TULSA, Okla., Aug. 8, 2011 /PRNewswire/ -- Apco Oil and Gas
International Inc. (NASDAQ: APAGF) today announced that for the
three and six-month periods ended June 30,
2011, it generated unaudited net income attributable to Apco
of $7.7 million and $15.9 million, or $0.26 and $0.54
cents per share, compared with net income of $7.1 million and $11.1
million for the same periods in 2010.
Net income was slightly higher quarter-to-quarter as higher
operating revenues were offset by higher costs and operating
expenses. Second-quarter 2011 also benefited from lower income tax
expense.
The increase in net income for the year-to-date period is
primarily the result of higher average oil sales prices, greater
equity income from Argentine investment and lower exploration
expense. These favorable benefits were partially offset by
higher non-exploration costs and operating expenses compared with
the first six months of 2010.
Higher average sales prices resulted in favorable impacts on
operating revenues of $2.9 million
for the quarter and $5.4 million for
the first six months. Total sales volumes applicable to Apco's
consolidated interest on a barrel of oil equivalent (BOE) basis
were one percent higher for the quarter and two percent higher for
the first six months of 2011.
Total costs and operating expenses for the quarter increased by
$2.6 million primarily from higher
production and lifting costs, depreciation expense and higher taxes
other than income.
For the first half of the year, the combination of higher
production and lifting costs, taxes other than income and greater
depreciation expense was partially offset by lower exploration
expenses. The decrease in exploration expense reflects lower
exploration activity including the absence of significant seismic
acquisition investments made in Colombia during the first half of 2010.
The benefits of higher average sales prices also led to greater
equity income from Argentine investment for the first half of 2011
compared with the same period in 2010.
Coiron Amargo Update
Apco has completed the drilling of two second-stage wells under
the farm-in agreement in the Coiron Amargo exploration permit to
earn a 45 percent total interest. Both wells were completed
and tested in July, resulting in oil discoveries in the Tordillo
formation.
The CAN x-4 well has been put on production from the Tordillo
formation. The CAS x-1 well in the southern part of the permit also
tested oil from the Vaca Muerta formation. Initially, this
well will remain on test from the Vaca Muerta formation to
determine its ability to sustain any flow of oil without
stimulation. Apco plans to evaluate its performance for the
short-term and then, depending on the results of this evaluation,
return to the well to either perform a fracture stimulation of the
Vaca Muerta or put the well on production from the Tordillo
formation.
Apco and its partners anticipate conducting further exploration
activities targeting both the Tordillo and Vaca Muerta formations
that will include drilling and possibly well re-entries throughout
the remainder of 2011. These investments will occur prior to
November 2011, the current
exploration period expiration date. By November, the joint
venture partners will determine how much of the area will be
converted to an exploitation concession and how much acreage, if
any, will have to be relinquished.
Coiron Amargo is located in the Neuquen basin adjacent to our
core properties of Entre Lomas, Bajada del Palo, Charco del
Palenque and Agua Amarga. The southern portion of the permit
is situated in the deepest portion of the basin near the Loma de la
Lata concession.
"Since entering the farm-in agreement in early 2010, we have
demonstrated our ability to successfully explore in the Neuquen
basin by drilling four wells that resulted in hydrocarbon
discoveries on four geological structures," said Thomas Bueno, Apco's president and chief
operating officer.
"These results are a continuation of our success and experience
gained during recent years while drilling exploration wells in our
core properties in the Neuquen basin," Bueno added.
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Apco Oil and Gas International
Inc.
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Summary of
Earnings
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(In Thousands of Dollars Except
Per Share Amounts)
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2011
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2010
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Three months ended June
30
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Operating revenue
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24,576
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21,810
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Costs and operating
expenses
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19,026
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16,436
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Investment income
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4,510
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4,492
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Net income attributable to
Apco
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7,699
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7,117
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Per share
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0.26
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0.24
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2011
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2010
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Six months ended June
30
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Operating revenue
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47,659
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41,628
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Costs and operating
expenses
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36,284
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33,901
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Investment income
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9,376
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8,389
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Net income attributable to
Apco
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15,861
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11,113
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Per share
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0.54
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0.38
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About Apco Oil and Gas International Inc. (NASDAQ:
APAGF)
Apco Oil and Gas International Inc. is an international oil and
gas exploration and production company with interests in eight oil
and gas concessions and two exploration permits in Argentina, and three exploration and
production contracts in Colombia.
