Intrinsic value of Apache - APA

Previous Close

$30.17

  Intrinsic Value

$4.85

stock screener

  Rating & Target

str. sell

-84%

Previous close

$30.17

 
Intrinsic value

$4.85

 
Up/down potential

-84%

 
Rating

str. sell

We calculate the intrinsic value of APA stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 11.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  43.80
  39.92
  36.43
  33.29
  30.46
  27.91
  25.62
  23.56
  21.70
  20.03
  18.53
  17.18
  15.96
  14.86
  13.88
  12.99
  12.19
  11.47
  10.82
  10.24
  9.72
  9.25
  8.82
  8.44
  8.09
  7.79
  7.51
  7.26
  7.03
  6.83
Revenue, $m
  8,466
  11,845
  16,160
  21,539
  28,099
  35,941
  45,149
  55,786
  67,892
  81,492
  96,592
  113,182
  131,244
  150,750
  171,669
  193,966
  217,610
  242,571
  268,826
  296,358
  325,155
  355,217
  386,551
  419,171
  453,103
  488,379
  525,041
  563,139
  602,731
  643,883
Variable operating expenses, $m
  10,438
  14,605
  19,925
  26,557
  34,646
  44,315
  55,669
  68,784
  83,711
  100,480
  119,098
  139,554
  161,824
  185,875
  211,667
  239,160
  268,313
  299,090
  331,463
  365,409
  400,916
  437,983
  476,617
  516,838
  558,676
  602,171
  647,375
  694,350
  743,167
  793,907
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  10,438
  14,605
  19,925
  26,557
  34,646
  44,315
  55,669
  68,784
  83,711
  100,480
  119,098
  139,554
  161,824
  185,875
  211,667
  239,160
  268,313
  299,090
  331,463
  365,409
  400,916
  437,983
  476,617
  516,838
  558,676
  602,171
  647,375
  694,350
  743,167
  793,907
Operating income, $m
  -1,972
  -2,760
  -3,765
  -5,019
  -6,547
  -8,374
  -10,520
  -12,998
  -15,819
  -18,988
  -22,506
  -26,371
  -30,580
  -35,125
  -39,999
  -45,194
  -50,703
  -56,519
  -62,637
  -69,051
  -75,761
  -82,766
  -90,066
  -97,667
  -105,573
  -113,792
  -122,335
  -131,211
  -140,436
  -150,025
EBITDA, $m
  1,320
  1,846
  2,519
  3,357
  4,380
  5,602
  7,038
  8,696
  10,583
  12,703
  15,056
  17,642
  20,458
  23,498
  26,759
  30,234
  33,920
  37,811
  41,903
  46,195
  50,684
  55,370
  60,254
  65,338
  70,627
  76,126
  81,841
  87,779
  93,951
  100,365
Interest expense (income), $m
  413
  458
  800
  1,249
  1,822
  2,537
  3,409
  4,451
  5,675
  7,088
  8,697
  10,504
  12,511
  14,716
  17,116
  19,708
  22,488
  25,451
  28,593
  31,911
  35,400
  39,058
  42,885
  46,880
  51,044
  55,379
  59,889
  64,577
  69,449
  74,512
  79,773
Earnings before tax, $m
  -2,431
  -3,560
  -5,014
  -6,841
  -9,084
  -11,783
  -14,971
  -18,673
  -22,907
  -27,685
  -33,010
  -38,883
  -45,296
  -52,241
  -59,707
  -67,682
  -76,154
  -85,113
  -94,547
  -104,451
  -114,820
  -125,651
  -136,947
  -148,711
  -160,952
  -173,681
  -186,911
  -200,660
  -214,948
  -229,798
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -2,431
  -3,560
  -5,014
  -6,841
  -9,084
  -11,783
  -14,971
  -18,673
  -22,907
  -27,685
  -33,010
  -38,883
  -45,296
  -52,241
  -59,707
  -67,682
  -76,154
  -85,113
  -94,547
  -104,451
  -114,820
  -125,651
  -136,947
  -148,711
  -160,952
  -173,681
  -186,911
  -200,660
  -214,948
  -229,798

