During the run-up in oil and gas prices, Apache (NYSE:APA) was totally overshadowed by fast-growing, higher-spending competitors like Chesapeake Energy (NYSE:CHK) and XTO Energy (NYSE:XTO). My, how things have changed. As we meet the down side of the latest commodity cycle, this company's strengths are finally coming back into focus.

Of course, pretty much every exploration and production company's third-quarter results are looking good. Apache's no exception, with earnings nearly doubling their prior-year levels, and cash flow coming in above the $2 billion mark once again.

The real difference here is the way Apache runs its business, and how it's positioned for a lower-priced commodity environment coupled with tight credit conditions.

Countless companies, from Hess (NYSE:HES) to Newfield Exploration (NYSE:NFX) to Quicksilver Resources (NYSE:KWK), have recently announced their intention to significantly reduce their 2009 capital budgets. Berry Petroleum (NYSE:BRY) went so far as to release eight of the 12 rigs it recently had working. Pretty much everyone in the space is now talking about matching spending to cash flows, and to some, this is a novel concept.

Here in Fooldom, we have a message board dedicated to living below your means. Apache was a proponent of such an approach long before it suddenly became more or less mandatory. Given its restrained spending and strong financial profile, the company suddenly finds itself "among the fortunate few with access to capital at a reasonable cost." The company issued $800 million of debt at the beginning of the month at an average cost of borrowing below 6.5%.

Between its cash on hand and unused credit facilities, Apache possesses around $4 billion of firepower. The company is positioned to be a key consolidator as the pendulum swings toward undervaluation of assets. I told you not to admonish Apache -- these guys are riding the cycle like Lance Armstrong.

Fools certainly favor this leading independent, bestowing a top five-star rating upon it in Motley Fool CAPS. Weigh in with a pitch of your own right here.

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Fool contributor Toby Shute, known to some as TMFSmashy, was recently ranked 72nd out of more than 120,000 CAPS players. He doesn't have a position in any company mentioned. Chesapeake Energy is an Inside Value selection. The Motley Fool has a disclosure policy.