Production and Operations - Reported production of 473,000 barrels of oil equivalent (BOE) per day; adjusted production was 405,000 BOE per day[1] - U.S. oil production increased by 67% from first-quarter 2024 to 139,500 barrels per day, driven by the addition of Callon assets[5] - Egypt adjusted production exceeded guidance by approximately 5% in the second quarter[1] - Oil production in the United States averaged 139,361 barrels per day, a 67% increase from 83,520 barrels per day in the previous quarter[23] - Natural gas production in the United States increased to 510,708 Mcf per day, a 15% rise from 443,737 Mcf per day in the previous quarter[23] - The company achieved a total production volume of 253,649 barrels of oil equivalent per day, a 27% increase from 200,083 barrels per day in the previous quarter[23] - Total oil volume increased to 209,046 barrels per day for the quarter ended June 30, 2024, a 34% increase from the previous quarter and a 36% increase year-over-year[25] - Natural gas volume reached 695,746 Mcf per day, reflecting a 9% increase from the previous quarter and a 7% increase compared to the same quarter last year[25] Financial Performance - Net income attributable to common stock was $541 million, or $1.46 per diluted share; adjusted earnings were $434 million, or $1.17 per diluted share[2] - Total revenues for the quarter ended June 30, 2024, were $2,543 million, a 42% increase from $1,796 million in the same quarter of 2023[22] - The company reported a net income attributable to common stock of $541 million for the quarter, compared to $381 million in the same quarter last year, representing a 42% increase[22] - The company declared a dividend of $0.25 per common share, consistent with the previous quarter[22] - Total operating expenses for the quarter were $1,864 million, up from $1,261 million in the same quarter of 2023[22] - The company reported a derivative instrument loss of $3 million for the quarter, compared to a gain of $51 million in the previous quarter[22] - Net cash provided by operating activities was $877 million for the quarter ended June 30, 2024, compared to $1,000 million for the same quarter in 2023[29] - Free cash flow for the quarter ended June 30, 2024, was $103 million, compared to $94 million for the same quarter in 2023, indicating a slight increase[35] - Non-GAAP earnings for the quarter were $636 million, down from $832 million year-over-year, reflecting a decline of 23.5%[43] Capital Expenditures and Investments - Capital investment for the second quarter was $839 million, significantly below guidance[6] - Full-year guidance for net gain on third-party oil and gas purchases and sales raised to $350 million, an increase of $120 million from previous guidance[5] - Integration of Callon acquisition is ahead of schedule, with revised annual cost synergies estimate increased to $250 million[1] - Upstream capital investment including noncontrolling interest in Egypt for the quarter was $904 million, compared to $583 million in the same quarter of 2023[35] - Proceeds from asset divestitures amounted to $702 million for the quarter ended June 30, 2024, compared to $7 million in the same quarter last year[29] Debt and Assets - Total assets increased to $20,195 million as of June 30, 2024, compared to $15,244 million at the end of 2023[30] - Long-term debt rose to $6,741 million as of June 30, 2024, up from $5,186 million at the end of 2023[30] - Total debt as of June 30, 2024, was $6,743 million, an increase from $5,180 million as of March 31, 2024[40] - Net debt as of June 30, 2024, stood at $6,583 million, compared to $5,078 million as of March 31, 2024, indicating a rise in leverage[40] Earnings Per Share and Taxation - For the quarter ended June 30, 2024, the company reported a diluted EPS of $1.67, compared to $1.49 for the same quarter in 2023, representing a 12.1% increase[43] - The diluted EPS attributable to common stock for the six months ended June 30, 2024, was $2.00, down from $2.01 in the same period of 2023, showing stability in earnings despite challenges[43] - The current income tax provision for the quarter was $285 million, compared to $300 million in the previous quarter, reflecting a decrease in tax obligations[38] - The allowance and other tax adjustments for the quarter were $0, while the previous year had adjustments of $30 million, showing a significant change in tax strategy[43] Exploration and Impairments - Exploration expenses totaled $71 million for the quarter ended June 30, 2024, compared to $43 million in the same quarter last year[28] - The company reported exploration expenses of $30 million for the quarter ended June 30, 2024, compared to $15 million for the previous quarter[37] - The company reported unproved leasehold impairments of $10 million for the first half of 2024, compared to $57 million in the same period of 2023, indicating a reduction in impairments[43] Restructuring and Financial Management - The reorganization and separation costs amounted to $115 million for the quarter, compared to $2 million in the same quarter last year, indicating increased restructuring efforts[43] - The company recorded a derivative instrument gain of $5 million for the quarter, contrasting with a loss of $80 million in the same quarter of the previous year, reflecting improved financial management[43] - The equity investment mark-to-market loss was $9 million for the quarter, compared to a loss of $45 million in the same quarter last year, indicating a recovery in investment valuations[43]

[PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section provides the company's consolidated financial statements, management's analysis of operations and liquidity, market risk disclosures, and internal controls [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) The company reported a net income attributable to common stock of $132 million for Q1 2024, a decrease from $242 million in Q1 2023, with diluted EPS falling to $0.44 from $0.78. Total revenues were slightly down at $1.95 billion. Net cash from operations increased to $368 million. The balance sheet shows total assets of $14.95 billion and total equity of $3.65 billion as of March 31, 2024. Key events include the post-quarter acquisition of Callon Petroleum, the sale of Kinetik shares, and ongoing management of significant decommissioning liabilities for sold Gulf of Mexico properties [Statement of Consolidated Operations](index=6&type=section&id=STATEMENT%20OF%20CONSOLIDATED%20OPERATIONS) This statement details the company's revenues, expenses, net income, and diluted earnings per share for the reported periods Q1 2024 vs Q1 2023 Statement of Operations (in millions, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Total Revenues** | **$1,951** | **$2,008** | | Total Operating Expenses | $1,456 | $1,220 | | Net Income Before Income Taxes | $447 | $810 | | **Net Income Attributable to Common Stock** | **$132** | **$242** | | **Diluted EPS** | **$0.44** | **$0.78** | | Weighted-Average Diluted Shares | 302 | 312 | - Key drivers for the decrease in net income include a **$66 million** loss on previously sold Gulf of Mexico properties, a **$96 million** increase in exploration expenses, and a **$98 million** increase in depreciation, depletion, and amortization (DD&A) compared to the prior-year period[12](index=12&type=chunk) [Statement of Consolidated Cash Flows](index=8&type=section&id=STATEMENT%20OF%20CONSOLIDATED%20CASH%20FLOWS) This statement presents the company's cash flows from operating, investing, and financing activities for the reported periods Q1 2024 vs Q1 2023 Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | **$368** | **$335** | | Net Cash Used in Investing Activities | $(88) | $(532) | | Net Cash Provided by (Used in) Financing Activities | $(265) | $106 | | **Net Increase (Decrease) in Cash** | **$15** | **$(91)** | - Investing activities in Q1 2024 included **$467 million** for additions to upstream oil and gas property, offset by **$428 million** in proceeds from the sale of Kinetik shares. Financing activities included **$101 million** for treasury stock repurchases and **$76 million** in dividend payments[16](index=16&type=chunk) [Consolidated Balance Sheet](index=9&type=section&id=CONSOLIDATED%20BALANCE%20SHEET) This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time Balance Sheet Summary (in millions) | Account | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $102 | $87 | | Total Current Assets | $2,506 | $2,462 | | **Total Assets** | **$14,952** | **$15,244** | | Total Current Liabilities | $2,152 | $2,404 | | Long-Term Debt | $5,178 | $5,186 | | **Total Liabilities** | **$11,299** | **$11,553** | | **Total Equity** | **$3,653** | **$3,691** | [Notes to Consolidated Financial Statements](index=11&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes provide detailed explanations of significant accounting policies, transactions, and contingent liabilities impacting the financial statements - On April 1, 2024, subsequent to the reporting period, APA completed its acquisition of Callon Petroleum Company in an all-stock transaction valued at approximately **$4.5 billion**, including debt[43](index=43&type=chunk) - On March 18, 2024, the Company sold its remaining shares in Kinetik Holdings Inc. for cash proceeds of **$428 million**[45](index=45&type=chunk)[62](index=62&type=chunk) - The company has a contingent liability of **$847 million** as of March 31, 2024, for potential decommissioning costs of legacy Gulf of Mexico properties sold to Fieldwood and other operators. A loss of **$66 million** related to these properties was recognized in Q1 2024[108](index=108&type=chunk) - In Q1 2024, the company repurchased approximately **3.0 million shares** for **$101 million**. As of March 31, 2024, authorization