APA Corp
For the period ended Jun 30, 2024. Filed Aug 2, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 2, 2024
APA$44.63+2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0001784031-24-000008
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0001784031-24-000013
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 128 previous paragraphs and 147 current paragraphs.
77 unchanged; 47 reworded; 20 added; 3 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
In the second quarter of 2024, the Company reported net income attributable to common stock of $541 million, or $1.46 per diluted share, compared to net income of $381 million, or $1.23 per diluted share, in the second quarter of 2023. The increase in net income in the second quarter of 2024 compared to the same prior year period was primarily driven by higher revenues as a result of production from the Callon acquisition, increased drilling activity in the U.S., and higher realized oil and NGL prices during the period. Net income also benefited from $276 million of net gains on divestitures of non-core assets during the second quarter of 2024. These benefits to net income were offset by higher depreciation expense, transaction and reorganization costs, and lease operating expenses compared to the same prior year period, primarily a result of the Callon acquisition.
Current report
In the first six months of 2024, the Company reported net income attributable to common stock of $673 million, or $2.00 per diluted share, compared to net income of $623 million, or $2.01 per diluted share, in the first six months of 2023. The increase in net income in the first six months of 2024 compared to the first six months of 2023 was primarily driven by higher revenues as a result of production from the Callon acquisition, increased drilling activity in the Permian Basin, and higher realized oil and NGL prices. Net income also benefited from $283 million of net gains on divestitures of non-core assets and lower deferred income tax expense compared to the same prior year period. These benefits to net income were offset by higher depreciation expense, transaction and reorganization costs, and lease operating expenses compared to the same prior year period, primarily as a result of the Callon acquisition.
Current report
Second-Quarter 2024 compared to Second-Quarter 2023
Current report
NGL NGL revenues for the second quarter of 2024 totaled $159 million, a $52 million increase from the comparative 2023 quarter. A 16 percent increase in average realized prices increased second-quarter 2024 NGL revenues by $17 million compared to the second quarter of 2023, while 29 percent higher average daily production increased revenues by $35 million. NGL revenues accounted for 7 percent of total oil and gas production revenues and 17 percent of worldwide production during the second quarter of 2024.
Current report
The Company’s worldwide NGL production increased 17.9 Mb/d to 80.5 Mb/d during the second quarter of 2024 from the comparative prior-year period, primarily a result of the Callon acquisition coupled with increased drilling activity in the Permian Basin, offset by natural production decline in the U.S. and the North Sea.
Current report
Year-to-Date 2024 compared to Year-to-Date 2023
Current report
Crude Oil Crude oil revenues for the first six months of 2024 totaled $3.3 billion, a $577 million increase from the comparative 2023 period. A 15 percent higher average daily production increased oil revenues for the 2024 period by $427 million compared to the prior-year period, while a 5 percent increase in average realized prices increased oil revenues by $150 million compared to the prior-year period. Crude oil revenues accounted for 84 percent of total oil and gas production revenues and 53 percent of worldwide production for the first six months of 2024. Crude oil prices realized during the first six months of 2024 averaged $81.57 per barrel, compared to $77.37 per barrel in the comparative prior-year period.
Current report
The Company’s worldwide oil production increased 28.9 Mb/d to 226.9 Mb/d in the first six months of 2024 compared to the prior-year period, primarily a result of the Callon acquisition coupled with increased drilling activity in the Permian Basin, offset by natural production decline across all assets.
Current report
Natural Gas Natural gas revenues for the first six months of 2024 totaled $311 million, a $111 million decrease from the comparative 2023 period. A 25 percent decrease in average realized prices decreased natural gas revenues for the 2024 period by $104 million compared to the prior-year period, while 2 percent lower average daily production decreased revenues by $7 million compared to the prior-year period. Natural gas revenues accounted for 8 percent of total oil and gas production revenues and 31 percent of worldwide production for the first six months of 2024.
Current report
The Company’s worldwide NGL production increased 9.2 Mb/d to 69.2 Mb/d in the first six months of 2024 compared to the prior-year period, primarily a result of the Callon acquisition coupled with increased drilling activity in the Permian Basin, offset by natural production decline in the U.S. and the North Sea.
Current report
LOE increased $99 million and $116 million compared to the second quarter and the first six months of 2023, respectively. On a per-unit basis, LOE increased 7 percent in both the second quarter and the first six months of 2024, when compared to the second quarter and the first six months of 2023. During the second quarter and first six months of 2024, higher operating and labor costs as well as higher workover activity, primarily from the Callon acquisition, drove the increase in absolute LOE costs compared to the same prior-year periods.
Current report
Impairments
Current report
During the three and six months ended June 30, 2023, the Company recorded $46 million of impairments in connection with valuations of drilling and operations equipment inventory upon the Company’s decision to suspend drilling operations in the North Sea. There were no impairments recorded during the three and six months ended June 30, 2024.
