APA Corp false 0001841666 0001841666 2024-11-06 2024-11-06

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 6, 2024

 

 

APA CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-40144   86-1430562
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (IRS Employer
Identification No.)

2000 W Sam Houston Pkwy S, Suite 200

Houston, Texas 77042-3643

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (713) 296-6000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange
on which registered

Common Stock, $0.625 par value   APA   Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


The information in this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of Section 18, and shall not be incorporated by reference in any filing under the Securities Act or the Exchange Act, except as set forth by specific reference in such filing.

 

Item 2.02.

Results of Operations and Financial Condition.

On November 6, 2024, APA Corporation issued a press release announcing financial and operating results for the fiscal quarter ended September 30, 2024. The full text of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit No.    Description
99.1    Press Release of APA Corporation dated November 6, 2024.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    APA CORPORATION
Date: November 7, 2024     By:  

/s/ Rebecca A. Hoyt

      Rebecca A. Hoyt
      Senior Vice President, Chief Accounting Officer, and Controller
      (Principal Accounting Officer)

Exhibit 99.1

 

LOGO

NEWS RELEASE

APA Corporation Announces Third-Quarter 2024

Financial and Operational Results

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.”

 

1


APA CORPORATION ANNOUNCES THIRD-QUARTER 2024

FINANCIAL AND OPERATIONAL RESULTS — PAGE 2 of 5

 

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.


APA CORPORATION ANNOUNCES THIRD-QUARTER 2024

FINANCIAL AND OPERATIONAL RESULTS — PAGE 3 of 5

 

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 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, 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 http://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


APA CORPORATION ANNOUNCES THIRD-QUARTER 2024

FINANCIAL AND OPERATIONAL RESULTS — PAGE 4 of 5

 

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,”


APA CORPORATION ANNOUNCES THIRD-QUARTER 2024

FINANCIAL AND OPERATIONAL RESULTS — PAGE 5 of 5

 

“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 www.sec.gov.

Contacts

Investor: (281) 302-2286 Gary Clark

Media: (713) 296-7276  Alexandra Franceschi

Website: www.apacorp.com

Click here for the full release with quarterly financial statements.

-end-


APA CORPORATION

STATEMENT OF CONSOLIDATED OPERATIONS

(Unaudited)

(In millions, except per share data)

 

     For the Quarter Ended
September 30,
    For the Nine Months Ended
September 30,
 
     2024     2023     2024     2023  

REVENUES AND OTHER:

        

Oil, natural gas, and natural gas liquids production revenues

        

Oil revenues

   $ 1,797     $ 1,705     $ 5,136     $ 4,467  

Natural gas revenues

     103       236       414       658  

Natural gas liquids revenues

     158       138       457       375  
  

 

 

   

 

 

   

 

 

   

 

 

 
     2,058       2,079       6,007       5,500  

Purchased oil and gas sales

     473       229       1,018       612  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     2,531       2,308       7,025       6,112  

Derivative instrument gain (loss), net

     (10     —        (17     104  

Gain on divestitures, net

     1       1       284       7  

Loss on previously sold Gulf of Mexico properties

     —        —        (83     —   

Other, net

     18       —        26       77  
  

 

 

   

 

 

   

 

 

   

 

 

 
     2,540       2,309       7,235       6,300  
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING EXPENSES:

        

Lease operating expenses

     418       394       1,216       1,076  

Gathering, processing, and transmission

     123       89       328       245  

Purchased oil and gas costs

     292       211       665       558  

Taxes other than income

     70       61       205       163  

Exploration

     29       49       248       144  

General and administrative

     92       139       270       276  

Transaction, reorganization, and separation

     14       5       156       11  

Depreciation, depletion, and amortization:

        

Oil and gas property and equipment

     588       407       1,589       1,086  

Other assets

     7       11       24       31  

Asset retirement obligation accretion

     36       29       112       86  

Impairments

     1,111       —        1,111       46  

Financing costs, net

     100       81       276       235  
  

 

 

   

 

 

   

 

 

   

 

 

 
     2,880       1,476       6,200       3,957  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS) BEFORE INCOME TAXES

     (340     833       1,035       2,343  

Current income tax provision

     260       422       845       1,022  

Deferred income tax benefit

     (461     (144     (503     (22
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS

     (139     555       693       1,343  

Net income attributable to noncontrolling interest

     84       96       243       261  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK

   $ (223   $ 459     $ 450     $ 1,082  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS) PER COMMON SHARE:

        

Basic

   $ (0.60   $ 1.49     $ 1.30     $ 3.50  

Diluted

   $ (0.60   $ 1.49     $ 1.29     $ 3.50  

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:

        

Basic

     370       308       348       309  

Diluted

     370       308       348       309  

DIVIDENDS DECLARED PER COMMON SHARE

   $ 0.25     $ 0.25     $ 0.75     $ 0.75  

 

Page 1


APA CORPORATION

PRODUCTION INFORMATION

 

     For the Quarter Ended      % Change     For the Nine Months Ended  
     September 30,
2024
     June 30,
2024
     September 30,
2023
     3Q24 to
2Q24
    3Q24 to
3Q23
    September 30,
2024
     September 30,
2023
 

OIL VOLUME - Barrels per day

                  

United States

     143,299        139,361        83,584        3     71     122,138        77,198  

Egypt (1, 2)

     91,673        87,702        88,521        5     4     88,725        88,038  

North Sea

     21,334        26,586        35,680        -20     -40     25,888        36,070  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

International (1)

     113,007        114,288        124,201        -1     -9     114,613        124,108  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

Total (1)

     256,306        253,649        207,785        1     23     236,751        201,306  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

NATURAL GAS VOLUME - Mcf per day

                  

United States

     467,615        510,708        454,643        -8     3     473,997        448,838  

Egypt (1, 2)

     300,418        273,077        300,326        10     0     287,953        331,158  

North Sea

     18,911        51,854        65,168        -64     -71     41,042        47,665  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

International (1)

     319,329        324,931        365,494        -2     -13     328,995        378,823  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

Total (1)

     786,944        835,639        820,137        -6     -4     802,992        827,661  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

NGL VOLUME - Barrels per day

                  

United States

     79,474        78,937        66,280        1     20     71,690        61,418  

North Sea

     543        1,550        1,497        -65     -64     1,164        1,209  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

Total (1)

     80,017        80,487        67,777        -1     18     72,854        62,627  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

BOE per day

                  

United States

     300,709        303,416        225,639        -1     33     272,827        213,423  

Egypt (1, 2)

     141,742        133,215        138,575        6     2     136,718        143,231  

North Sea

     25,029        36,778        48,038        -32     -48     33,892        45,222  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

International (1)

     166,771        169,993        186,613        -2     -11     170,610        188,453  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

Total (1)

     467,480        473,409        412,252        -1     13     443,437        401,876  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

Total excluding noncontrolling interests

     420,199        428,972        366,051        -2     15     397,832        354,094  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

(1) Includes net production volumes attributed to our noncontrolling partner in Egypt below:

 

Oil (b/d)

     30,579        29,255        29,514            29,596        29,369  

Gas (Mcf/d)

     100,210        91,094        100,122            96,054        110,476  

BOE per day

     47,281        44,437        46,201            45,605        47,782  

(2) Egypt Gross Production

                  

Oil (b/d)

     136,670        139,490        144,528            138,039        141,995  

Gas (Mcf/d)

     447,173        431,750        472,744            445,397        511,430  

BOE per day

     211,199        211,448        223,319            212,272        227,233  

 

Page 2


APA CORPORATION

ADJUSTED PRODUCTION INFORMATION

Adjusted production excludes certain items that management believes affect the comparability of operating results for the periods presented. Adjusted production excludes production attributable to 1) noncontrolling interest in Egypt and 2) Egypt tax barrels. Management uses adjusted production to evaluate the company’s operational trends and performance and believes it is useful to investors and other third parties.

 

     For the Quarter Ended      % Change     For the Nine Months Ended  
     September 30,
2024
     June 30,
2024
     September 30,
2023
     3Q24 to
2Q24
    3Q24 to
3Q23
    September 30,
2024
     September 30,
2023
 

OIL VOLUME - Barrels per day

                  

United States

     143,299        139,361        83,584        3     71     122,138        77,198  

Egypt

     44,627        43,099        42,535        4     5     43,414        42,724  

North Sea

     21,334        26,586        35,680        -20     -40     25,888        36,070  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

International

     65,961        69,685        78,215        -5     -16     69,302        78,794  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

Total

     209,260        209,046        161,799        0     29     191,440        155,992  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

NATURAL GAS VOLUME - Mcf per day

 

               

