Good afternoon. My name is Brandi, and I will be your conference operator today. At this time, I would like to welcome everyone to the second quarter 2016 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I would now like to turn the conference over to Mr. Gary Clark, Vice President of Investor Relations. Please go ahead, sir.

Good afternoon and thank you for joining us on Apache Corporation's second quarter of 2016 financial and operational results conference call. Speakers making prepared remarks on today's call will be Apache CEO and President John Christmann and Executive Vice President CFO Steve Riney. Also joining us in the room is Tim Sullivan, Executive Vice President of Operations. In conjunction with this morning's press release, I hope you have had the opportunity to review our second quarter financial and operational supplement. As discussed in our press release yesterday, Apache announced that during the second quarter of 2016, the company voluntarily changed its method of accounting for oil and gas exploration and development activities from the full cost to the successful efforts method. All numbers discussed today will be stated under successful efforts unless otherwise noted. Please note the following documents will be available after the close of business today: our second quarter 10-Q filing; Form 8-K filings that include certain financial information from Apache's 2015 Form 10-K and first quarter 2016 Form 10-Q recast to reflect the retrospective application of the successful efforts method; and a successful efforts conversion PDF presentation which contains additional detailed information regarding the impact of this accounting change. Please reference our Investor Relations website at investor.apachecorp.com to access these documents. I'd like to remind everyone that today's discussions will contain forward-looking estimates and assumptions based on our current views and reasonable expectations. However, a number of factors could cause actual results to differ materially from what we discuss today. A full disclaimer is located with the supplemental data on our website. I will now turn the call over to John. John J. Christmann - President, Chief Executive Officer & Director: Good afternoon and thank you for joining us. Apache continues to make great progress in all…

Our first question comes from the line of Pearce Hammond with Simmons Piper Jaffray.

Thank you for taking my questions. John, on hedging, what are your latest thoughts there? John J. Christmann - President, Chief Executive Officer & Director: Pierce, we came into this downturn unhedged. And our best hedge was being able to reduce our activity levels, which we've done. We feel like we're living within cash flow. We're going to approach forward-looking prices in terms of budgeting around a band and then giving ourselves flexibility when prices range above that. So the plan at this point is we don't have a lot of plans for hedging. We want the exposure. And I think the big key has been we're making long-term decisions and long-term investments, and we need to be gearing our cost structure and overhead structure and investment criteria to where those prices are. We'll budget conservatively and then reap the benefits when things are above it.

Great. And then my follow-up is what are you doing differently with the Blue Jay well, the very strong well results there? Is there anything specific that you're doing differently now versus, say, a few months ago? John J. Christmann - President, Chief Executive Officer & Director: I think it's just the culmination of the technical work that we've been doing in the area with specific targeting. We now have three zones in the Third Bone in that area. We've really gone in and I'll say specialized our completions. We're learning which zones, where we want to complete with all of the changes there. But it's just really the evolution of the process and the continuous improvement that we seek in every well we drill.

Our next question comes from the line of David Tameron with Wells Fargo.

Good morning – or I guess it's afternoon. John, when you start thinking about 2017 and assume a higher price deck, I'll just call it whatever, call it $50 – $55, how should we think about the Permian as far as allocation? I know that number bumped up a little bit this quarter, thinking about 2016. So how do you think about Permian allocations, and where would those rigs be focused within the Permian? John J. Christmann - President, Chief Executive Officer & Director: At this point, we geared 2016 at $35. And at that level, we were not making very many development drilling choices in North America. You see with the little shift in capital, North America is getting the lion's share of that. The lion's share of that is going into our Permian operations. Clearly, at those types of price levels, Dave, we'd be looking at significant higher levels of investment. We're running a bunch of scenarios as we start to think about 2017. We'll come out with more color and more guidance like we typically do when we look at the fourth quarter call of this year as we start to think about 2017.

