APA Corporation

APA reported second-quarter consolidated net income of $747 million, or $2.11 per diluted share. Adjusted net income was $669 million, or $1.89 per diluted share, excluding a $92 million unrealized gain related to basis hedges and other small items. Free cash flow was $738 million in the quarter, and APA returned $189 million to shareholders through dividends and share repurchases. For full year 2026, management now expects Permian oil production of 123 thousand barrels per day with $1.3 billion of capital, Egypt gross oil production of about 118 thousand barrels per day and gross gas production of 535 million cubic feet per day, lease operating expense of $1.5 billion, and about $2.3 billion of free cash flow at current strip pricing.

John Christmann framed the quarter as evidence of APA’s “momentum,” emphasizing stronger execution, lower costs, and lower capital intensity across the core Permian and Egypt businesses. He said the company is doing “more with less,” highlighted that annualized run-rate savings should reach about $500 million, and argued the structural improvements of the last two years are improving the economics and resilience of the portfolio. He also emphasized that GranMorgu, Alaska, Uruguay, and Egypt gas are creating a differentiated long-term growth runway while APA advances toward its $3 billion net debt target.

Ben Rodgers focused on the financial translation of operating improvements: $747 million of reported net income, $669 million of adjusted net income, $738 million of quarterly free cash flow, and $1.2 billion-plus of free cash flow in the first half of 2026. He said the company expects year-end run-rate savings of $500 million, LOE of $1.5 billion, about $950 million of pretax cash flow from the gas trading portfolio, and about $2.3 billion of free cash flow at current strip. He also noted $752 million of bond debt repaid in the first half, including $673 million in Q2, and said APA expects net debt of about $3.3 billion by year-end and to reach the $3 billion target in 2027.

Analysts pressed management on Alaska after the Savant acquisition, and Christmann said APA has nearly 500 thousand acres, two discoveries, and two 2027 wells planned: an appraisal well at Sockeye/Hungry Horse and a larger independent prospect at Chinook. On Uruguay, management said ENI came in through a competitive process because of strong prospectivity, but the first well will likely test deeper Cretaceous objectives rather than the shallower Raya-1 concept. Questions also focused on capital returns and debt reduction; Rodgers said APA is still committed to returning at least 60% of free cash flow to shareholders and expects roughly $3.3 billion of net debt at year-end, while Christmann said 2027 exploration spend will step up from this year but the 60% framework remains in place.