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  31,470
  44,033
  60,074
  80,069
  104,456
  133,610
  167,841
  207,381
  252,387
  302,945
  359,077
  420,752
  487,896
  560,410
  638,173
  721,063
  808,958
  901,752
  999,354
  1,101,701
  1,208,756
  1,320,511
  1,436,992
  1,558,257
  1,684,397
  1,815,535
  1,951,825
  2,093,453
  2,240,636
  2,393,616
Adjusted assets (=assets-cash), $m
  31,470
  44,033
  60,074
  80,069
  104,456
  133,610
  167,841
  207,381
  252,387
  302,945
  359,077
  420,752
  487,896
  560,410
  638,173
  721,063
  808,958
  901,752
  999,354
  1,101,701
  1,208,756
  1,320,511
  1,436,992
  1,558,257
  1,684,397
  1,815,535
  1,951,825
  2,093,453
  2,240,636
  2,393,616
Revenue / Adjusted assets
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
Average production assets, $m
  26,336
  36,850
  50,273
  67,007
  87,415
  111,813
  140,459
  173,549
  211,213
  253,522
  300,497
  352,110
  408,300
  468,984
  534,061
  603,428
  676,984
  754,639
  836,319
  921,969
  1,011,558
  1,105,081
  1,202,559
  1,304,041
  1,409,603
  1,519,346
  1,633,402
  1,751,925
  1,875,096
  2,003,119
Working capital, $m
  59
  83
  113
  151
  197
  252
  316
  390
  475
  570
  676
  792
  919
  1,055
  1,202
  1,358
  1,523
  1,698
  1,882
  2,075
  2,276
  2,487
  2,706
  2,934
  3,172
  3,419
  3,675
  3,942
  4,219
  4,507
Total debt, $m
  14,811
  23,128
  33,747
  46,984
  63,128
  82,428
  105,089
  131,264
  161,058
  194,528
  231,687
  272,516
  316,965
  364,969
  416,449
  471,322
  529,508
  590,938
  655,551
  723,304
  794,174
  868,156
  945,267
  1,025,544
  1,109,049
  1,195,862
  1,286,086
  1,379,844
  1,477,279
  1,578,552
Total liabilities, $m
  20,833
  29,150
  39,769
  53,006
  69,150
  88,450
  111,111
  137,286
  167,080
  200,550
  237,709
  278,538
  322,987
  370,991
  422,471
  477,344
  535,530
  596,960
  661,573
  729,326
  800,196
  874,178
  951,289
  1,031,566
  1,115,071
  1,201,884
  1,292,108
  1,385,866
  1,483,301
  1,584,574
Total equity, $m
  10,637
  14,883
  20,305
  27,063
  35,306
  45,160
  56,730
  70,095
  85,307
  102,395
  121,368
  142,214
  164,909
  189,418
  215,703
  243,719
  273,428
  304,792
  337,782
  372,375
  408,559
  446,333
  485,703
  526,691
  569,326
  613,651
  659,717
  707,587
  757,335
  809,042
Total liabilities and equity, $m
  31,470
  44,033
  60,074
  80,069
  104,456
  133,610
  167,841
  207,381
  252,387
  302,945
  359,077
  420,752
  487,896
  560,409
  638,174
  721,063
  808,958
  901,752
  999,355
  1,101,701
  1,208,755
  1,320,511
  1,436,992
  1,558,257
  1,684,397
  1,815,535
  1,951,825
  2,093,453
  2,240,636
  2,393,616
Debt-to-equity ratio
  1.390
  1.550
  1.660
  1.740
  1.790
  1.830
  1.850
  1.870
  1.890
  1.900
  1.910
  1.920
  1.920
  1.930
  1.930
  1.930
  1.940
  1.940
  1.940
  1.940
  1.940
  1.950
  1.950
  1.950
  1.950
  1.950
  1.950
  1.950
  1.950
  1.950
Adjusted equity ratio
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338
  0.338