Current report
Proceeds from Term Loan Facility On April 1, 2024, the Company borrowed an aggregate $1.5 billion under a syndicated credit agreement. Loan proceeds were used to refinance certain indebtedness of Callon upon the closing of the Callon acquisition. For additional details of the credit agreement, see “Term Loan Credit Agreement”in the section below under Liquidity. As of June 30, 2024, $1.5 billion remained outstanding under the term loan facility governed by the Term Loan Credit Agreement.
Current report
Payments on Callon Credit Agreement During the first six months of 2024, the Company financed Callon’s repayment in full of the $472 million outstanding under the Callon Credit Agreement upon the Callon acquisition.
Current report
Payments on Fixed-Rate Debt During the first six months of 2024, the Company financed Callon’s repayment pursuant to Callon’s cash tender offers for, and redemptions of all senior notes issued under Callon’s indentures for an aggregate cash payment amount of $1.6 billion, reflecting principal amounts, premium to par, and associated fees.
Current report
Purchase Price Allocation
Current report
Accounting for the acquisition of a business requires the allocation of the purchase price to the various assets and liabilities of the acquired business and recording deferred taxes for any differences between the allocated values and tax basis of assets and liabilities. Any excess of the purchase price over the amounts assigned to assets and liabilities would be recorded as goodwill.
Current report
The purchase price allocation is accomplished by recording each asset and liability at its estimated fair value. Estimated deferred taxes are based on available information concerning the tax basis of the acquired company’s assets and liabilities and tax-related carryforwards at the merger date, although such estimates may change in the future as additional information becomes known. The amount of goodwill recorded in any particular business combination can vary significantly depending upon the values attributed to assets acquired and liabilities assumed relative to the total acquisition cost.
Current report
In estimating the fair values of assets acquired and liabilities assumed, the Company has made various assumptions. The most significant assumptions relate to the estimated fair values assigned to proved and unproved crude oil and natural gas properties. To estimate the fair values of these properties, the Company prepared estimates of crude oil and natural gas reserves as described in the “Reserves Estimates” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Estimated fair values assigned to assets acquired can have a significant effect on results of operations in the future.
Removed paragraphs (3)
Previous report
In the first quarter of 2024, the Company reported net income attributable to common stock of $132 million, or $0.44 per diluted share, compared to net income of $242 million, or $0.78 per diluted share, in the first quarter of 2023. Results for the first quarter of 2024 compared to the first quarter of 2023 were primarily impacted by higher DD&A and dry hole expense and an upward revision on decommissioning costs for its previously sold Gulf of Mexico assets in the current-year period, partially offset by lower deferred income tax expense.
Previous report
First-Quarter 2024 compared to First-Quarter 2023
Previous report
LOE increased $17 million compared to the first quarter of 2023. On a per-unit basis, LOE increased 7 percent in the first quarter of 2024 when compared to the first quarter of 2023. Overall higher labor costs and other operating costs trending with global inflation drove an increase in absolute LOE, partially offset by decreased workover activity primarily in the U.S. and changes in foreign currency exchange rates against the US dollar.
Reworded paragraphs (47)
Previous wording
Uncertainties in the global supply chain and financial markets, including the impact of ongoing international conflicts, inflation and rising interest rates, and actions taken by foreign oil and gas producing nations, including OPEC+, continue to impact oil supply and demand and contribute to commodity price volatility. Despite these uncertainties, the Company remains committed to its longer-term objectives: (1) to invest for long-term returns in pursuit of moderate, sustainable production growth; (2) to strengthen the balance sheet to underpin the generation of cash flow in excess of its upstream exploration, appraisal, and development capital program that can be directed to debt reduction, share repurchases, and other return of capital to its shareholders; and (3) to responsibly manage its cost structure regardless of the oil price environment.
Current wording
Uncertainties in the global supply chain and financial markets, including the impact of ongoing international conflicts, inflation, and actions taken by foreign oil and gas producing nations, including OPEC+, impact oil supply and demand and contribute to commodity price volatility. Despite these uncertainties, the Company remains committed to its longer-term objectives: (1) to invest for long-term returns in pursuit of moderate, sustainable production growth; (2) to strengthen the balance sheet to underpin the generation of cash flow in excess of its upstream exploration, appraisal, and development capital program that can be directed to debt reduction, share repurchases, and other return of capital to its shareholders; and (3) to responsibly manage its cost structure regardless of the oil price environment.
Previous wording
•The Company’s quarterly dividend of $0.25 per share.
Current wording
•The Company pays a quarterly dividend of $0.25 per share on its common stock.
Previous wording
•Beginning in the fourth quarter of 2021 and through the end of the first quarter of 2024, the Company has repurchased 79.1 million shares of the Company’s common stock.
Current wording
•Beginning in the fourth quarter of 2021 and through the end of the second quarter of 2024, the Company has repurchased 80.6 million shares of the Company’s common stock. The Company repurchased 0.1 million shares in July 2024, and as of July 31, 2024, the Company had remaining authorization to repurchase up to 39.3 million shares under the Company’s share repurchase programs.
