<PAGE>

                                                                   Exhibit 10.38

                               APACHE CORPORATION
               EQUITY COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
                    AS AMENDED AND RESTATED FEBRUARY 5, 2004

Apache Corporation, a Delaware corporation (the "Company"), established the
Apache Corporation Equity Compensation Plan for Non-Employee Directors (the
"Plan"), effective as of February 9, 1994, for those directors of the Company
who are neither officers nor employees of the Company (the "Directors") and
authorized a maximum of 115,500 shares of the Company's common stock, par value
$1.25 per share (the "Common Stock") for issuance thereunder during the term of
the Plan, which shares consist entirely of treasury stock.

1.       Each Director shall receive automatic and non-discretionary grants of
restricted stock ("Restricted Stock Awards") on the terms and conditions set
forth under the Plan. Each Director receiving a Restricted Stock Award shall
enter into an agreement (a "Restricted Stock Agreement") in such form as the
Board of Directors of the Company (the "Board") or a duly authorized committee
of the Board (the "Committee") shall determine to be consistent with the
provisions of the Plan and which may contain additional terms and conditions
relating to the Restricted Stock Awards. In the event of any inconsistency
between the provisions of the Plan and any Restricted Stock Agreement, the
provisions of the Plan shall govern.

2.       The Committee shall be responsible for the administration of the Plan.
However, the Committee shall have no authority, discretion or power to (i)
select the Directors who will receive Restricted Stock Awards, (ii) determine
the terms of the Restricted Stock Awards to be granted pursuant to the Plan, the
number of shares of Common Stock to be issued thereunder or the time at which
such Restricted Stock Awards are to be granted, (iii) establish the duration and
nature of Restricted Stock Awards, or (iv) alter any other terms or conditions
specified in the Plan, except to administer the Plan in accordance with its
terms or to comport with changes in the Internal Revenue Code, the Employment
Retirement Income Security Act, or the rules and regulations promulgated
thereunder. Subject to the foregoing limitations, the Committee is authorized to
(A) interpret the Plan, (B) prescribe, amend and rescind rules and regulations
relating to the Plan, (C) provide for conditions and assurances deemed necessary
or advisable to protect the interests of the Company, and (D) make all other
determinations necessary or advisable for the administration of the Plan, but
only to the extent not contrary to the express provisions of the Plan. The
Committee's authority shall include, but not be limited to, the right to make
equitable adjustments in the number or kind of shares subject to outstanding
Restricted Stock Awards, or which have been reserved for issuance pursuant to
the Plan but are not then subject to Restricted Stock Awards, to reflect changes
in the number or kind of outstanding shares of Common Stock due to any merger,
recapitalization or other extraordinary or unusual event.

                                       1
<PAGE>

3.       If the Company shall at any time increase or decrease the number of its
outstanding shares of Common Stock or change in any way the rights and
privileges of such shares by means of the payment of a stock dividend or any
other distribution upon such shares payable in Common Stock, or through a stock
split, subdivision, consolidation, combination, reclassification or
recapitalization involving the Common Stock, then in relation to the Common
Stock that is affected by one or more of the above events, the numbers, rights
and privileges of the following shall be increased, decreased or changed in like
manner as if they had been issued and outstanding, fully paid and nonassessable
at the time of such occurrence: (i) the shares of Common Stock which have been
reserved for issuance pursuant to the Plan but are not then subject to
Restricted Stock Awards, and (ii) the shares of Common Stock subject to
outstanding Restricted Stock Awards granted hereunder.

4.       Beginning on July 1, 1994, and on July 1 of each fifth year thereafter
through and including July 1, 2000, each Director shall receive a Restricted
Stock Award of 1,000 shares of Common Stock. Such Restricted Stock Awards shall
vest at the rate of 20 percent per year on each of the first through the fifth
anniversaries of the date of the Restricted Stock Award. No further grants will
be made pursuant to this Section 4 after May 3, 2001.