United States

     467,615        510,708        454,643        -8     3     473,997        448,838  

Egypt

     145,190        133,184        143,211        9     1     139,860        159,648  

North Sea

     18,911        51,854        65,168        -64     -71     41,042        47,665  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

International

     164,101        185,038        208,379        -11     -21     180,902        207,313  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

Total

     631,716        695,746        663,022        -9     -5     654,899        656,151  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

NGL VOLUME - Barrels per day

                  

United States

     79,474        78,937        66,280        1     20     71,690        61,418  

North Sea

     543        1,550        1,497        -65     -64     1,164        1,209  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

Total

     80,017        80,487        67,777        -1     18     72,854        62,627  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

BOE per day

                  

United States

     300,709        303,416        225,639        -1     33     272,827        213,423  

Egypt

     68,825        65,296        66,403        5     4     66,724        69,332  

North Sea

     25,029        36,778        48,038        -32     -48     33,892        45,222  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

International

     93,854        102,074        114,441        -8     -18     100,616        114,554  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

Total

     394,563        405,490        340,080        -3     16     373,443        327,977  
  

 

 

    

 

 

    

 

 

        

 

 

    

 

 

 

 

Page 3


APA CORPORATION

PRICE INFORMATION

 

     For the Quarter Ended      For the Nine Months Ended  
     September 30,
2024
     June 30,
2024
     September 30,
2023
     September 30,
2024
     September 30,
2023
 

AVERAGE OIL PRICE PER BARREL

              

United States

   $ 76.34      $ 80.54      $ 82.33      $ 78.16      $ 77.40  

Egypt

     79.88        84.30        88.99        82.41        82.04  

North Sea

     83.36        84.62        87.70        83.67        83.25  

International

     80.38        84.38        88.57        82.66        82.41  

Total

     78.06        82.28        86.15        80.31        80.50  

AVERAGE NATURAL GAS PRICE PER MCF

 

           

United States

   $ 0.16      $ 0.31      $ 2.12      $ 0.61      $ 1.87  

Egypt

     2.93        2.92        2.91        2.93        2.92  

North Sea

     9.76        10.61        10.98        9.89        12.83  

International

     3.30        4.09        4.36        3.75        4.15  

Total

     1.43        1.77        3.12        1.89        2.91  

AVERAGE NGL PRICE PER BARREL

              

United States

   $ 20.91      $ 21.22      $ 21.87      $ 22.20      $ 21.24  

North Sea

     45.93        43.43        42.78        46.47        47.58  

Total

     21.29        21.68        22.26        22.73        21.85  

 

Page 4


APA CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

(Unaudited)

(In millions)

SUMMARY EXPLORATION EXPENSE INFORMATION

 

     For the Quarter Ended
September 30,
     For the Nine Months Ended
September 30,
 
     2024      2023      2024      2023  

Unproved leasehold impairments

   $ 1      $ 9      $ 11      $ 20  

Dry hole expense

     8        18        172        71  

Geological and geophysical expense

     6        1        22        3  

Exploration overhead and other

     14        21        43        50  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 29      $ 49      $ 248      $ 144  
  

 

 

    

 

 

    

 

 

    

 

 

 

SUMMARY CASH FLOW INFORMATION

 

     For the Quarter Ended
September 30,
     For the Nine Months Ended
September 30,
 
     2024      2023      2024      2023  

Net cash provided by operating activities

   $ 1,339      $ 764      $ 2,584      $ 2,099  
  

 

 

    

 

 

    

 

 

    

 

 

 

Additions to upstream oil and gas property

     (930      (628      (2,153      (1,747

Leasehold and property acquisitions

     (1      (1      (64      (11

Proceeds from asset divestitures

     (5      1        724        29  

Proceeds from sale of Kinetik shares

     —         —         428        —   

Other, net

     81        (39      58        (53
  

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in investing activities

   $ (855    $ (667    $ (1,007    $ (1,782
  

 

 

    

 

 

    

 

 

    

 

 

 

Proceeds from commercial paper and revolving credit facilities, net

     127        6        190        202  

Proceeds from term loan facility

     —         —         1,500        —   

Payments on term loan facility

     (500      —         (500      —   

Payment on Callon Credit Agreement

     —         —         (472      —   

Payments on fixed-rate debt

     —         —         (1,641      (65

Distributions to noncontrolling interest

     (110      (54      (233      (154

Treasury stock activity, net

     (2      (20      (146      (208

Dividends paid to APA common stockholders

     (92      (77      (260      (232

Other, net

     (3      1        (38      (10
  

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in financing activities

   $ (580    $ (144    $ (1,600    $ (467
  

 