Previous wording
On April 1, 2024, APA completed its acquisition of Callon Petroleum Company (Callon) in an all-stock transaction valued at approximately $4.5 billion, inclusive of Callon’s debt (the Callon acquisition). The transaction was approved by APA and Callon shareholders at special meetings held on March 27, 2024. The acquired assets include approximately 120,000 net acres in the Delaware Basin and 25,000 net acres in the Midland Basin. Callon’s fourth-quarter 2023 production was 103,000 BOE per day, comprising 58 percent oil and 80 percent liquids.
Current wording
On April 1, 2024, APA completed its acquisition of Callon Petroleum Company (Callon) in an all-stock transaction valued at approximately $4.5 billion, inclusive of Callon’s debt (the Callon acquisition). The transaction was approved by APA and Callon shareholders at special meetings held on March 27, 2024. The acquired assets include approximately 120,000 net acres in the Delaware Basin and 25,000 net acres in the Midland Basin. The Company believes the acquisition of Callon provides opportunities to reduce costs, improve capital efficiencies, leverage economies of scale, and expand the development inventory that formed the basis of the transaction value.
Previous wording
Subject to the terms of the merger agreement, each share of Callon common stock was converted into the right to receive 1.0425 shares of APA common stock, with cash in lieu of fractional shares. As a result, APA issued approximately 70 million shares of APA common stock in connection with the transaction, and following the acquisition, Callon common stock is no longer listed for trading on the NYSE.
Current wording
Subject to the terms of the merger agreement (Merger Agreement), each share of Callon common stock was converted into the right to receive 1.0425 shares of APA common stock, with cash in lieu of fractional shares. As a result, APA issued approximately 70 million shares of APA common stock in connection with the transaction, and following the acquisition, Callon common stock is no longer listed for trading on the NYSE.
Previous wording
The Company generated $368 million of cash from operating activities during the first three months of 2024, 10 percent higher than the first three months of 2023. APA’s higher operating cash flows for the first three months of 2024 were primarily driven by timing of working capital items. The Company repurchased 3.0 million shares of its common stock for $101 million and paid $76 million in dividends to APA common stockholders during the first three months of 2024.
Current wording
The Company generated $1.2 billion of cash from operating activities during the first six months of 2024, 7 percent lower than the first six months of 2023. APA’s lower operating cash flows for the first six months of 2024 were primarily driven by timing of working capital items. The Company repurchased 4.5 million shares of its common stock for $144 million and paid $168 million in dividends to APA common stockholders during the first six months of 2024.
Previous wording
•Daily boe production from the Company’s U.S. assets accounted for 55 percent of its total production during the first quarter of 2024 and increased 6 percent from the first quarter of 2023. Daily oil production from the Company’s U.S. assets increased 16 percent from the first quarter of 2023. During the first quarter of 2024, the Company averaged six drilling rigs in the U.S., including three rigs in the Southern Midland Basin and three rigs in the Delaware Basin, and drilled and brought online 12 operated wells in the quarter. The Company’s core Permian Basin development program continues to represent key growth areas for the U.S. assets.
Current wording
•Daily boe production from the Company’s U.S. assets accounted for 64 percent of its total production during the second quarter of 2024 and increased 43 percent from the second quarter of 2023. Daily oil production from the Company’s U.S. assets increased 83 percent from the second quarter of 2023. During the second quarter of 2024, the Company averaged eleven drilling rigs in the Permian Basin, including six rigs in the Southern Midland Basin and five rigs in the Delaware Basin. The Company brought online 60 operated wells during the quarter, of which 25 wells were associated with the Callon acquisition. The Company’s core Permian Basin development program continues to represent key growth areas for the U.S. assets.
Previous wording
•The Company expects to average 10 drilling rigs in the U.S. for the remainder of 2024 as it integrates Callon operations, including contracting and logistics, well planning and design, drilling and completions, and facility construction.
Current wording
•The Company expects to average 10 drilling rigs in the Permian Basin for the remainder of 2024 as it integrates Callon operations, including contracting and logistics, well planning and design, drilling and completions, and facility construction.
Previous wording
•In Egypt, the Company continued its drilling and workover activity with a focus on oil production. The Company averaged 17 drilling rigs and drilled 17 new productive wells during the first quarter of 2024. During the same period, the Company averaged 21 workover rigs as it continues to align its drilling and workover activity with a goal of driving improved capital efficiency. First quarter 2024 gross and net equivalent production in the Company’s Egypt assets decreased 8 percent from the first quarter of 2023, while daily oil production remained essentially flat.
Current wording
•In Egypt, the Company continued its drilling and workover activity with a focus on oil production. The Company averaged 15 drilling rigs and drilled 14 new productive wells during the second quarter of 2024. During the same period, the Company averaged 20 workover rigs as it continues to align its drilling and workover activity with a goal of driving improved capital efficiency. Second quarter 2024 gross production from the Company’s Egypt assets decreased 7 percent from the second quarter of 2023, and net production decreased 8 percent, while daily oil production remained essentially flat.
