01—Abstract
Summary
Summary of the 8-K filed November 7, 2024. Cited figures are marked; the original filing is the authoritative source.
APA Corporation reported third-quarter 2024 results in a press release furnished as Exhibit 99.1 to this Form 8-K, dated November 6, 2024.
The company reported a net loss attributable to common stock of $223 milliona, or $0.60 per diluted share, driven primarily by non-cash impairments of assets in the U.K. and assets held for sale in the Permian Basin. Excluding these and other items affecting comparability, adjusted earnings were $370 million, or $1.00 per diluted share. Net cash provided by operating activities was $1.3 billion and adjusted EBITDAX was $1.6 billion.
Reported production was 467,000 barrels of oil equivalent (BOE) per day, and adjusted production was 395,000 BOE per day. Operationally, the company highlighted the announced final investment decision on a 220,000 barrels per day oil development project in Suriname (GranMorgu), a $950 millionb non-core Permian divestiture package, and a revised Egyptian gas pricing agreement. Management said the integration of Callon is effectively complete and that most cost synergies are expected by year-end.
Subsequent to quarter-end, Standard & Poor's raised APA's credit rating to BBB-, and the company now holds investment grade status at all three rating agencies. Net debt was reduced by $275 millionc during the quarter.
For 2025, APA plans to reduce upstream capital to $2.5 to $2.6 billiond in light of a softer oil price outlook, and expects to sustain adjusted oil production in the U.S. and Egypt while delivering mid-single digit adjusted BOE growth. Fourth-quarter upstream capital investment is expected to be approximately $645 million.
02—Key points
Key Highlights
- Q3 2024 net loss attributable to common stock of $223 million ($0.60 per diluted share), driven primarily by non-cash impairments in the U.K. and Permian assets held for sale
- Adjusted earnings of $370 million ($1.00 per diluted share) for the quarter, excluding impairments and other comparability items
- Reported production of 467,000 BOE per day; adjusted production of 395,000 BOE per day, approximately 2% ahead of guidance
- Final investment decision announced on the 220,000 barrels per day GranMorgu oil development project in Suriname
- Announced a $950 million non-core Permian divestiture package; net debt reduced by $275 million during the quarter
- Credit rating raised to BBB- by Standard & Poor's; investment grade status now obtained at all three rating agencies
- 2025 preliminary capital budget of $2.5 to $2.6 billion, with expected mid-single digit adjusted BOE growth
03—Questions
Frequently Asked Questions
Why did APA report a net loss in the third quarter of 2024?
The filing states the loss of $223 million, or $0.60 per diluted share, was primarily driven by non-cash impairments of assets in the U.K. and assets held for sale in the Permian Basin. The impairments line in the income statement totaled $1,111 million for the quarter.
What is the outlook for APA's capital spending and production in 2025?
APA plans to reduce capital to $2.5 to $2.6 billion in 2025 due to a softer oil price outlook, including $200 million for Suriname development and $100 million for other exploration, primarily in Alaska. The company expects to run an eight-rig program in the Permian Basin and a 12-rig program in Egypt, which is expected to roughly sustain adjusted oil production in the U.S. and Egypt while delivering mid-single digit adjusted BOE growth.
What is the significance of the Suriname GranMorgu project?
The company announced a final investment decision on a 220,000 barrels per day oil development project in Suriname. Management described it as the first offshore development in the country, with the best returns in APA's portfolio and a very low break-even oil price, expected to contribute significant oil production and cash-flow growth beginning in 2028.
How is APA's balance sheet and debt position changing?
Net debt was $6,308 million at September 30, 2024, down from $6,583 million at June 30, 2024. Subsequent to quarter-end, Standard & Poor's raised APA's rating to BBB-, and the company has obtained investment grade status at all three rating agencies.
04—Continue