The headline number is impressive: Apache
Namely, Apache's cash margins have held up very well during the downturn. Last year, they pushed well north of 70%. This quarter, margins came in at a still-attractive 65%. That's quite close to what Range Resources
I said not everything went Apache's way this quarter. The firm's hedge book did it no favors at all. Both oil and gas price realizations were brought down versus what they would have been without hedging. This was most pronounced on the gas side, in which Apache's companywide realization was $3.19 per thousand cubic feet (mcf). That's less than half what well-hedged Cabot Oil & Gas
Hedges are supposed to cushion your revenue during commodity crashes. How'd you botch this one so badly, Apache? Maybe you need to poach someone from XTO Energy
Hedges aside, rising oil prices are definitely making a strong impact on Apache's results. Liquid hydrocarbons made up 49% of production during the period, and average realized prices rose 12% from last quarter, when we pointed out Apache's beautiful balance compared to peers like Anadarko Petroleum
Apache remains one of my go-to independents. Keep this one high up on your watch list in case oil gets a haircut in the months ahead.
Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. The Motley Fool owns shares of XTO. Feel free to drill into our disclosure policy.