APA Q2 Earnings Shine With Beat on Both Top and Bottom Lines

Core Insights - APA Corporation reported second-quarter 2025 adjusted earnings of 87 cents per share, exceeding the Zacks Consensus Estimate of 45 cents, driven by higher-than-expected production and lower costs [1][10] - Revenues totaled $2.6 billion, down 6.4% year-over-year but surpassing the Zacks Consensus Estimate by over 26% [1][10] - The adjusted profit decreased from $1.17 in the previous year due to lower oil realizations [1] Production & Selling Prices - Average production of oil and natural gas was 465,078 BOE/d, with liquids comprising 68%, down 1.8% year-over-year but above expectations of 457,000 BOE/d [3][4] - U.S. output fell 4.5% year-over-year to 289,902 BOE/d, while international production increased by 3% to 175,176 BOE/d [4] - Average realized crude oil price was $65.58 per barrel, down 20.3% from $82.28 a year ago but above the projected $56.07 [5] - Average realized natural gas price rose to $2.28 per thousand cubic feet from $1.77 in the prior year, missing the estimate of $2.35 [5] Costs & Financial Position - Lease operating expenses for the second quarter were $367 million, down 20.2% from $460 million a year ago [6] - Total operating expenses decreased 15% year-over-year to $1.6 billion, lower than the expected $1.5 billion [6] - Cash generated from operating activities was $1.2 billion, with upstream capital expenditures of $648 million, resulting in an adjusted operating cash flow of $981 million and free cash flow of $134 million [7] Financial Metrics - As of June 30, APA had approximately $107 million in cash and cash equivalents and $4.3 billion in long-term debt, leading to a debt-to-capitalization ratio of 42.1% [8] - The company returned $140 million to shareholders through dividends and buybacks during the quarter [2][10] Guidance - APA expects production to average 448,000 BOE/d in Q3 and 457,000 BOE/d for the full year 2025, with oil volumes projected at 228,000 Bbl/d for Q3 and 232,000 Bbl/d for the year [9] - Upstream capital expenditure for the year is estimated at $2.315-$2.365 billion, an increase from the previous estimate of $2.225 billion-$2.325 billion [9]