Previous wording
(4) Average sales volumes from the North Sea for the first quarters of 2024 and 2023 were 35,078 boe/d and 46,632 boe/d, respectively. Sales volumes may vary from production volumes as a result of the timing of liftings.
Current wording
(4) Average sales volumes from the North Sea for the second quarters of 2024 and 2023 were 37,491 boe/d and 40,099 boe/d, respectively, and 36,285 boe/d and 43,347 boe/d for the first six months of 2024 and 2023, respectively. Sales volumes may vary from production volumes as a result of the timing of liftings.
Previous wording
Crude Oil Crude oil revenues for the first quarter of 2024 totaled $1.4 billion, a $35 million increase from the comparative 2023 quarter. A 3 percent increase in average realized prices primarily drove the increase in crude oil revenues compared to the first quarter of 2023. Crude oil revenues accounted for 82 percent of total oil and gas production revenues and 51 percent of worldwide production in the first quarter of 2024. Crude oil prices realized in the first quarter of 2024 averaged $80.65 per barrel, compared with $78.37 per barrel in the comparative prior-year quarter.
Current wording
Crude Oil Crude oil revenues for the second quarter of 2024 totaled $1.9 billion, a $542 million increase from the comparative 2023 quarter. A 28 percent higher average daily production increased second-quarter 2024 oil revenues by $437 million compared to the second quarter of 2023, while an 8 percent increase in average realized prices increased oil revenues by $105 million. Crude oil revenues accounted for 87 percent of total oil and gas production revenues and 54 percent of worldwide production in the second quarter of 2024. Crude oil prices realized in the second quarter of 2024 averaged $82.28 per barrel, compared with $76.38 per barrel in the comparative prior-year quarter.
Previous wording
The Company’s worldwide oil production increased 2.9 Mb/d to 200.1 Mb/d during the first quarter of 2024 from the comparative prior-year period, primarily a result of increased drilling activity in the U.S., offset by natural production decline across all assets.
Current wording
The Company’s worldwide oil production increased 54.8 Mb/d to 253.6 Mb/d during the second quarter of 2024 from the comparative prior-year period, primarily a result of the Callon acquisition coupled with increased drilling activity in the Permian Basin, offset by natural production decline across all assets.
Previous wording
Natural Gas Gas revenues for the first quarter of 2024 totaled $176 million, a $66 million decrease from the comparative 2023 quarter. A 23 percent decrease in average realized prices decreased first-quarter 2024 natural gas revenues by $56 million compared to the prior-year quarter, while 6 percent lower average daily production decreased revenues by $10 million. Natural gas revenues accounted for 10 percent of total oil and gas production revenues and 34 percent of worldwide production during the first quarter of 2024. The Company’s worldwide natural gas production decreased 51.7 MMcf/d to 786.6 MMcf/d during the first quarter of 2024 from the comparative prior-year period, primarily a result of natural production decline across all assets, reduced gas-focused activity in Egypt, and curtailment of volumes at Alpine High in response to extreme Waha basis differentials. These decreases were partially offset by increased drilling activity and recompletions in the U.S.
Current wording
Natural Gas Natural gas revenues for the second quarter of 2024 totaled $135 million, a $45 million decrease from the comparative 2023 quarter. A 26 percent decrease in average realized prices decreased second-quarter 2024 natural gas revenues by $46 million compared to the second quarter of 2023, while 1 percent higher average daily production increased revenues by $1 million. Natural gas revenues accounted for 6 percent of total oil and gas production revenues and 29 percent of worldwide production during the second quarter of 2024.
Previous wording
NGL NGL revenues for the first quarter of 2024 totaled $140 million, a $10 million increase from the comparative 2023 quarter. A 5 percent increase in average realized prices increased first-quarter 2024 NGL revenues by $7 million compared to the prior-year quarter, while 1 percent higher average daily production increased revenues by $3 million. NGL revenues accounted for 8 percent of total oil and gas production revenues and 15 percent of worldwide production during the first quarter of 2024. The Company’s worldwide NGL production increased 0.6 Mb/d to 58.0 Mb/d during the first quarter of 2024 from the comparative prior-year period, primarily a result of increased drilling activity in the U.S.
Current wording
NGL NGL revenues for the first six months of 2024 totaled $299 million, a $62 million increase from the comparative 2023 period. A 9 percent increase in average realized prices increased NGL revenues for the 2024 period by $22 million compared to the prior-year period, while 15 percent higher average daily production increased revenues by $40 million compared to the prior-year period. NGL revenues accounted for 8 percent of total oil and gas production revenues and 16 percent of worldwide production for the first six months of 2024.
