Apache Corp. (NYSE:APA)

The financial data reveals several notable trends affecting the company's performance across the reviewed periods.

Revenue Composition

Oil revenues consistently accounted for 100% of production revenues until early 2014 when natural gas and natural gas liquids revenues began to be recorded, indicating diversification in the revenue mix. From 2014 onward, the contribution of oil revenues declined to approximately 74% to 82%, while gas revenues fluctuated between about 15% and 21%, and natural gas liquids contributed between around 3% and 5% of production revenues.

Cost Structure

Lease operating expenses as a percentage of oil and gas production revenues showed an increasing trend, rising significantly from approximately -16% in 2011 to a peak of nearly -37% in late 2015, before decreasing somewhat afterward. Gathering and transportation costs also increased, peaking close to -4.8% by early 2016. The combined cost of revenues followed a similar pattern, with a marked increase from around -18% in 2011 up to over -41% in late 2015, before declining in the first half of 2016. This rising cost pressure adversely impacted gross profit margins.

Profitability Metrics

Gross profit as a percentage of production revenues remained relatively stable around 80% through 2013 and early 2014 but then trended downward, reaching a low near 59% by late 2015 before partially recovering above 70% in mid-2016. Operating income demonstrated significant volatility: after steady levels around 45%-50% in 2011, it declined sharply post-2014, going negative from the end of 2014 through 2016, reflecting severe operational challenges and cost increases.

Depreciation and Asset Charges

Depreciation, depletion, and amortization expenses exhibited a steep increase, particularly from 2013 onward, culminating in an exceptional charge exceeding -600% of production revenues in late 2015, indicating significant asset write-downs or accelerated amortization. This is mirrored by a similar surge in oil and gas property and equipment expenses, suggesting impairments or disposals during these periods.

Impairments and One-Time Charges

Impairment charges became significant starting in 2014, with periodic peaks including a dramatic impairment near -127% of revenues in early 2016. Transaction, reorganization, and separation costs also appeared sporadically, increasing during 2014 and 2015, which may reflect corporate restructurings or disposals.

Income Tax Effects

Income tax provisions fluctuated significantly, with unusually high tax benefits noted in 2015 and 2016, when operating losses deepened. This suggests the utilization of tax credits or loss carrybacks during periods of negative pre-tax income.

Net Income Trends

Net income from continuing operations followed a declining trajectory, starting from positive double digits in early periods, falling sharply after 2014 into large net losses exceeding -600% of revenue in late 2015. This negative trend continued into 2016, albeit with some mitigation. The overall net income including noncontrolling interest mirrored this pattern, indicating persistent financial stress.

Financing Costs

Financing costs increased substantially in 2015 and 2016, rising from under -1% prior to 2014 to over -9% of production revenues by early 2016, reflecting possibly higher leverage, increased borrowing costs, or restructuring expenses.

In summary, the company experienced a period of stable operational profitability through early 2014, followed by a marked deterioration characterized by sharply increased costs, substantial impairments, and significant net losses through 2015 and into 2016. These challenges likely stem from adverse market conditions or strategic restructuring activities, as evidenced by rising expenses, impairments, and financing costs. The diversification of revenues into gas and natural gas liquids during the latter periods may represent an attempt to broaden the revenue base amid industry pressures.