remained to repurchase up to **40.9 million shares**[111](index=111&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management reported Q1 2024 net income of $132 million, down from Q1 2023, primarily due to higher DD&A, exploration expenses, and a loss on sold Gulf of Mexico assets. Total production was slightly down at 389.2 Mboe/d, with U.S. volumes increasing 6% while Egypt and North Sea declined. The company completed the $4.5 billion acquisition of Callon Petroleum post-quarter end and revised its full-year 2024 capital investment estimate to $2.7 billion. The company remains committed to its capital return framework, having repurchased $101 million of stock and paid $76 million in dividends during the quarter. Liquidity remains strong with $102 million in cash and $2.9 billion in available borrowing capacity [Financial and Operational Highlights](index=29&type=section&id=Financial%20and%20Operational%20Highlights) This section summarizes key financial results, significant corporate transactions, and operational performance across various regions - Reported net income attributable to common stock was **$132 million** (**$0.44 per diluted share**) in Q1 2024, compared to **$242 million** (**$0.78 per diluted share**) in Q1 2023[125](index=125&type=chunk) - On April 1, 2024, APA completed its acquisition of Callon Petroleum Company in an all-stock transaction valued at approximately **$4.5 billion**, including debt. The acquired assets add approximately **145,000 net acres** in the Permian Basin[127](index=127&type=chunk) - U.S. daily production increased **6% YoY**, with oil production up **16%**. The company plans to increase its U.S. rig count from six to an average of ten for the remainder of 2024 to integrate Callon's operations[128](index=128&type=chunk) - Egypt's net equivalent production decreased **8% YoY**, though daily oil production remained flat. All new drilling activity in the North Sea was suspended in Q2 2023[129](index=129&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's production volumes, average realized prices, and key operating expenses Production Volumes by Region (Q1 2024 vs Q1 2023) | Region | Q1 2024 (BOE/d) | Q1 2023 (BOE/d) | % Change | | :--- | :--- | :--- | :--- | | United States | 214,050 | 201,580 | 6% | | Egypt | 135,140 | 147,186 | (8)% | | North Sea | 39,967 | 45,483 | (12)% | | **Total** | **389,157** | **394,249** | **(1)%** | Average Realized Prices (Q1 2024 vs Q1 2023) | Commodity | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Oil (per bbl) | $80.65 | $78.37 | 3% | | Natural Gas (per Mcf) | $2.47 | $3.22 | (23)% | | NGL (per bbl) | $25.38 (U.S.) | $23.79 (U.S.) | 7% | - Exploration expenses increased significantly by **$96 million YoY** to **$148 million**, primarily due to dry hole expenses from an unsuccessful initial drilling campaign in Alaska[150](index=150&type=chunk) - Depreciation, Depletion, and Amortization (DD&A) increased by **$98 million YoY**, driven by a higher DD&A rate on oil and gas properties due to price-related negative reserve revisions and higher property balances from U.S. capital investment[153](index=153&type=chunk) [Capital Resources and Liquidity](index=36&type=section&id=Capital%20Resources%20and%20Liquidity) This section discusses the company's cash flow generation, capital allocation strategies, and overall liquidity position Sources and Uses of Cash (Q1 2024, in millions) | Category | Amount | | :--- | :--- | | **Sources of Cash** | | | Net cash from operations | $368 | | Proceeds from asset divestitures | $27 | | Proceeds from sale of Kinetik Shares | $428 | | **Total Sources** | **$823** | | **Uses of Cash** | | | Additions to upstream oil and gas property | $467 | | Treasury stock activity, net | $101 | | Dividends paid to APA common stockholders | $76 | | Distributions to noncontrolling interest | $70 | | **Total Uses** | **$808** | - Following the Callon acquisition, the company revised its full-year 2024 estimated upstream capital investment to approximately **$2.7 billion**[161](index=161&type=chunk) Liquidity Position (as of March 31, 2024, in millions) | Item | Amount | | :--- | :--- | | Cash and cash equivalents | $102 | | Total debt | $5,180 | | Available committed borrowing capacity | $2,884 | - Subsequent to quarter-end, on April 1, 2024, APA borrowed an aggregate **$1.5 billion** in senior unsecured term loans to refinance certain indebtedness of Callon as part of the acquisition[178](index=178&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is primarily exposed to market risks from commodity prices, interest rates, and foreign currency exchange rates. A sensitivity analysis indicates that a $1.00 per barrel change in oil price would impact quarterly revenues by approximately $18 million. The company's debt is predominantly fixed-rate, mitigating interest rate risk on existing debt. Foreign currency risk is mainly tied