Apache 3Q15 Earnings Call Notes

Getting balance sheet in order

“So far in 2015, we have paid down $2.5 billion of debt. Currently our net debt is less than two times annualized 2015 adjusted EBITDA. We have extended our nearest long-term debt maturity to 2018, with only $700 million maturing prior to 2021. We have restructured and refreshed our current credit facility at $3.5 billion, which now matures in June 2020. And we have retained $1.7 billion of cash liquidity.”

Repatriation has triggered tax payable

“I would like to remind everyone that as previously discussed, the repatriation of proceeds from some of our foreign asset sales has triggered a U.S. income tax payable of approximately $560 million. Actual cash payment of this liability will occur in the fourth quarter of this year, thus some might consider our net debt of $7.1 billion at the end of the third quarter as closer to $7.7 billion.”

Plan capital program to keep us cash flow neutral for 2016

“we will plan a capital program, which we believe will keep us cash flow neutral for the year. We will not attempt to balance cash flow within each quarter, but instead to level-load activity for the year. We will fund the capital program from operating cash flows; we will not use asset sales.”

We’re going to live within cash flow

“I think the best thing we can do given this price environment; the commodity price is going be a big driver. As Steve mentioned, we’re going to live within cash flow.”

Looking to purchase acreage that will require application of science and technology

“we are looking at some things that would be significantly lower than what I’d call the retail prices that are being paid. And it’s where we’re applying technology and science and we think we’ve got some things that could be material. It is new ventures acreage, so there’s always risk with that and that’s why we wouldn’t want to talk about it now. But we’re talking significant multiples lower in terms of what that acreage might be viewed as and what it potentially could be worth. And I think that’s the zip-code that we feel like makes the most sense in this price environment because we can pick it up and we can work the science and you can have something that could be material.”