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2,431
  -3,560
  -5,014
  -6,841
  -9,084
  -11,783
  -14,971
  -18,673
  -22,907
  -27,685
  -33,010
  -38,883
  -45,296
  -52,241
  -59,707
  -67,682
  -76,154
  -85,113
  -94,547
  -104,451
  -114,820
  -125,651
  -136,947
  -148,711
  -160,952
  -173,681
  -186,911
  -200,660
  -214,948
  -229,798
Depreciation, amort., depletion, $m
  3,292
  4,606
  6,284
  8,376
  10,927
  13,977
  17,557
  21,694
  26,402
  31,690
  37,562
  44,014
  51,038
  58,623
  66,758
  75,428
  84,623
  94,330
  104,540
  115,246
  126,445
  138,135
  150,320
  163,005
  176,200
  189,918
  204,175
  218,991
  234,387
  250,390
Funds from operations, $m
  861
  1,047
  1,270
  1,535
  1,843
  2,193
  2,587
  3,021
  3,494
  4,005
  4,552
  5,131
  5,742
  6,382
  7,051
  7,746
  8,469
  9,217
  9,993
  10,795
  11,625
  12,484
  13,373
  14,294
  15,248
  16,237
  17,264
  18,331
  19,439
  20,592
Change in working capital, $m
  18
  24
  30
  38
  46
  55
  64
  74
  85
  95
  106
  116
  126
  137
  146
  156
  166
  175
  184
  193
  202
  210
  219
  228
  238
  247
  257
  267
  277
  288
Cash from operations, $m
  843
  1,023
  1,240
  1,497
  1,797
  2,139
  2,522
  2,946
  3,410
  3,910
  4,446
  5,015
  5,615
  6,246
  6,904
  7,590
  8,303
  9,043
  9,809
  10,602
  11,424
  12,274
  13,154
  14,066
  15,010
  15,990
  17,008
  18,064
  19,162
  20,304
Maintenance CAPEX, $m
  -2,289
  -3,292
  -4,606
  -6,284
  -8,376
  -10,927
  -13,977
  -17,557
  -21,694
  -26,402
  -31,690
  -37,562
  -44,014
  -51,038
  -58,623
  -66,758
  -75,428
  -84,623
  -94,330
  -104,540
  -115,246
  -126,445
  -138,135
  -150,320
  -163,005
  -176,200
  -189,918
  -204,175
  -218,991
  -234,387
New CAPEX, $m
  -8,023
  -10,513
  -13,424
  -16,734
  -20,408
  -24,398
  -28,646
  -33,089
  -37,664
  -42,310
  -46,974
  -51,613
  -56,191
  -60,683
  -65,077
  -69,367
  -73,556
  -77,655
  -81,680
  -85,650
  -89,589
  -93,523
  -97,478
  -101,482
  -105,561
  -109,744
  -114,056
  -118,523
  -123,171
  -128,023
Cash from investing activities, $m
  -10,312
  -13,805
  -18,030
  -23,018
  -28,784
  -35,325
  -42,623
  -50,646
  -59,358
  -68,712
  -78,664
  -89,175
  -100,205
  -111,721
  -123,700
  -136,125
  -148,984
  -162,278
  -176,010
  -190,190
  -204,835
  -219,968
  -235,613
  -251,802
  -268,566
  -285,944
  -303,974
  -322,698
  -342,162
  -362,410
Free cash flow, $m
  -9,469
  -12,783
  -16,790
  -21,520
  -26,987
  -33,187
  -40,101
  -47,700
  -55,948
  -64,801
  -74,219
  -84,160
  -94,589
  -105,475
  -116,796
  -128,534
  -140,682
  -153,236
  -166,201
  -179,588
  -193,412
  -207,694
  -222,460
  -237,736
  -253,556
  -269,954
  -286,967
  -304,634
  -322,999
  -342,106
Issuance/(repayment) of debt, $m
  6,327
  8,317
  10,619
  13,237
  16,144
  19,300
  22,661
  26,175
  29,794
  33,469
  37,159
  40,829
  44,450
  48,004
  51,479
  54,873
  58,187
  61,429
  64,613
  67,754
  70,870
  73,982
  77,110
  80,278
  83,505
  86,813
  90,224
  93,758
  97,435
  101,273
Issuance/(repurchase) of shares, $m
  5,652
  7,806
  10,436
  13,599
  17,327
  21,637
  26,541
  32,037
  38,119
  44,773
  51,983
  59,729
  67,991
  76,750
  85,991
  95,699
  105,863
  116,477
  127,537
  139,044
  151,004
  163,424
  176,317
  189,699
  203,588
  218,005
  232,977
  248,530
  264,695
  281,505
Cash from financing (excl. dividends), $m  
  11,979
  16,123
  21,055
  26,836
  33,471
  40,937
  49,202
  58,212
  67,913
  78,242
  89,142
  100,558
  112,441
  124,754
  137,470
  150,572
  164,050
  177,906
  192,150
  206,798
  221,874
  237,406
  253,427
  269,977
  287,093
  304,818
  323,201
  342,288
  362,130
  382,778
Total cash flow (excl. dividends), $m
  2,510
  3,340
  4,265
  5,316
  6,484
  7,751
  9,101
  10,512
  11,966
  13,442
  14,924
  16,397
  17,851
  19,279
  20,675
  22,037
  23,368
  24,671
  25,949
  27,211
  28,462
  29,712
  30,968
  32,240
  33,536
  34,865
  36,235
  37,654
  39,131
  40,672
Retained Cash Flow (-), $m
  -5,652
  -7,806
  -10,436
  -13,599
  -17,327
  -21,637
  -26,541
  -32,037
  -38,119
  -44,773
  -51,983
  -59,729
  -67,991
  -76,750
  -85,991
  -95,699
  -105,863
  -116,477
  -127,537
  -139,044
  -151,004
  -163,424
  -176,317
  -189,699
  -203,588
  -218,005
  -232,977
  -248,530
  -264,695
  -281,505
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -3,142
  -4,466
  -6,171
  -8,283
  -10,843
  -13,886
  -17,440
  -21,525
  -26,154
  -31,332
  -37,059
  -43,331
  -50,139
  -57,472
  -65,317
  -73,661
  -82,495
  -91,806
  -101,588
  -111,834
  -122,542
  -133,712
  -145,349
  -157,459
  -170,051
  -183,140
  -196,742
  -210,876
  -225,565
  -240,833
Discount rate, %
  6.00
  6.30
  6.62
  6.95
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.78
  11.31
  11.88
  12.47
  13.10
  13.75
  14.44
  15.16
  15.92
  16.72
  17.55
  18.43
  19.35
  20.32
  21.33
  22.40
  23.52
  24.70
PV of cash for distribution, $m
  -2,964
  -3,952
  -5,092
  -6,332
  -7,626
  -8,919
  -10,149
  -11,255
  -12,177
  -12,867
  -13,287
  -13,418
  -13,256
  -12,816
  -12,127
  -11,231
  -10,180
  -9,028
  -7,832
  -6,644
  -5,508
  -4,460
  -3,525
  -2,717
  -2,042
  -1,493
  -1,063
  -735
  -493
  -321
Current shareholders' claim on cash, %
  67.1
  45.6
  31.4
  22.0
  15.6
  11.2
  8.1
  6.0
  4.4
  3.3
  2.5
  1.9
  1.4
  1.1
  0.9
  0.7
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0

