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Apache Offers Q4 Operational Update

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Upstream operator Apache Corp. (APA - Free Report) has released an operational update which reveals the company’s expected production status from activities in the Permian Basin and Central Region during fourth-quarter 2013. The company also outlined the effect that the last year’s asset divestments are likely to have on the fourth-quarter 2013 output.

Permian Region

Apache expects its Oct-Dec 2013 output in the Permian area to increase by more than 1000 barrels of oil equivalent per day (Boe/d) as compared to 131,700 Boe/d during third-quarter 2013. Accordingly, the December quarter output is also expected to be higher than the year-ago production of 117,900 Boe/d. New production from the drilling operations in the Permian region aided the results, which is however partially offset by shutdown activities and pipeline outages in the area, owing to an extreme fall in temperature.

Central Region

In the Central region, Apache anticipates fourth-quarter 2013 production to be marginally lower than 94,800 Boe/d output in the previous quarter. Downtime activities owing to severe winter in Texas Panhandle and western Oklahoma along with decreased rig drilling operations in the Central region affected the results. However, Apache projects its fourth-quarter production to increase as compared to 79,300 Boe/d in the year-ago period.

Asset divestiture

Last year, Apache completed the sale of several non-core assets in the Gulf of Mexico, Canada and Egypt. Owing to the divestitures, the company expects total production in fourth-quarter 2013 to decline from the previous quarter. Apache projects a decrease of 134,000 Boe/d in total production as compared to third-quarter 2013.

Fourth Quarter Estimate

Apache plans to release its quarterly results on Feb 13, 2014. The Zacks Consensus Estimate for the company’s fourth-quarter is $1.90 per share.

Zacks Rating

Houston, Texas-based Apache currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in-line with the broader U.S equity market over the next one to three months.

Meanwhile, one can consider better-ranked players in the oil and gas exploration and production sector like Linn Co LLC , Swift Energy Co. and Clayton Williams Energy Inc. . All the stocks sport a Zacks Rank #1 (Strong Buy).

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