HOUSTON - APA Corporation (NASDAQ: APA), an oil and natural gas exploration company, has provided a supplemental update on its financial and operational results for the third quarter of 2024. The company announced a realized gain on commodity derivatives before tax of $3 million and a significant gain on natural gas transactions with Cheniere, totaling $178 million before tax. APA also disclosed estimated dry hole costs ranging from $10 to $15 million.
In response to low Waha hub prices, APA curtailed approximately 103 million cubic feet per day (MMcf/d) of its U.S. natural gas production and around 10,000 barrels per day of natural gas liquids (NGLs) in the third quarter. These figures exceed the curtailment guidance issued in July, which estimated reductions of 90 MMcf/d of natural gas and 7,500 barrels per day of NGLs.
The company also provided an update on its asset sales, revealing an agreement to sell non-core assets in the Permian Basin for $950 million, subject to customary closing adjustments. The properties in question had an estimated net production of 21 thousand barrels of oil equivalent per day (MBOE/D), with oil accounting for 57% of this figure. APA has adjusted its fourth-quarter guidance to exclude production from these assets, though the transaction is expected to close later in the fourth quarter.
APA reported an estimated weighted-average basic common shares count of 370 million for the third quarter, a slight decrease from 371 million in the second quarter of 2024. The company repurchased 0.1 million shares at an average price of $29.32 during the third quarter.
APA Corporation plans to host a conference call on Thursday, November 7, to discuss its third-quarter results in greater detail. The call will be available for replay on the company's website for one year following the event.
This update from APA Corporation is based on a press release statement and contains forward-looking statements regarding the company's expectations for operations and financial outcomes. These statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those projected.
In other recent news, APA Corporation and TotalEnergies (EPA:TTEF) have committed to a significant $10.5 billion investment in Suriname's Block 58 offshore oil project. The joint venture, expected to produce over 750 million barrels of oil, is slated to begin production in 2028. Truist Securities has raised its price target for Apache Corp (NASDAQ:APA) to $36.00, citing operational opportunities and strategies in Suriname, the Permian region, and Egypt. Similarly, Wolfe Research has increased its price target to $39.00, maintaining an Outperform rating due to the first oil development in Suriname. However, Mizuho has maintained an underperform rating on Apache shares, noting the higher costs of the Suriname project. APA Corporation also announced a dividend of 25 cents per share and sold non-core assets in the Permian Basin for $950 million, moves that analysts from TD Cowen, Truist Securities, and Scotiabank have reacted positively to. Lastly, APA Corporation extended its agreement with Palantir Technologies (NYSE:PLTR), integrating artificial intelligence capabilities into its operations for several years.
InvestingPro Insights
APA Corporation's recent financial update aligns with several key metrics and insights from InvestingPro. The company's decision to curtail natural gas production due to low Waha hub prices reflects its adaptability in a volatile market environment. This strategic move is consistent with an InvestingPro Tip indicating that APA's stock price movements are quite volatile.
Despite the production curtailments and asset sales, APA's financial position remains robust. The company's P/E ratio of 2.91 suggests that it's trading at a relatively low valuation compared to its earnings. This could be attractive to value investors, especially considering the company's profitability over the last twelve months, as noted in another InvestingPro Tip.
APA's dividend yield of 3.81% and its track record of maintaining dividend payments for 54 consecutive years, as highlighted by InvestingPro, demonstrate the company's commitment to shareholder returns. This consistent dividend policy may provide some stability for investors amidst the volatility in the energy sector.
It's worth noting that InvestingPro has 21 additional tips available for APA Corporation, offering investors a more comprehensive analysis of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.