Welcome to the Apache Corporation first quarter earning 2008 conference call. (Operator Instructions) At this time for opening remarks and introductions I’d like to turn the program over to Bob Dye, Vice President of Investor Relations.

This morning Apache Corporation released first quarter 2008 results which totaled net income of $1.02 billion or $3.03 per diluted share. Consistent with prior quarters we also provided adjusted non-GAAP net income for the first quarter that is $2.99 per diluted share with the adjustment primarily related to foreign currency fluctuations on deferred tax balances. Today’s discussion may contain forward-looking estimates and assumptions and no assurance can be given that those expectations will be realized. A full disclaimer is located on our website. In addition, any non-GAAP number that we discuss such as adjusted earnings cash flow from operations or cost incurred will be identified as such with the reconciliation located on our website located at www.ApacheCorp.com. Steve Farris our CEO and Roger Plank our CFO will now make prepared remarks prior to taking questions. With that, I’ll turn the call over to Steve.

Thank you for joining us for Apache’s first quarter earnings conference call. The first quarter was highlighted by our solid financial results. Some excellent explorations success and continued progress in delivering and expanding our major pipeline of visible growth projects. Our financial results were excellent as we clipped $3.00 per share for the second consecutive quarter and our $1 billion of earnings was driven by $1.84 billion of cash from operations for the quarter. Roger is going to cover the financial results in more detail and I thought I’d go in to some of the operating highlights. We told you at the beginning of the year that 2008 would encompass the largest exploration program in our history in terms of resource exposure and I could not be more pleased with our results so far. We’ve made five important discoveries during the first quarter including Brulimar-1, Julimar Southeast-1, the Haylard-1 all in Australia, the Hydra-1X in Egypt and three wells in our Muskwa Shale play in British Columbia Canada. In addition today we announced the positive results of our Julimar Northwest appraisal well offsetting our Julimar discovery in Australia. I’ll go over the developments on a regional basis in a few minutes but let me summarize up front our achievements for the first quarter of updated Apache’s future growth profile. We began the year with a pipeline of six major projects scheduled to begin production between the latter part of this year and 2012 which should contribute about 120,000 barrels of oil equivalent per day of new production to Apache. During the first quarter we had updated this profile in really three main ways. First, we added a seventh development project to our inventory, a new 100 million a day gas plant in Egypt which expected should be online by mid…

Steve talked about our exploration results and our future growth profile so I thought I’d start by looking back on how far we’ve come financially and how large the numbers have grown from just a year ago. First quarter a year ago our revenues were $2 billion. This year they’ve crossed $3 billion. Oil revenue alone climbed $1 billion to $2.1 billion and comprised over two thirds of our total revenue from just half our production which really speaks to the benefit of our uniquely balanced production mix. Margins reached record levels. Of our $3 billion of revenue over 30% made it to the bottom line. Obviously a $33 per barrel increase in our oil realizations over a year ago significantly benefited the first quarter but that’s really only part of the story. Oil production climbed 30,000 barrels a day to 261,000 barrels driving our 4% growth and equivalent daily production first quarter to first quarter. The combination of unprecedented oil prices and higher oil production were the primary drivers behind our earnings doubling from a year ago. Excluding the impact of foreign currency fluctuations on deferred tax balances Apache earned a record $1.1 billion or $2.99 a share which is twice the $1.48 adjusted amount we earned a year ago. When you earn half a billion more on essentially the same number of shares outstanding returns become very robust. First quarter annualized return on capital employed was 22%. Return on equity was 26%. Cash flow was also robust up by just over half to $1.84 billion for the quarter. I just thought that this information might be useful perspective on our progress before I swamped you with detailed comparisons of first quarter versus the fourth quarter which I will now go through. Oil and gas revenues rose 6% of…

(Operator Instructions) Your first question comes from Tom Gardner – Simmons & Co. Int’l. Tom Gardner – Simmons & Co. Int’l: Steve, you’re spinning off a lot of free cash flow here driving down sort of our models debt to cap, what level are you most comfortable with and how you see deploying that free cash flow in the near future?

Well, the first quarter we had about $300 million worth of sales included in that cash line that I think you see on our abbreviated balance sheet so it’s not quite as large. The other thing I would say which I say constantly and periodically is that we allocate capital quarterly and we are very active right now. I would tell you with respect to production we expect the first quarter to be the lowest quarter of the year and we have a very active program going on in a number of places. We’ve got the Salam gas plants coming on fourth quarter. But, I think we’re going to have to go through the year and see what our capital program is and also if these prices hold. We’ve lost about $9 a barrel in the last three or four days on the oil price, it’s pretty volatile out there right now. Tom Gardner – Simmons & Co. Int’l: Just kind of related to then your growth strategy, with these higher commodity prices we’ve heard some of the majors express regrets over certain investments, I think Forties field was mentioned specifically by one. What is the outlook for large scale unsolicited acquisitions? I mean, are you seeing the opportunity there?

