2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 456 Our Approach to Pay Our approach to compensation takes into account external market and internal parity concerns as well as recruitment, retention, and long-term performance goals, which drive shareholder value. Our Compensation Philosophy Our executive compensation philosophy is to design compensation programs that: ✓ Attract, retain, and reward top talent; ✓ Align our executives’ interests with those of our shareholders by paying for performance; and ✓ Provide a substantial portion of our compensation in long-term equity-based compensation to reward performance over the long-term and align the compensation of our top executives with the shareholder experience. Peer Groups and Data Peer group data contributes to our external market parity, recruitment, retention, and performance analysis. To assemble the right peer group, our MD&C Committee uses ten criteria, ranked in the following order: Industry : companies with our 6-digit GICS code (101020 – Oil, Gas and Consumable Fuels) Market Capitalization : companies +/-2.5x Apache’s market cap Revenues : companies +/-2.5x Apache’s revenues Assets : companies +/-2.5x Apache’s assets United States headquarters Compete with Apache for talent List Apache as a peer in their 2017 proxy statement List a peer of Apache as a peer in their 2017 proxy statement Considered an Apache peer by Institutional Shareholder Services Considered an Apache peer by Glass Lewis The MD&C Committee believes that, in combination, the above criteria generate a tailored peer group that reflects the size and complexity of Apache’s business, as well as the labor market in which we compete for talent. Of the 11 companies included in Apache’s 2017 peer group, seven met all criteria and the remaining four met at least six of the criteria. Anadarko Petroleum Corporation Chesapeake Energy Corporation ConocoPhillips Devon Energy Corporation EOG Resources, Inc. Hess Corporation Marathon Oil Company Murphy Oil Corporation Noble Energy, Inc. Occidental Petroleum Corporation Pioneer Natural Resources Company APA Peer Median Peer Median Peer Median APA APA $19.4 $17.3 $4.9 $7.0 $23.1 $26.8 Tight Alignment with Peer Median Market Cap ($B) Revenue ($B) Assets ($B) Chart includes data reviewed bythe MD&C Committee when confirming Apache’s peer group for 2017. Specifically, the chart reflects Apache’s and, with respect to the peer group, the peer group’s median (the “Peer Median”) (i) average market capitalization over the 12 months ended November 15, 2016, (ii) aggregate revenue as reported in the Exchange Act reports filed during the 12 months ended November 15, 2016, and (iii) assets as reported in the most recent Exchange Act report filed on or before November 15, 2016. We also relied on this peer group for the relative TSR measurement within our 2017 Performance Share program. In addition to the data gathered from the peers above, we use (i) the most recent compensation data provided by our Consultant (defined below), (ii) industry size-based surveys, and (iii) our own labor market data. In reviewing the 2018 peer group, and after considering all of the inputs described above, the MD&C Committee has determined that the 2017 peer group remains appropriate and will be used for 2018. 40 APACHE CORPORATION - 2018 Proxy Statement APACHE CORPORATION