The headline number is impressive: Apache (NYSE:APA) surpasses 600,000 barrels per day of average production in the third quarter. Digging further into the financial report, it's clear that not everything went Apache's way during the period, but I think there's plenty to be pleased with here.

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 (NYSE:RRC), a low-cost leader, achieved this quarter. This achievement by Apache is all the more impressive when you consider the firm's unfavorable hedge position.

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 (NYSE:COG) got for its 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 (NYSE:XTO) to run your hedge book. Then again, with only 12% of oil volumes and 8% of gas volumes hedged in the quarter, I guess better hedging wouldn't have made that big of a difference.

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 (NYSE:APC) and EOG Resources (NYSE:EOG). Apache has some nice oil projects coming online in Australia next year, with partners Inpex and BHP Billiton (NYSE:BHP). Those will add another 40,000 barrels or so of daily production to the mix.

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.