01—Abstract
Summary
Summary of the 10-Q filed May 8, 2025. Cited figures are marked; the original filing is the authoritative source.
APA Corporation (APA) reported first-quarter 2025 net income attributable to common stock of $347 milliona, or $0.96 per diluted share, compared with $132 million, or $0.44 per diluted share, in the first quarter of 2024.
Total revenues were $2.64 billionb, up from $1.95 billion. The increase was primarily driven by increased production from Permian Basin drilling coupled with the Callon merger, as well as gains on extinguishment of debt, partially offset by higher depreciation, depletion, and amortization and higher income tax expense. Net cash provided by operating activities was $1.1 billion, compared with $368 million a year earlier.
The company reduced its debt during the quarter. Long-term debt ended the quarter at about $5.2 billionc, down $754 million from year-end 2024. Cash and cash equivalents fell to $67 million from $625 million at December 31, 2024.
APA repaid the $900 milliond term loan in full, and it settled Apache indenture debt exchange and tender offers, with a $135 million gain recognized on the tender purchases and a total gain on extinguishment of debt of $142 million. The company repurchased 4.4 million shares for approximately $100 million and paid $91 million in common dividends. Upstream capital additions were $777 million, and the company expects full-year 2025 upstream capital investment of $2.2 billion to $2.3 billion.
Subsequent to quarter-end, in May 2025, APA agreed to sell non-core Permian Basin assets and leasehold, representing a full exit from New Mexico, for $608 million in cash, with proceeds intended primarily for debt reduction. The company also announced a cost reduction initiative targeting over $350 million in annualized savings by the end of 2027.
The company recorded a $76 million deferred tax expense from U.K. Finance Act 2025 remeasurement, and it continues to carry $1.0 billion in contingent liabilities for decommissioning of Legacy Gulf of America assets.
02—Key points
Key Highlights
- Net income attributable to common stock was $347 million ($0.96 per diluted share), up from $132 million ($0.44 per diluted share) in Q1 2024.
- Total revenues were $2.64 billion, versus $1.95 billion in Q1 2024; oil revenues were $1.6 billion, a $168 million increase.
- Net cash provided by operating activities was $1.1 billion, compared with $368 million in Q1 2024.
- Long-term debt declined $754 million from year-end 2024 to about $5.2 billion; the $900 million term loan was fully repaid and a $142 million gain on extinguishment of debt was recognized.
- Cash and cash equivalents were $67 million at March 31, 2025, down from $625 million at December 31, 2024.
- Agreed in May 2025 to sell non-core Permian Basin assets and exit New Mexico for $608 million in cash, with proceeds primarily for debt reduction.
- Full-year 2025 upstream capital investment is expected to be $2.2 billion to $2.3 billion; a cost reduction initiative targets over $350 million in annualized savings by the end of 2027.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed May 8, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Operating Expenses | $1.85B$1.46B | +27.0% |
| Operating Income | $865.00M$691.00M | +25.2% |
| Interest Expense | $91.00M$85.00M | +7.1% |
| Net Income | $347.00M$132.00M | +162.9% |
| EPS (Basic) | $0.96$0.44 | +118.2% |
| EPS (Diluted) | $0.96$0.44 | +118.2% |
| Shares Outstanding (Basic) | 364.00M302.00M | +20.5% |
| Shares Outstanding (Diluted) | 364.00M302.00M | +20.5% |
05—Questions
Frequently Asked Questions
What drove the increase in APA's first-quarter 2025 net income?
The filing attributes the increase primarily to increased production from Permian Basin drilling combined with the Callon merger, as well as gains on extinguishment of debt. These were partially offset by higher depreciation, depletion, and amortization and higher income tax expense.
How did APA's debt position change during the quarter?
Total debt fell to $5.368 billion from $6.044 billion at year-end 2024. APA fully repaid its $900 million term loan and settled exchange and tender offers for Apache indenture debt, recognizing gains on extinguishment of debt of $142 million in total. Commercial paper and credit facility borrowings were $766 million at quarter-end.
What is APA's capital return activity?
During the first quarter of 2025, APA repurchased 4.4 million shares for approximately $100 million at an average price of $22.87 per share and paid $91 million in dividends to common stockholders. As of March 31, 2025, it had remaining authorization to repurchase 30.4 million shares, and the quarterly dividend is $0.25 per share.
What is APA's pending asset sale?
In May 2025, APA agreed to sell certain non-core Permian Basin assets and leasehold, reflecting a full exit from New Mexico, for $608 million in cash, subject to customary post-closing adjustments. The transaction is expected to close late in the second quarter of 2025, and the company intends to use the proceeds primarily for debt reduction.
What tax and contingent liability items affect APA's results?
The U.K. Finance Act 2025 increased the Energy Profits Levy from 35 percent to 38 percent, and APA recorded a $76 million deferred tax expense in the first quarter from remeasuring its U.K. deferred tax liability. APA also carries $1.0 billion in contingent liabilities representing estimated decommissioning costs for Legacy Gulf of America assets, and it settled a related surety dispute in the first quarter, receiving $140 million under the Bonds.
06—Continue