More information is available at www.apcooilandgas.com. Go to
http://www.b2i.us/irpass.asp?BzID=1671&to=ea&s=0 to join
our e-mail list.
Our reports, filings, and other public announcements may
contain or incorporate by reference statements that do not directly
or exclusively relate to historical facts. Such statements are
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. We make these
forward looking statements in reliance on the safe harbor
protections provided under the Private Securities Litigation Reform
Act of 1995. You typically can identify forward-looking statements
by various forms of words such as "anticipates," "believes,"
"seeks," "could," "may," "should," "continues," "estimates,"
"expects," "forecasts," "intends," "might," "goals," "objectives,"
"targets," "planned," "potential," "projects," "scheduled," "will"
or other similar expressions. These forward-looking statements are
based on management's beliefs and assumptions and on information
currently available to management and include, among others,
statements regarding:
- Amounts and nature of future capital expenditures;
- Volumes of future oil, natural gas, and LPG
production;
- Expansion and growth of our business and
operations;
- Financial condition and liquidity;
- Business strategy;
- Estimates of proved gas and oil reserves;
- Reserve potential;
- Development drilling potential;
- Cash flow from operations or results of operations;
- Seasonality of natural gas demand; and
- Oil and natural gas prices and demand.
Forward-looking statements are based on numerous assumptions,
uncertainties and risks that could cause future events or results
to be materially different from those stated or implied in this
announcement. Many of the factors that will determine these results
are beyond our ability to control or predict. Specific factors that
could cause actual results to differ from results contemplated by
the forward-looking statements include, among others, the
following:
- Availability of supplies (including the uncertainties
inherent in assessing, estimating, acquiring and developing future
oil and natural gas reserves), market demand, volatility of prices,
and the availability and cost of capital;
- Inflation, interest rates, fluctuation in foreign currency
exchange rates, and general economic conditions (including future
disruptions and volatility in the global credit markets and the
impact of these events on our customers and suppliers);
- The strength and financial resources of our
competitors;
- Development of alternative energy sources;
- The impact of operational and development hazards;
- Costs of, changes in, or the results of laws, government
regulations (including climate change regulation and/or potential
additional regulation of drilling and completion of wells),
environmental liabilities and litigation;
- Political conditions in Argentina, Colombia and other parts of the
world;
- The failure to renew participation in hydrocarbon
concessions granted by the Argentine government on reasonable
terms;
- Risks related to strategy and financing, including
restrictions stemming from our loan agreement and the availability
and cost of credit;
- Risks associated with future weather conditions, volcanic
activity and earthquakes;
- Acts of terrorism; and
- Additional risks described in our filings with the
Securities and Exchange Commission ("SEC").
Given the uncertainties and risk factors that could cause our
actual results to differ materially from those contained in any
forward-looking statement, we caution investors not to unduly rely
on our forward-looking statements. We disclaim any obligations to
and do not intend to update the above list or to announce publicly
the result of any revisions to any of the forward-looking
statements to reflect future events or developments.
In addition to causing our actual results to differ, the
factors listed above may cause our intentions to change from those
statements of intention set forth in this announcement. Such
changes in our intentions may also cause our results to differ. We
may change our intentions, at any time and without notice, based
upon changes in such factors, our assumptions, or
otherwise.
Investors are urged to closely consider the disclosures and
risk factors in our annual report on Form 10-K filed with the SEC
on Mar. 10, 2011, and our quarterly
reports on Form 10-Q available from our offices or from our website
at www.apcooilandgas.com.
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MEDIA CONTACT:
Kelly Swan
(918) 573-4944
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INVESTOR CONTACT:
Thomas Bueno
(918) 573-2570
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SOURCE Apco Oil and Gas International Inc.