--Issuer Default Rating (IDR) to 'A-' from 'A';

--Senior unsecured credit facility to 'A-' from 'A';

--Senior unsecured notes to 'A-' from 'A';

--Preferred to 'BBB+' from 'A-';

--Commercial paper to 'F2' from 'F1';

--Short-term IDR to 'F2' from 'F1'.

The Outlook was revised to Stable from Negative.

Approximately $4.97 billion in debt is affected by this rating action. Apache's ratings reflect the company's significant leverage to oil; solid operational metrics; diversified portfolio of upstream properties; and long track record of strong organic reserve and production growth.

Ratings downsides for Apache center on steady increases in the company's absolute debt levels over the last several quarters; the cash flow stresses created by the recent collapse in commodity prices; and the potential for increased event risk for Apache bondholders given the backdrop of very low natural gas prices and the financial distress those prices are expected to create for potential acquisition targets, especially in the U.S. gas sector.

Higher debt levels have eroded key debt metrics monitored by Fitch. Total debt at June 30, 2009 rose to $4.97 billion, more than double the level seen in early 2006. Recent issuances include $800 million in 5- and 10-year notes issued in September of last year, as well as a $350 million secured credit facility to finance the development of the Van Gogh and Pyrenees properties in Western Australia. As calculated by Fitch, Apache's upstream debt metrics on a pro-forma basis at the end of the second quarter (using year-end 2008 reserve data) were $2.07 debt per barrel of oil equivalent (boe) of proven (p1) reserves, $2.88 debt/boe of proven developed (PD) reserves, and $3.98 adjusted debt/boe of proven developed reserves.

Apache continued to perform well on the operational front. In the second quarter, total hydrocarbon production rose by a robust 6.5%, including an 8.5% year-over-year increase in oil volumes. The largest increases were seen in Egypt, while Australia benefited from the restoration of production lost to the Varanus Island explosion and fire in June of last year. Liquids comprised approximately 50% of Apache's production in the second quarter, but were 45% of total proven reserves at year-end 2008.