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APACHE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Any excess of the net book value of proved oil and gas properties, less related deferred income taxes, over the ceiling is charged to expense and reflected as additional DD&A in the accompanying statement of consolidated operations. Such limitations are imposed separately on a country-by-country basis and are tested quarterly. The following table presents non-cash write-downs of the carrying value of the Company’s proved oil and gas properties by country for 2015, 2014, and 2013: For the Year Ended December 31, 2015 Before tax

After tax

For the Year Ended December 31, 2014 Before tax

After tax

For the Year Ended December 31, 2013 Before tax

After tax

(In millions) U.S. . . . . . . . . . . . . . . . . . . . . . . . Canada . . . . . . . . . . . . . . . . . . . . . North Sea . . . . . . . . . . . . . . . . . . . Egypt . . . . . . . . . . . . . . . . . . . . . . Other international . . . . . . . . . . . .

$ 19,537 3,667 2,032 281 -

$12,602 2,721 1,016 281 -

$ 4,412 589 -

$ 2,844 224 -

$ 552 368 75

$356 139 46

Total write-downs . . . . . . . . . . . . . .

$25,517

$16,620

$5,001

$ 3,068

$995

$541

In 2013, the Company recorded a non-cash write-down of $118 million, net of tax, in Argentina, which is reflected as discontinued operations in the Company’s consolidated financial statements. Cash flow hedges did not materially affect the 2015, 2014, and 2013 calculations. Proceeds from the sale or disposition of oil and gas properties are accounted for as a reduction to capitalized costs unless a significant portion (greater than 25 percent) of the Company’s reserve quantities in a particular country are sold, in which case a gain or loss is recognized in income. During 2015, Apache recorded a $1.3 billion and $922 million loss related to the sale of its Australia oil and gas assets and Wheatstone LNG project, respectively. During 2014, Apache recorded a $539 million loss related to the divestiture of operations in Argentina. No gain or loss was recorded on the Company’s divestitures in 2013. See Note 2—Acquisitions and Divestitures for more detail. Gathering, Transmission, and Processing Facilities GTP facilities totaled $1.1 billion and $5.4 billion at December 31, 2015 and 2014, respectively, with accumulated depreciation for these assets totaling $160 million and $1.7 billion for the respective periods. GTP facilities are depreciated on a straight-line basis over the estimated useful lives of the assets. The estimation of useful life takes into consideration anticipated production lives from the fields serviced by the GTP assets, whether Apache-operated or third party, as well as potential development plans by Apache for undeveloped acreage within or in close proximity to those fields. The Company assesses the carrying amount of its GTP facilities whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. If the carrying amount of these facilities is more than the sum of the undiscounted cash flows, an impairment loss is recognized for the excess of the carrying value over its fair value. During 2015, the Company recorded impairments of $1.7 billion on certain GTP assets, which were written down to their fair values of $306 million in aggregate. The fair values of the impaired assets were determined using an income approach, which considered internal estimates of future throughput volumes, processing rates, and costs. These assumptions were applied to develop future cash flow projections that were then discounted to estimated fair value, using a discount rate believed to be consistent with those applied by market participants. Apache has classified these non-recurring fair value measurements as Level 3 in the fair value hierarchy. During 2014, the Company recorded an impairment of $1.0 billion of its GTP assets F-12

Apache 2015 Summary Annual Report  

Adapting to a changing environment

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