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APA 8-K Report, Financial Results (Feb 22, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 22, 2024
Period End
February 21, 2024
Security
APA
In the record · 2021–202610-K510-Q188-K64

APA filed 5 annual reports (10-K), 18 quarterly reports (10-Q) and 64 current reports (8-K) between 2021 and 2026.

  1. Leadership change8-K · Jan ’23Jan ’23
  2. Leadership change8-K · May ’26May ’26

01—Abstract

Summary

Summary of the 8-K filed February 22, 2024. Cited figures are marked; the original filing is the authoritative source.

APA Corporation reported fourth-quarter and full-year 2023 results in a press release furnished as Exhibit 99.1.

For full-year 2023, the company reported net income of $2.9 billiona, or $9.25 per diluted common share, and adjusted earnings of $1.4 billion, or $4.53 per diluted share. Net cash provided by operating activities was $3.1 billion, adjusted EBITDAX was $5.3 billion, and free cash flow (FCF) was $965 million. APA returned $637 million to shareholders, or 66% of FCF, through $329 million of share repurchases and $308 million of dividends.

Net debt ended the year at $5.1 billionb, down slightly from the end of 2022. Fourth-quarter GAAP net income of $1.8 billion, or $5.78 per diluted share, included a $1,634 million tax-related valuation allowance and other tax adjustment. Adjusted fourth-quarter earnings were $352 million, or $1.15 per diluted share.

Operationally, total company oil production increased 8%c year-over-year in 2023, and U.S. oil rose 12% from fourth-quarter 2022 to fourth-quarter 2023, driven by Permian Basin execution and well performance. APA identified an estimated 700 million barrels of recoverable oil resource at Sapakara and Krabdagu on Block 58 offshore Suriname, and it added onshore leases in Alaska and two offshore blocks in Uruguay. Year-end 2023 worldwide estimated proved reserves totaled 807 million BOE, 91% of which were proved developed.

Looking ahead, APA plans a 2024 upstream capital budget of $1.9 to $2.0 billiond and expects to invest to sustain production on a year-over-year basis. The company forecasts U.S. oil growth of approximately 8% in 2024 and more than 10% from fourth-quarter 2023 to fourth-quarter 2024. It also committed to returning at least 60% of FCF to shareholders and said the pending acquisition of Callon Petroleum Company adds scale to its Delaware Basin assets and is expected to be accretive to key financial metrics.

02—Key points

Key Highlights

  1. Full-year 2023 net income of $2.9 billion, or $9.25 per diluted share; adjusted earnings of $1.4 billion, or $4.53 per diluted share
  2. Net cash from operating activities of $3.1 billion, adjusted EBITDAX of $5.3 billion, and free cash flow of $965 million
  3. Returned $637 million to shareholders, or 66% of FCF, including $329 million of share repurchases and $308 million of dividends
  4. Total company oil production increased 8% year-over-year; U.S. oil increased 12% from fourth-quarter 2022 to fourth-quarter 2023
  5. Identified an estimated 700 million barrels of recoverable oil resource at Sapakara and Krabdagu on Block 58 offshore Suriname; FEED study initiated with 2024 FID targeted
  6. 2024 upstream capital budget of $1.9 to $2.0 billion; forecasts U.S. oil growth of approximately 8% year-over-year in 2024
  7. Year-end 2023 worldwide estimated proved reserves of 807 million BOE, 91% proved developed; net debt of $5.1 billion

03—Questions

Frequently Asked Questions

  1. How much cash did APA return to shareholders in 2023, and how does that compare to its free cash flow?

    APA returned $637 million to shareholders in 2023, which the company states equals 66% of its $965 million of free cash flow. The return consisted of $329 million of common stock repurchases and $308 million of dividends paid.

  2. Why does GAAP fourth-quarter earnings differ so much from adjusted earnings?

    Fourth-quarter GAAP net income attributable to common stock was $1.8 billion, or $5.78 per diluted share, while adjusted earnings were $352 million, or $1.15 per diluted share. The reconciliation shows a $1,634 million after-tax valuation allowance and other tax adjustment, which is excluded from adjusted earnings, along with a $212 million pre-tax loss on previously sold Gulf of Mexico properties.

  3. What is APA's capital plan and production outlook for 2024?

    APA plans to invest $1.9 to $2.0 billion in upstream oil and gas capital in 2024, including $100 million toward exploration predominantly in Alaska and $50 million toward progressing a large-scale FPSO project in Suriname. Total company adjusted oil and natural gas production is expected to be relatively flat year-over-year, while NGL volumes are anticipated to be lower. U.S. oil is forecast to grow approximately 8% year-over-year.

  4. What is the status of the Callon Petroleum acquisition and the Suriname exploration program?

    The Callon Petroleum Company acquisition is described as pending and is expected to add scale to APA's Delaware Basin assets and be accretive to key financial metrics. In Suriname, APA identified an estimated 700 million barrels of recoverable oil resource at Sapakara and Krabdagu on Block 58, initiated a FEED study, and is progressing toward a 2024 final investment decision.

04—Continue

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