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Apache May 2000 Report





  Report on Apache Corporation (APA) -- May 21, 2000
  TO:  HPD Investment Group
  FR:  Nancy Montague, For May meeting

  1.  (market price/share as of close of market, 5/19/00 - $58 7/8)
  Shares owned:  22
  Market value:   $1295.25
  Cost basis:        $774     ($35.19/share, inc. commission)
  Percent gain:   67.29


  2. Research - 12 Strong Buy; 11 moderate buy; 4 hold  -- As you all
  know, the price of oil is still very high.  APA price has climbed
significantly.
OPEC is standing mostly firm.  It hasn't cracked yet.


3. PRESS -
Sunday May 21 6:00 AM ET
Saudi Sees More OPEC Supply if Price High
By Karen Matusic
DUBAI, United Arab Emirates (Reuters) - OPEC giant Saudi Arabia expects the
producers' group to release more supply to the market automatically if the
20-day average for the basket of OPEC crude rises above $28, a Gulf source
said Sunday.
The source told Reuters that OPEC President Ali Rodriguez of Venezuela would
probably instruct the producers' group to boost output by a collective
500,000 barrels per day (bpd) under an agreement reached in March if the
price rose that far.
``It is expected that if the (average) price (stays out of the range) then
the president will instruct us to implement the (automatic production
mechanism),'' said the source familiar with policy in Saudi Arabia, the
world's biggest producer and OPEC's most influential member.
>From First Qtr 10Q
OVERVIEW
On a foundation of strong production combined with high pricing, Apache
enjoyed record results of operations during the first quarter 2000:
o Record income attributable to common stock of $111.0 million ($.98 per
share) was generated. These results represent over half the full 1999's
record earnings of $186.4 million ($1.73 per share). Last year's first
quarter reflected a loss attributable to common stock of $3.6 million ($.04
per share). o In conjunction with substantially improved prices over last
year, oil and gas production were up 60 percent and 30 percent,
respectively. The improved production added a combined $.53 to earnings per
share. o Net cash provided by operating activities increased $196.6 million,
or 431 percent, to $242.2 million from $45.6 million. o Reflecting
production from property acquisitions in 1999 and subsequent exploration,
quarterly production on a barrel of oil equivalent (boe) basis increased 44
percent from 169,629 boe/day in 1999 to 244,574 boe/day in 2000.
Commodity Prices - Apache's average realized oil price increased $14.07 per
barrel from $11.44 per barrel in the first quarter of 1999 to $25.51 per
barrel in the comparable 2000 period, increasing revenues by $90.4 million.
The average realized price for natural gas increased $.82 per thousand cubic
feet (Mcf) from $1.70 per Mcf in the first quarter of 1999 to $2.52 per Mcf
in 2000, positively impacting revenues by $42.6 million.
Production - Oil production increased 60 percent during the first quarter of
2000 when compared to the same period last year. The increase was primarily
due to the Shell Offshore acquisition in the United States and the Shell
Canada acquisition. The increase in oil production positively impacted
revenues by $102.0 million. Gas production increased 30 percent during the
first quarter of 2000 when compared to the same period last year. The
increase was primarily due to the Shell Offshore acquisition in the U.S.,
the Shell Canada acquisition in Canada and completion of the northern
portion of the Western Desert Gas Pipeline on the Khalda concession in
Egypt, with first sales commencing in August 1999. The increase in gas
production positively impacted revenues by $41.0 million.

RESULTS OF OPERATIONS
Apache reported income attributable to common stock of $111.0 million in the
first quarter of 2000 versus a loss attributable to common stock of $3.6
million in the prior year. Basic net income per common share of $.98 for the
first quarter of 2000 was significantly higher than the basic net loss per
common share of $.04 in 1999. A significant increase in oil and gas
production revenues was partially offset by higher DD&A expense, operating
costs, net financing costs, administrative, selling and other (G&A) costs
and preferred stock dividends