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APA Corp. Fourth Quarter, Full Year 2021 Results

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   |    Monday,February 21,2022

APA Corp. announced its financial and operational results for the fourth-quarter and full-year 2021.

Fourth-Quarter Highlights:

• Reported production of 386,000 barrels of oil equivalent (BOE) per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 331,000 BOE per day; 
• Delivered net cash from operating activities of $1.1 billion and adjusted EBITDAX of $1.3 billion;
• Initiated a 60% capital return framework for shareholders, raised dividend for the second time in 2021, and repurchased $847 million of stock at an average price of $27.13 per share;
• Modernized production sharing contracts in Egypt, which will result in production and free cash flow uplift;
• Advanced path to first oil development on Block 58 in Suriname with successful Sapakara South-1 flow test, and subsequent to the quarter, announced discovery at Krabdagu;
• Exceeded U.S. production guidance with strong well performance in the Permian; and
• Announced elimination of routine flaring in onshore U.S. operations, achieving this critical ESG goal three months ahead of schedule.

During the fourth-quarter 2021, APA reported net income attributable to common stock of $382 million, or $1.05 per share on a fully diluted basis. When adjusted for certain items that impact the comparability of results, APA’s fourth-quarter earnings totaled $468 million or $1.29 on a diluted share basis. Net cash provided by operating activities in the fourth quarter was $1.1 billion and adjusted EBITDAX was $1.3 billion.
 
For the full-year 2021, APA reported net income of $973 million, or $2.59 per diluted common share. On an adjusted basis, APA’s 2021 earnings totaled $1.46 billion or $3.90 per diluted common share. Net cash provided by operating activities was $3.5 billion, and adjusted EBITDAX was $4.57 billion. 

John J. Christmann IV, APA’s chief executive officer and president, said: “2021 was an important turning point for APA with several key financial and operational accomplishments positioning us very well for the future. We generated approximately $1.8 billion in free cash flow and significantly strengthened our balance sheet, reducing upstream net debt by $1.2 billion. We also implemented a robust capital return framework, as we repurchased 8.5% of outstanding shares in the fourth quarter and raised the dividend twice during the year. The modernized production sharing contract in Egypt, which we finalized in late December, provides a foundation for increased investment and long-term production and free cash flow growth in one of our most important operating areas. Additionally, the discovery we announced today with our Krabdagu exploration well in Suriname marks another important step on our path to a first oil development in Suriname.”

Streamlining the Portfolio

APA continued to streamline its portfolio in 2021, selling $256 million of noncore assets in the Permian Basin. The company also recently signed an agreement to sell $805 million of mineral rights in the Delaware Basin, which is expected to close by the end of February.

The previously announced business combination between Altus Midstream and BCP Raptor Holdco LP, the parent company of EagleClaw Midstream, is on schedule to close by the end of February and provides APA with the option to sell up to four million shares of its ownership interest in the near-term. Together with the expected proceeds from the mineral sale this would make more than $1 billion of cash available for debt reduction, share repurchases and/or other corporate purposes.

ESG Achievements and Future Initiatives

APA is committed to progressing ESG initiatives in the areas where the company can achieve the greatest direct impact: air, water, communities and people. In 2021, APA established aggressive ESG goals tied to short-term incentive compensation for all employees. The company accomplished all of its 2021 ESG goals, most notably the elimination of routine flaring in U.S. onshore operations. For 2022, APA is introducing a number of new compensation-linked, short-term ESG goals, including: reducing upstream routine flaring in Egypt by 40%; establishing a supplier diversity program; and implementing a future-of-work strategy to enhance the employee work experience. The company is also establishing a first ever, long-term incentive compensation target linked to reducing emissions over the next three years.

Year-End 2021 Proved Reserves

Worldwide estimated proved reserves totaled 913 million BOE at year-end 2021, up 4% from year-end 2020. More than 90% of APA’s estimated proved reserves at year-end 2021 were classified as proved developed. During the year, APA added approximately 102 million BOE in field extensions and discoveries. Production and divestitures reduced proved reserves by 142 million BOE and 28 million BOE, respectively. Revised proved reserves increased by 107 million BOE driven by price and benefits associated with the modernized PSC terms in Egypt.

2024 Development Plan

Category	2023	2024 Est. Initial	Updated 2024 Guidance	%Difference (2023 vs 2024)
Total Capital Expenditure($mm)

 Click here for More Planned 2024 Activity