Apache Vice President, Planning and Strategy Alfonso Leon was recently promoted to Senior Vice President and Chief of Staff. In this role, he will continue to report to G. Steven Farris, and will be responsible for furthering Apache's growth strategy, performance, and new business opportunities.
This will be a growth role for Leon and for Apache, since the firm's success in coming years hinges on continuing to make and exploit world class oil and natural gas discoveries while onboarding projects accumulated over the past several years.
Leon has a very strong and deep background in the energy sector. Since 2009 he served Apache in various planning and strategy roles. Previous to this, he directed energy investment banking at Perella Weinberg Partners, after successfully serving in several strategy and planning roles at Shell.
While Strategy Advisor for Shell International, in a 2004 interview, Leon indicated that in order to prepare for markets where oil is at a premium to historical prices, investments in conventional oil alternatives like heavy crude, gas to liquids, and oil sands would be necessary; these are all areas where Apache can claim a leadership position. Combined with his experience and education, I think this match between Leon's forecast and Apache's activities is an indication of the likelihood of success in his new role, which will be a major support for Apache.
Apache is currently trading around $84 per share, with a price to book of 1.1 and a forward price to earnings of 7.3. BP, preparing to go to trial over claims that the Macando blowout was due to its own gross negligence, is trading around $42, with a price to book of 1.2 and a forward price to earnings of 15.9.
Exxon Mobil is trading around $87 with a price to book of 2.5 and a forward price to earnings of 9.9. Shell is trading around $70 with a price to book of 1.2 and a forward price to earnings of 10.9. Statoil is trading around $25 per share, with a price to book of 1.5 and a forward price to earnings of 3.1.
Apache believes it has an inventory of 67,000 drillable locations in its onshore U.S. liquids rich leasehold. According to its Chairman and CEO G. Steven Farris, "Now is the time to drill wells," and Apache is doing so with an accelerated drilling schedule designed to maximize its production even further.
Apache's accelerated drilling schedule on onshore U.S. plays should help blunt the impact of lower price realizations in the third quarter, but based on the current price picture it is likely that Apache's third quarter earnings will again be lower than in the same period last year.
