Financial Performance & Strategy - APA Corporation aims to return at least 60% of free cash flow to investors through dividends and share repurchases[14] - The company initiated a long-term net debt target of $30 billion[14] - APA reduced net debt by over $850 million due to the New Mexico asset sale and progress on Egypt payments[29] - Share repurchases amounted to approximately $30 billion since year-end 2020[20] Operational Highlights - Permian Basin accounted for 75% of APA's total adjusted production[14] - Second quarter 2025 global reported production was 465078 BOE/D, with the United States contributing 289902 BOE/D and international operations producing 175176 BOE/D[28] - APA secured presidential approval for approximately 2 million acres, increasing its Egypt footprint by over 35%[29, 38] Cost Savings & Capital Efficiency - APA is accelerating controllable spend reduction targets, with realized savings of $200 million YTD 2025 and an expected YE25 run-rate of $300 million[15] - The company has reduced per-foot drilling and completion costs by over 20% since the first half of 2024 in both the Midland and Delaware Basins[33] Suriname Project - The Suriname Block 58 project is expected to generate significant free cash flow growth starting in 2028[14] - The Suriname GranMorgu project is on track for first oil in mid-2028, with an estimated recoverable resource of over 750 million barrels of oil[52, 53] Guidance - The company expects U S & U K current income tax expense of $240 million in FY25[74]

[APA Corporation Second-Quarter 2025 Results](index=1&type=section&id=APA%20Corporation%20Announces%20Second-Quarter%202025%20Financial%20and%20Operational%20Results) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) APA Corporation reported Q2 2025 net income of $603 million ($1.67 diluted EPS), adjusted earnings of $313 million ($0.87 diluted EPS), and strong cash flow with $1.2 billion from operations and $1.3 billion adjusted EBITDAX Q2 2025 Key Financial Metrics | Metric | Amount (in millions) | | :--- | :--- | | Net Income (attributable to common stock) | $603 | | Diluted EPS | $1.67 | | Adjusted Earnings | $313 | | Adjusted Diluted EPS | $0.87 | | Net Cash Provided by Operating Activities | $1,200 | | Adjusted EBITDAX | $1,300 | [Operational Highlights](index=1&type=section&id=Operational%20Highlights) APA exceeded Q2 2025 production guidance with 465,000 BOE/day reported (394,000 adjusted), reduced Permian rig count while maintaining outlook, and expanded Egypt's footprint Q2 2025 Production | Metric | Volume (BOE/day) | | :--- | :--- | | Reported Production | 465,000 | | Adjusted Production | 394,000 | - Permian rig count reduced from **eight to six** due to drilling efficiencies, maintaining flat Permian volumes with fewer rigs[5](index=5&type=chunk)[7](index=7&type=chunk) - Egypt exceeded gas production guidance and secured presidential approval for **2 million additional acres**, expanding its footprint by over **35%**[4](index=4&type=chunk)[5](index=5&type=chunk) [Capital Allocation and Balance Sheet](index=2&type=section&id=Capital%20Allocation%20and%20Balance%20Sheet) APA returned $140 million to shareholders, reduced net debt by over $850 million (15%), and set a new long-term net debt target of $3 billion - Returned **$140 million** to shareholders through dividends and share repurchases[5](index=5&type=chunk)[9](index=9&type=chunk) - Reduced net debt by over **$850 million** (more than **15%**), supported by asset sales and Egypt working capital inflows[5](index=5&type=chunk)[9](index=9&type=chunk) - Initiated a new long-term net debt target of **$3 billion**, reflecting confidence in durable cash flows and investment-grade credit profile[10](index=10&type=chunk) [Strategic Initiatives](index=3&type=section&id=Strategic%20Initiatives) APA accelerated cost reduction targets to $350 million run-rate savings by 2026 and increased 2025 realized savings to $200 million, while GranMorgu project remains on track Updated Cost Reduction Targets | Metric | Previous Target | New Target | | :--- | :--- | :--- | | 3-Year Run-Rate Savings Goal | $350M by YE 