Apache Corporation is an independent energy company. The Company explores for, develops, and produces natural gas, crude oil and natural gas liquids. The Company’s production segments include: the United States, Egypt and the United Kingdom North Sea. It also pursues exploration interests in Suriname. In North America, the Company has three onshore regions: The Permian region, The Midcontinent/Gulf Coast region. The Permian region located in West Texas and New Mexico includes the Permian sub-basins, the Midland Basin, Central Basin Platform/Northwest Shelf and Delaware Basin. The Midcontinent/Gulf Coast region includes the Granite Wash, Tonkawa, Canyon Lime, Marmaton, and Cleveland formations of the West Anadarko Basin, the Woodford-SCOOP and Stack plays located in Central Oklahoma, and the Eagle Ford shale in South East Texas.

FINANCIAL RATIOS  of  Apache (APA)

Valuation Ratios
P/E Ratio -8.1
Price to Sales 2.1
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 4.7
Price to Free Cash Flow 17.3
Growth Rates
Sales Growth Rate -19.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -60.2%
Cap. Spend. - 3 Yr. Gr. Rate -28%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 137%
Total Debt to Equity 137%
Interest Coverage -3
Management Effectiveness
Return On Assets -4.6%
Ret/ On Assets - 3 Yr. Avg. -12.6%
Return On Total Capital -9%
Ret/ On T. Cap. - 3 Yr. Avg. -20.3%
Return On Equity -19.9%
Return On Equity - 3 Yr. Avg. -33.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 72%
Gross Margin - 3 Yr. Avg. 75.5%
EBITDA Margin 25.3%
EBITDA Margin - 3 Yr. Avg. -15.6%
Operating Margin -31.5%
Oper. Margin - 3 Yr. Avg. -79.2%
Pre-Tax Margin -31.5%
Pre-Tax Margin - 3 Yr. Avg. -79.2%
Net Profit Margin -26.3%
Net Profit Margin - 3 Yr. Avg. -75.1%
Effective Tax Rate 26.3%
Eff/ Tax Rate - 3 Yr. Avg. 3.7%
Payout Ratio -27%

APA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the APA stock intrinsic value calculation we used $5887 million for the last fiscal year's total revenue generated by Apache. The default revenue input number comes from 0001 income statement of Apache. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our APA stock valuation model: a) initial revenue growth rate of 43.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6%, whose default value for APA is calculated based on our internal credit rating of Apache, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Apache.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of APA stock the variable cost ratio is equal to 123.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for APA stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Apache.