We never plan for acquisitions because they’re events not really a strategy. Having said that, we are a very inquisitive company and we have been since inception and we constantly look for things from a well in west Texas that’s on the Internet that somebody is selling to larger acquisitions. I will tell you this, in all honestly we are beginning to see that market loosen up a little bit and we don’t have anything we’re doing right now nor do we have anything even on our horizon. But, if you’re in the market you begin to see, certainly not from the big three right now but certainly there are starting to be properties that are out there that are for sale. The real question is can you find something that’s in an area that you like.

I think part of that is this credit crunch, to those with strong balance sheets is perhaps a bit of a benefit. Those who don’t have strong balance sheets are seeing the cost of their borrowing go up significantly or aren’t able to borrow further funds so as credit gets tight the remaining resort for some is to sell properties. So, we’re starting to see a little more of that kind of thing. Tom Gardner – Simmons & Co. Int’l: One other question I had just given your success in the shale in Canada are you looking at other unconventional resource acquisition opportunities in the lower 48 or perhaps outside North America all together?

We’re in an opportunity business. Certainly, we don’t have any stealth plays out there that we are ready to announce but this business is a business of opportunity and we continue to look for it. We have a new ventures group that whether it’s in Canada, Argentina or anywhere else in the world we continue to look for opportunities. Interestingly, we’re looking at a shale in Argentina right now.

Your next question comes from Jeffrey P. Hayden – Pritchard Capital Partners. Jeffrey P. Hayden – Pritchard Capital Partners: Just wondering if you could touch on your activities in the Gippsland Basin so far and what the expectations are for kind of the future drilling activity out there?

In fact Raymond and I and one of our directors just got back from Australia and spent a week in our office there. We’ve drilled pre-dry holes with a jack up, none of which were of the size of the wells that we’re going to drill later this year in what’s called Block-59 which is by far the highest potential in that area. They’re very dissimilar with respect to prospect geological traps and I’ll be real honest with you, they’re exploration wells but I’m tremendously high on the first three we’re going to drill. We really have the potential to find a large amount of oil. Jeffrey P. Hayden – Pritchard Capital Partners: What’s kind of the timing on those three wells?

We expect to get a rig in July, later part of July, a floater that we have contracted and it depends on whether or not the current contract person that has the rig drills an option well or not. It will either be July, or probably if it’s not in July then it will be in September because they’ll drill one more well.

Your next question comes from Brian Singer – Goldman Sachs. Brian Singer – Goldman Sachs: Could you talk a little bit more on the Western Australia side, timing of various gas price contracts? And additionally how you see any exploration that you’re doing nearby anything against the infrastructure that could come on over the next couple of years? Could you give us an update there?

In terms of where we are frankly I would think we are very, very near to announcing the contract that we’ve been talking about now since the turn of this year. I would expect that to happen in May. I may be wrong but I think we’re down to a point where it’s nit and nats. In terms of projects that we have in front of us, we just announced the Haylard well that is actually a discovery that could come through our [Veranus] Island very easily, it’s about 20 miles north of an oil field that we have that was depleted that will bring the pipeline back through what’s called East Spar. The name is not as important as we could get that on in 18 months. Later in the year we’re also drilling a well called Rosella, a well that we drilled later last year that actually had quite a bit of gas in it and we expect to be able to get that drilled later this year but it is hat is very close to the John Brookes Field and also East Spar so both of those discoveries or potential discoveries could come back to our island. We’re upgrading our island to add about 100 million a day of capacity to come out of there from compressors so we will have some potential there. We’re also drilling a well called Marley which is directly north of [Veranus] Island that we would just tie back to one of our platforms off of [Veranus] Island and bring back through. We’ve got two or three shots to be able to do that. Brian Singer – Goldman Sachs: On the Egypt front with the third processing facility now approved at what point does that give you the ability or willingness in going to the Egyptian government and potentially trying to negotiate higher gas price terms?

You must be visionary. We should be in front of the Egyptians the first part of next week. Brian Singer – Goldman Sachs: Any initial thoughts on the timing of that process?

I don’t know but we are going to make them a proposal. We will see how receptive that is.

Our next question comes from David Tameron – Wachovia Capital Markets. David Tameron – Wachovia Capital Markets: Could you talk a little bit more about Argentina? You mentioned briefly some of the pipeline issues. Can you give us a little more detail there?

