Apache Corp. (NYSE:APA) Q3 2017 Earnings Conference Call Transcript
Nov 02, 2017 • 02:00 pm ET
Good afternoon. My name is Jennifer and I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.
And I would like to turn the conference over to Mr. Gary Clark. Sir, you may begin.
Good afternoon, and thank you for joining us on Apache Corporation's third quarter 2017 financial and operational results conference call. Speakers making prepared remarks on today's call will be Apache's CEO and President, John Christmann; EVP of Operations Support, Tim Sullivan; and EVP and CFO, Steve Riney.
In conjunction with this morning's press release, I hope you have had the opportunity to review our third quarter financial and operational supplement, which can be found on our IR website at investor.apachecorp.com.
On today's conference call, we may discuss certain non-GAAP financial measures. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures can be found in the supplemental information provided on our website. Consistent with previous reporting practices, production numbers cited in today's call are adjusted to exclude non-controlling interest in Egypt and Egypt tax barrels.
(Forward-Looking Cautionary Statements)
I will now turn the call over to John.
Good afternoon and thank you for joining us. On today's call, I will discuss third quarter results and accomplishments, comment on our Midland basin oil production and development program, recap some of the key Alpine High points from last month's webcast and provide an update on our 2018 planning process and current thinking around commodity price assumptions.
Beginning with the third quarter, as anticipated, our average daily net production in the US returned to a growth trajectory. We also grew net production in the North Sea and gross production in Egypt. Production was in line with our guidance with notably strong performance in Permian oil volumes. We stated in our webcast update last month that we expect this performance to carry through into the fourth quarter with Midland and Delaware oil production tracking at the high end of the guidance range established back in February. As we also noted, the delayed startup of two central processing facilities at Alpine High caused by Hurricane Harvey will defer some natural gas volumes into 2018. So, our updated fourth quarter production guidance is unchanged.
In the Midland and Delaware basins, we are benefiting today from the strategic testing, optimization and development planning initiatives that we implemented in 2015 and 2016, while running a very lean capital program. Going forward, we anticipate continued capital efficiency gains in both the Midland and Delaware basins. This is particularly true at Alpine High, as we move further into multi-well pad development, continue to extend average lateral length, utilize more smart completions and further optimize our landing zone targeting and well spacing. The majority of optimization benefits, which have been