UPDATE 4-Apache profit, production up; shares climb

* Oil, gas production up 10 pct

* Shares rise 5.1 pct

* 2011 output seen growing in “double digits”

* Apache planning $1 bln in asset sales in 2011

* Apache sees capex rising to $7 bln next year
(Adds details from conference call, updates share price)

By Anna Driver and Matt Daily

HOUSTON/NEW YORK, Nov 4 (BestGrowthStock) – Apache Corp (APA.N: ),
the largest U.S. independent oil and gas producer, posted a 74
percent jump in quarterly profit as natural gas and crude oil
prices rose from a year earlier and output grew.

Third-quarter earnings at energy companies such as
Houston-based Apache have been fattened by a 13 percent
increase in U.S. crude oil prices and a 23 percent jump in the
price of benchmark gas on the New York Mercantile Exchange.

Apache shares rose 5.1 percent, helped in part by
Thursday’s jump in crude prices. [ID:nSGE6A307Z] Oil topped $86
a barrel, rising to a seven month high.

“Apache is pretty much moving in tandem with crude,” said
John Olson, fund manager with Houston Energy Partners. “It was
also a good quarter and it’s a very cheap stock relative to its
peers.”

For example, Apache is trading at 10 times expected 2011
earnings, compared with a multiple of 32 for Anadarko Petroleum
Corp (APC.N: ), Olson said, adding investors also like the
company’s high exposure to more profitable oil production.

Apache, which has bought $12 billion in assets this year,
said third-quarter oil and gas production rose 10 percent from
a year ago and it expects to finish the year with output up 35
percent from end-2009 levels.

Next year, the company’s output is expected to grow “double
digits,” on a percentage basis when the company plans to spend
about $7 billion, up from $6 billion this year, Apache
president Roger Plank told analysts on a conference call.
[ID:nnWEN2580]

The company repeated it expects to close on the $2.7
billion acquisition of Mariner Energy Inc (ME.N: ) and its
deepwater Gulf of Mexico assets with the approval of that
company’s shareholders at a meeting scheduled for Nov. 10.

The deal was announced just five days before the BP Plc
(BP.L: ) well blow-out in the Gulf of Mexico that caused the
worst-ever U.S. marine oil accident.

Apache Chief Executive Steve Farris also spent $1 billion
to buy Devon Energy’s Gulf of Mexico fields and $7 billion to
buy BP’s assets in Western Canada, Texas and Egypt. All of the
BP deals have now closed.

Apache also plans to sell $1 billion in assets during the
first half of next year to help pay down debt, but those
properties have not been identified yet, Plank said on the
call.

Apache’s profit in the third quarter was $765 million, or
$2.12 per share, compared with $441 million, or $1.30 per
share, a year earlier.

Adjusted for one-time items, profit was $2.19 per share,
below the average Wall Street forecast of $2.24, according to
Thomson Reuters I/B/E/S.

Oil and gas production in the quarter rose 10 percent from
a year ago to 667,460 barrels of oil equivalent (boe) per day.
More than half of the output was made up of more profitable
crude oil and natural gas liquids.

Liquids stripped from natural gas, butane for example, can
be sold at a premium to dry gas.

Apache’s average selling price for crude oil was $74.14 per
barrel in the quarter, up $9.25 from a year ago. Its average
natural gas selling price was $4.01 per thousand cubic feet, up
from $3.46 a year earlier.

Apache said third-quarter revenue rose 29 percent to $3.01
billion.

Smaller peer Chesapeake Energy Corp (CHK.N: ) posted sharply
higher third quarter-profit after the market close on Wednesday
as its production rose 23 percent. [ID:nN03137022]

Apache shares closed $5.21 higher at $107.79 on the New
York Stock Exchange.
(Reporting by Matt Daily in New York and Anna Driver in
Houston; editing by Derek Caney, Dave Zimmerman, John Wallace
and Andre Grenon)

UPDATE 4-Apache profit, production up; shares climb