Okay, and then let me follow up with the North Sea. You're talking about keeping two operated rigs – or platform rigs out there. Can you talk about what that looks like over the next six months? John J. Christmann - President, Chief Executive Officer & Director: It shows you that first and foremost, we're able to add a couple of platform rigs back into our plan in the North Sea. And truthfully, if you look at our international CapEx, it's going to be down from where we started initially the year, which is due to the efficiencies. So it shows you the progress we've been making on the international front as well. We felt like maintaining those two rigs is critical. We've got a lot of workovers and a lot of high-return projects that we can pursue, and it's not a lot of capital added back in for the back half of the year. So they compete very, very well, and a lot of low-hanging fruit that we'll go after.

Our next question comes from the line of John Herrlin with Société Générale.

Yes, hi. Thank you. John, in your prepared comments, you mentioned that your employees can support a much higher level of activity. Could you give us a sense of how high is high? John J. Christmann - President, Chief Executive Officer & Director: John, the one thing we didn't want to do, we reduced our staff about 30% in 2015. And quite frankly, I think when we look at us today, we've got the ability to ramp up internally significantly from where we sit today. I think we could probably handle a $60 – $65 deck pretty easily. So we tried really hard. We've got a lot of employees we've made significant investments in, and we were very methodical and forward-thinking in terms of our staffing levels. So I feel really good about our internal head count. That's the one area we didn't want to get too aggressive and try to gear it to this lower side of the – the lower end of the price environment.

Okay. Thanks. My next one for me is on Suriname. I couldn't quite hear you. You shot seismic on Block 53 or Block 58? John J. Christmann - President, Chief Executive Officer & Director: We've got two blocks there. Block 53 we own 45% of. That seismic was shot prior. We have gone and we drilled a well last year and have gone in and fully evaluated that. We have a handful of prospects we're looking at. We have contracted a rig and anticipate drilling a well on Block 53 in very early 2017. Block 58, we are currently shooting seismic there now, and we own that block 100%.

Our next question comes from the line of Brian Singer with Goldman Sachs. Brian Singer - Goldman Sachs & Co.: Thank you, good afternoon. As you begin to ramp up CapEx a bit, you talked about the incremental going a little bit more for strategic testing versus development. Can you talk about how long the period would be where you'd be more focused on strategic testing versus development based on the inventory or opportunity to do those strategic tests? Or what oil price would you need to see where you would allocate meaningfully more capital towards the development side of the equation? John J. Christmann - President, Chief Executive Officer & Director: I think the important thing, Brian, is we've got a lot of opportunity in our acreage position that we're excited about, and we have a lot of key wells that we want to drill. We want to get some of those wells drilled because knowing those results and those things will impact how you grade out your capital in the future, which projects you pursue, and also it comes into how you address the portfolio. So there's a lot of things out there. And quite frankly, we took a very balanced approach this year. We took a conservative approach. We budgeted $35. We scaled back significantly. That just slows down the rate at which we're moving through some things that are pretty important to us. Clearly, with prices averaging in the second quarter above $35, it's given us some cash flow. You see we put a rig out last month in the Midland Basin, which will be drilling some Midland Basin, Wolfcamp, and Lower Spraberry shale wells. So we're excited about that, and clearly we've got some areas where we're doing some additional testing. And I think we'll…

Our next question comes from the line of John Freeman with Raymond James. John A. Freeman - Raymond James & Associates, Inc.: Good afternoon. When I'm thinking about the CapEx budget and through the new conversation on the higher end, can I still think about that when I'm looking at the implied oil price? Is it still okay to just say roughly, on an annualized basis, $400 million of incremental cash flow for every $5 improvement in the oil price? John J. Christmann - President, Chief Executive Officer & Director: I think that's a pretty good number annualized. John A. Freeman - Raymond James & Associates, Inc.: Okay, and then just one quick one. On the North Sea, last quarter you all had a good bit of the third-party plant and some pipeline outages, and I'm just curious. Did all of that get resolved, or did any of that spill into this quarter? John J. Christmann - President, Chief Executive Officer & Director: I think we had a little bit. It was better this quarter. But I think we planned for a little bit more than in years past, but it's much better today.

