Key Takeaways
- Reported production of 473,000 barrels of oil equivalent (BOE) per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 405,000 BOE per day;
- Exceeded second-quarter U.S. oil production guidance and raising full-year guidance;
- Expect U.S. oil production to increase 8% from second-quarter 2024 to fourth-quarter 2024;
- Egypt adjusted production exceeded guidance by approximately 5% in the second quarter;
- Closed non-core asset sales of approximately $660 million in net proceeds, consisting of approximately 13,000 BOE per day in first-quarter 2024;
- Returned $135 million of free cash flow to shareholders through dividends and share buybacks in the second quarter; and
- Callon acquisition integration proceeding ahead of schedule; revised annual cost synergies estimate to $250 million, up $100 million from initial estimate.
APA Corporation has announced its financial and operational results for the second quarter of 2024.
APA reported net income attributable to common stock of $541 million, or $1.46 per diluted share. When adjusted for items that impact the comparability of results, APA’s second-quarter earnings were $434 million, or $1.17 per diluted share. Net cash provided by operating activities was $877 million, and adjusted EBITDAX was $1.6 billion.
'In the second quarter, we delivered higher-than-expected production across all three operating areas,' said John J. Christmann IV, APA’s chief executive officer. 'In the Permian Basin, we had outstanding second-quarter oil production performance and are raising our outlook for the back half of the year after adjusting for asset sales. We also had strong second-quarter performance in Egypt as we benefitted from newly implemented water injection initiatives on our base production and redirected workover rig capacity to opportunities on recompletions and offline volumes.
'During the first half of the year, our focus was on the smooth integration of the Callon assets and rebalancing our drilling and workover rig programs in Egypt. We made tremendous progress on both fronts and are now poised for a strong second half where we will deliver significant organic oil production growth in the Permian Basin and expect to see a meaningful increase in free cash flow.'
Second-Quarter summary
Second-quarter reported production was 473,000 BOE per day, and adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 405,000 BOE per day. U.S. oil production was 139,500 barrels per day, up 67% from first-quarter 2024, driven by the addition of Callon. Despite the impact of asset sales and significant natural gas and NGL curtailments in response to pricing extremes in the Permian Basin, total U.S. volumes on a BOE basis were in line with company guidance for the quarter.
For the second quarter, APA guided to a net gain on third-party oil and gas purchases and sales of $100 million, and the company generated $132 million. Based on the second-quarter actuals and forward strip pricing, APA is raising its full-year estimate of net gain on third-party oil and gas purchases and sales to $350 million, which is $120 million higher than full-year guidance issued in May.
APA’s second-quarter upstream capital investment of $839 million and G&A of $85 million were considerably below guidance, while upstream lease operating expense was generally in line.
Exploration and development update
APA and its partner, TotalEnergies, remain on track in Suriname for FID on Block 58 by year-end 2024 and first oil in 2028. TotalEnergies announced that it has secured a floating production storage and offloading (FPSO) hull for the 200,000 barrel per day development project.
In Alaska, APA and its partners were awarded an additional 51,000 gross acres, bringing the total lease position to 326,000 gross acres entirely situated on state lands. The company is planning more exploration following its high-quality oil discovery at King Street #1.
Capital activity
For the remainder of 2024, APA plans to average nine to 10 rigs in the Permian Basin and 11 rigs in Egypt. At this activity rate, the company expects full-year capital will be at or below company guidance of $2.7 billion.
2024 Sustainability Report
The company recently published its 2024 Sustainability Report, which contains its vision of the important role that oil and natural gas play in human progress and a secure energy future, along with an in-depth review of our ESG performance, initiatives and success stories.
Source: APA Corp