Previous wording
Purchased oil and gas sales represent volumes primarily attributable to U.S. domestic gas purchases that were sold by the Company to fulfill natural gas takeaway obligations and delivery commitments. Sales related to these purchased volumes totaled $203 million and $239 million during the first quarters of 2024 and 2023, respectively. Purchased oil and gas sales were offset by associated purchase costs of $163 million and $216 million during the first quarters of 2024 and 2023, respectively. Gross purchased oil and gas sales values were lower in the first quarter of 2024, primarily due to lower average natural gas prices during the first quarter of 2024, as compared to the first quarter of 2023.
Current wording
Purchased oil and gas sales represent volumes primarily attributable to U.S. domestic oil and gas purchases that were sold by the Company to fulfill oil and natural gas takeaway obligations and delivery commitments. Sales related to these purchased volumes totaled $342 million and $144 million during the second quarters of 2024 and 2023, respectively, and $545 million and $383 million during the first six months of 2024 and 2023, respectively. Purchased oil and gas sales were offset by associated purchase costs of $210 million and $131 million during the second quarters of 2024 and 2023, respectively, and $373 million and $347 million during the first six months of 2024 and 2023, respectively. Gross purchased oil and gas sales values were higher in the second quarter and the first six months of 2024, primarily driven by activity associated with the Callon acquisition as compared to the second quarter and the first six months of 2023.
Previous wording
GPT costs increased $6 million in the first quarter of 2024 when compared to the first quarter of 2023, primarily driven by a slight increase in natural gas production volumes in the U.S. when compared to the prior-year period.
Current wording
GPT costs increased $43 million and $49 million in the second quarter and the first six months of 2024, respectively, when compared to the second quarter and the first six months of 2023, primarily driven by an increase in natural gas production volumes in the U.S. when compared to the prior-year periods.
Previous wording
Purchased oil and gas costs decreased $53 million in the first quarter of 2024, to $163 million from $216 million in the first quarter of 2023. The decrease is a result of lower average natural gas prices in the first quarter of 2024 compared to the first quarter of 2023. Purchased oil and gas costs were more than offset by associated sales to fulfill natural gas takeaway obligations and delivery commitments totaling $203 million in the first quarter of 2024, as discussed above.
Current wording
Purchased oil and gas costs increased $79 million and $26 million in the second quarter and the first six months of 2024, respectively, when compared to the second quarter and the first six months of 2023. The increase in the second quarter and the first six months of 2024 compared to same prior year periods is primarily driven by activity associated with the Callon acquisition. With widening margins under third-party gas agreements, purchased oil and gas costs were more than offset by associated sales to fulfill oil and natural gas takeaway obligations and delivery commitments totaling $342 million and $545 million in the second quarter and the first six months of 2024, respectively, as discussed above.
Previous wording
Taxes other than income increased $5 million from the first quarter of 2023, primarily from higher severance taxes driven by increased production volumes and higher oil prices in the U.S. compared to the prior-year period.
Current wording
Taxes other than income increased $28 million and $33 million from the second quarter and the first six months of 2023, respectively, primarily from higher severance taxes driven by increased production volumes and higher oil prices in the U.S. compared to the prior-year periods.
Previous wording
Exploration expenses increased $96 million from the first quarter of 2023, primarily the result of the completion of an initial drilling campaign in Alaska where two wells were unable to reach target objectives in the allotted seasonal time window.
Current wording
Exploration expenses increased $28 million and $124 million from the second quarter and the first six months of 2023, respectively. The increase in exploration expenses for the second quarter and the six months of 2024 compared to the second quarter and six months of 2023 was primarily the result of dry hole expense associated with the completion of an initial drilling campaign in Alaska where two wells were unable to reach target objectives in the allotted seasonal time window.
Previous wording
G&A expenses increased $28 million compared to the first quarter of 2023. The increase in G&A expenses for the first quarter of 2024 compared to the first quarter of 2023 was primarily driven by higher overall labor costs across the Company and higher cash-based stock compensation expense resulting from changes in the Company’s stock price.
Current wording
G&A expenses increased $13 million and $41 million compared to the second quarter and the first six months of 2023, respectively. The increase in G&A expenses for the second quarter of 2024 compared to the second quarter of 2023 was primarily driven by the Callon acquisition and higher overall labor costs across the Company. The increase in G&A expenses for the first six months of 2024 compared to the first six months of 2023 was primarily driven by higher overall labor costs across the Company and higher cash-based stock compensation expense resulting from changes in the Company’s stock price.
Previous wording
TRS costs increased $23 million from the first quarter of 2023. Higher TRS costs during the first quarter of 2024 were primarily a result of ongoing transaction costs related to the Callon acquisition coupled with separation costs in the North Sea. The Company expects to incur an additional $90 million of TSR costs related to the Callon merger. A majority of these costs will be incurred in the second quarter for professional services, departing Callon employees, and other closing costs.