2027 | $350M in 2026 | | 2025 Realized Savings | $130M | $200M | | 2025 Year-End Run-Rate Savings | $225M | $300M | - GranMorgu project in Suriname remains on schedule for first oil in **mid-2028**; 2025 capital guidance raised to **$275 million** for milestone payments, with no change to total project costs[13](index=13&type=chunk)[14](index=14&type=chunk) [Financial Statements and Supplemental Data](index=7&type=section&id=Financial%20Statements%20and%20Supplemental%20Data) [Statement of Consolidated Operations](index=7&type=section&id=Statement%20of%20Consolidated%20Operations) Q2 2025 total revenues decreased to $2.18 billion from $2.54 billion, while net income attributable to common stock increased to $603 million ($1.67 diluted EPS) Q2 2025 vs Q2 2024 Income Statement Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $2,178 | $2,543 | | Net Income Before Income Taxes | $1,028 | $928 | | Net Income Attributable to Common Stock | $603 | $541 | | Diluted EPS | $1.67 | $1.46 | [Production Information](index=8&type=section&id=Production%20Information) Q2 2025 total reported production decreased 2% to 465,078 BOE/day, with US down 4% and Egypt up 8% driven by gas volumes Q2 2025 Production by Region (BOE/day) | Region | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | United States | 289,902 | 303,416 | (4)% | | Egypt | 143,818 | 133,215 | 8% | | North Sea | 31,358 | 36,778 | (15)% | | **Total** | **465,078** | **473,409** | **(2)%** | [Adjusted Production Information](index=9&type=section&id=Adjusted%20Production%20Information) Q2 2025 adjusted production decreased 3% to 394,041 BOE/day, with US and North Sea declines offset by 11% growth in Egypt's adjusted volumes Q2 2025 Adjusted Production by Region (BOE/day) | Region | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | United States | 289,902 | 303,416 | (4)% | | Egypt | 72,781 | 65,296 | 11% | | North Sea | 31,358 | 36,778 | (15)% | | **Total** | **394,041** | **405,490** | **(3)%** | [Price Information](index=10&type=section&id=Price%20Information) APA realized lower Q2 2025 oil prices at $65.58/barrel (down from $82.28) but higher natural gas prices at $2.28/Mcf (up from $1.77) Average Realized Prices | Commodity | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Oil (per barrel) | $65.58 | $82.28 | | Natural Gas (per Mcf) | $2.28 | $1.77 | | NGL (per barrel) | $20.49 | $21.68 | [Supplemental Financial Information](index=11&type=section&id=Supplemental%20Financial%20Information) Q2 2025 net cash from operations was $1.18 billion, with total assets at $18.08 billion, total debt at $4.55 billion, and cash at $107 million [Summary Cash Flow Information](index=12&type=section&id=Summary%20Cash%20Flow%20Information) Q2 2025 net cash provided by operating activities was $1.18 billion, with net cash used in investing and financing activities Q2 2025 Cash Flow Summary (in millions) | Category | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,181 | $877 | | Net cash used in investing activities | $(95) | $(64) | | Net cash used in financing activities | $(1,046) | $(755) | [Summary Balance Sheet Information](index=12&type=section&id=Summary%20Balance%20Sheet%20Information) As of June 30, 2025, total assets were $18.08 billion, total debt was $4.55 billion, and APA shareholders' equity was $5.91 billion Balance Sheet Highlights (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $107 | $625 | | Total assets | $18,078 | $19,390 | | Current debt | $263 | $53 | | Long-term debt | $4,288 | $5,991 | | Total debt | $4,551 | $6,044 | | APA shareholders' equity | $5,905 | $5,280 | [Non-GAAP Reconciliations](index=13&type=section&id=Non-GAAP%20Reconciliations) This section reconciles GAAP to non-GAAP metrics, including Q2 2025 upstream capital investment of $648 million, free cash flow of $134 million, and adjusted EBITDAX of $1.3 billion [Reconciliation to Upstream capital investment](index=13&type=section&id=Reconciliation%20to%20Upstream%20capital%20investment) Q2 2025 total upstream capital investment was $648 million, a decrease from $827 million in the prior year - Total Upstream capital investment for