HOUSTON: Apache Corp reported a better-than-expected 40 percent increase in quarterly profit on Thursday, fueled by record oil and natural gas production and higher crude prices. Shares of Apache, which has operations in Australia, the US, Egypt and the North Sea, fell 7 percent, weighed down by the market's broad losses and weakness in crude oil. Most oil and gas companies saw profits rise in the second quarter as oil and natural gas prices rose from a year ago. US benchmark WTI crude prices averaged $102 in the quarter, up 32 percent, while natural gas prices rose about 6 percent. Oil and natural gas liquids — which bring higher prices than "dry" gas — accounted for 48 percent of Apache's production and 78 percent of its revenue, the Houston company said. "They have a good amount of their production tied to Brent, which is a good thing," said Mark Hanson, oil analyst at Morningstar. European Brent oil prices averaged $117 per barrel in the second quarter, higher than WTI. Apache's profit in the second quarter was $1.2 billion, or $3.17 per share, compared with $860 million or $2.53 per share, a year earlier. Excluding one-time items, earnings were $3.22 per share. Analysts had expected $3.09, according to Thomson Reuters I/B/E/S. Oil and gas output rose 16 percent to a record 749,000 barrels of oil equivalent (boe) per day. Apache outlined some operational bumps that might have a small affect on production in the current quarter. Operations at the company's Forties Field in the North Sea will be shut for several days as the pipeline operator, BP Plc, clears ordnance from World War II away from the system, Steve Farris, Apache's chief executive said on a conference call with analysts. The field should restart on Friday or Saturday, the executive said. Some analysts had expected Apache's oil and gas production to be even greater. Barclay's Capital pegged it at 759,000 boe per day, while Simmons & Co expected 756,000 boe per day. Apache also said on Thursday it had made two new oil discoveries in Egypt's Faghur Basin. The company has drilled 11 wells in the Faghur Basin this year, uninterrupted by unrest in that country. Demand for natural gas in Egypt has not diminished and the company has seen no interruption in payments for its oil and natural gas production in that country, Farris said. Apache shares fell $8.58 to $109.87 in late trading on the New York Stock Exchange.