Current wording
TRS costs increased $113 million and $136 million from the second quarter and the first six months of 2023, respectively. Higher TRS costs during the second quarter and the first six months of 2024 were primarily a result of ongoing transaction costs related to the Callon acquisition coupled with separation costs in the North Sea. TRS costs incurred in the first six months of 2024 comprised $128 million associated with the Callon acquisition, including $62 million of separation costs and $66 million of transaction and integration costs.
Previous wording
Total DD&A expenses increased $98 million from the first quarter of 2023, primarily driven by DD&A on the Company’s oil and gas properties. The Company’s DD&A rate on its oil and gas properties increased $2.86 per boe from the first quarter of 2023 driven primarily by price-related negative reserve revisions over the prior 12 months. The increase on an absolute basis was also impacted by higher oil and gas property balances resulting from capital investment activity in the U.S. over the past year.
Current wording
Total DD&A expenses increased $221 million and $319 million from the second quarter and the first six months of 2023, respectively, primarily driven by DD&A on the Company’s oil and gas properties. The Company’s DD&A rate on its oil and gas properties increased $3.69 per boe and $3.35 per boe from the second quarter and the first six months of 2023, respectively. The increase in DD&A on an absolute and per boe basis were driven by negative price-related reserve revisions in prior periods and impacts resulting from the Callon acquisition during the second quarter of 2024.
Previous wording
Net financing costs increased $4 million from the first quarter of 2023. The increase in costs during the first quarter of 2024 was primarily a result of gains on extinguishment of debt recorded during the first quarter of 2023. The increase was partially offset by lower interest expense from lower average long-term debt balances during the first quarter of 2024 compared to the same prior year period.
Current wording
Net financing costs increased $18 million and $22 million from the second quarter and the first six months of 2023, respectively. The increase in costs during the second quarter and the first six months of 2024 was primarily due to higher interest expense from higher average long-term debt balances compared to the second quarter and the first six months of 2023.
Previous wording
The Company’s effective income tax rate for the three months ended March 31, 2024 differed from the U.S. federal statutory income tax rate of 21 percent due to taxes on foreign operations. The Company’s effective income tax rate for the three months ended March 31, 2023 differed from the U.S. federal statutory income tax rate of 21 percent due to taxes on foreign operations, a deferred tax expense related to the remeasurement of taxes in the U.K. as a result of the enactment of Finance Act 2023, and a decrease in the amount of valuation allowance against its U.S. deferred tax assets.
Current wording
The Company’s effective income tax rate for the three and six months ended June 30, 2024 differed from the U.S. federal statutory income tax rate of 21 percent due to taxes on foreign operations. During the second quarter of 2023, the Company’s effective income tax rate differed from the U.S. federal statutory income tax rate of 21 percent due to taxes on foreign operations and a decrease in the amount of valuation allowance against its U.S. deferred tax assets. The Company’s effective income tax rate for the six months ended June 30, 2023 differed from the U.S. federal statutory income tax rate of 21 percent due to taxes on foreign operations, a deferred tax expense related to the remeasurement of taxes in the U.K. as a result of the enactment of Finance Act 2023, and a decrease in the amount of valuation allowance against its U.S. deferred tax assets.
Previous wording
Net cash provided by operating activities during the first three months of 2024 totaled $368 million, up $33 million from the first three months of 2023, primarily the result of timing of working capital items.
Current wording
Net cash provided by operating activities during the first six months of 2024 totaled $1.2 billion, down $90 million from the first six months of 2023, primarily the result of timing of working capital items.
Previous wording
Payments on and proceeds from commercial paper and revolving credit facilities, net During the first three months of 2024, the Company made net payments of $2 million on its commercial paper and revolving credit facilities borrowings. As of March 31, 2023, outstanding borrowings under the Company’s U.S. dollar denominated syndicated credit facility were $983 million, an increase of $417 million since December 31, 2022.
Current wording
Proceeds from Commercial Paper and Revolving Credit Facilities, Net As of June 30, 2024, outstanding borrowings under the Company’s commercial paper and U.S. dollar denominated syndicated credit facility were $435 million, an increase of $63 million since December 31, 2023. During the six months ended June 30, 2023, the Company had net borrowings of $196 million under the Company’s U.S. dollar denominated syndicated credit facility.
Previous wording
Proceeds from Asset Divestitures The Company received $27 million and $21 million in proceeds from the divestiture of certain non-core assets during the first three months of 2024 and 2023, respectively. For more information regarding the Company’s acquisitions and divestitures, refer to Note 2—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Current wording
Proceeds from Asset Divestitures The Company received $729 million and $28 million in proceeds from the divestiture of certain non-core assets during the first six months of 2024 and 2023, respectively. For more information regarding the Company’s acquisitions and divestitures, refer to Note 2—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Previous wording
Additions to Upstream Oil & Gas Property Exploration and development cash expenditures were $467 million and $543 million during the first three months of 2024 and 2023, respectively. The decrease in capital investment is reflective of the Company’s strategy to continually assess drilling activity across its diverse portfolio and balance workover activity in Egypt. The Company operated an average of approximately 23 drilling rigs during the first three months of 2024, compared to an average of approximately 26 drilling rigs during the first three months of 2023.
