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Crude Oil Prices A substantial portion of our crude oil production is sold at prevailing market prices, which fluctuate in response to many factors that are outside of the Company’s control. Average realized crude oil prices for 2015 were down 47 percent compared to 2014, a direct result of the sharply lower benchmark oil prices over the past year. Continued volatility in the commodity price environment reinforces the importance of our asset portfolio. While the market price received for natural gas varies among geographic areas, crude oil tends to trade within a tighter global range. Price movements for all types and grades of crude oil generally move in the same direction. Crude oil prices realized in 2015 averaged $48.17 per barrel. Natural Gas Prices Natural gas, which currently has a limited global transportation system, is subject to price variances based on local supply and demand conditions. Our primary markets include North America, Egypt, and the U.K. An overview of the market conditions in our primary gas-producing regions follows: •

North America has a common market; most of our gas is sold on a monthly or daily basis at either monthly or daily market prices. Our North American regions averaged $2.39 per Mcf in 2015, down from $4.24 per Mcf in 2014.

In Egypt, our gas is sold to EGPC, primarily under an industry pricing formula indexed to Dated Brent crude oil with a minimum gas price of $1.50 per MMBtu and a maximum gas price of $2.65 per MMBtu, plus an upward adjustment for liquids content. Overall, the region averaged $2.92 per Mcf in 2015, down 1 percent from the prior year.

Natural gas from the North Sea Beryl field is processed through the SAGE gas plant operated by Apache. The gas is sold to a third party at the St. Fergus entry point of the national grid on a National Balancing Point index price basis. The region averaged $6.73 per Mcf in 2015, a 19 percent decrease from an average of $8.29 per Mcf in 2014.

NGL Prices Apache’s NGL production is sold under contracts with prices at market indices based on local supply and demand conditions, less the costs for transportation and fractionation, or on a weighted-average sales price received by the purchaser. Crude Oil Revenues 2015 vs. 2014 During 2015 crude oil revenues totaled $5.0 billion, approximately 50 percent lower than the 2014 total of $10.0 billion, driven by a 47 percent decrease in average crude oil prices and a 5 percent decrease in worldwide production. Average daily production in 2015 was 284.4 Mb/d, with prices averaging $48.17 per barrel. Crude oil represented 78 percent of our 2015 oil and gas production revenues and 53 percent of our equivalent production, compared to 79 and 51 percent, respectively, in the prior year. Lower realized prices reduced revenues $4.8 billion, while lower production volumes reduced revenues an additional $273 million. Worldwide crude oil production from continuing operations decreased 15.5 Mb/d. When excluding production from asset divestitures during 2015 and 2014, crude oil production remained essentially flat as drilling and recompletion activity in our North American onshore regions offset natural decline in all regions. 2014 vs. 2013 During 2014 crude oil revenues totaled $10.0 billion, $1.8 billion lower than the 2013 total of $11.9 billion, driven by a 6 percent decrease in worldwide production and 10 percent decrease in average realized prices. Average daily production in 2014 was 300.0 Mb/d, with prices averaging $91.73 per barrel. 38


Apache 2015 Summary Annual Report