Key Takeaways

• Reported production of 467,000 barrels of oil equivalent (BOE) per day; adjusted production, excluding Egypt noncontrolling interest and tax barrels, was 395,000 BOE per day; 
• Announced final investment decision (FID) on 220,000 barrels per day oil development project in Suriname; 
• Streamlined Permian footprint with announcement of $950 million, non-core divestiture package; 
• Signed agreement that raises the contractual price for natural gas production in Egypt and incentivizes increased gas exploration and development activity; and
• Returned $406 million of free cash flow to shareholders year-to-date through dividends and share buybacks.

HOUSTON, Nov. 6, 2024 – APA Corporation (Nasdaq: APA) today announced its financial and operational results for the third quarter of 2024.
 
APA reported a loss attributable to common stock of $223 million or $0.60 per diluted share, which was primarily driven by non-cash impairments of assets in the U.K. and assets held for sale in the Permian Basin. When adjusting for this and other items that impact the comparability of results, APA’s third-quarter earnings were $370 million, or $1.00 per diluted share. Net cash provided by operating activities was $1.3 billion, and adjusted EBITDAX was $1.6 billion. 

“Third-quarter results were strong across our operating areas, driven by higher-than-expected production and lower costs,” said John J. Christmann IV, APA’s CEO. “Adjusted global oil production exceeded the high-end of our guidance range and was up nearly 30% year-over-year. The integration of Callon is effectively complete, and we expect to capture most of the cost synergies by year-end. This, combined with the non-core Permian Basin asset sale, will significantly lower per unit costs as we move into next year. 

“We also achieved an important milestone in Suriname with the announcement of GranMorgu, the first offshore development in the country,” he said. “This large-scale project offers the best returns in APA’s portfolio, has a very low break-even oil price, and will contribute significant oil production and cash-flow growth beginning in 2028 and continuing for many years.” 

Third-Quarter Summary

Third-quarter reported production was 467,000 BOE per day. Adjusted production, excluding Egypt noncontrolling interest and tax barrels, was 395,000 BOE per day, approximately 2% ahead of guidance. 

A number of positive factors influenced the third-quarter results, including significant free cash flow from U.S. third-party gas trading activities and the Cheniere gas supply contract; cash flow resilience to lower oil prices in Egypt under the revised PSC structure; the successful integration of Callon and associated cost synergies; and organic oil production growth. As a result, APA’s third-quarter cash flow from operations and free cash flow increased when compared to the second quarter, despite lower commodity prices.  

Subsequent to quarter-end, the company received a credit rating increase to BBB- from Standard & Poor’s and has obtained investment grade status at all three rating agencies. During the quarter, APA reduced net debt by $275 million and returned $94 million of free cash flow to shareholders through dividends and share buybacks.

2024 Fourth-Quarter Capital and Production Guidance
 
The company expects total fourth-quarter production on a BOE basis will be the highest of the year despite ongoing curtailments in the Permian Basin in response to weak regional natural gas prices. 

APA’s upstream capital investment in the fourth quarter is expected to be approximately $645 million, which includes $80 million of incremental capital for Suriname, Alaska and Egypt.
  
2025 Preliminary Capital Budget and Production Outlook

In 2025, as a result of a softer oil price outlook, APA plans to reduce capital to $2.5 to $2.6 billion, of which, $200 million is allocated to Suriname development activity and $100 million to other exploration, primarily in Alaska. At this investment level, the company expects to run an eight-rig program in the Permian Basin and a 12-rig program in Egypt, which includes one rig dedicated to natural gas following the signing of a new gas pricing agreement. The company expects this program will roughly sustain adjusted oil production in the U.S. and Egypt, while delivering mid-single digit adjusted BOE growth.

Conference Call

APA will host a conference call to discuss its third-quarter 2024 results at 10 a.m. Central time, Thursday, Nov. 7. The conference call will be webcast from APA’s website at https://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, https://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 https://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 https://www.sec.gov.

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

Click here for the full release with quarterly financial statements.

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