On February 27, 2025, APA Corp (APA, Financial) released its 8-K filing detailing the financial and operational results for the fourth quarter and full-year 2024. Based in Houston, APA is an independent exploration and production company operating primarily in the US, Egypt, the North Sea, and Suriname. At the end of 2023, APA's proved reserves totaled 807 million barrels of oil equivalent, with net reported production of 405 thousand boe/day, 64% of which was oil and natural gas liquids.

Performance Overview and Challenges

APA Corp reported a net income attributable to common stock of $354 million, or $0.96 per diluted share, for the fourth quarter of 2024. This exceeded the analyst estimate of $0.95 per share. However, when adjusted for items impacting comparability, earnings were $290 million, or $0.79 per diluted share, falling short of expectations. The company's net cash provided by operating activities was $1.0 billion, with an adjusted EBITDAX of $1.6 billion. Fourth-quarter production was reported at 488,000 BOE per day, with adjusted production at 418,000 BOE per day.

Financial Achievements and Industry Importance

For the full year, APA Corp achieved a net income of $804 million, or $2.27 per diluted share, below the annual estimate of $2.79 per share. On an adjusted basis, earnings were $1.3 billion, or $3.77 per diluted share. The company generated $3.6 billion in net cash from operating activities and an adjusted EBITDAX of $5.9 billion. These financial achievements are crucial for APA Corp as they reflect the company's ability to generate cash flow and sustain operations in the volatile oil and gas industry.

Key Financial Metrics

APA Corp's financial statements reveal significant metrics that are vital for understanding its performance. The company generated $841 million in free cash flow, repurchased $246 million of common stock, and paid $353 million in dividends. Despite acquiring over $2 billion in debt with the Callon acquisition, APA ended the year with a net debt increase of only $300 million, maintaining a debt level of $6 billion and cash reserves of $625 million.

Strategic Developments and Future Outlook

APA Corp made strategic moves in 2024, including the acquisition of Callon Petroleum Company and the sale of conventional Central Basin Platform assets, which resulted in a 22% reduction in breakeven oil price on Callon Delaware acreage. The company also achieved a final investment decision for the GranMorgu Phase 1 project in Suriname Block 58 with TotalEnergies and signed a new gas price agreement in Egypt. These actions are expected to strengthen APA's portfolio and improve investment opportunities.

“Over the last several years, APA has been strategically reshaped in numerous ways. We have enhanced the quality and sustainability of the portfolio in our core areas of the Permian Basin and the Western Desert of Egypt, while also building optionality through a differentiated exploration strategy,” said John J. Christmann IV, APA’s chief executive officer.

Analysis of APA Corp's Performance

APA Corp's performance in 2024 reflects its strategic focus on enhancing portfolio quality and sustainability. The company's ability to generate significant cash flow and maintain a stable debt level despite substantial acquisitions demonstrates financial resilience. However, the challenges of meeting adjusted earnings expectations highlight the volatility and unpredictability inherent in the oil and gas sector. APA's strategic initiatives, including cost reduction efforts and investment in key projects, position the company for potential growth and stability in the coming years.

Explore the complete 8-K earnings release (here) from APA Corp for further details.