Corporate tax rate of 27% is the nominal tax rate for Apache. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the APA stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for APA are equal to 311.1%.

Life of production assets of 8 years is the average useful life of capital assets used in Apache operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for APA is equal to 0.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $7416 million for Apache - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 382.486 million for Apache is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Apache at the current share price and the inputted number of shares is $11.5 billion.

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COMPANY NEWS

▶ The Bear Has Apache in a Downtrend With No Support   [Dec-18-18 03:31PM  TheStreet.com]
▶ Shale Under Pressure As Oil Falls Below $50   [Dec-17-18 07:00PM  Oilprice.com]
▶ Hedge Funds Are Betting On Apache Corporation (APA)   [Dec-12-18 01:23AM  Insider Monkey]
▶ Put This High-Octane Growth Stock on Your Watch List   [Dec-10-18 05:05PM  Motley Fool]
▶ These 5 Oil Stocks Chose the Right Side   [Dec-09-18 05:50PM  Motley Fool]
▶ Apache Brings North Sea Garten Field Online   [Dec-04-18 07:00PM  Rigzone.com]
▶ Dispute involving Fort Worth oil company to continue in arbitration   [Dec-03-18 12:34PM  American City Business Journals]
▶ Apache Corporation Releases 2018 Sustainability Report   [Nov-19-18 05:02PM  GlobeNewswire]
▶ [$$] Deal Close Announcements: Nov. 12-16   [04:58PM  The Wall Street Journal]
▶ Apache Donates 50,000 Trees in Four States   [01:45PM  GlobeNewswire]
▶ Should Value Investors Buy Apache (APA) Stock?   [Nov-13-18 09:10AM  Zacks]
▶ Apache Corp. founder dies at age 96   [05:43PM  American City Business Journals]
▶ Apache: 3Q Earnings Snapshot   [Oct-31-18 05:55PM  Associated Press]
▶ 5 Crude Oil Stocks to Buy While Investors Run Scared   [Oct-26-18 03:38PM  InvestorPlace]
▶ 3 Top Oil Stocks to Buy in October   [Oct-20-18 08:00AM  Motley Fool]
▶ See the largest office leases signed in Houston so far this year   [Oct-19-18 02:49PM  American City Business Journals]
▶ Correction: Blowout-Texas Oil Boom story   [Oct-12-18 03:16PM  Associated Press]
▶ West Texas an 'extraction colony' as oil, gas exports surge   [Oct-11-18 10:00AM  Associated Press]
▶ EPIC Pipeline To Switch To Carrying Crude Oil   [Oct-05-18 10:16AM  Investor's Business Daily]
▶ 3 Stocks That Are Absurdly Cheap Right Now   [Sep-24-18 06:39PM  Motley Fool]
▶ Apache Corporation Stock Is Set for a Strong Comeback   [Sep-19-18 10:25AM  InvestorPlace]
▶ Why Is No One Talking About Apache Corp. Stock?   [Sep-16-18 10:32AM  Motley Fool]
▶ Apache Declares Cash Dividend on Common Shares   [Sep-13-18 04:15PM  GlobeNewswire]
▶ Trade of the Day: Apache Stock Is a Gusher   [07:29AM  InvestorPlace]
▶ 3 Stocks That Could Make You Rich   [Sep-10-18 08:03AM  Motley Fool]
▶ Permian Drillers Are Literally Burning Profit   [Sep-04-18 05:00PM  Oilprice.com]
▶ Weekly Top Insider Buys Highlight for the Week of Aug. 31   [Sep-02-18 12:02PM  GuruFocus.com]
▶ Apache announces pricing of upsized cash tender offers   [Aug-23-18 03:39PM  GlobeNewswire]
▶ Apache Prices $1.0 Billion Notes Offering   [Aug-14-18 05:28PM  GlobeNewswire]
▶ 3 Oil Stocks Seen Plunging as Much as 14%   [11:30AM  Investopedia]
▶ 2 Houston cos. join forces in $3.5B midstream firm   [09:14AM  American City Business Journals]
▶ [$$] Apache to Form Midstream Business in Deal With 'Blank-Check' Company   [Aug-08-18 09:10PM  The Wall Street Journal]

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