Apco Oil and Gas International Inc. (NASDAQ:APAGF) today announced that for the three and nine-month periods ended Sept. 30, 2012, it generated unaudited net income attributable to Apco of $10.2 million and $33.0 million, or $0.35 and $1.12 per share, compared with net income of $6.1 million and $21.9 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 and greater equity income from Argentine investment. These benefits were partially offset by greater costs and operating expenses that included increases in production and lifting costs, depreciation and exploration expense, and higher income tax expense.
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 Argentine investment, and other income. These improvements over last year were partially offset by higher costs and operating expenses that included an $8.9 million increase in exploration expense compared with the first nine months of 2011. During 2012, Apco incurred significant 3D seismic costs in its Sur Río Deseado property in Argentina and in the Llanos 40 block in Colombia.
The benefits of higher sales prices and greater sales volumes resulted in an increase in operating revenues of $8.8 million for the third quarter and $24.2 million for the year-to-date period compared with the same periods in 2011. The quarter and year-to-date periods also benefited from initial sales revenues from Apco’s Colombian operations.
Total sales volumes applicable to Apco’s consolidated interest on a barrel of oil equivalent (BOE) basis were 10 percent higher than third-quarter 2011 and 4 percent higher than the first nine months of 2011.
Total costs and operating expenses for the quarter and the first nine months increased by $5.3 million and $17.3 million, respectively, primarily the result of higher production and lifting costs, depreciation expense, exploration expense and higher taxes other than income.