01—Abstract
Summary
Summary of the 10-Q filed August 6, 2026. Cited figures are marked; the original filing is the authoritative source.
APA Corporation (APA) reported net income attributable to common stock of $747 milliona, or $2.11 per diluted share, for the second quarter of 2026, compared with $603 million, or $1.67 per diluted share, in the second quarter of 2025.
For the first six months of 2026, net income attributable to common stock was $1.19 billionb, or $3.37 per diluted share, versus $950 million, or $2.62 per diluted share, a year earlier. The filing attributes the improvement primarily to higher oil revenues on stronger crude oil price realizations, improved margins on third-party purchased oil and gas activity, and lower operating expenses from prior-year cost savings. Average realized oil prices rose to $98.24 per barrel in the quarter from $65.58, while natural gas realizations fell to $0.60 per Mcf from $2.28 amid negative Permian Basin gas pricing.
Worldwide production declined to 409,959 boe per day from 465,078 boe per day. Cash flow from operations was $2.3 billionc for the first six months of 2026, essentially flat year over year. Total debt fell to $3.7 billion at June 30, 2026, from $4.49 billion at December 31, 2025, after several notes were repaid or redeemed in 2026, and cash stood at $444 million.
The company repurchased about $100 milliond of stock in the first half and paid $177 million in common dividends. Management expects to invest about $2.1 billion in upstream capital in 2026 and has raised its annualized cost savings target to $500 million by year-end 2026.
The filing also flags several items for investors, including an EPA draft Administrative Penalty Assessment under the Clean Air Act tied to Permian Basin facilities, ongoing litigation over the sold Australian operations and Delaware climate suit, and a contingent liability of $847 million for decommissioning obligations on sold Gulf of America properties. Separately, APA agreed to acquire Savant Alaska, LLC for about $70 million upfront and entered a strategic partnership with Eni in offshore Uruguay Block 6.
02—Key points
Key Highlights
- Q2 2026 net income attributable to common stock was $747 million ($2.11 per diluted share), up from $603 million ($1.67 per diluted share) in Q2 2025.
- Average realized crude oil price rose to $98.24 per barrel from $65.58, while average natural gas price fell to $0.60 per Mcf from $2.28.
- Worldwide production was 409,959 boe per day in Q2 2026, down from 465,078 boe per day, with natural gas curtailments at Alpine High amid negative Waha pricing.
- Total debt declined to $3.74 billion at June 30, 2026 from $4.49 billion at December 31, 2025, following 2026 note repayments and redemptions totaling roughly $1.4 billion in cash.
- Operating cash flow was $2.26 billion for the first six months of 2026, versus $2.28 billion a year earlier; 2026 capital investment is expected to be about $2.1 billion.
- Raised expected annualized cost savings target to $500 million by end of 2026, an increase of $50 million.
- EPA issued a draft Administrative Penalty Assessment on Clean Air Act violations at Texas Permian facilities, with a possible fine or penalty above $300,000; Gulf of America decommissioning contingent liabilities total $847 million.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 6, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Operating Expenses | $1.12B$1.58B | −29.2% |
| Operating Income | $1.28B$739.00M | +73.2% |
| Interest Expense | $69.00M$86.00M | −19.8% |
| Net Income | $747.00M$603.00M | +23.9% |
| EPS (Basic) | $2.11$1.67 | +26.3% |
| EPS (Diluted) | $2.11$1.67 | +26.3% |
| Shares Outstanding (Basic) | 353.00M361.00M | −2.2% |
| Shares Outstanding (Diluted) | 354.00M361.00M | −1.9% |
05—Questions
Frequently Asked Questions
Why did APA's earnings improve in the second quarter of 2026?
The filing attributes the increase in net income primarily to higher oil revenues from stronger crude oil price realizations, improved margins on third-party purchased oil and gas activity, and lower operating expenses from prior-year cost savings initiatives. Average realized oil prices were $98.24 per barrel versus $65.58 a year earlier.
How did natural gas pricing affect APA's results?
Average realized natural gas prices fell to $0.60 per Mcf from $2.28, driven by periods of negative pricing across the Permian Basin. Natural gas revenues were $41 million in Q2 2026, down $143 million from the prior-year quarter, and the company curtailed volumes at Alpine High in response to extreme Waha basis differentials.
How much debt did APA retire and how is its balance sheet positioned?
Total debt was $3.74 billion at June 30, 2026, down from $4.49 billion at December 31, 2025. In 2026 the company repaid or redeemed notes including $425 million of 2027 and 2028 notes in April, $754 million of fixed-rate debt in the first half, and an additional $118 million of 2030 notes on June 29. Cash and cash equivalents were $444 million, and available committed borrowing capacity under syndicated credit facilities was $3.99 billion.
What are the main legal and environmental risks disclosed?
The company disclosed an EPA draft Administrative Penalty Assessment on Clean Air Act emissions and reporting violations at Texas Permian Basin facilities, with a possible fine or penalty above $300,000 that it cannot yet reasonably estimate. It also disclosed a $847 million contingent liability for decommissioning Legacy Gulf of America assets sold to Fieldwood, and ongoing litigation with Santos over the Quadrant Australian divestiture and Delaware's climate damages suit.
What capital allocation returns did APA make to shareholders?
In the first six months of 2026, APA paid $177 million in common dividends and repurchased about $100 million of stock, or 2.8 million shares at an average price of $35.26. The company's stated framework is to return 60 percent of free cash flow annually through dividends and share repurchases, and it had 19.0 million shares of remaining repurchase authorization at June 30, 2026.
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