to British pound expenditures for North Sea operations - The company's revenues and cash flow are highly dependent on volatile crude oil, natural gas, and NGL prices[192](index=192&type=chunk) Commodity Price Sensitivity Analysis (per quarter) | Price Change | Estimated Revenue Impact | | :--- | :--- | | $1.00 / bbl change in oil price | ~$18 million | | $0.10 / Mcf change in natural gas price | ~$7 million | | $1.00 / bbl change in NGL price | ~$5 million | - As of March 31, 2024, the company had **$4.8 billion** in fixed-rate notes and debentures, minimizing cash flow risk from interest rate changes on this debt[196](index=196&type=chunk) - Foreign currency risk is primarily from North Sea operations where costs are in British pounds but revenues are in U.S. dollars. A **10%** change in the British pound exchange rate would result in a net gain or loss of approximately **$3 million**[198](index=198&type=chunk)[199](index=199&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) The company's principal executive and financial officers evaluated the disclosure controls and procedures as of March 31, 2024, and concluded they were effective. There were no material changes to the company's internal controls over financial reporting during the quarter - The CEO and CFO concluded that as of March 31, 2024, the company's disclosure controls and procedures were effective[200](index=200&type=chunk) - No changes occurred during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, the company's internal controls over financial reporting[202](index=202&type=chunk) [PART II - OTHER INFORMATION](index=44&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section details legal proceedings, risk factors, equity security sales, other relevant information, and a list of filed exhibits [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 11 of the Consolidated Financial Statements for a description of material legal proceedings - For details on material legal proceedings, the report refers to Note 11—Commitments and Contingencies in the financial statements[204](index=204&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 - No material changes have been made to the risk factors disclosed in the company's 2023 Annual Report on Form 10-K[205](index=205&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) During the first quarter of 2024, the company repurchased a total of 3,011,117 shares of its common stock at an average price of $33.27 per share Issuer Purchases of Equity Securities (Q1 2024) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2024 | 2,226,352 | $34.22 | | February 2024 | 784,765 | $30.59 | | March 2024 | 0 | N/A | | **Total** | **3,011,117** | **$33.27** | [Item 5. Other Information](index=44&type=section&id=Item%205.%20OTHER%20INFORMATION) During the first quarter of 2024, no officers or directors of the company adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement - No company officers or directors adopted or terminated any Rule 10b5-1 trading arrangements during the three months ended March 31, 2024[208](index=208&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20EXHIBITS) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including certifications by the CEO and CFO, and interactive data files (Inline XBRL) - The report includes a list of exhibits filed, such as the Merger Agreement with Callon Petroleum, credit agreements, and required officer certifications[210](index=210&type=chunk)[211](index=211&type=chunk)

APA Corporation (NASDAQ:APA) Q1 2024 Earnings Conference Call May 2, 2024 11:00 AM ET Company Participants Gary Clark – Vice President-Investor Relations John Christmann – Chief Executive Officer Steve Riney – President and Chief Financial Officer Conference Call Participants John Freeman – Raymond James Neal Dingmann – Truist Securities David Deckelbaum – TD Cowen Betty Jiang – Barclays Leo Mariani – ROTH MKM Neil Mehta – Goldman Sachs Paul Cheng – Scotiabank Operator Good day and thank you for standing by ...

First-Quarter 2024 Financial and Operational Supplement May 1, 2024 Notice to Investors Certain statements in this earnings supplement contain "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 including, without limitation, expectations, beliefs, plans, and objectives regarding anticipated financial and operating results, asset divestitures, estimated reserves, drilling locations, capital expenditures, price es ...

Exhibit 99.1 NEWS RELEASE Key Takeaways • Reported production of 389,000 barrels of oil equivalent (BOE) per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 320,000 BOE per day; • Generated net cash from operating activities of $368 million, adjusted EBITDAX of $1.24 billion; • Returned $176 million to shareholders in the first quarter through dividends and share buybacks; • Continued Permian strength drove U.S. oil volumes above guidance, marking the fifth consec ...

