Apache Corporation posted a net loss in the third quarter but reaffirmed a commitment to returning cash to shareholders as high oil prices and increased demand lifted revenues.
Apache recorded a net loss of $113 million for the three months to 30 September, up from the $4 million net loss in the same period last year.
Chief executive John Christmann told analysts the company generated $1.3 billion in free cash flow in the first three quarters of 2021 and expects this to reach $2 billion for the full year at current strip pricing.
“With the substantial strengthening of our balance sheet, a streamlined and more profitable enterprise and a planned capital programme that will sustain or slightly grow production for the long term, we are committing to returning a minimum of 60% of our free cash flow to shareholders,” he said.
The company bought back 14.7 million shares in October and the annual dividend was increased to $0.50 per share.
“We intend to continue these returns of capital to shareholders this quarter and into 2022,” Christmann said.
Apache’s production for the quarter was 389,000 barrels of oil equivalent per day.
US production was 237,000 boepd and international adjusted volumes were 99,000 boepd, while upstream capital investment was $228 million.
“Through a combination of strong commodity prices, capital and cost discipline and good well performance, we generated nearly $1.2 billion of adjusted Ebitda, making it our strongest quarter of the year thus far,” Christmann said.
“We anticipate fourth-quarter will be even stronger.”
US production exceeded guidance in the third quarter, with company seeing good performance in its Permian basin oil plays, in Alpine High and in its Austin Chalk assets in Texas.
“Internationally, production was a bit below guidance, as we experienced some extended maintenance turnarounds and compressor outages in the North Sea and lower volumes in Egypt associated with the impact of strengthening oil prices on our production sharing contracts,” he said.
“We expect gross production in both the UK and Egypt will increase in the fourth quarter.”
In regard to Block 58 offshore Suriname, Christman said two rigs are currently running, with one conducting flow testing at Sapakara and the other drilling the Bonboni exploration well in the north of the block.
The area has been touted as a possible location for a major offshore development.
Christmann said Apache is finalising plans for an exploration well on nearby Block 53 with partners Petronas and Cepsa.
Two previous wildcats drilled on Block 53, while uncommercial, provided information on source rocks, down to the basement.
The Noble Gerry de Souza drillship is scheduled to begin drilling a third commitment well in the first quarter of next year, Christmann said.
“The plan is to drill one well in Block 53 in 2022, but we have an option on the drillship for two additional wells if warranted.”