APA Corporation surges as earnings beat expectations

Investing.com -- APA Corporation (NASDAQ:APA) reported second-quarter earnings that significantly exceeded analyst expectations, driving shares up 2.7% as investors responded positively to the company’s operational efficiency gains and accelerated cost reduction initiatives.

The oil and gas producer posted adjusted earnings of $0.87 per share for the second quarter, handily beating the analyst estimate of $0.52. Reported production reached 465,000 barrels of oil equivalent (BOE) per day, with adjusted production of 394,000 BOE per day after excluding Egypt noncontrolling interest and tax barrels. The company exceeded its production guidance across all three operating regions while maintaining capital spending in line with expectations.

"Our strong second-quarter results reflect the continued momentum across our entire portfolio as a result of the hard work and dedication of the APA team," said John J. Christmann IV, CEO of APA Corporation.

APA has accelerated its cost reduction initiatives, now targeting $350 million in run-rate savings by 2026 instead of year-end 2027. The company also raised its 2025 in-year savings target by more than 50% from $130 million to $200 million.

During the quarter, APA reduced its Permian rig count from eight to six due to significant drilling efficiency improvements. Despite this 25% reduction, the company expects to maintain flat Permian production levels, demonstrating substantial operational improvements.

APA returned $140 million to shareholders through dividends and share repurchases while reducing net debt by more than 15% during the quarter. The company has established a long-term net debt target of $3 billion, reinforcing its commitment to maintaining a strong balance sheet.

In Egypt, APA secured presidential approval for approximately 2 million acres of additional leasehold, increasing its footprint by more than 35%. The company also remains on track for first oil from its Suriname Block 58 GranMorgu project by mid-2028.

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