Current wording
Additions to Upstream Oil & Gas Property Exploration and development cash expenditures were $1.2 billion and $1.1 billion during the first six months of 2024 and 2023, respectively. The increase in capital investment compared to the prior-year period is reflective of the Company’s acquisition of Callon, which increased the number of drilling rigs being operated in the Permian Basin, partially offset by the Company’s efforts to balance workover activity in Egypt and reduce drilling activity in the North Sea as it continually assesses inventory opportunities across its diverse portfolio. The Company operated an average of approximately 25 drilling rigs during the first six months of 2024, compared to an average of approximately 24 drilling rigs during the first six months of 2023.
Previous wording
Leasehold and Property Acquisitions During the first three months of 2024 and 2023, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $63 million and $6 million, respectively.
Current wording
Leasehold and Property Acquisitions During the first six months of 2024 and 2023, in addition to the Callon acquisition, the Company completed other leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $63 million and $10 million, respectively.
Previous wording
Payments on Apache Fixed-Rate Debt During the three months ended March 31, 2023, Apache purchased in the open market and canceled senior notes issued under its indentures in an aggregate principal amount of $74 million for an aggregate purchase price of $65 million in cash. The Company recognized a $9 million gain on these repurchases.
Current wording
During the six months ended June 30, 2023, Apache purchased in the open market and canceled senior notes issued under its indentures in an aggregate principal amount of $74 million for an aggregate purchase price of $65 million in cash. The Company recognized a $9 million gain on these repurchases.
Previous wording
Dividends Paid to APA Common Stockholders The Company paid $76 million and $78 million during the first three months of 2024 and 2023, respectively, for dividends on its common stock.
Current wording
Dividends Paid to APA Common Stockholders The Company paid $168 million and $155 million during the first six months of 2024 and 2023, respectively, for dividends on its common stock.
Previous wording
Distributions to Noncontrolling Interest Sinopec International Petroleum Exploration and Production Corporation (Sinopec) holds a one-third minority participation interest in the Company’s oil and gas operations in Egypt. The Company paid $70 million and $17 million during the first three months of 2024 and 2023, respectively, in cash distributions to Sinopec.
Current wording
Distributions to Noncontrolling Interest Sinopec International Petroleum Exploration and Production Corporation (Sinopec) holds a one-third minority participation interest in the Company’s oil and gas operations in Egypt. The Company paid $123 million and $100 million during the first six months of 2024 and 2023, respectively, in cash distributions to Sinopec.
Previous wording
Treasury Stock Activity, net In the first three months of 2024, the Company repurchased 3.0 million shares at an average price of $33.27 per share and an aggregate purchase price of approximately $101 million, and as of March 31, 2024, the Company had remaining authorization to repurchase 40.9 million shares. In the first three months of 2023, the Company repurchased 3.7 million shares at an average price of $38.93 per share and an aggregate purchase price of approximately $142 million.
Current wording
Treasury Stock Activity, net In the first six months of 2024, the Company repurchased 4.5 million shares at an average price of $31.77 per share and an aggregate purchase price of approximately $144 million, and as of June 30, 2024, the Company had remaining authorization to repurchase 39.4 million shares. In the first six months of 2023, the Company repurchased 5 million shares at an average price of $37.53 per share and an aggregate purchase price of approximately $188 million.
Previous wording
Cash and Cash Equivalents As of March 31, 2024, the Company had $102 million in cash and cash equivalents. The majority of the Company’s cash is invested in highly liquid, investment-grade instruments with maturities of three months or less at the time of purchase.
Current wording
Cash and Cash Equivalents As of June 30, 2024, the Company had $160 million in cash and cash equivalents. The majority of the Company’s cash is invested in highly liquid, investment-grade instruments with maturities of three months or less at the time of purchase.
Previous wording
Debt As of March 31, 2024, the Company had $5.2 billion in total debt outstanding, which consisted of notes and debentures of Apache, credit facility and commercial paper borrowings, and finance lease obligations. As of March 31, 2024, current debt included $2 million of finance lease obligations.
Current wording
Debt As of June 30, 2024, the Company had $6.7 billion in total debt outstanding, which consisted of notes and debentures of Apache, credit facility and commercial paper borrowings, and finance lease obligations. As of June 30, 2024, current debt included $2 million of finance lease obligations.
Previous wording
Committed 2022 Credit Facilities On April 29, 2022, the Company entered into two unsecured syndicated credit agreements for general corporate purposes.
Current wording
Unsecured 2022 Committed Credit Facilities On April 29, 2022, the Company entered into two unsecured syndicated credit agreements for general corporate purposes.
