(APA Corp., 1.May.2024) — APA Corporation (Nasdaq: APA) announced its financial and operational results for the first quarter of 2024.
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 $368mn, adjusted EBITDAX of $1.24bn;
- Returned $176mn to shareholders in the first quarter through dividends and share buybacks;
- Continued Permian strength drove U.S. oil volumes above guidance, marking the fifth consecutive quarter of meeting or exceeding guidance;
- Completed acquisition of Callon Petroleum Company and increased expected annual cost synergies by 50% to $225mn; increases APA’s U.S. oil production by more than 80% from fourth-quarter 2023 to estimated fourth-quarter 2024;
- Updated for the acquisition, Permian expected to represent more than 70% of total company capital expense and production for 2024; and
- Discovered high-quality oil in two zones at King Street #1 well in joint-venture leasehold in Alaska.
APA reported net income attributable to common stock of $132mn, or $0.44 per diluted share. When adjusted for items that impact the comparability of results, APA’s first-quarter earnings were $237mn, or $0.78 per diluted share. Net cash provided by operating activities was $368mn and adjusted EBITDAX was $1.24bn.
“Our drilling programs in the U.S. and Egypt performed well during the quarter,” said John J. Christmann IV, APA’s CEO. “In the Permian Basin, where we are consistently delivering excellent results, we added scale and oil leverage with the recently closed Callon Petroleum Company acquisition. We are currently focused on integrating the Callon assets and have identified compelling opportunities to generate value across the acquired asset base through changes in planning and well design, drilling and completions, and many aspects of daily operations. Accordingly, we have increased our expected annual cost synergies from the transaction by 50% to $225mn.”
First-Quarter summary
First-quarter reported production was 389,000 BOE per day and adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 320,000 BOE per day. APA’s first-quarter upstream capital investment and lease operating expense were better than expected primarily due to the timing of planned facility, leasehold and exploration spend.
Alaska update
Exploration efforts in Alaska resulted in the confirmation of a working petroleum system and a high-quality oil discovery at King Street #1. The other two wells, Sockeye #1 and Voodoo #1, did not reach their target objectives during the drilling season due to a number of delays. The joint venture is currently analyzing the data and evaluating next steps.
2024 capital and activity update
Following the completion of the Callon acquisition, APA is providing revised full-year 2024 guidance. In 2024, APA plans to invest $2.7bn in upstream oil and gas capital. The company expects to average approximately 10 rigs for the remainder of this year in the U.S. as it actively manages and high grades the newly combined rig fleet.
“In the month since we closed the Callon acquisition, we have made significant progress in the integration process,” Christmann said. “We believe the most compelling opportunities for value from the acquisition are in future capital efficiencies and the impact of the company’s increased oil exposure.”
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