APA Corporation

What they do

APA produces crude oil, natural gas, and natural gas liquids from onshore U.S. acreage (primarily the Permian Basin's Midland and Delaware sub-basins) and from concessions in Egypt, with additional production in the North Sea. The company also holds undeveloped acreage on Alaska's North Slope and in Suriname. In 2025, total production was 169.5 MMboe, with the U.S. contributing 62% and Egypt 31%.

Revenue drivers

• U.S. oil and gas production — Largest segment at 105.0 MMboe in 2025 (62% of production) and $3,819 million of production revenue; centered on the Permian Basin, which holds 74% of proved reserves.
• Egypt production — 53.3 MMboe in 2025 (31% of production) and $2,637 million of revenue; operates under concessions with a one-third noncontrolling interest, including a revised gas pricing agreement benefiting nearly half of Egypt's gas production.
• North Sea production — 11.2 MMboe in 2025 (7% of production) and $773 million of revenue; sales volumes were 11.4 MMboe and may vary with lifting timing.
• Purchased oil and gas sales — Third-party purchased volumes generated $721 million of revenue in the first half of 2026, smaller than production revenue but reported as a separate line.

Recent performance

In Q2 2026, APA reported net income attributable to common stock of $747 million, or $2.11 per diluted share, on total revenues of $2.37 billion. Reported production was 410,000 BOE per day and adjusted production (excluding Egypt noncontrolling interest and tax barrels) was 347,000 BOE per day, both above guidance; U.S. oil production averaged 123,500 barrels per day, 2,500 above guidance. Net cash provided by operating activities was $1.7 billion, free cash flow was $738 million, and adjusted EBITDAX was $1.8 billion. The company returned $189 million to shareholders through dividends and repurchases, including 2.8 million shares at an average price of $35.26.

Strategy

APA is concentrating its U.S. portfolio on the Permian Basin, following the Callon acquisition and divestitures of non-core Central Basin Platform and New Mexico properties, to gain scale and cost efficiency. In the first half of 2026 it repaid $752 million of near-term bond debt and has reduced total debt by $2.3 billion since year-end 2024. It raised expected 2026 exit run-rate cost savings to $500 million from $450 million and plans to return at least 60% of free cash flow to shareholders in 2026. Exploration is being advanced through the pending $70 million Savant Alaska acquisition and a new Uruguay partnership with Eni. Management also cites GranMorgu as a path to organic oil production growth.

Risks

• Commodity price volatility — Operating cash flows and earnings depend on volatile oil and gas prices, and management states operating cash flow is the primary source of capital and liquidity.
• Geographic concentration — The U.S. Permian Basin and Egypt together accounted for 93% of 2025 production and 91% of proved reserves, concentrating operational and political exposure.
• Divestiture and acquisition execution — APA relies on portfolio moves such as the Callon acquisition, New Mexico divestitures, the Savant Alaska purchase, and the Eni Uruguay partnership, which carry integration and timing risk.
• Debt and interest burden — Long-term debt is substantial relative to shareholder equity, though the company has repaid $752 million of near-term bonds in the first half of 2026 and reduced annualized interest expense by more than $155 million.

Outlook

Management raised full-year U.S. oil production guidance to 123,000 barrels per day while maintaining U.S. capital at $1.3 billion, and increased expected 2026 exit run-rate cost savings to $500 million. It expects to return at least 60% of free cash flow to shareholders in 2026 while continuing to strengthen the balance sheet. Exploration appraisal work continues in Alaska and Uruguay. The 10-K notes that 2026 capital will be budgeted to offset production and reserve declines, subject to commodity prices.