Our next question comes from the line of Evan Calio with Morgan Stanley. Evan Calio - Morgan Stanley & Co. LLC: Good afternoon, guys. My first question is a follow-up to Brian's macro question. John, you've been constructive on the oil outlook since February, and now you've begun a modest acceleration. So as it relates to Apache, what are your early thoughts on 2017 volumes on a low $50 oil price? And are you ready to join the emerging, growing low $50s club that seems to be emerging from earnings? And I guess secondly, given the tremendous costs and sequential improvements, any thoughts on what that means for your commodity outlook that have been pretty constructive since they've been pretty accurate as well? John J. Christmann - President, Chief Executive Officer & Director: The first thing I would say is we're going to be a member of the returns club, is the club we want to be focused in and focused on full cycle, full cost, fully burdened returns. And that's the club we're focused in. I think above $45 this year, you would have seen our volumes grow and been able to do that. So as I think about joining a $50 club, we probably already were in the $50 club. So we just haven't planned accordingly. We budgeted $35 this year, and you've seen us let a little bit of capital out. So I think the market today is more constructive than it's been, both on oil and natural gas. I think it got a little bit ahead of itself here in the last few months, and we've seen it come back as we went back and touched $40. I think we'll see what kind of price band we look at as we get into 2017. I don't…

Our next question comes from the line of Edward Westlake with Credit Suisse. Edward G. Westlake - Credit Suisse Securities (USA) LLC (Broker): Good afternoon. I guess you've allocated more capital to the Permian, and obviously that brings into question I guess non-core assets. You've got $7 billion of net debt, which could still be viewed as a bit high in a volatile oil price environment. So maybe talk through about disposals or the plans for Canada, the Mid-Continent, and the Gulf, an area which has not gotten as much capital together. John J. Christmann - President, Chief Executive Officer & Director: I think right now we've been working on North American cost structure. And I'm thankful that we're not in the position that we're wholesale selling assets and that over the last 12 months in this low price environment. We moved some conventional assets in late 2014 when prices were high. We moved some South Louisiana assets in late 2014 when prices were high. We moved our LNG on a high price deck. So I feel real good about what we were able to sell. I think as we look at the portfolio, and it will continue to evolve. And as we continue to assess our inventory and look at that, we'll address some of those decisions over the next 24 months in the future. But I don't see right now is a time that you want to be trying to just sell assets and bring forward cash when we're not in a period where we're outspending or wanting to spend more and drive a lot of development in this low price environment either. But clearly, over the next 24 months, we'll continue to assess what the portfolio looks like and where we will be making those types of…

Our next question comes from the line of Doug Leggate with Bank of America Merrill Lynch.

Thanks, good afternoon. Stephen, I wonder if I could throw you another bone. The LOE guidance, clearly tremendous cost progress you guys have made. How much of that would you say is going to be kept by Apache, assuming oil prices do go back up? I guess we're hearing the service companies are starting to chat a little bit about them needing some relief to some extent. Stephen J. Riney - Chief Financial Officer & Executive Vice President: Thanks, Doug. We feel like the vast majority of our cost reductions, not just in LOE, but on the capital side and on the expense side, we feel like the vast majority of those are going to be cost reductions that we can retain. Sure, if oil prices go back up, when they go back up, there will be some pressures in some places. I'm sure John will want to weigh in on this question as well. But we feel like a lot of the actions that we've taken are really what we would call self-help type of things, changing the way we work, changing the way we do things, and both on the capital side and on the expense side. These are things that are not dependent upon the pricing from third parties. They're things that we do and the way that we work, and we feel like the vast majority of those are permanent. And a significant amount of these cost reductions have come in the onshore North America and in particular in the Permian Basin. John J. Christmann - President, Chief Executive Officer & Director: And the only thing I would add, Doug, is just a lot to our field folks. What we've got is workforce out there that's taken on the burden of doing things themselves, things that they might have contracted in the past, and it's that old Apache hard-core, low-cost mentality, where everybody realizes they can pitch in and save a few dollars here, and it adds up. And it's that mindset that I think that you've seen really come through in 2016.

