Apco Oil and Gas International Inc. (NASDAQ:APAGF) today announced that for the three and six-month periods ended June 30, 2012, it generated unaudited net income attributable to Apco of $12.7 million and $22.8 million, or $0.43 and $0.77 cents per share, compared with net income of $7.7 million and $15.9 million for the same periods in 2011.
Net income improved quarter-to-quarter from increased operating revenues due to higher average sales prices and increased volumes, greater equity income from Apco’s Argentine investment and a one-time credit to other income attributable to the farm-out of part of the company’s interest in the exploration area within the Sur Rio Deseado Este concession. These improvements were partially offset by higher costs and operating expenses that included increases in production and lifting costs, depreciation expense, exploration expense, taxes other than income and income taxes.
The increase in net income for the year-to-date period is also due primarily to higher average oil sales prices and increased volumes, greater equity income from Apco’s Argentine investment, and other income. These improvements over last year were partially offset by higher costs and operating expenses that included a $6.6 million increase in exploration expense compared with the first six months of 2011. During 2012, Apco incurred significant 3D seismic costs in its Sur Rio Deseado property in Argentina and in the Llanos 40 block in Colombia.
Higher average sales prices were the largest contributor to the increase of $8.4 million in operating revenues during the quarter and $15.4 million for the first six months. Total sales volumes applicable to Apco’s consolidated interest on a barrel of oil equivalent (BOE) basis were 1.5 percent higher than second-quarter 2011 and 3 percent higher than the first six months of 2011.
Total costs and operating expenses for the quarter and the six months increased by $4.2 million and $12 million, respectively, primarily the result of higher production and lifting costs, depreciation expense, exploration expense and higher taxes other than income.