APA Corporation has announced its first-quarter 2024 financial and operational results, reporting a net income attributable to common stock of $132 million, or $0.44 per diluted share, compared to $0.78 a year ago.
APA reported adjusted earnings of $237 million, or $0.78 per diluted share, after accounting for comparable items.
The company’s net cash in operating activities amounted to $368 million, and adjusted EBITDAX reached $1.24 billion.
Additionally, the company returned $176 million to shareholders in the first quarter of 2024 through dividends and share buybacks and repurchased $100 million of stock at an average price of $33.27 per share.
The company operates subsidiaries engaged in oil and natural gas exploration and production in the US, Egypt, and the UK, as well as exploration activities offshore Suriname and elsewhere.
“Our drilling programs in the US and Egypt performed well during the quarter,” said John J. Christmann IV, APA’s CEO.
APA’s first quarter reported production stood at 389,000 million barrel of oil equivalent per day (boe/d), with adjusted production (excluding Egypt noncontrolling interest and tax barrels) at 320,000 million boe/d.
Egypt is a significant area of focus for APA Corporation, with a drilling program that has been performing in line with expectations. The average drilling days, well connection timing, and oil initial production rates have all been in line with the plan, APA stated in its financial and operational supplement.
However, adjusted oil production was slightly below guidance in the first quarter due to the impacts of rising oil prices in March.
The drilling success rate for the first quarter was 74%, with 17 out of 23 wells being successful. It is expected that there will be an average of 15 drilling rigs in the second quarter.
Additionally, the structure of public joint-stock companies (PSC) in Egypt is noted to be more resilient to downside oil price volatility, and the area is expected to generate strong free cash flow.
In Alaska, the company confirmed a working petroleum system and a high-quality oil discovery at King Street #1, although other drilling efforts faced delays. APA plans to invest $2.7 billion in upstream oil and gas capital for 2024, aiming to maintain approximately 10 rigs in the US for the remainder of the year.
Following the successful Callon acquisition, APA is actively integrating assets and anticipates future value from enhanced capital efficiencies and increased oil exposure.
“In the Permian Basin, where we are consistently delivering excellent results, we added scale and oil leverage with the recently closed Callon Petroleum Company acquisition,” said Christmann.
“We are currently focused on integrating the Callon assets and have identified compelling opportunities to generate value across the acquired asset base through changes in planning and well design, drilling and completions, and many aspects of daily operations. Accordingly, we have increased our expected annual cost synergies from the transaction by 50% to $225 million,” he added.
By complete acquisition of Callon Petroleum Company, the company anticipates over 80% substantial increase in its US oil production from the fourth quarter of 2023 to the fourth quarter of 2024.