 

    

 

 

    

 

 

    

 

 

 

SUMMARY BALANCE SHEET INFORMATION

 

     September 30,
2024
     December 31,
2023
 

Cash and cash equivalents

   $ 64      $ 87  

Assets held for sale

     1,091        —   

Other current assets

     2,465        2,375  

Property and equipment, net

     12,601        10,038  

Decommissioning security for sold Gulf of Mexico properties

     21        21  

Other assets

     3,134        2,723  
  

 

 

    

 

 

 

Total assets

   $ 19,376      $ 15,244  
  

 

 

    

 

 

 

Current debt

   $ 2      $ 2  

Liabilities held for sale

     224        —   

Current liabilities

     2,699        2,402  

Long-term debt

     6,370        5,186  

Decommissioning contingency for sold Gulf of Mexico properties

     759        764  

Deferred credits and other noncurrent liabilities

     3,162        3,199  

APA shareholders’ equity

     5,114        2,655  

Noncontrolling interest

     1,046        1,036  
  

 

 

    

 

 

 

Total Liabilities and equity

   $ 19,376      $ 15,244  
  

 

 

    

 

 

 

Common shares outstanding at end of period

     370        304  

 

Page 5


APA CORPORATION

NON-GAAP FINANCIAL MEASURES

(In millions, except per share data)

Reconciliation of Costs incurred to Upstream capital investment

Management believes the presentation of upstream capital investments is useful for investors to assess APA’s expenditures related to our upstream capital activity. We define capital investments as costs incurred for oil and gas activities, adjusted to exclude property acquisitions, asset retirement obligation revisions and liabilities incurred, capitalized interest, and certain exploration expenses, while including amounts paid during the period for abandonment and decommissioning expenditures. Upstream capital expenditures attributable to a one-third noncontrolling interest in Egypt are also excluded. Management believes this provides a more accurate reflection of APA’s cash expenditures related to upstream capital activity and is consistent with how we plan our capital budget.

 

     For the Quarter Ended
September 30,
     For the Nine Months Ended
September 30,
 
     2024      2023      2024      2023  

Costs incurred in oil and gas property:

           

Asset and leasehold acquisitions

   $ (2    $ 3      $ 4,554      $ 15  

Exploration and development

     959        569        2,546        1,725  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Costs incurred in oil and gas property

   $ 957      $ 572      $ 7,100      $ 1,740  
  

 

 

    

 

 

    

 

 

    

 

 

 

Reconciliation of Costs incurred to Upstream capital investment:

           

Total Costs incurred in oil and gas property

   $ 957      $ 572      $ 7,100      $ 1,740  

Property acquisitions

     4        (1      (4,550      (1

Asset retirement obligations settled vs. incurred - oil and gas property

     (174      7        (163      20  

Capitalized interest

     (8      (7      (22      (18

Exploration seismic and administration costs

     (20      (22      (65      (53
  

 

 

    

 

 

    

 

 

    

 

 

 

Upstream capital investment including noncontrolling interest - Egypt

   $ 759      $ 549      $ 2,300      $ 1,688  

Less noncontrolling interest - Egypt

     (61      (75      (195      (203
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Upstream capital investment

   $ 698      $ 474      $ 2,105      $ 1,485  
  

 

 

    

 

 

    

 

 

    

 

 

 

Reconciliation of Net cash provided by operating activities to Cash flows from operations before changes in operating assets and liabilities and Free cash flow

Cash flows from operations before changes in operating assets and liabilities and free cash flow are non-GAAP financial measures. APA uses these measures internally and provides this information because management believes it is useful in evaluating the company’s ability to generate cash to internally fund exploration and development activities, fund dividend programs, and service debt, as well as to compare our results from period to period. We believe these measures are also used by research analysts and investors to value and compare oil and gas exploration and production companies and are frequently included in published research reports when providing investment recommendations. Cash flows from operations before changes in operating assets and liabilities and free cash flow are additional measures of liquidity but are not measures of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing, or financing activities. Additionally, this presentation of free cash flow may not be comparable to similar measures presented by other companies in our industry.

