Apco Oil and Gas International Inc. (NASDAQ:APAGF) today announced net income attributable to Apco of $39.1 million in 2012, or $1.33 per share, compared with net income of $31.7 million, or $1.08 per share in 2011.
The increase in net income for 2012 was primarily due to the favorable impacts of higher average sales prices and increased volumes on operating income and equity income from Argentine investment. These benefits were partially offset by greater costs and operating expenses.
Initial sales revenues from Apco’s Colombian operations also contributed to the increase in net income for 2012.
Total operating revenues increased by $28.5 million compared with 2011. Higher average oil and natural gas sales prices drove a $19.5 million increase due to prices in operating revenues for 2012. A 4 percent growth in sales volumes – which resulted in 2.7 million barrels of oil equivalent (BOE) for the year applicable to Apco’s consolidated interests – contributed $11 million to the increase in operating revenues. A decrease in other operating revenues partially offset these favorable variances.
Total costs and operating expenses for the year increased by $23.6 million, primarily the result of higher production and lifting costs, selling and administrative expense, depreciation expense, and higher exploration expense.
Exploration expense increased by $8 million due to greater exploration activity in 2012 compared with 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.
Apco also experienced higher equity income from its 40.72 percent interest in Petrolera Entre Lomas S.A. (Petrolera). For 2012, the favorable impacts of higher average oil and natural gas sales prices and greater sales volumes contributed to an increase of $5.9 million in equity income from Argentine investment compared with 2011.
Total sales volumes applicable to Apco’s equity interest in Petrolera were 2.2 million BOE in 2012 – an increase of 3 percent.