APA Corporation reports strong 2024 earnings with strategic growth plans for 2025

APA Corporation concluded 2024 with robust financial results, reflecting strong operational execution and strategic portfolio enhancements. The company reported a full-year net income of $804 million, translating to $2.27 per diluted share, while adjusted earnings reached $1.3 billion, or $3.77 per diluted share. Free cash flow generation remained solid at $841 million, with APA distributing $599 million to shareholders through dividends and stock repurchases.

For the fourth quarter, APA posted a net income of $354 million, or $0.96 per diluted share, with adjusted earnings of $290 million. Operating cash flow reached $1.0 billion, while adjusted EBITDAX stood at $1.6 billion, reinforcing the company’s strong financial foundation. The company’s total production for the quarter averaged 488,000 barrels of oil equivalent per day (BOE/D), with adjusted production at 418,000 BOE/D, excluding Egypt’s noncontrolling interest and tax barrels.

The full-year financial performance demonstrated resilience despite fluctuations in commodity prices. APA’s reported production averaged 455,000 BOE/D, with adjusted production at 385,000 BOE/D. Operating cash flow for the year amounted to $3.6 billion, while adjusted EBITDAX totaled $5.9 billion, underpinning the company’s commitment to capital discipline and shareholder value.

What Strategic Moves Reshaped APA Corporation’s Portfolio in 2024?

Throughout 2024, APA made significant strides in reshaping its portfolio, ensuring long-term sustainability and profitability. A major highlight was the acquisition of Callon Petroleum Company, which significantly enhanced APA’s footprint in the Permian Basin. The transaction contributed to a 22% reduction in breakeven oil prices on Callon’s Delaware acreage, providing a competitive advantage in a key U.S. production hub.

Additionally, APA divested conventional assets in the Central Basin Platform, refining its asset base to focus on higher-margin, growth-oriented opportunities. Internationally, the company advanced its GranMorgu Phase 1 project in Suriname’s Block 58, securing a final investment decision with partner TotalEnergies. This milestone positions APA to capitalize on Suriname’s promising offshore resources, with first oil expected in 2028.

In Egypt, APA renegotiated a gas pricing agreement, ensuring gas-focused investments achieve economic parity with oil. This move bolsters the company’s presence in one of its key international markets, improving the financial viability of its gas production assets.

What Are APA’s Investment Plans and Production Forecasts for 2025?

APA Corporation has outlined an upstream capital budget of $2.5 billion to $2.6 billion for 2025, reinforcing its commitment to disciplined capital allocation. A portion of this budget includes $200 million earmarked for the GranMorgu project in Suriname and $100 million allocated for exploration, with a primary focus on Alaska.

The company projects total adjusted production to average 396,000 BOE/D in 2025, marking a 3% increase compared to 2024 levels. U.S. oil production is expected to remain stable at 125,000 to 127,000 barrels per day, while gas production should see improvements due to the absence of price-related curtailments. In Egypt, APA anticipates slight growth in adjusted production volumes, reaching 69,000 BOE/D, compared to 67,500 BOE/D in 2024.

How Is APA Corporation Optimizing Costs and Enhancing Shareholder Returns?

To further strengthen its financial position, APA is implementing cost-cutting initiatives across overhead, lease operating expenses (LOE), and capital spending, with a goal of achieving $350 million in run-rate savings by 2027. The company remains committed to returning at least 60% of free cash flow to shareholders, reinforcing its shareholder-friendly approach.

CEO John J. Christmann IV emphasized the importance of these efficiency measures, stating that APA’s disciplined approach to capital allocation and cost management will drive strong free cash flow growth in the years ahead. He noted that APA’s recent acquisitions and renegotiated agreements have significantly improved its portfolio’s resilience and positioned the company for long-term value creation.

In the Permian Basin, APA plans to operate eight rigs, ensuring steady production growth while maintaining cost efficiency. In Egypt, the company will run 12 rigs, further optimizing its production capabilities while adhering to a lower-cost structure. With these measures, APA expects to lower its development capital spending by 17% compared to 2024, when adjusted for Callon’s first-quarter expenditures.

What Do APA Corporation’s Reserves and Balance Sheet Indicate About Future Growth?

At the close of 2024, APA reported estimated proved reserves of 969 million BOE, with 69% classified as proved developed reserves. This strong reserve base underscores the company’s long-term production sustainability and growth potential.

Despite taking on additional debt from the Callon Petroleum acquisition, APA maintained a strong balance sheet, ending the year with $6 billion in total debt and $625 million in cash. Notably, net debt only increased by $300 million, despite the addition of over $2 billion in debt from the Callon deal, showcasing the company’s strong cash flow generation and disciplined financial management.

How Are Investors Reacting to APA Corporation’s Performance and Strategy?

Investor sentiment toward APA Corporation remains positive, given its strong financial results, disciplined capital allocation, and strategic acquisitions. The improved cost structure and shareholder return commitments further solidify APA’s standing among energy investors.

With first oil from GranMorgu expected in 2028, APA’s long-term outlook appears robust, with future cash flow potential increasing as new projects come online. The combination of increased production, cost efficiencies, and a strong reserve base positions the company for sustained profitability in the years ahead.

APA’s stock performance will largely depend on commodity price trends, execution of its capital program, and progress on cost reductions. However, its commitment to operational excellence and capital discipline continues to drive investor confidence and long-term shareholder value.