Q2 2025 was **$648 million**, down from **$827 million** in Q2 2024[40](index=40&type=chunk) [Reconciliation to Free cash flow](index=13&type=section&id=Reconciliation%20to%20Free%20cash%20flow) Q2 2025 free cash flow was $134 million, an increase compared to $103 million in the prior-year quarter - Free cash flow for Q2 2025 was **$134 million**, compared to **$103 million** in Q2 2024[42](index=42&type=chunk) [Reconciliation to Adjusted EBITDAX](index=14&type=section&id=Reconciliation%20to%20Adjusted%20EBITDAX) Q2 2025 Adjusted EBITDAX was $1.3 billion, a decrease from $1.58 billion in the prior-year quarter - Adjusted EBITDAX for Q2 2025 was **$1,299 million**, compared to **$1,576 million** in Q2 2024[44](index=44&type=chunk) [Reconciliation to net debt](index=14&type=section&id=Reconciliation%20to%20net%20debt) Net debt as of June 30, 2025, was $4.44 billion, a significant reduction from $5.42 billion at year-end 2024 - Net debt as of June 30, 2025, was **$4,444 million**, a significant reduction from **$5,419 million** at the end of 2024[46](index=46&type=chunk) [Reconciliation to Adjusted earnings](index=15&type=section&id=Reconciliation%20to%20Adjusted%20earnings) Q2 2025 adjusted earnings were $313 million, or $0.87 per diluted share, after accounting for various adjustments Q2 2025 Adjusted Earnings Reconciliation | Metric | Amount (in millions) | Per Diluted Share | | :--- | :--- | :--- | | Net income attributable to common stock (GAAP) | $603 | $1.67 | | Adjustments (net) | $(290) | $(0.80) | | **Adjusted earnings (Non-GAAP)** | **$313** | **$0.87** |

Core Insights - APA reported a revenue of $2.61 billion for the quarter ended June 2025, reflecting a year-over-year decline of 6.5% and an EPS of $0.87 compared to $1.17 a year ago, with a revenue surprise of +26.08% over the Zacks Consensus Estimate of $2.07 billion and an EPS surprise of +93.33% over the consensus estimate of $0.45 [1] Financial Performance - The stock has returned -9.3% over the past month, while the Zacks S&P 500 composite has changed by +0.5%, indicating underperformance relative to the broader market [3] - The company holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the market in the near term [3] Production Metrics - Total production volume per day was 465.08 KBOE/D, exceeding the average estimate of 457.24 KBOE/D [4] - Natural gas production was 894.1 million cubic feet per day, slightly below the average estimate of 902.9 million cubic feet per day [4] - Oil production was 235.24 thousand barrels per day, above the average estimate of 230.62 thousand barrels per day [4] - NGL production was 80.82 thousand barrels per day, surpassing the average estimate of 76.12 thousand barrels per day [4] Pricing Metrics - Average price for natural gas was $2.28, slightly above the average estimate of $2.27 [4] - Average price per barrel of oil was $65.58, exceeding the average estimate of $63.60 [4] - Average price per barrel of NGL was $20.49, above the average estimate of $20.10 [4] Revenue Breakdown - Natural gas revenues were $184 million, slightly above the estimated $182.92 million, representing a +36.3% change year-over-year [4] - Natural gas liquids revenues were $153 million, below the estimated $139.21 million, reflecting a -3.8% change year-over-year [4] - Total revenues from oil, natural gas, and NGL production were $1.72 billion, exceeding the average estimate of $1.62 billion, but showing a -21.9% change year-over-year [4] - Oil revenues were $1.38 billion, above the estimated $1.32 billion, but down -27.6% year-over-year [4] - Purchased oil and gas sales reached $460 million, surpassing the average estimate of $418.35 million, with a +34.5% change year-over-year [4]

