In 2019, Apache Corporation plans to invest $2.4 billion in upstream oil and gas capital, a reduction of 22 percent from 2018 levels. Growth will be driven by investment in the U.S., which will receive approximately 75 percent of total upstream investment. Internationally, Apache will continue to invest at a level to sustain long-term free cash flow in Egypt and the North Sea. 

Even with a significant reduction in upstream capital investment, production is expected to grow at an attractive rate both year over year and exit to exit. The company projects total adjusted production growth rates of 6 to 10 percent from fourth-quarter 2018 to fourth-quarter 2019, with 12 to 16 percent in the U.S., and 5 percent for Permian oil. The company is raising the lower end of the range for its annual guidance to 425,000 to 440,000 BOE per day from a previous range of 410,000 to 440,000 BOE per day following strong fourth-quarter momentum. Internationally, Apache expects production to decline 2 to 4 percent over the same time period.  

John J. Christmann IV, Apache’s chief executive officer and president, said,
“Our projected 2019 exit rates underscore Apache’s ability to deliver attractive and sustainable growth on a reduced activity set. This is made possible by our diverse, high-quality portfolio, relatively low base production decline rate in the mid 20 percent range, and excellent execution by our regions.  

“Looking forward through 2021, we expect to spend between $2.5 to $2.8 billion per year, assuming $50 to $55 WTI. This investment level will deliver continued, attractive growth while enabling Apache to achieve cash-flow neutrality. We intend to return to investors at least 50 percent of cash flow in excess of plan, inclusive of asset sale proceeds, before increasing planned activity levels. This disciplined approach is capable of delivering long-term returns and growth and is supported by a deep inventory of development locations and exciting exploration opportunities in the U.S. and internationally.”