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APA Corp. Second Quarter 2021 Results

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   |    Wednesday,August 11,2021

APA Corp. announced its financial and operational results for the second-quarter 2021.

Key Takeaways:

• Reported production of 395,000 barrels of oil equivalent (BOE) per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 342,000 BOE per day; 
• Generated net cash from operating activities of $969 million, adjusted EBITDAX of $1.01 billion, and free cash flow of $396 million;
• Advanced agreement to modernize Egypt Production Sharing Contracts; expected review by Egyptian Parliament in the fall; and
• Announced appraisal drilling success offshore Suriname, moving closer to goal of commercial oil development.

APA reported net income attributable to common stock of $316 million, or $0.82 per diluted share. When adjusted for items that impact the comparability of results, APA’s second-quarter earnings were $266 million, or $0.70 per diluted share. Net cash provided by operating activities was $969 million, and adjusted EBITDAX was $1.01 billion. 

John J. Christmann IV, APA’s CEO and president, said: “A combination of strong well performance in the U.S., continued capital and cost discipline, and a favorable price environment enabled free cash flow generation of nearly $400 million during the quarter. I am also very pleased with the progress we have made on our ESG initiatives, Production Sharing Contract modernization in Egypt and appraisal drilling in Suriname.”

The company is advancing key ESG initiatives and announced that it will achieve its goal of eliminating routine flaring onshore in the U.S. in the third quarter of this year. The focus on that goal has also helped drive down flaring intensity, which is tracking below the company’s goal of less than 1% for the year.
  
In May, the company reached an agreement in principle to modernize Production Sharing Contract terms in Egypt. The agreement has been finalized and signed by the Egyptian Ministry of Petroleum and Mineral Resources and the Egyptian General Petroleum Corporation and is proceeding through the next stages of the approval process. 

In Suriname, APA and TotalEnergies announced last week a successful appraisal well in the Sapakara area, which encountered approximately 30 meters (98 feet) of net black oil pay in a single, high-quality zone of the Campano-Maastrichtian reservoir. This moves the JV closer to its goal of sanctioning the first commercial oil development in Block 58. Upon completion of drilling operations at Sapakara, the Maersk Valiant will move to the Bonboni exploration prospect approximately 45 kilometers to the north.  

Second-Quarter Summary

Second-quarter reported production was 395,000 BOE per day, and adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 342,000 BOE per day. U.S. production of 242,000 BOE per day benefitted from strong well performance throughout the company’s Permian Basin DUC completion program. This more than offset slightly lower international adjusted volumes of 100,000 BOE per day, which were impacted by lower cost recovery barrels in Egypt due to higher oil prices and extended operational downtime in the North Sea. APA’s second-quarter upstream capital investment was $257 million, which was below guidance primarily due to timing.
 
APA, excluding Altus Midstream, had total debt of $8.0 billion, cash and cash equivalents of $1.2 billion, and $3.2 billion available capacity under its undrawn revolving credit facility at the end of the quarter.

Looking Ahead

“APA is capable of delivering strong and sustainable free cash flow for many years to come. At current strip prices, we expect to generate approximately $1.7 billion of free cash flow this year to support our debt reduction goals,” Christmann concluded.

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