The situation is, is that Tierra del Fuego obviously an island on the very tip of the pipeline is 550 miles long and it goes up to Buenos Aires and what has happened recently, like over the last three or four months, is that Chevron and Petrobras are on the mainland and they are actually over-injecting gas into that pipeline which basically makes the line pressure so high that you can’t get gas into it. When I was down there about a month ago we talked to the Governor of the Province of Tierra del Fuego about the fact that the Province was losing royalties and also losing price in terms of being able to get their gas in that pipe. We have seen a little relief in the last three or four weeks. In fact we got some indication that Tierra del Fuego was going to be able to back Chevron and Petrobras out, but that’s a little bit of a wait and see game. We could come back and stay where we are or we could see Chevron and Petrobras that had big fields on the mainland continue to over-inject and honestly I wish we could solve that problem. This is not a well issue, it’s purely a restriction issue. David Tameron – Wachovia Capital Markets: It sounds like there’s no definitive timeline on the back end to get this resolved? It’s a wait and see, like you said?

The real answer to this, and I don’t know if you follow what’s going on down there, they’re increasing the capacity of that line that’s supposed to be done by the middle of 2009 by 250 million a day and then they have a longer term project to bring the capacity of that line up to 500 million a day. We can find a lot of gas in Tierra del Fuego and there’s a tremendous need for gas, especially in the Buenos Aires area. That is the longer term solution. The shorter term solution was we could we put some additional compression. The other thing we have considered is doing another LPG plant down there where we re-inject gas and take the liquids off the additional gas. I will tell you we are exploring the alternatives for it. The only thing I would say is this is an island issue. Total is significantly constrained also. David Tameron – Wachovia Capital Markets: The move into Australia, can you talk about the Northwest well that you announced, Northwest Number One, you mentioned in the press release communication with, I think it was Julimar East or Julimar One?

It’s both, Julimar One and Julimar East. David Tameron – Wachovia Capital Markets: I think those wells you mentioned were four or five miles away, how big do you think this can be and can you talk about the relevance of the communication there?

In terms of the overall clock we’re going to drill a well called Grange starting pretty quickly that’s in the Groban between our Julimar discovery and also the Julimar well. It has a lot of merit to it. In terms of the overall accumulation we definitely believe that it has very good potential to be the 2 to 4 TCF of gas. David Tameron – Wachovia Capital Markets: You had previously mentioned 1 to 2, so I’m just trying to figure out.

We drilled more wells and I will tell you the other thing is that we’re using obviously amplitude, seismic conversion. We have drilled six out of seven discoveries, the one well that was not a discovery did not have the attributes. We were drilling really for a deeper sand so we’re basically six out of six for amplitudes off of our seismic conversions. We feel very comfortable with our geologic picture. David Tameron – Wachovia Capital Markets: Any update on pricing in Australia from what you’ve said prior quarter?

I will tell you the pricing is definitely on the rise. I don’t know if you’ve seen any of our presentations. Certainly in the past we’ve gotten from $1 to $2 and I think we’re a little bit higher than that right now. We’re looking at North of $6 for gas now from spot sales, from short term contracts in the five year range, we’re looking for significant price increase there. Hopefully we’ll be able to announce this contract in the near future and it will give you some indication of the pricing.

Your next question comes from David Heikkinen – Tudor, Pickering, Holt. David Heikkinen – Tudor, Pickering, Holt & Co., LLC: First one follow up question on the Australian TDF pipeline, what’s the current capacity of that line? You said you had increased it.

Argentina. I think TDF takes about 500 million a day. David Heikkinen – Tudor, Pickering, Holt & Co., LLC: So it’s going to double in capacity?

Through 2007 they’re supposed to upgrade it by 250 million a day by the middle of 2009. David Heikkinen – Tudor, Pickering, Holt & Co., LLC: As you think about that expansion what percentage of the expansion would go for Apache and what would go for Total?

We’re in the throes of discussing that. We obviously would like to have gas on that system. David Heikkinen – Tudor, Pickering, Holt & Co., LLC: Switching to another pipe and plant, up at Ootla, the missile plant, what is the gas plant capacity there?

Right now if we put a compressor on it we could do about 50 million a day out of that plant. We will have to put more infrastructure in to get higher there. I don’t know if any of you read that we have a new partner in our Ootla area, Exxon announced that they had bought 115,000 acres in the Horn River play since September. David Heikkinen – Tudor, Pickering, Holt & Co., LLC: As you think about plant capacity in the area are there are any other companies that are actually producing oils into a plan and getting sustained production history from the wells that you know of?

[Nexun] is just getting ready to start.

John Crum is sitting here with us. He runs our Canadian region. He said there’s no one on yet but [Nexun] is just getting ready to put some of their wells in.

[Inaudible] later this year.