Core Viewpoint - APA reported quarterly earnings of $0.87 per share, significantly exceeding the Zacks Consensus Estimate of $0.45 per share, but down from $1.17 per share a year ago, indicating a +93.33% earnings surprise [1] - The company generated revenues of $2.61 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 26.08%, although this is a decrease from $2.79 billion in the same quarter last year [2] Group 1: Earnings Performance - APA's earnings surprise of +93.33% reflects a strong performance compared to expectations, following a previous quarter where it also exceeded estimates by +27.71% [1][2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped revenue estimates four times [2] Group 2: Stock Performance and Outlook - APA shares have declined approximately 19.5% year-to-date, contrasting with the S&P 500's gain of 7.1%, indicating underperformance in the market [3] - The company's current Zacks Rank is 3 (Hold), suggesting that shares are expected to perform in line with the market in the near future [6] Group 3: Future Earnings Expectations - The current consensus EPS estimate for the upcoming quarter is $0.68 on revenues of $2.12 billion, while for the current fiscal year, the estimate is $2.92 on revenues of $8.97 billion [7] - The trend of earnings estimate revisions is mixed ahead of the earnings release, which could influence future stock performance [6] Group 4: Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently ranked in the bottom 27% of over 250 Zacks industries, which may impact APA's stock performance [8] - Empirical research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1, highlighting the importance of industry performance on individual stocks [8]

Core Viewpoint - APA Corporation announced its second-quarter 2025 results and will host a conference call to discuss these results on August 7, 2025 [1]. Group 1: Company Overview - APA Corporation engages in the exploration and production of oil and natural gas in the United States, Egypt, and the United Kingdom, as well as offshore Suriname and other locations [2]. Group 2: Investor Relations - The results of the second quarter can be accessed on the company's website, and a replay of the conference call will be available for one year on the "Investors" page [1].

Key Takeaways The oil/energy sector is under pressure in the second quarter of 2025, as falling crude oil prices and narrowing profit margins create a difficult operating environment. With roughly 25% of S&P 500 energy companies having reported second-quarter results, early indications confirm that the challenges are impacting earnings. Although a rise in natural gas demand has offered some support, it hasn't been sufficient to offset the broader issues affecting the industry. Ongoing global economic uncert ...

Core Viewpoint - APA Corporation is expected to report second-quarter earnings on August 6, with an estimated profit of 45 cents per share and revenues of $2.07 billion, reflecting a significant decline compared to the previous year [1][7]. Group 1: Previous Quarter Performance - In the last reported quarter, APA exceeded consensus estimates with adjusted earnings per share of $1.06, surpassing the Zacks Consensus Estimate of 83 cents, and revenues of $2 billion, which beat the estimate by 37.3% [2]. - The company has had mixed results in the past four quarters, beating estimates in two and missing in the other two, resulting in an average surprise of 7.35% [3]. Group 2: Revenue and Earnings Estimates - The Zacks Consensus Estimate for second-quarter earnings indicates a 61.54% decline year over year, while revenues are expected to decrease by 25.80% compared to the previous year [3]. - Revenues for the upcoming quarter are projected to drop from $2.54 billion in the year-ago quarter, with a 31.4% decline in revenues from core oil, natural gas, and natural gas liquids segments [5]. Group 3: Cost Management - APA's total expenses are anticipated to reach $1.52 billion in the second quarter, down 18.5% from the previous year, with lease operating expenses expected to decrease from $489.6 million to $460 million [6]. - Costs associated with gathering, processing, and transmission are also projected to decline from $121 million to $105.1 million, and the cost of purchased oil and gas is expected to drop from $210 million to $156.9 million [6]. Group 4: Earnings Prediction Model - The Zacks model does not predict a definitive earnings beat for APA this season, with an Earnings ESP of 0.00% and a Zacks Rank of 3 [7][8].

