Key Takeaways

• Generated net cash from operating activities of $1.104 billion, adjusted EBITDAX of $1.690 billion, and free cash flow of $609 million for the quarter; 
• Reported production of 382,000 barrels of oil equivalent (BOE) per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 310,000 BOE per day; 
• Production in the U.S. exceeded expectations, driven by strong performance across the Permian Basin;
• Repurchased 10 million shares of APA common stock during the quarter at an average price of $33.85;
• Announced a doubling of the quarterly dividend to an annualized rate of $1.00 per share;
• Announced first oil discovery on Block 53 offshore Suriname at Baja; and
• Achieved 2022 ESG goal to reduce routine upstream flaring in Egypt by 40%.

HOUSTON, Nov. 2, 2022 – APA Corporation (Nasdaq: APA) today announced its financial and operational results for the third-quarter 2022. 

APA reported net income attributable to common stock of $422 million, or $1.28 per diluted share. When adjusted for items that impact the comparability of results, APA’s third-quarter earnings were $651 million, or $1.97 per diluted share. Net cash provided by operating activities was $1.104 billion, and adjusted EBITDAX was $1.690 billion.  

“APA’s diversified and unhedged portfolio delivered another strong quarter, generating $609 million of free cash flow,” said John J. Christmann IV, APA’s CEO and president. “Global production was in line with expectations, as excellent Permian Basin performance offset weakness in North Sea production that was heavily impacted by unplanned downtime.”  

Third-Quarter Summary

Third-quarter reported production was 382,000 BOE per day, and adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 310,000 BOE per day. APA’s third-quarter upstream capital investment was $492 million, which was below guidance of $515 million. 

Permian Basin operations drove the strong third-quarter results through a combination of performance and timing of new well completions, strong base production, and relatively minimal downtime. 

In Egypt, after a significant ramp in drilling activity spanning the last five quarters, the pace of well completions continues to improve, and third-quarter new well connections exceeded guidance. Production in the North Sea was down due to planned seasonal turnarounds and was subsequently impacted by significant unplanned downtime. In October, North Sea production returned to more normalized levels. 

In Suriname, the company announced a discovery at Baja on Block 53 during the quarter. Currently, appraisal and exploration activities continue on Block 58 at Sapakara South 2 and Awari, respectively. 

Capital Return to Shareholders and Debt Reduction Progress

Since the inception of APA’s capital return framework in October 2021, the company has repurchased 55.2 million shares at an average price of $31.33 through the end of the third quarter. For the full-year 2022, APA expects to generate approximately $2.7 billion of free cash flow, of which, at least $1.6 billion will be returned to shareholders in the form of dividends and share buybacks.

The company continues to strengthen the balance sheet. Since mid-2021, $3.1 billion in bond debt has been eliminated, including the recent redemption of $123 million of notes due January 2023, through tender offers, open market repurchases and early redemptions. 

2022 Capital and Fourth-Quarter Production Guidance

APA’s full-year capital investment guidance remains unchanged at $1.725 billion. The company expects fourth-quarter adjusted production to be in the range of 328,000 to 332,000 BOE per day, up more than 5% from the third quarter, with the increase expected to be driven by higher oil production across its assets. 

ESG Progress

APA has made significant progress on its 2022 ESG goals, achieving an environmental target to reduce Egypt upstream routine flaring by at least 40% ahead of schedule. The company also continues to implement new projects to eliminate at least 1 million tonnes of annualized CO2e emissions by year-end 2024. 

Conference Call

APA will host a conference call to discuss its third-quarter 2022 results at 10 a.m. Central time, Thursday, Nov. 3. The conference call will be webcast from APA’s website at www.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 the Dominican Republic. APA posts announcements, operational updates, investor information and press releases on its website, www.apacorp.com. Additional details regarding Suriname, ESG performance and other investor-related topics are posted at investor.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, 2021, 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, 2021 available from APA at www.apacorp.com or by writing APA at: 2000 Post Oak Blvd., Suite 100, Houston, TX 77056 (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) 296-7189    Alexandra Franceschi            
Website:    www.apacorp.com

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