Key Takeaways

• Reported production of 473,000 barrels of oil equivalent (BOE) per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 405,000 BOE per day; 
• Exceeded second-quarter U.S. oil production guidance and raising full-year guidance;
• Expect U.S. oil production to increase 8% from second-quarter 2024 to fourth-quarter 2024;
• Egypt adjusted production exceeded guidance by approximately 5% in the second quarter;
• Closed non-core asset sales of approximately $660 million in net proceeds, consisting of approximately 13,000 BOE per day in first-quarter 2024;
• Returned $135 million of free cash flow to shareholders through dividends and share buybacks in the second quarter; and
• Callon acquisition integration proceeding ahead of schedule; revised annual cost synergies estimate to $250 million, up $100 million from initial estimate.

HOUSTON, July 31, 2024 – APA Corporation (Nasdaq: APA) today announced its financial and operational results for the second quarter of 2024. 

APA reported net income attributable to common stock of $541 million, or $1.46 per diluted share. When adjusted for items that impact the comparability of results, APA’s second-quarter earnings were $434 million, or $1.17 per diluted share. Net cash provided by operating activities was $877 million, and adjusted EBITDAX was $1.6 billion.  

“In the second quarter, we delivered higher-than-expected production across all three operating areas,” said John J. Christmann IV, APA’s chief executive officer. “In the Permian Basin, we had outstanding second-quarter oil production performance and are raising our outlook for the back half of the year after adjusting for asset sales. We also had strong second-quarter performance in Egypt as we benefitted from newly implemented water injection initiatives on our base production and redirected workover rig capacity to opportunities on recompletions and offline volumes. 

“During the first half of the year, our focus was on the smooth integration of the Callon assets and rebalancing our drilling and workover rig programs in Egypt. We made tremendous progress on both fronts and are now poised for a strong second half where we will deliver significant organic oil production growth in the Permian Basin and expect to see a meaningful increase in free cash flow.” 

Second-Quarter summary    

Second-quarter reported production was 473,000 BOE per day, and adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 405,000 BOE per day. U.S. oil production was 139,500 barrels per day, up 67% from first-quarter 2024, driven by the addition of Callon. Despite the impact of asset sales and significant natural gas and NGL curtailments in response to pricing extremes in the Permian Basin, total U.S. volumes on a BOE basis were in line with company guidance for the quarter. 

For the second quarter, APA guided to a net gain on third-party oil and gas purchases and sales of $100 million, and the company generated $132 million. Based on the second-quarter actuals and forward strip pricing, APA is raising its full-year estimate of net gain on third-party oil and gas purchases and sales to $350 million, which is $120 million higher than full-year guidance issued in May.

APA’s second-quarter upstream capital investment of $839 million and G&A of $85 million were considerably below guidance, while upstream lease operating expense was generally in line.
  
Exploration and development update

APA and its partner, TotalEnergies, remain on track in Suriname for FID on Block 58 by year-end 2024 and first oil in 2028. TotalEnergies announced that it has secured a floating production storage and offloading (FPSO) hull for the 200,000 barrel per day development project.

In Alaska, APA and its partners were awarded an additional 51,000 gross acres, bringing the total lease position to 326,000 gross acres entirely situated on state lands. The company is planning more exploration following its high-quality oil discovery at King Street #1.

Capital activity 

For the remainder of 2024, APA plans to average nine to 10 rigs in the Permian Basin and 11 rigs in Egypt. At this activity rate, the company expects full-year capital will be at or below company guidance of $2.7 billion. 

2024 Sustainability Report

The company recently published its 2024 Sustainability Report, which contains its vision of the important role that oil and natural gas play in human progress and a secure energy future, along with an in-depth review of our ESG performance, initiatives and success stories.
 
Conference call

APA will host a conference call to discuss its second-quarter 2024 results at 10 a.m. Central time, Thursday, Aug. 1. The conference call will be webcast from APA’s website at www.apacorp.com and investor.apacorp.com. Following the conference call, a replay will be available for one year on the “Investors” page of the company’s website.

About APA

APA Corporation owns consolidated subsidiaries that explore for and produce oil and natural gas in the United States, Egypt and the United Kingdom and that explore for oil and natural gas offshore Suriname and elsewhere. APA posts announcements, operational updates, investor information and press releases on its website, www.apacorp.com. 

Additional information

Additional information follows, including reconciliations of adjusted earnings, adjusted EBITDAX, upstream capital investment, net debt, cash flows from operations before changes in operating assets and liabilities, and free cash flow (non-GAAP financial measures) to GAAP measures and information regarding adjusted production. APA’s quarterly supplement is available at http://www.apacorp.com/financialdata.

Non-GAAP financial measures

APA’s financial information includes information prepared in conformity with generally accepted accounting principles (GAAP) as well as non-GAAP financial information. It is management’s intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted earnings, adjusted EBITDAX, upstream capital investment, net debt, cash flows from operations before changes in operating assets and liabilities, and free cash flow are non-GAAP measures. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “continues,” “could,” “estimates,” “expects,” “goals,” “guidance,” “may,” “might,” “outlook,” “possibly,” “potential,” “projects,” “prospects,” “should,” “will,” “would,” and similar references to future periods, but the absence of these words does not mean that a statement is not forward-looking. These statements include, but are not limited to, statements about future plans, expectations, and objectives for operations, including statements about our capital plans, drilling plans, production expectations, asset sales, and monetizations. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See “Risk Factors” in APA’s Form 10-K for the year ended December 31, 2023, and in our quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. APA and its subsidiaries undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development or otherwise, except as may be required by law.

Cautionary note to investors

The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SEC's definitions for such terms. APA may use certain terms in this news release, such as "resources," "potential resources," "resource potential," "estimated net reserves," "recoverable reserves," and other similar terms that the SEC guidelines strictly prohibit APA from including in filings with the SEC. Such terms do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality, and other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in APA’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2023 available from APA at www.apacorp.com or by writing APA at: 2000 W. Sam Houston Pkwy S, Ste. 200, Houston, TX 77042 (Attn: Corporate Secretary). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC's website at www.sec.gov. 

Contacts
Investor:    (281) 302-2286    Gary Clark
Media:    (713) 296-7276    Alexandra Franceschi            
Website:    www.apacorp.com

Click here for the full release with quarterly financial statements.

-end-