 

     For the Quarter Ended
September 30,
     For the Nine Months Ended
September 30,
 
     2024      2023      2024      2023  

Net cash provided by operating activities

   $ 1,339      $ 764      $ 2,584      $ 2,099  

Changes in operating assets and liabilities

     (221      161        428        440  
  

 

 

    

 

 

    

 

 

    

 

 

 

Cash flows from operations before changes in operating assets and liabilities

   $ 1,118      $ 925      $ 3,012      $ 2,539  

Adjustments to free cash flow:

           

Upstream capital investment including noncontrolling interest - Egypt

     (759      (549      (2,300      (1,688

Decommissioning spend on previously sold Gulf of Mexico properties

     (10      —         (39      —   

Non oil and gas capital investment

     (20      (15      (19      (24

Distributions to Sinopec noncontrolling interest

     (110      (54      (233      (154
  

 

 

    

 

 

    

 

 

    

 

 

 

Free cash flow

   $ 219      $ 307      $ 421      $ 673  
  

 

 

    

 

 

    

 

 

    

 

 

 

Reconciliation of Net cash provided by operating activities to Adjusted EBITDAX

Management believes EBITDAX, or earnings before income tax expense, interest expense, depreciation, amortization and exploration expense is a widely accepted financial indicator, and useful for investors, to assess a company’s ability to incur and service debt, fund capital expenditures, and make distributions to shareholders. We define adjusted EBITDAX, a non-GAAP financial measure, as EBITDAX adjusted for certain items presented in the accompanying reconciliation. Management uses adjusted EBITDAX to evaluate our ability to fund our capital expenditures, debt services and other operational requirements and to compare our results from period to period by eliminating the impact of certain items that management does not consider to be representative of the Company’s on-going operations. Management also believes adjusted EBITDAX facilitates investors and analysts in evaluating and comparing EBITDAX from period to period by eliminating differences caused by the existence and timing of certain operating expenses that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted EBITDAX may not be comparable to similar measures of other companies in our industry.

 

     For the Quarter Ended     For the Nine Months Ended  
     September 30,     June 30,     September 30,     September 30,  
     2024     2024     2023     2024      2023  

Net cash provided by operating activities

   $ 1,339     $ 877     $ 764     $ 2,584      $ 2,099  

Adjustments:

           

Exploration expense other than dry hole expense and unproved leasehold impairments

     20       30       22       65        53  

Current income tax provision

     260       285       422       845        1,022  

Other adjustments to reconcile net income to net cash provided by operating activities

     45       (21     (22     14        45  

Changes in operating assets and liabilities

     (221     190       161       428        440  

Financing costs, net

     100       100       81       276        244  

Transaction, reorganization & separation costs

     14       115       5       156        11  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Adjusted EBITDAX (Non-GAAP)

   $ 1,557     $ 1,576     $ 1,433     $ 4,368      $ 3,914  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

 

Page 6


APA CORPORATION

NON-GAAP FINANCIAL MEASURES

(In millions)

Reconciliation of debt to net debt

Net debt, or outstanding debt obligations less cash and cash equivalents, is a non-GAAP financial measure. Management uses net debt as a measure of the Company’s outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand.

 

     September 30,
2024
     June 30,
2024
     March 31,
2024
     December 31,
2023
 

Current debt

   $ 2      $ 2      $ 2      $ 2  

Long-term debt

     6,370        6,741        5,178        5,186  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total debt

     6,372        6,743        5,180        5,188  

Cash and cash equivalents

     64        160        102        87  
  

 

 

    

 

 

    

 

 

    

 

 

 

Net debt

   $ 6,308      $ 6,583      $ 5,078      $ 5,101  
  

 

 

    

 

 

    

 

 

    

 

 

 

Reconciliation of Income attributable to common stock to Adjusted earnings

Our presentation of adjusted earnings and adjusted earnings per share are non-GAAP measures because they exclude the effect of certain items included in Income Attributable to Common Stock. Management believes that adjusted earnings and adjusted earnings per share provides relevant and useful information, which is widely used by analysts, investors and competitors in our industry as well as by our management in assessing the Company’s operational trends and comparability of results to our peers.

