APA (APA) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered strong operational and financial results, with reported production of 473,000 BOE/day and adjusted production of 405,000 BOE/day, exceeding guidance in the U.S. and Egypt, driven by the Callon acquisition and Permian/Egypt outperformance.

• Completed $4.5 billion all-stock acquisition of Callon Petroleum on April 1, 2024, increasing annual synergy estimates to $250 million and adding significant Permian Basin scale.

• Suriname Block 58 FPSO hull secured, with FID targeted by year-end 2024 and first oil in 2028.

• Returned $135 million to shareholders in Q2 2024 via dividends and buybacks, and $311 million in H1 2024, with a focus on further debt reduction.

• Closed $660 million in non-core asset sales, reducing production by 13,000 BOE/day and supporting debt paydown.

Financial highlights

• Q2 2024 net income attributable to common stock was $541 million ($1.46 per diluted share), with adjusted earnings of $434 million ($1.17 per share).

• Q2 2024 revenues were $2.54 billion, up from $1.80 billion year-over-year; adjusted EBITDAX reached $1.6 billion.

• Free cash flow for Q2 was $103 million; H1 2024 free cash flow was approximately $200 million.

• Upstream capital investment in Q2 was $839 million, below guidance.

• Net cash from operating activities was $877 million in Q2 2024.

Outlook and guidance

• Full-year 2024 upstream capital investment expected at or below $2.7 billion, reflecting synergy capture and improved capital efficiency.

• U.S. oil production guidance raised, with Q4 2024 expected to be 150,000 barrels/day, representing 8% organic growth from Q2.

• Suriname Block 58 FID remains on track for year-end 2024, with first oil targeted for 2028.

• Egypt and North Sea production guidance unchanged, with Egypt offsetting lower rig count through strong base production and workovers.

• Substantial increase in free cash flow expected in H2 2024 at current strip pricing.