Apache says profit again on ledger

Houston oil and gas producer Apache Corp. returned to profitability last quarter and, perhaps more importantly, delivered the first gas to market from its Alpine High field and improved oil production at the West Texas discovery.

First-quarter revenue jumped by almost 75 percent to $1.9 billion from about $1.1 billion in the same period last year, Apache reported Thursday. The company posted $213 million in profit, swinging from a loss of nearly $400 million in the first quarter of 2016.

At the same time, the company reported new results for its West Texas discovery, Alpine High. It finished construction of the first section of a 30inch gas pipeline, allowing the company to send gas from the field to market

for the first time. The trunk line allows Apache to begin bringing on new wells and increase production of oil and natural gas liquids.

Apache also reported new test well results from Alpine High, including some of the field’s best oil production rates so far, an important marker after earlier results disappointed analysts.

The Chinook 101AH, with a horizontal well length of just 4,500 feet, is producing more than 600 barrels of oil per day, the company said, about three times better than previously released rates in the Woodford formation at Alpine High.

And the Blackhawk 5H, with another 4,500-foot lateral, is producing more than 700 barrels of oil per day, 200 better than the company’s next best result in the Barnett formation in North Texas.

Apache stock fell 1.8 percent to $47.90.

Cheniere Energy

Another Houston company, Cheniere Energy, also reported solid first quarter earnings Thursday. Cheniere said it significantly increased revenue and swung to a profit in as its exports of liquefied natural gas grew.

Cheniere, which began exporting from its Sabine Pass terminal about a year ago, said revenue rose to $1.2 billion from $69 million a year earlier and its profit rose to $54 million from a $321 million loss in the first quarter of last year.

As of April, the Sabine Pass terminal had delivered LNG to 20 of the 39 LNG importing countries around the world. The company is also expanding its terminal in Corpus Christi, where it acquired 500 acres surrounding the project inland and on the waterfront. Cheniere shares closed at $44.88, down 1.7 percent.

Royal Dutch Shell

Also Thursday, Royal Dutch Shell, which has a large presence in Houston, showed it has adapted to a world of lower oil prices, generating a surge in cash that allowed it to pay dividends while reducing debt.

The Anglo-Dutch company’s first-quarter performance helps validate CEO Ben Van Beurden’s $54 billion purchase of BG Group — for which some shareholders complained he overpaid — and the deep spending cuts and asset sales he undertook to protect the balance sheet.

“With new projects starting and higher-cost assets being sold, you’d expect cash generation to only increase,” said Iain Armstrong, an analyst at Brewin Dolphin. “It’s becoming a cash-generating machine.”

Shell has adjusted its business to $50-a-barrel crude by cutting costs, increasing production and learning to live within its means.

It beat first-quarter profit estimates, as did its supermajor peers — Exxon Mobil Corp., Chevron Corp., Total and BP — all of which tightened their belts following oil’s collapse.