Management uses adjusted earnings and adjusted earnings per share to evaluate our operating and financial performance because it eliminates the impact of certain items that management does not consider to be representative of the Company’s on-going business operations. As a performance measure, adjusted earnings may be useful to investors in facilitating comparisons to others in the Company’s industry because certain items can vary substantially in the oil and gas industry from company to company depending upon accounting methods, book value of assets, capital structure and asset sales and other divestitures, among other factors. Management believes excluding these items facilitates investors and analysts in evaluating and comparing the underlying operating and financial performance of our business from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted earnings and adjusted earnings per share may not be comparable to similar measures of other companies in our industry.

 

     For the Quarter Ended
September 30, 2024
    For the Quarter Ended
September 30, 2023
 
     Before
Tax
    Tax
Impact
    After
Tax
    Diluted
EPS
    Before
Tax
    Tax
Impact
    After
Tax
    Diluted
EPS
 

Net income (loss) including noncontrolling interests (GAAP)

   $ (340   $ 201     $ (139   $ (0.38   $ 833     $ (278   $ 555     $ 1.80  

Income attributable to noncontrolling interests

     152       (68     84       0.22       171       (75     96       0.31  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to common stock

     (492     269       (223     (0.60     662       (203     459       1.49  

Adjustments:*

                

Asset and unproved leasehold impairments

     1,112       (540     572       1.53       9       (6     3       0.01  

Valuation allowance and other tax adjustments

     —        —        —        —        —        (93     (93     (0.30

Unrealized derivative instrument loss

     13       (3     10       0.03       19       (3     16       0.05  

Kinetik equity investment mark-to-market gain

     —        —        —        —        28       (6     22       0.07  

Transaction, reorganization & separation costs

     14       (2     12       0.04       5       (1     4       0.01  

Gain on divestitures, net

     (1     —        (1     —        (1     —        (1     —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted earnings (Non-GAAP)

   $ 646     $ (276   $ 370     $ 1.00     $ 722     $ (312   $ 410     $ 1.33  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     For the Nine Months Ended
September 30, 2024
    For the Nine Months Ended
September 30, 2023
 
     Before
Tax
    Tax
Impact
    After
Tax
    Diluted
EPS
    Before
Tax
    Tax
Impact
    After
Tax
    Diluted
EPS
 

Net income including noncontrolling interests (GAAP)

   $ 1,035     $ (342   $ 693     $ 1.99     $ 2,343     $ (1,000   $ 1,343     $ 4.34  

Income attributable to noncontrolling interests

     441       (198     243       0.70       465       (204     261       0.84  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to common stock

     594       (144     450       1.29       1,878       (796     1,082       3.50  

Adjustments:*

                

Asset and unproved leasehold impairments

     1,122       (542     580       1.66       66       (46     20       0.07  

Valuation allowance and other tax adjustments

     —        16       16       0.05       —        7       7       0.02  

Gain on extinguishment of debt

     —        —        —        —        (9     2       (7     (0.02

Unrealized derivative instrument (gain) loss

     18       (4     14       0.04       (61     13       (48     (0.15

Loss on previously sold Gulf of Mexico properties

     83       (18     65       0.19       —        —        —        —   

Kinetik equity investment mark-to-market (gain) loss

     9       —        9       0.03       (17     4       (13     (0.05

Drilling contract termination charges

     —        —        —        —        13       (10     3       0.01  

Transaction, reorganization & separation costs

     156       (27     129       0.37       11       (3     8       0.02  

Gain on divestitures, net

     (284     62       (222     (0.64     (7     1       (6     (0.02
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Earnings (Non-GAAP)

   $ 1,698     $ (657   $ 1,041     $ 2.99     $ 1,874     $ (828   $ 1,046     $ 3.38  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

The income tax effect of the reconciling items are calculated based on the statutory rate of the jurisdiction in which the discrete item resides. 

 

Page 7

v3.24.3
Document and Entity Information
Nov. 06, 2024
Cover [Abstract]  
Entity Registrant Name APA Corp
Amendment Flag false
Entity Central Index Key 0001841666
Document Type 8-K
Document Period End Date Nov. 06, 2024
Entity Incorporation State Country Code DE
Entity File Number 001-40144
Entity Tax Identification Number 86-1430562
Entity Address, Address Line One 2000 W Sam Houston Pkwy S
Entity Address, Address Line Two Suite 200
Entity Address, City or Town Houston
Entity Address, State or Province TX
Entity Address, Postal Zip Code 77042-3643
City Area Code (713)
Local Phone Number 296-6000
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Common Stock, $0.625 par value
Trading Symbol APA
Security Exchange Name NASDAQ
Entity Emerging Growth Company false

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