5.       Beginning on July 1, 2001, and on July 1 of each third year thereafter
through and including July 1, 2003, each Director shall receive a Restricted
Stock Award of 1,000 shares of Common Stock. Such Restricted Stock Awards shall
vest at the rate of one-third (1/3) per year on each of the first through the
third anniversaries of the date of the Restricted Stock Award. No further grants
will be made pursuant to this Section 5 after July 1, 2003.

6.       Beginning on July 1, 2004, and on July 1 of each third year thereafter
through and including July 1, 2009, each Director shall receive a Restricted
Stock Award of 2,310 shares of Common Stock. Such Restricted Stock Awards shall
vest at the rate of one-third (1/3) per year on each of the first through the
third anniversaries of the date of the Restricted Stock Award. Any Director
elected to the Board of Directors subsequent to July 1, 2004 shall receive a
Restricted Stock Award of 2,310 shares of Common Stock on the next July 1
following the date of such election, regardless of whether such date would
normally have been an award date, which shall vest on the same schedule and the
same percentage as set forth in the second sentence hereof.

7.       (a)      No Restricted Stock Awards shall be granted to any Director
subsequent to July 1, 2009. Restricted Stock Awards, whether vested or unvested,
may not be sold, assigned, pledged, hypothecated, transferred or otherwise
disposed of as long as a Director is serving as a member of the Board.

         (b)      All restrictions on Restricted Stock Awards shall lapse on the
first business day following the date on which a Director ceases to be a member
of the Board; provided, however, that the unvested portion of any Restricted
Stock Award shall be automatically forfeited at such time. Notwithstanding the
foregoing, effective as of May 1, 2000, the unvested portion of any Restricted
Stock Award shall be automatically vested upon a Director's retirement from the
Board or upon a Director's death while still serving as a member of the Board;
provided, however, that the Director (i) is at least 60

                                       2
<PAGE>

years of age and has completed at least ten years of service as a Director at
the time of retirement, or (ii) has completed at least ten years of service as a
Director at the time of death.

8. Certificates issued pursuant to Restricted Stock Awards shall be registered
in the name of the recipient Director and shall bear an appropriate restrictive
legend referring to the terms, conditions and restrictions applicable to such
Restricted Stock Award. Certificates issued pursuant to Restricted Stock Awards
shall be held by the Corporate Secretary of the Company until the award, or
portion thereof, has vested and all applicable restrictions thereon shall have
lapsed. As a condition of any Restricted Stock Award, each Director shall have
delivered to the Corporate Secretary of the Company a stock power, endorsed in
blank, relating to the Common Stock issued pursuant to a Restricted Stock Award.
A Director shall have all voting, dividend, liquidation and other rights of a
stockholder of the Company with respect to the shares of Common Stock issued
pursuant to any Restricted Stock Award, notwithstanding that all or a portion of
such award shall be unvested, subject to the restrictions described in the
preceding paragraph.

9. In the event of a "change of control" of the Company, as defined in the
Company's Income Continuance Plan (without regard to whether such Income
Continuance Plan remains in effect or is subsequently amended), any unvested
portion of any Restricted Stock Award shall be vested automatically, without
further action by the Board or the Committee, effective as of the date of such
change of control.

10. The Board may at any time terminate, and from time to time may amend or
modify the Plan; provided, however, that no amendment or modification may become
effective without approval of such amendment or modification by the stockholders
of the Company, if stockholder approval is required to enable the Plan to
satisfy any applicable statutory or regulatory requirements, or if the Company,
on the advice of counsel, determines that stockholder approval is otherwise
necessary or desirable. The Plan is expressly intended to comport with Rule
16b-3(c)(2)(ii) (or any successor provision) as promulgated under the Securities
Exchange Act of 1934, as amended, and any ambiguities in the construction of the
Plan or any Restricted Stock Agreement shall be resolved so as to effectuate
such intent.

Dated: February 5, 2004

                                           APACHE CORPORATION

ATTEST:

By:   /s/ Cheri L. Peper                   By:   /s/ Jeffrey M. Bender
      ----------------------------               -------------------------------
      Cheri L. Peper                             Jeffrey M. Bender
      Corporate Secretary                        Vice President, Human Resources

                                       3