Is Apache Having Reserve & Spending Issues? (APA)
Apache Corporation (NYSE: APA) is trading lower after beating earnings estimates. The company’s adjusted earnings were $2.94 EPS versus Thomson Reuters estimates of $2.87 EPS. After beating earnings and with the problems in north African operations, it would have seemed…
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Apache Corporation (NYSE: APA) is trading lower after beating earnings estimates. The company’s adjusted earnings were $2.94 EPS versus Thomson Reuters estimates of $2.87 EPS. After beating earnings and with the problems in north African operations, it would have seemed that the bar was being set low. A gain of 75% in earnings sounds great on the surface. So why is the stock lower?
Apache’s proven reserves grew about 1% in 2011 and it replaced 133% of its production. These seem to be not good enough for a $40 billion exploration and production giant. A cape-ex plan of $9.5 billion in 2012 also seems a bit high when you consider production growth of 7% to 13%.
Apache is down 1.4% at $106.14 and the 52-week trading range is $73.04 to $134.13. The good news is that at about ten-times earnings it should not fall apart too much. Still, it looks as though investors still want more for less… more output and reserves with lower spending.
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Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
