Apache Corporation Annual Report 2021
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Apache Corporation Annual Report 2021 Form 10-K (NYSE:APA) Published: February 26th, 2021 PDF generated by stocklight.com UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-4300 APACHE CORPORATION (Exact name of registrant as specified in its charter) Delaware 41-0747868 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) One Post Oak Central, 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code (713) 296-6000 Securities registered pursuant to Section 12(b) of the Act : Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.625 par value APA Nasdaq Global Select Market Securities registered pursuant to section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Y es ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes ☐ No ☒ Aggregate market value of the voting and non-voting common equity held by non-affiliates of registrant as of June 30, 2020 $ 5,095,687,766 Number of shares of registrant’s common stock outstanding as of January 29, 2021 377,860,971 Documents Incorporated By Reference Portions of the registrant’s definitive proxy statement relating to the registrant’s 2021 annual meeting of stockholders are incorporated by reference in Part II and Part III of this Annual Report on Form 10-K. On January 4, 2021, the registrant (Apache) announced that its Board of Directors authorized Apache to proceed with the implementation of a holding company reorganization, in connection with which, Apache will create APA Corporation, a new holding company (APA). Upon completion of the holding company reorganization, Apache will be a wholly-owned subsidiary of APA, APA will be the successor issuer to Apache pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended, and APA will replace Apache as the public company trading on the Nasdaq Global Select Market under the ticker symbol “APA”. If the holding company reorganization is completed prior to the date that Apache’s definitive proxy statement relating to the 2021 annual meeting of stockholders is filed with the Securities and Exchange Commission, then the definitive proxy statement will be filed by APA, as successor issuer to Apache. TABLE OF CONTENTS Item Page PART I 1. BUSINESS 1 1A.RISK FACTORS 18 1B.UNRESOLVED STAFF COMMENTS 30 2. PROPERTIES 1 3. LEGAL PROCEEDINGS 30 4. MINE SAFETY DISCLOSURES 30 PART II 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES 31 6. SELECTED FINANCIAL DATA 32 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 33 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 54 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 55 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 55 9A.CONTROLS AND PROCEDURES 56 9B.OTHER INFORMATION 56 PART III 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 57 11. EXECUTIVE COMPENSATION 57 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 57 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 57 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 57 PART IV 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 58 16. FORM 10-K SUMMARY 62 i FORWARD-LOOKING STATEMENTS AND RISK This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding the Company’s future financial position, business strategy, budgets, projected revenues, projected costs, and plans and objectives of management for future operations, are forward-looking statements. Such forward-looking statements are based on the Company’s examination of historical operating trends, the information that was used to prepare its estimate of proved reserves as of December 31, 2020, and other data in the Company’s possession or available from third parties. In addition, forward- looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “could,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “continue,” “seek,” “guidance,” “might,” “outlook,” “possibly,” “potential,” “prospect,” “should,” “would,” or similar terminology, but the absence of these words does not mean that a statement is not forward looking. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable under the circumstances, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, its assumptions about: • the scope, duration, and reoccurrence of any epidemics or pandemics (including, specifically, the coronavirus disease 2019 (COVID-19) pandemic) and the actions taken by third parties, including, but not limited to, governmental authorities, customers, contractors, and suppliers, in response to such epidemics or pandemics; • the market prices of oil, natural gas, natural gas liquids (NGLs), and other products or services; • the Company’s commodity hedging arrangements; • the supply and demand for oil, natural gas, NGLs, and other products or services; • production and reserve levels; • drilling risks; • economic and competitive conditions; • the availability of capital resources; • capital expenditures and other contractual obligations; • currency exchange rates; • weather conditions; • inflation rates; • the availability of goods and services; • legislative, regulatory, or policy changes, including initiatives addressing the impact of global climate change or further regulating hydraulic fracturing, methane emissions, flaring, or water disposal; • the Company’s performance on environmental, social, and governance measures; • terrorism or cyberattacks; • the occurrence of property acquisitions or divestitures; • the integration of acquisitions; • the Company’s ability to access the capital markets; • market-related risks, such as general credit, liquidity, and interest-rate risks; • the Company’s expectations with respect to the new operating structure anticipated to be implemented pursuant to the announced holding company reorganization described in this Annual Report on Form 10-K and the associated disclosure implications; and • other factors disclosed under Items 1 and 2—Business and Properties—Estimated Proved Reserves and Future Net Cash Flows, Item 1A—Risk Factors, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 7A—Quantitative and Qualitative Disclosures About Market Risk and elsewhere in this Annual Report on Form 10-K. Other factors or events that could cause the Company’s actual results to differ materially from the Company’s