Company Overview - APA is expected to report quarterly earnings of $0.45 per share, reflecting a year-over-year decline of 61.5% [3] - Revenues are anticipated to be $2.07 billion, down 25.8% from the same quarter last year [3] - The Most Accurate Estimate for APA matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [12] Earnings Expectations - The earnings report is scheduled for release on August 6, and better-than-expected results could lead to a stock price increase [2] - Conversely, missing expectations may result in a decline in stock price [2] - The consensus EPS estimate has been revised 4% higher in the last 30 days, indicating a reassessment by analysts [4] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10] - APA currently holds a Zacks Rank of 3, making it challenging to predict an earnings beat conclusively [12] Historical Performance - In the last reported quarter, APA exceeded the expected earnings of $0.83 per share, achieving $1.06, resulting in a surprise of +27.71% [13] - Over the past four quarters, APA has beaten consensus EPS estimates two times [14] Industry Context - Devon Energy, another player in the oil and gas exploration and production sector, is expected to report earnings of $0.82 per share, indicating a year-over-year decline of 41.8% [18] - Devon's revenues are projected to be $4.01 billion, up 2.5% from the previous year [18] - The consensus EPS estimate for Devon has been revised 13.8% higher in the last 30 days, but a lower Most Accurate Estimate results in an Earnings ESP of -0.16% [19]

Group 1 - APA's stock increased by 2.46% to $19.57, outperforming the S&P 500's gain of 0.02% on the same day [1] - Over the past month, APA's shares gained 2.91%, surpassing the Oils-Energy sector's gain of 2.64% but underperforming the S&P 500's 4.93% increase [1] Group 2 - APA is set to release its earnings report on August 6, 2025, with an expected EPS of $0.45, reflecting a 61.54% decrease from the same quarter last year [2] - The consensus estimate for revenue is $2.07 billion, down 25.8% from the prior-year quarter [2] Group 3 - For the full year, earnings are projected at $2.92 per share and revenue at $8.97 billion, indicating declines of 22.55% and 7.87% respectively from the previous year [3] - Recent revisions to analyst forecasts for APA may indicate changing business trends, with positive revisions suggesting optimism about the company's outlook [3] Group 4 - The Zacks Rank system, which incorporates estimate changes, has a strong track record, with 1 stocks averaging an annual return of +25% since 1988 [5] - Currently, APA holds a Zacks Rank of 3 (Hold), with the consensus EPS estimate having decreased by 3.2% over the past month [5] Group 5 - APA's Forward P/E ratio is 6.55, which is lower than the industry average of 11.06, indicating a valuation discount [6] - The company's PEG ratio stands at 6.24, compared to the industry average PEG ratio of 0.71 [7] Group 6 - The Oil and Gas - Exploration and Production - United States industry, which includes APA, has a Zacks Industry Rank of 173, placing it in the bottom 30% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Market Performance - The US stock market saw significant gains on July 23, with the Dow Jones Industrial Average rising by 507.85 points, or 1.14%, closing at 45010.29 points. The Nasdaq Composite increased by 127.33 points, or 0.61%, closing at 21020.02 points, marking its first close above the 21000-point threshold. The S&P 500 index rose by 49.29 points, or 0.78%, closing at 6358.91 points [1][3][4]. Trade Agreements - President Trump announced a trade agreement between the US and Japan, which has heightened market expectations for further trade agreements before the August 1 tariff deadline. The agreement includes a reduction of the reciprocal tariff rate from 25% to 15% and Japan's commitment to invest $550 billion in the US [2][6][7]. Sector Performance - In the S&P 500, nine out of eleven sectors experienced gains, with the healthcare and industrial sectors leading with increases of 2.03% and 1.75%, respectively. The utilities and consumer staples sectors saw declines of 0.79% and 0.07% [8]. - Major technology stocks mostly rose, with AMD increasing over 3%, and other companies like NVIDIA, Boeing, and TSMC rising over 2%. Financial stocks also saw gains, with Mizuho Financial up over 6% and UBS Group up over 3% [8]. Chinese Stocks - The Nasdaq Golden Dragon China Index rose by 0.75%, with notable increases in stocks such as iQIYI, which rose over 4%, and Tiger Brokers, which increased over 3%. However, some stocks like NIO and Li Auto saw declines of over 1% [9].