The following is a summary of the APA Corporation (APA) Q1 2024 Earnings Call Transcript:
Financial Performance:
APA Corporation reported Q1 net income of $132 million or $0.44 per diluted share, with adjusted net income at $237 million or $0.78 per share.
The company showed upstream capital investment of $568 million, below the previous guidance due to deferred expenditure.
A total of $176 million was returned to shareholders through dividends and share repurchases.
After the Callon acquisition, yearly guidance includes Q1 APA standalone results, and three quarters of combined APA and Callon performance.
The company recognizes the need for debt reduction to avoid fluctuating between investment and non-investment grades, and intends to sell non-core assets and target the received proceeds for debt reduction.
Business Progress:
The company highlighted its fifth consecutive quarter of meeting or exceeding U.S. oil production guidance, with a 16% increase in U.S. oil volumes from Q1 2023.
APA successfully completed the acquisition of Callon, expanding its Permian Basin footprint significantly and revising expected synergies from the acquisition upward to $225 million from $150 million.
The company is optimizing capital efficiency in Egypt by adjusting its drilling to workover rig ratio and planning to finalize the FEED study for its first development project in Suriname by year-end.
APA expects improved capital productivity in the second half of 2024 through workflow enhancements and other modifications.
Despite the inclusion of Callon's assets, the company anticipates strong momentum towards the end of 2024.
A strategic balance is sought by APA Corporation in terms of drilling new wells versus conducting more financially efficient workovers, aiming for a balance in their operations in Egypt and the Permian Basin. The company is targeting more progress on debt reduction by the end of the year alongside meeting its 60% shareholder return commitment.
More details: Apache IR
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