Company recognized a gain of approximately $6 million upon closing of these transactions during the first quarter of 2020.
Suriname Joint Venture Agreement
In December 2019, the Company entered into a joint venture agreement with Total S.A. to explore and develop Block 58 offshore Suriname. Under the terms of the agreement, the Company and Total S.A. each hold a 50 percent working interest in Block 58. Pursuant to the agreement, the Company operated the drilling of the first four wells, the Maka Central-1, Sapakara West-1, Kwaskwasi-1, and Keskesi East-1, and subsequently transferred operatorship of Block 58 to Total S.A. on January 1, 2021; however, the Company continued to operate the Keskesi exploration well until completion of drilling operations during the first quarter of 2021.
In connection with the agreement, the Company received $100 million from Total S.A. upon closing in the fourth quarter of 2019 and $79 million upon satisfying certain closing conditions in the first quarter of 2020 for reimbursement of 50 percent of all costs incurred on Block 58 as of December 31, 2019. All proceeds were applied against the carrying value of the Company’s Suriname properties and associated inventory. The Company recognized a $19 million gain in the first quarter of 2020 associated with the transaction.
The Company will also receive various other forms of consideration, including $5 billion of cash carry on the Company’s first $7.5 billion of appraisal and development capital, 25 percent cash carry on all of the Company’s appraisal and development capital beyond the first $7.5 billion, a $75 million cash payment upon achieving first oil production, and future contingent royalty payments from successful joint development projects.
3.    CAPITALIZED EXPLORATORY WELL COSTS
The Company’s capitalized exploratory well costs were $237 million and $197 million at March 31, 2021 and December 31, 2020, respectively. The increase is primarily attributable to additional drilling activity in Suriname, partially offset by dry hole write-offs during the period. Projects with suspended exploratory well costs capitalized for a period greater than one year since the completion of drilling are those identified by management as exhibiting sufficient quantities of hydrocarbons to justify potential development. Management is actively pursuing efforts to assess whether proved reserves can be attributed to these projects.
4.    DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Objectives and Strategies
The Company is exposed to fluctuations in crude oil and natural gas prices on the majority of its worldwide production, as well as transactions denominated in foreign currencies. The Company manages the variability in its cash flows by occasionally entering into derivative transactions on a portion of its crude oil and natural gas production and foreign currency transactions. The Company also utilizes various types of derivative financial instruments, including forward contracts, futures contracts, swaps, and options, to manage fluctuations in cash flows resulting from changes in commodity prices or foreign currency values.
Counterparty Risk
The use of derivative instruments exposes the Company to credit loss in the event of nonperformance by the counterparty. To reduce the concentration of exposure to any individual counterparty, the Company utilizes a diversified group of investment-grade rated counterparties, primarily financial institutions, for its derivative transactions. As of March 31, 2021, the Company had derivative positions with 10 counterparties. The Company monitors counterparty creditworthiness on an ongoing basis; however, it cannot predict sudden changes in counterparties’ creditworthiness. In addition, even if such changes are not sudden, the Company may be limited in its ability to mitigate an increase in counterparty credit risk. Should one of these counterparties not perform, the Company may not realize the benefit of some of its derivative instruments resulting from changes in commodity prices, currency exchange rates, or interest rates.
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Derivative Instruments
Commodity Derivative Instruments
As of March 31, 2021, the Company had the following open crude oil derivative positions:
Fixed-Price Swaps
Production PeriodSettlement IndexMbbls
Weighted Average Fixed Price(1)(2)
April—June 2021NYMEX WTI5,642 $61.20
July—September 2021NYMEX WTI1,472 $60.18
October—December 2021NYMEX WTI1,012 $58.59
April—June 2021Dated Brent2,366 $64.20
July—September 2021Dated Brent414 $63.14
October—December 2021Dated Brent828 $61.44
(1)Subsequent to March 31, 2021, the Company entered into fixed-price crude oil contracts settling against NYMEX WTI totaling 6,000 Bbls/d at a weighted average price of $60.10 for the third quarter of 2021.
(2)Subsequent to March 31, 2021, the Company entered into fixed-price crude oil contracts settling against Platts Dated Brent totaling 19,714 Bbls/d at a weighted average price of $64.07 for the second quarter of 2021 and 13,500 Bbls/d at a weighted average price of $63.06 for the third quarter of 2021.
As of March 31, 2021, the Company had the following open crude oil financial basis swap contracts:
Production PeriodSettlement IndexMbblsWeighted Average Price Differential
May—June 2021Midland-WTI/Cushing-WTI3,782 $0.56
July—September 2021Midland-WTI/Cushing-WTI