Third-quarter 2026 highlights
- Reported production of approximately 450,000 barrels of oil equivalent (BOE) per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 381,000 BOE per day and exceeded guidance;
- Delivered U.S. oil production of 128,000 barrels of oil per day, 4,000 barrels above guidance through high uptime, earlier turn-in-lines and robust new well performance;
- Generated $1.38 billion of net cash provided by operating activities, $699 million of free cash flow, and
$1.86 billion of adjusted EBITDAX; - Returned $537 million to shareholders including $450 million of share repurchases;
- Repaid $451 million of debt maturities in the third quarter; total debt has declined by $2.8 billion since year-end 2024, lowering annualized interest expense by more than $180 million;
- Reiterated $500 million run-rate cost savings across capital, lease operating expense and G&A by year-end 2026;
- Increased full-year 2026 free cash flow outlook to approximately $2.9 billion, reflecting stronger operating performance and higher commodity prices;
- Lowered net debt target to $2 billion, reinforcing commitment to a strong balance sheet; and
- Established preliminary capital budget of $2.5 billion for 2027; exploration capital and GranMorgu development to account for approximately 60% of the year-over-year increase.
APA Corporation has announced its financial and operational results for the third quarter of 2026. APA reported net income attributable to common stock of $698 million, or $2.00 per diluted share. When adjusted for certain items that impact the comparability of results, APA’s third-quarter earnings totaled $676 million, or $1.94 per diluted share.
Third-quarter summary
Third-quarter reported production was 450,000 BOE per day, and adjusted production was 381,000 BOE per day, both exceeding guidance. U.S. oil production averaged 128,000 barrels per day, 4,000 barrels per day above guidance, reflecting high uptime, earlier turn-in-lines and robust new well performance in the Permian Basin.
In Egypt, gross production averaged 206,000 BOE per day, relatively flat with the second quarter. Gross gas production increased to 542 million cubic feet (MMCF) per day, exceeding guidance through strong well performance and more resilient base production. Average gas realizations increased to $4.34 per Mcf from $4.23 in the second quarter. Adjusted production averaged 64,000 BOE per day, slightly lower than guidance primarily due to production sharing contract impacts associated with higher Brent prices.
Net cash provided by operating activities was $1.38 billion, and adjusted EBITDAX was $1.86 billion. Upstream capital investment was $466 million, approximately $30 million below guidance, primarily reflecting timing impacts of GranMorgu capital spending that shifted into the fourth quarter; lease operating expense was $418 million. Free cash flow totaled $699 million, bringing year-to-date free cash flow to $1.91 billion.
Balance sheet and shareholder returns
APA has repaid $1.2 billion of debt maturities year-to-date, including $451 million in the third quarter. The company has reduced total debt by $2.8 billion since year-end 2024, lowering annualized interest expense by more than $180 million; these savings are incremental to the company’s controllable spend reduction program. Net debt was $3.2 billion at the end of the third quarter.
APA returned $537 million to shareholders through dividends and share repurchases during the third quarter. Through October, the company repurchased an additional 4.5 million shares at an average price of $47.32 per share, bringing total year-to-date repurchases to 17.8 million shares. Consistent with its established capital returns framework, APA expects to return at least 60% of 2026 free cash flow to shareholders while continuing to strengthen its balance sheet.
At current strip prices APA expects to reach its $3 billion net debt target by year-end. Building on this progress, the company has updated its net debt target to $2 billion. Continued debt reduction will lower financing costs and enhance financial flexibility.
CEO commentary
'We are delivering another strong year, with our third-quarter results reflecting the quality of our assets and consistent execution across the business,' said John J. Christmann IV, APA’s CEO. 'Our teams are raising the standard for performance, operating more efficiently, and translating those gains into substantial cash flow. This quarter alone, we generated nearly $700 million in free cash flow, returned more than $500 million to shareholders and reduced total debt by more than $450 million.'
Fourth quarter and full-year outlook
Continued drilling and completion efficiency gains in the Permian are improving capital productivity and supporting an increase in full-year U.S. oil production to 124,000 barrels per day, above the company’s initial guidance of 120,000 to 122,000 barrels per day. Faster drilling cycle times are also enabling APA to accelerate completion activity into the fourth quarter, increasing 2026 Permian capital investment by $30 million and supporting a smoother production profile entering 2027. Fourth-quarter U.S. oil production is expected to moderate with the timing of turn-in-lines during the year and seasonal weather impacts.
In Egypt, gross BOE production is expected to increase slightly for the fourth quarter and full year.
Fourth-quarter upstream capital investment is expected to be approximately $525 million reflecting timing shifts in Suriname and increased Permian activity.
Full-year abandonment and decommissioning expenditures are now expected to total $285 million, a $15 million reduction from prior guidance. Lease operating expense guidance has been increased $25 million to $1,525 million to reflect higher stock-based compensation expense allocated to LOE.
At current strip prices, APA expects to generate approximately $2.9 billion of free cash flow in 2026, an increase of $600 million from its August update. The stronger free cash flow outlook supports substantial fourth-quarter share repurchases alongside continued debt reduction.
Preliminary 2027 outlook
APA’s preliminary budget for 2027 upstream capital investment is $2.5 billion. Exploration and GranMorgu development represent approximately 60% of the $400 million year-over-year increase, with the balance reflecting increased Permian activity and expected service cost inflation. This investment program is expected to result in similar U.S. and Egypt production year-over-year.
CEO closing commentary
'We will enter 2027 well positioned, with a strong core business and significant opportunities ahead. Our Permian and Egypt assets provide a reliable production and cash flow base, while GranMorgu continues to progress toward first oil in mid-2028. Our diversified portfolio, strengthened balance sheet, and the capital carry in Suriname provide APA with a distinct financial advantage. We have the capacity to advance high-impact exploration opportunities, further reduce debt, and deliver substantial shareholder returns,' Christmann concluded.
Source: APA Corporation
