Apache Oil (APA) maintains a careful balance of its assets, with a successful mix of revenue lines in both foreign and domestic holdings. Apache has approximately a 50-50 split in its production between gas and liquids, with oil making up over 40% of the liquid production. This adds a high-priced revenue source to its income statement, with oil currently selling at over $100 per barrel. This type of careful balance in assets and revenue lines is an excellent approach to staying solvent, and weathering changing economic conditions in the gas and oil exploration industry.
Apache operates in six countries, spreading each geographic and geopolitical risk factor among different continental zones. Currently, Apache has operations in North America (the U.S., including the Gulf of Mexico, and Canada), Europe (the North Sea off the coast of the UK), the Middle East (Egypt), South America (Argentina), and Australia. With revenues at around $17 billion, Houston-based Apache Oil is one of the larger mid-cap oil exploration companies operating in the world market.
In addition to spreading risk among its assets, Apache also maintains a very attractive debt-to-equity ratio. At 0.25, it’s lower than the 0.34 debt to equity ratio median among its peers. Apache ensures it has the cash reserves to withstand wild fluctuations in the market for the price of energy, as well as the inherent risks in oil exploration and the unsure political climate in some regions where it operates.One of the economic conditions Apache has had to withstand is the current price point for natural gas on the domestic market.To continue reading, click here.