Highlights

• Generated net cash from operating activities of $1.104 billion, adjusted EBITDAX of $1.690 billion, and free cash flow of $609 million for the quarter; 
• Reported production of 382,000 barrels of oil equivalent (BOE) per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 310,000 BOE per day; 
• Production in the U.S. exceeded expectations, driven by strong performance across the Permian Basin;
• Repurchased 10 million shares of APA common stock during the quarter at an average price of $33.85;
• Announced a doubling of the quarterly dividend to an annualized rate of $1.00 per share;
• Announced first oil discovery on Block 53 offshore Suriname at Baja; and
• Achieved 2022 ESG goal to reduce routine upstream flaring in Egypt by 40%.

APA Corporation has announced its financial and operational results for the third-quarter 2022. 

APA reported net income attributable to common stock of $422 million, or $1.28 per diluted share. When adjusted for items that impact the comparability of results, APA’s third-quarter earnings were $651 million, or $1.97 per diluted share. Net cash provided by operating activities was $1.104 billion, and adjusted EBITDAX was $1.690 billion.  

“APA’s diversified and unhedged portfolio delivered another strong quarter, generating $609 million of free cash flow,” said John J. Christmann IV, APA’s CEO and president. “Global production was in line with expectations, as excellent Permian Basin performance offset weakness in North Sea production that was heavily impacted by unplanned downtime.”  

Third-Quarter Summary

Third-quarter reported production was 382,000 BOE per day, and adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 310,000 BOE per day. APA’s third-quarter upstream capital investment was $492 million, which was below guidance of $515 million. 

Permian Basin operations drove the strong third-quarter results through a combination of performance and timing of new well completions, strong base production, and relatively minimal downtime. 

In Egypt, after a significant ramp in drilling activity spanning the last five quarters, the pace of well completions continues to improve, and third-quarter new well connections exceeded guidance. Production in the North Sea was down due to planned seasonal turnarounds and was subsequently impacted by significant unplanned downtime. In October, North Sea production returned to more normalized levels. 

In Suriname, the company announced a discovery at Baja on Block 53 during the quarter. Currently, appraisal and exploration activities continue on Block 58 at Sapakara South 2 and Awari, respectively. 

Capital Return to Shareholders and Debt Reduction Progress

Since the inception of APA’s capital return framework in October 2021, the company has repurchased 55.2 million shares at an average price of $31.33 through the end of the third quarter. For the full-year 2022, APA expects to generate approximately $2.7 billion of free cash flow, of which, at least $1.6 billion will be returned to shareholders in the form of dividends and share buybacks.

The company continues to strengthen the balance sheet. Since mid-2021, $3.1 billion in bond debt has been eliminated, including the recent redemption of $123 million of notes due January 2023, through tender offers, open market repurchases and early redemptions. 

2022 Capital and Fourth-Quarter Production Guidance

APA’s full-year capital investment guidance remains unchanged at $1.725 billion. The company expects fourth-quarter adjusted production to be in the range of 328,000 to 332,000 BOE per day, up more than 5% from the third quarter, with the increase expected to be driven by higher oil production across its assets. 

KeyFacts Energy: APA US onshore country profile