John, my follow up, if I may, is it seems from your prepared remarks that you're making some pretty good progress in your strategic review in terms of the initiatives and so on. Can you give us some idea where you stand then in terms of what you think is the identified inventory? Because clearly, you have a very large footprint, and I'm guessing that there's room for another portfolio high-grading exercise in North America somewhere down the line. If you could just give us some color on that, that would be great. John J. Christmann - President, Chief Executive Officer & Director: I think the color we'll give you is we've been busy, and we're going to continue to be busy. We've had to go through a total reset in the business over the last 18 months. And the good news is we've made progress in all aspects of our portfolio. From Canada to our Mid-Continent to our Eagle Ford to our Permian, we've made progress in all of our projects, and we have a deep inventory. We also have a lot of key things that we're testing, which obviously could change the pecking order things. So we're working through all those things, Doug. I think as we start to make some decisions and conclude some of the testing and things that we're doing and start to talk about some of that, I think then that leads to what some of the follow-ons might be after that. But I'm excited about the progress that we're making across the entire portfolio and that all of our areas are doing a fantastic job. And we've got a lot of things that look very attractive with where prices are today and where cost structure has moved today.

Our next question comes from the line of Charles Meade with Johnson Rice & Company. Charles A. Meade - Johnson Rice & Co. LLC: Good afternoon, John, and to the rest of your team there. I'd like to drill in a little bit more on your Midland Basin program, where you're putting that rig back to work, or where you've recently put that rig back to work. Could you talk a little bit about, in your prepared comments, you mentioned the CC 4144 East 2HM well that came on at 2,200 BOE a day. Could you talk about, is that also in the Powell-Miller area, and was it also a 5,000-foot lateral, or was it a longer lateral? Timothy J. Sullivan - Executive Vice President – Operations Support: Charles, this is Tim Sullivan. That well was in the Powell field. It is a little bit longer. It's about a mile and a half lateral, and it's currently flowing at a rate of about 2,000 barrels a day and about 1,800 MCF per day as well. And in regard to the activity for that additional rig, second half activity in Midland will consist probably of about 17 wells, primarily focusing in the Wolfcamp and the Lower Spraberry shale. And where we will be drilling, again strategic testing in our three main fields at Wildfire, Azalea, and at Powell. And that should keep that rig busy for the remainder of 2016. John J. Christmann - President, Chief Executive Officer & Director: The thing I'd add to that, Charles, is we've been busy doing some swaps and some things too that have really cored up that acreage neutral, but have cored up our position where we really can drill more longer laterals now and less the shorter laterals. That's another thing that some of the progress that we've made while we haven't had rigs in the field. Charles A. Meade - Johnson Rice & Co. LLC: Got it. And, John, that actually gets to where I was going to go with my follow-up. Should we expect more longer laterals? It sounds like yes. And are you also still testing your individual landing zones within those formations, or do you think that you've pretty much figured out where you want to go there and you're more testing completion concepts at this point? Can you give us a sense? John J. Christmann - President, Chief Executive Officer & Director: The answer to the first question is yes. You can anticipate longer laterals. That's one of the things we've been working on in our Midland basin portfolio. And then secondly, we're making progress, but there will still be some testing with this rig and some of these concepts. We've got a pretty good idea we'll be working some spacing tests as well as the zones and how you stack those zones across a section. And so we'll never stop testing.

Ladies and gentlemen, we have reached the end of our allotted time for today. Presenters, did you have any closing remarks?

Yes, this is Gary Clark. For those of you that did not have an opportunity to ask a question, please feel free to follow up with myself or my team, and we'll be happy to get back and answer any remaining questions you have. Thank you all for joining us today and we'll talk to you next quarter.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.