APA Corporation Announces Q4 & Full-Year 2022 Results

2022 Highlights
- Delivered full-year net cash from operating activities of $4.9 billion, adjusted EBITDAX of $6.8 billion and $2.5 billion of free cash flow (FCF);
- Returned $1.6 billion of FCF to shareholders and exceeded 60% capital return to shareholders commitment;
- Repurchased 36.2 million shares of common stock; doubled the annual base dividend;
- Eliminated $1.4 billion, or more than 20%, of outstanding bond debt;
- Increased drilling and completion activity in the U.S. and Egypt to a pace that returns the company to moderate and sustainable production growth;
- Advanced appraisal programs on Block 58 offshore Suriname at Sapakara and Krabdagu with three successful flow tests; announced first oil discovery on Block 53 at Baja; and
- Achieved primary emissions goal of reducing upstream routine flaring by more than 40% in Egypt.

2023 Outlook and Objectives
- Reiterating upstream capital budget of $2.0 to $2.1 billion;
- Expecting adjusted barrels of oil equivalent (BOE) growth of 4 to 5%, and oil growth of more than 10%;
- Substantial upside FCF potential from Cheniere gas sales contract commencing in third-quarter 2023;
- Committed to returning at least 60% of FCF to shareholders and strengthening the balance sheet; and
- Continuing to appraise and explore Block 58 offshore Suriname.

APA Corporation (APA) announced its financial and operational results for the fourth-quarter and full-year 2022.

During the fourth-quarter 2022, APA reported net income attributable to common stock of $443 million, or $1.38 per share on a fully diluted basis. When adjusted for certain items that impact the comparability of results, APA’s fourth-quarter earnings totaled $476 million or $1.48 on a diluted share basis. Reported fourth-quarter production was 414,000 BOE per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 334,000 BOE per day. Net cash provided by operating activities in the fourth quarter was $1.4 billion, and adjusted EBITDAX was $1.5 billion.

For the full-year 2022, APA reported net income of $3.67 billion, or $11.02 per diluted common share. On an adjusted basis, APA’s 2022 earnings totaled $2.56 billion or $7.68 per diluted common share. Reported full-year production was 396,000 BOE per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 318,000 BOE per day. Net cash provided by operating activities was $4.94 billion, and adjusted EBITDAX was $6.84 billion.

“APA ended the year with strong performance in each of our operational areas,” said John J. Christmann IV, APA’s CEO and president. “In the U.S., we exceeded fourth-quarter production guidance, and in Egypt, we continue to make good progress improving rig efficiencies and growing quarterly oil production. Volumes in the North Sea returned to the mid-40 thousand BOE per day level as facilities' uptime improved from prior quarters. In Suriname, during 2022, we established more than 800 million barrels of combined estimated oil resource-in place, following three successful flow tests at Sapakara and Krabdagu. These validate our geologic, geophysical and reservoir models in the upper cretaceous age section of the central portion of Block 58, where we are further appraising Krabdagu with two rigs.”

2023 Capital Budget and Outlook

In 2023, APA plans to invest $2.0 to $2.1 billion in upstream oil and gas capital, which is consistent with the preliminary guidance provided in the third-quarter 2022. This capital investment level is expected to result in year-over-year adjusted BOE growth of 4 to 5%, underpinned by a more than 10% increase in oil volumes.

“APA’s diversified portfolio provides us the optionality to allocate capital to areas that generate the highest returns and to opportunistically respond to changes in oil and gas prices,” Christmann said. “This year our emphasis will be on higher-margin oil development, and we will continue to drive improvements in safety, operational execution, and cost management, while prioritizing initiatives that reduce our carbon intensity and help protect the environment.”

Year-End 2022 Proved Reserves

Worldwide estimated proved reserves totaled 890 million BOE at year-end 2022, 90% of which were classified as proved developed. During the year, APA added approximately 109 million BOE through field extensions, discoveries, and revisions, and 13 million BOE from the net impact of acquisition and divestiture activity.