Financial Data and Key Metrics Changes - For Q4 2023, APA Corporation reported consolidated net income of $1.8 billion or $5.78 per diluted common share, with adjusted net income of $352 million or $1.15 per share [24] - Free cash flow for the quarter was $292 million, with 68% returned to shareholders, and for the full year, 66% of free cash flow was returned [25][26] - General and administrative (G&A) expenses for the quarter were $75 million, significantly below guidance due to a decrease in APA share price [26] Business Line Data and Key Metrics Changes - Adjusted oil production increased by 4% from Q4 2022 to Q4 2023, driven by production growth in the Midland and Delaware Basins, which was up over 20% [10] - Upstream capital investment for Q4 was $520 million, slightly above guidance, with a strong performance from the U.S. oil production, which was up 12% compared to the same quarter last year [12] - In Egypt, adjusted production exceeded guidance due to higher natural gas production, although gross oil production was lower than expected due to workover rig capacity constraints [13][14] Market Data and Key Metrics Changes - The company anticipates a flat to lower price environment in 2024, establishing a budget based on $70 WTI and $75 Brent [16] - In the North Sea, production is expected to decrease by roughly 20% year-over-year due to reduced capital investment and planned maintenance [18] Company Strategy and Development Direction - The company emphasizes a strategic framework focused on long-term full-cycle returns, moderate sustainable production growth, and strengthening the balance sheet [8][9] - APA plans to redirect capital to the Permian Basin while reducing the drilling program in Egypt to manage workover rig capacity [16][17] - The acquisition of Callon Petroleum is expected to enhance scale and balance in the Permian asset base, with anticipated operational synergies exceeding initial estimates [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges in Egypt related to workover rig availability and early life failures of new electrical submersible pumps, which are being addressed [15][41] - The company maintains a constructive medium- and long-term outlook despite potential near-term commodity price weakness, committing to return at least 60% of free cash flow to shareholders [23][22] Other Important Information - The company has successfully appraised significant oil resources in Suriname, with plans for high-margin production beginning in 2028 [22] - APA has implemented over 70% of projects aimed at reducing CO2 emissions, aligning with its ESG goals [11] Q&A Session Summary Question: Outlook for Egypt's production and resolution of issues - Management indicated that the underlying issue is the ratio of workover rigs to drilling rigs, which has been below historical levels, and they are working to balance this [32][33][34] Question: Exploration program in Alaska - The exploration program in Alaska is seen as high-risk but with significant potential, with three wells planned for drilling [39][40] Question: Performance and productivity in Egypt - The new wells in Egypt performed well, but challenges with ESPs impacted overall production [44] Question: Integration of Callon assets - Integration teams are in place, and the company is focused on a smooth transition, with expectations to run a combined total of 11 rigs in the Permian [46][47] Question: Payment situation in Egypt - The company reported a decrease in past due receivables from the Egyptian government, indicating improved collection trends [68] Question: Abandonment cost impact on cash flow - Management clarified that abandonment costs are booked liabilities and do not go through the capital program [71]

Part I [Item 1 & 2. Business and Properties](index=8&type=section&id=ITEMS%201%20and%202.%20BUSINESS%20AND%20PROPERTIES) APA Corporation is an independent energy company with diverse upstream operations and a strategy focused on returns and free cash flow - APA Corporation is an independent energy company engaged in the exploration, development, and production of natural gas, crude oil, and NGLs, with primary operations in the U.S., Egypt, and the U.K. North Sea[15](index=15&type=chunk) - The company's business strategy emphasizes a diversified asset portfolio, investing for **long-term returns** over production growth, and generating **free cash flow** for debt reduction and shareholder returns[18](index=18&type=chunk)[23](index=23&type=chunk) - On January 3, 2024, APA entered into a definitive agreement to acquire Callon Petroleum Company in an all-stock transaction valued at approximately **$4.5 billion**, aiming to enhance its Permian Basin asset base[22](index=22&type=chunk)[232](index=232&type=chunk) - In Suriname Block 58, development studies have been launched for a large oil project with confirmed recoverable resources of an estimated **700 million barrels of oil**, with a final investment decision expected by year-end 2024[51](index=51&type=chunk)[230](index=230&type=chunk) 2023 Operational Summary by Geographic Area | Operating Area | Production (MMboe) | % of Total Production | Production Revenue ($M) | Year-End Proved Reserves (MMboe) | % of Total Proved Reserves | |---------------------|--------------------|-----------------------|-------------------------|----------------------------------|------------------------------| | United States | 79.3 | 54% | $3,018 | 566 | 70% | | Egypt | 52.3 | 35% | $3,029 | 171 | 21% | | North Sea | 16.2 | 11% | $1,338 | 70 | 9% | | **Total** | **147.8** | **100%** | **$7,385** | **807** | **100%** | Year-End 2023 Estimated Proved Reserves | Reserve Category | Oil (MMbbls) | NGL (MMbbls) | Gas (Bcf) | Total (MMboe) | |-----------------------|--------------|--------------|-----------|---------------| | **Proved Developed** | 343 | 155 | 1,428 | 735 | | **Proved Undeveloped**| 36 | 18 | 102 | 72 | | **Total Proved** | **379** | **173** | **1,530** | **807** | [Upstream Exploration and Production](index=10&type=section&id=Upstream%20Exploration%20and%20Production) The company's upstream activities are led by U.S. operations in the Permian Basin, with international assets in Egypt and the North Sea - U.S. operations are concentrated in the Permian Basin (Midland and Delaware Basins), holding **1.8 million net acres**, where the company drilled **126 successful development wells** in 2023[29](index=29&type=chunk)[30](index=30&type=chunk) - In Egypt, operations are governed by a modernized Production Sharing Contract (PSC) that consolidated most acreage and refreshed lease terms, with a joint venture holding a **one-third noncontrolling interest**[41](index=41&type=chunk)[43](index=43&type=chunk) - The company **suspended all new drilling activity** in the North Sea during the second quarter of 2023, shifting its investment program toward safety and asset maintenance[46](index=46&type=chunk) Worldwide Drilling Statistics (2021-2023) | Year | Net Exploratory Wells (Productive/Dry) | Net Development Wells (Productive/Dry) | Total Net Wells (Productive/Dry) | |:----:|:--------------------------------------:|:--------------------------------------:|:------------------------------------:| | 2023 | 25.2 / 24.3 | 144.5 / 7.7 | 169.7 / 32.0 | | 2022 | 16.0 / 16.6 | 106.1 / 0.0 | 122.1 / 16.6 | | 2021 | 10.6 / 15.8 | 98.2 / 1.5 | 108.8 / 17.3 | [Human Capital Management](index=21&type=section&id=Human%20Capital%20Management) The company focuses on diversity, talent development, and employee safety, employing 2,271 people globally as of year-end 2023 - Globally, **women comprise 23% of the workforce**, 20% of leadership roles, and 30% of the Board of Directors, while in the U.S., 37% of the workforce self-reports as non-white[90](index=90&type=chunk)[91](index=91&type=chunk) Employee Count by Region (as of Dec 31, 2023) | Region | Employees | |----------------|-----------| | North America | 1,403 | | United Kingdom | 607 | | Egypt | 259 | | France | 2 | | **Total** | **2,271** | 2023 Global Primary Workforce Safety Metrics | Metric | 2023 Rate | Performance vs. Target | |--------------------------------------|-----------|-----------------------------| | Total Recordable Incident Rate (TRIR)| 0.22 | 27% below target of 0.30 | | Days Away, Restricted (DART) Rate | 0.14 | 7% below target of 0.15 | | Severe Incident Rate (SIR) | 0.005 | 82% below target of 0.028 | | Vehicle Incident Rate (VIR) | 0.65 | 16% above target of 0.56 | [Item 1A. Risk Factors](index=27&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks from commodity price volatility, operational hazards, international politics, and climate change regulations - The company's financial results are **highly dependent on volatile crude oil, natural gas, and NGL prices**, which are influenced by global supply and demand, OPEC+ actions, and geopolitical events[124](index=124&type=chunk)[125](index=125&type=chunk) - International operations, which accounted for **46% of 2023 production**, are subject to political and economic risks, including deteriorating economic conditions in Egypt leading to payment delays[179](index=179&type=chunk)[183](index=183&type=chunk) - The company faces risks related to the pending merger with Callon Petroleum, including **failure to complete the transaction** and inability to successfully integrate operations[185](index=185&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Regulatory and environmental risks are significant, including potential costs from **climate change initiatives**, new regulations on hydraulic fracturing, and changes in tax laws[163](index=163&type=chunk)[166](index=166&type=chunk)[168](index=168&type=chunk)[172](index=172&type=chunk) - **Cybersecurity threats** pose a risk to operations, which are dependent on digital technologies, and a successful attack could lead to operational and financial loss[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) [Item 1B. Unresolved Staff Comments](index=38&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments from the SEC - None[196](index=196&type=chunk) [Item 1C. Cybersecurity](index=38&type=section&id=ITEM%201C.%20CYBERSECURITY) APA maintains a comprehensive cybersecurity program overseen by a dedicated Board committee, with no material incidents reported in 2023 - The company's cybersecurity program includes safeguards for data, technology, and information systems, with material risks incorporated into the corporate risk register[196](index=196&type=chunk) - In 2023, the Board of Directors formed a standing **Cybersecurity Committee** to assist with oversight of the company's cybersecurity program and associated risks[199](index=199&type=chunk)[200](index=200&type=chunk) - The **Chief Information Officer (CIO)** is primarily responsible for assessing and managing cybersecurity threats and oversees the Information Security Team[203](index=203&type=chunk) - As of December 31, 2023, **no risks from cybersecurity threats have materially affected** or are reasonably likely to materially affect the company's business strategy, operations, or financial condition[198](index=198&type=chunk) [Item 3. Legal Proceedings](index=41&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) This section incorporates by reference the information on legal and environmental matters detailed in Note 11 of the financial statements - Information regarding legal proceedings is incorporated by reference from **Note 11—Commitments and Contingencies** in the Notes to Consolidated Financial Statements[206](index=206&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) The company reports that there are no mine safety disclosures - None[207](index=207&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=42&type=section&id=ITEM%205.