EOG has announced that sometime in June they’re going to put some gas. David Heikkinen – Tudor, Pickering, Holt & Co., LLC: At year end you’ll have at least Apache and potentially [Nexun] and EOG will be able to give a lot more details as far as productivity or at least the potential to give a lot more details as far as productivity from Canadian shale?

You bet. The other thing I would tell you is early results from not only the tests but early results of our, because we are producing gas, are favorable. We feel good about what we’re seeing.

We’ll go now to Ben Dell – Bernstein. Ben Dell – Bernstein: I had a quick question around the gas model because in general you’ve obviously gone off the natural gas in regions where prices are depressed, when you look around the world at areas like Libya or Algeria even Russia do any of those appeal to you as next places to go?

I don’t imagine anybody would let us in Russia any more. We continue to look and honestly we looked at Libya early on during the first bid round and that was a very difficult bid round and I don’t know that it’s gotten a tremendous amount better in terms of what your takes are. The new ventures group that I alluded to earlier doesn’t just look for shale plays in the United States or North America. It’s a game of opportunity and we’re looking for opportunities that other people haven’t seen or early stages.

You may well be aware but we got intrigued with the upside of Tierra del Fuego and even when we were looking at the first acquisition there, the guys noticed basically right down the middle is the border so obviously what we saw on the Argentine side probably didn’t stop just because the man-made border is there. That’s what led to our bidding on and getting 1 million net acres on the other side where pricing seems to be better and the price regulations aren’t in place. While that’s a ways off and about all we’ll do is we’ll focus on a shoot seismic. If that does have the kind of potential that exists on the Argentine side that’s right up our alley. We’re already there, we can run it out of the same office and it’s got interesting potential.

We have now officially signed those concession agreements. We should be moving a seismic crew in there in June and hopefully with any luck we’ll have a well drilled by the end of the year. Ben Dell – Bernstein: Just following up on that in South America there’s been some talk out of Brazil that domestic gas consumption is growing up 20% per annum, do you see any indications from the Brazilians that they’re willing to open up just for the shallower or shelf areas or onshore for their [inaudible] participants to come in especially looking for gas?

They talk about being open for business but the fact of the matter is it’s very difficult to get concessions in those areas away from Petrobras.

Your next question comes from Gil Yang – Cit Investment Research. Gil Yang – Cit Investment Research: Steve, can you talk about in Argentina going back there for a moment, did the reduced volumes contribute to the higher prices in the region because you were able to sell less of the lower priced residential gas?

It may be a couple of cents but not really. What we’ve really seen over the last 12 months is we continue to see prices increase in terms of industrial volumes and also in terms of people knocking on their door and wanting gas. There is a move right now actually by the unions and [Donic] and to get together with the producers and demand higher gas prices because the fact of the matter is they see the same problem. They see shrinking investment which means something happening to their jobs. In fact we just met with them last week. In all of these areas, and I will tell you, the one thing people hopefully understand about is look at quarter-to-quarter but we are more of a long term player. I feel very good about gas production and oil production going throughout the year and I feel very good about gas prices in Argentina. I think you’ll see it. Will we have some hiccups? Sure we will. Gil Yang – Cit Investment Research: I was just under the impression that a good chunk of the price increase in the last couple quarters was more due to a mix effect than actual prices rising. Or you were just getting more high price gas.

I think what you’re seeing is not just a mix. Definitely [Donic] is a higher price because number one you have more markets there, you can get the gas there easier so you have the potential of finding different markets. In terms of the overall gas price in Argentina it is definitely creeping up and I wouldn’t be surprised if it jumped up here in the next 12 months.

I think that’s all exactly right. The one thing Gill that maybe you’ve got in the back of your mind is they’re just coming out of their summer months and everything is upside down in Argentina. You go in to the winter, that’s when the greatest call is on low fixed price gas for residential use so there is in effect a winter to summer effect that you’re probably seeing in our higher realizations but we haven’t seen these realizations I don’t think this decade. So, what’s Steve is talking about is the primary driver. Gil Yang – Cit Investment Research: So then as we go in to the winter, their winter, do you think that your average price may drop temporarily?

I think that’s going to be a factor.

You bet it will.

But I don’t think it’s going back to yesterday’s levels. Gil Yang – Cit Investment Research: Just backing off from a more macro perspective, I know that you don’t typically do a lot of hedging but given that oil was at $120 a few days ago, it’s back up quite a bit, have you given any thought to locking in some prices here?

We should have done that a couple of days ago. I think Roger alluded to the fact that we have 20% debt. I think we certainly have plenty of cash flow to fuel the opportunities that we have in front of us so that’s somewhat our hedge frankly.

That would conclude our question and answer session.

Thanks for joining us. I know you’ve had a gazillion call today but if any of you have any follow up questions feel free to give me a call after we’re done here. Thank you very much.