%20MARKET%20FOR%20THE%20REGISTRANT'S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%2C%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company details its common stock information, dividend history, and share repurchase activities for 2023 - The company has paid cash dividends on its common stock for **59 consecutive years**, with the quarterly dividend set at **$0.25 per share**[209](index=209&type=chunk) - As of December 31, 2023, the company had authorization to repurchase a maximum of **43.9 million additional shares** under its plans[211](index=211&type=chunk) 2023 Issuer Purchases of Equity Securities | Period | Total Shares Purchased | Average Price Paid per Share | |-----------------------------|------------------------|------------------------------| | January 1 to March 31, 2023 | 3,662,708 | $38.86 | | April 1 to June 30, 2023 | 1,348,347 | $33.72 | | July 1 to Sept 30, 2023 | 477,465 | $41.90 | | Oct 1 to Dec 31, 2023 | 3,222,658 | $37.73 | | **Total 2023** | **8,711,178** | **$37.81** | [Item 6. Selected Financial Data](index=43&type=section&id=ITEM%206.%20SELECTED%20FINANCIAL%20DATA) This section has been omitted from the report - Omitted[216](index=216&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=ITEM%207.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses 2023 financial results, highlighting lower net income due to commodity prices, strategic acquisitions, and operational performance - The decrease in 2023 net income was driven by lower revenues from significantly lower commodity prices, partially offset by a **$1.7 billion non-cash deferred income tax benefit**[225](index=225&type=chunk)[269](index=269&type=chunk) - The company remains committed to its capital return framework of returning **60% of cash flow** over capital investment to shareholders, which included **$329 million in share repurchases** in 2023[224](index=224&type=chunk)[226](index=226&type=chunk) - APA has recorded a contingent liability of **$824 million** as of year-end 2023 for potential decommissioning obligations on Gulf of Mexico properties sold to Fieldwood Energy[326](index=326&type=chunk)[596](index=596&type=chunk)[602](index=602&type=chunk) - The company's 2024 upstream capital investment is planned at **$1.9 to $2.0 billion**, with worldwide production expected to be relatively flat year-over-year[272](index=272&type=chunk) Key Financial Results (2023 vs. 2022) | Metric | 2023 | 2022 | Change | |---------------------------------------------|---------------|---------------|-------------| | Net Income Attributable to Common Stock ($B)| $2.9 | $3.7 | ($0.8B) | | Diluted EPS | $9.25 | $11.02 | ($1.77) | | Cash from Operating Activities ($B) | $3.1 | $4.9 | ($1.8B) | | Oil & Gas Production Revenues ($B) | $7.4 | $9.2 | ($1.8B) | [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Revenues decreased in 2023 due to lower commodity prices, despite a slight increase in production volumes - G&A expenses **decreased by $132 million** compared to 2022, primarily due to lower cash-based stock compensation expense[260](index=260&type=chunk) - The DD&A rate **increased to $10.12 per boe** in 2023 from $8.18 per boe in 2022, driven by cost inflation and lower proved reserves[262](index=262&type=chunk) Production Volumes by Product (Avg. Daily) | Product | 2023 | 2022 | % Change | |-----------------|-----------|-----------|----------| | Oil (b/d) | 202,746 | 188,057 | +8% | | Natural Gas (Mcf/d) | 828,343 | 864,946 | -4% | | NGL (b/d) | 64,237 | 64,034 | 0% | | **Total (boe/d)** | **405,040** | **396,249** | **+2%** | Average Realized Prices | Product | 2023 | 2022 | % Change | |-----------------------------|----------|-----------|----------| | Oil (per bbl) | $80.72 | $99.11 | -19% | | Natural Gas (per Mcf) | $2.91 | $4.98 | -42% | | NGL (per bbl) | $21.54 | $34.51 | -38% | [Capital Resources and Liquidity](index=54&type=section&id=Capital%20Resources%20and%20Liquidity) Operating cash flow decreased in 2023, with major cash uses for capital expenditures, share repurchases, and dividends - As of December 31, 2023, the company had **$5.2 billion in total debt** and **$2.9 billion in available borrowing capacity** under its syndicated credit facilities[290](index=290&type=chunk)[291](index=291&type=chunk) - In January 2024, APA entered into a **$2.0 billion** syndicated credit agreement for a senior unsecured delayed-draw term loan facility to refinance certain Callon indebtedness[304](index=304&type=chunk)[545](index=545&type=chunk) - The company has a significant contingent liability related to decommissioning sold Gulf of Mexico properties, estimated at **$824 million to $1.2 billion**, for which it has recorded a liability of $824 million[326](index=326&type=chunk)[602](index=602&type=chunk) Summary of Cash Flows (in millions) | Cash Flow Category | 2023 | 2022 | |---------------------------|-----------|-----------| | Net Cash from Operating | $3,129 | $4,943 | | Net Cash Used in Investing | ($2,138) | ($1,511) | | Net Cash Used in Financing | ($1,149) | ($3,489) | | **Change in Cash** | **($158)**| **($57)** | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks are commodity price volatility, interest rate fluctuations, and foreign currency exchange rates - The company's revenues and cash flows are highly dependent on volatile commodity prices; a **$1.00 per barrel change in oil price** would change annual revenue by approximately **$74 million**[347](index=347&type=chunk)[348](index=348&type=chunk) - As of December 31, 2023, the company had **$4.8 billion in fixed-rate debt**, mitigating interest rate risk on its long-term notes[350](index=350&type=chunk)[351](index=351&type=chunk) - The company is exposed to foreign currency exchange rate risk, particularly between the **U.S. dollar and the British pound**, for its North Sea operations[353](index=353&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=68&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section indicates the company's audited financial statements and supplementary data are included in Part IV, Item 15 of the report - The financial statements and supplementary financial information are presented on pages F-1 through F-64 in Part IV, Item 15 of this Annual Report on Form 10-K[355](index=355&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=68&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The company reports no changes in or disagreements with its independent registered public accounting firm - There have been **no changes in or disagreements with the accountants** during the periods presented[356](index=356&type=chunk) [Item 9A. Controls and Procedures](index=68&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of year-end 2023 - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2023[357](index=357&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter ended December 31, 2023, that materially affected, or are reasonably likely to materially affect, internal controls[360](index=360&type=chunk) [Item 9B. Other Information](index=69&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) The company reports no adoption, modification, or termination of Rule 10b5-1 trading arrangements by directors or officers in Q4 2023 - During the three months ended December 31, 2023, none of the Company's directors or officers adopted, modified, or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement"[361](index=361&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=69&type=section&id=ITEM%209C.%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS) This section is not applicable to the company - Not applicable[361](index=361&type=chunk) Part III [Items 10-14. Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Accountant Fees](index=70&type=section&id=ITEMS%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information regarding governance, compensation, and security ownership is incorporated by reference from the 2024 proxy statement - Information for Items 10, 11, 12, 13, and 14 is **incorporated by reference** from the registrant's definitive proxy statement for the 2024 annual meeting of stockholders[363](index=363&type=chunk)[365](index=365&type=chunk)[366](index=366&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=71&type=section&id=ITEM%2015.%20EXHIBITS%2C%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists the company's financial statements, independent auditor's reports, and all exhibits filed with the Form 10-K - This item includes the consolidated financial statements, notes to the financial statements, and the report of the independent registered public accounting firm, **Ernst & Young LLP**[371](index=371&type=chunk)[391](index=391&type=chunk)[398](index=398&type=chunk) - A list of exhibits filed with the report is provided, including the **merger agreement with Callon Petroleum**, credit agreements, and executive compensation plans[374](index=374&type=chunk) - The report from independent petroleum consultants **Ryder Scott Company, L.P.** regarding the company's oil and gas reserves is filed as an exhibit[378](index=378&type=chunk) [Item 16. Form 10-K Summary](index=74&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) The company reports that there is no Form 10-K summary - None[380](index=380&type=chunk)

Exhibit 99.1 NEWS RELEASE APA Corporation Announces Fourth-Quarter and Full-Year 2023 Financial and Operational Results 2023 Highlights • Delivered full-year net cash from operating activities of $3.1 billion, adjusted EBITDAX of $5.3 billion and $965 million of free cash flow (FCF); • Returned $637 million to shareholders or 66% of FCF; • Increased total company oil production by 8% year-over-year; • U.S. oil increased 12% from fourth-quarter 2022 to fourth-quarter 2023, driven by strong Permian Basin exec ...

APA Corporation (NASDAQ:APA) Q3 2023 Earnings Conference Call November 2, 2023 11:00 AM ET Company Participants Gary Clark - VP, IR John Christmann - CEO & President Steve Riney - EVP & CFO Dave Pursell - EVP, Development Tracey Henderson - EVP, Exploration Clay Bretches - EVP, Operations Conference Call Participants Doug Leggate - Bank of America John Freeman - Raymond James Bob Brackett - Bernstein Research Neal Dingmann - Truist Securities Scott Gruber - Citigroup Roger Read - Wells Fargo Securities Mich ...

Third-Quarter 2023 Financial & Operational Supplement ...