Previous wording
As of March 31, 2024, there were $30 million of borrowings under the USD Agreement and an aggregate £348 million in letters of credit outstanding under the GBP Agreement. As of March 31, 2024, there were no letters of credit outstanding under the USD Agreement. As of December 31, 2023, there were $372 million of borrowings under the USD Agreement and an aggregate £348 million in letters of credit outstanding under the GBP Agreement. As of December 31, 2023, there were no letters of credit outstanding under the USD Agreement. The letters of credit denominated in pounds were issued to support North Sea decommissioning obligations, the terms of which require such support while Apache’s credit rating by Standard & Poor’s remains below BBB; on March 26, 2020, Standard & Poor’s reduced Apache’s rating from BBB to BB+, which was affirmed in 2023.
Current wording
As of June 30, 2024, there were $395 million of borrowings under the USD Agreement and an aggregate £348 million in letters of credit outstanding under the GBP Agreement. As of June 30, 2024, there were no letters of credit outstanding under the USD Agreement. As of December 31, 2023, there were $372 million of borrowings under the USD Agreement and an aggregate £348 million in letters of credit outstanding under the GBP Agreement. As of December 31, 2023, there were no letters of credit outstanding under the USD Agreement.
Previous wording
Uncommitted Credit Facilities Each of the Company and Apache, from time to time, has and uses uncommitted credit and letter of credit facilities for working capital and credit support purposes. As of March 31, 2024 and December 31, 2023, there were no outstanding borrowings under these facilities. At each of March 31, 2024 and December 31, 2023, there were £416 million and $2 million in letters of credit outstanding under these facilities.
Current wording
Uncommitted Lines of Credit Each of the Company and Apache, from time to time, has and uses uncommitted credit and letter of credit facilities for working capital and credit support purposes. As of June 30, 2024 and December 31, 2023, there were no outstanding borrowings under these facilities. As of June 30, 2024, there were £416 million and $11 million in letters of credit outstanding under these facilities. As of December 31, 2023, there were £416 million and $2 million in letters of credit outstanding under these facilities.
Previous wording
As of March 31, 2024, there was $340 million in aggregate face amount of CP Notes outstanding, which is classified as long-term debt. As of December 31, 2023, there were no CP Notes outstanding.
Current wording
As of June 30, 2024, there was $40 million in aggregate face amount of CP Notes outstanding, which is classified as long-term debt. As of December 31, 2023, there were no CP Notes outstanding.
Previous wording
Term Loan Credit Agreement On January 30, 2024, APA entered into a syndicated credit agreement under which the lenders committed an aggregate $2.0 billion for senior unsecured delayed-draw term loans to APA (Term Loan Credit Agreement), the proceeds of which could be used to refinance certain indebtedness of Callon only on the date of closing of transactions under the Merger Agreement. Refer to “Subsequent Events” for further detail. Apache has guaranteed obligations under the Term Loan Credit Agreement effective until the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures first is less than $1.0 billion.
Current wording
Term Loan Credit Agreement On January 30, 2024, APA entered into a syndicated credit agreement under which the lenders committed an aggregate $2.0 billion for senior unsecured delayed-draw term loans to APA (Term Loan Credit Agreement), the proceeds of which could be used to refinance certain indebtedness of Callon only once upon the date of the closings under the Merger Agreement and Term Loan Credit Agreement; of such aggregate commitments, $1.5 billion was for term loans that would mature three years after the date of such closings (3-Year Tranche Loans) and $500 million was for term loans that would mature 364 days after the date of such closings (364-Day Tranche Loans). Apache has guaranteed obligations under the Term Loan Credit Agreement effective until the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures first is less than $1.0 billion.
Showing the first 40 of 47 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The Company’s worldwide natural gas production increased 10.8 MMcf/d to 835.6 MMcf/d during the second quarter of 2024 from the comparative prior-year period, primarily a result of the Callon acquisition coupled with increased drilling activity and recompletions in the Permian Basin. These increases were offset by natural production decline across all assets, reduced gas-focused activity in Egypt, curtailment of volumes at Alpine High in response to extreme Waha basis differentials, and the sale of non-core assets in the U.S.
Current report — wording carried from elsewhere
The Company’s worldwide natural gas production decreased 20.4 MMcf/d to 811.1 MMcf/d in the first six months of 2024 compared to the prior-year period, primarily a result of natural production decline across all assets, reduced gas-focused activity in Egypt, curtailment of volumes at Alpine High in response to extreme Waha basis differentials, and the sale of non-core assets in the U.S. These decreases were partially offset by the Callon acquisition and increased drilling activity in the Permian Basin.
Current report — wording carried from elsewhere
On April 1, 2024, all indebtedness under the Callon Credit Agreement and Callon’s 2026 Notes was repaid, and the aggregate principal balance remaining outstanding under Callon’s 2028 Notes and Callon’s 2030 Notes was reduced to $24 million. On May 6, 2024, all remaining indebtedness under Callon’s 2028 Notes and Callon’s 2030 Notes was repaid. Given these repayments, no guarantee by Callon of APA’s obligations under the Term Loan Credit Agreement is required.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The lenders under the Term Loan Credit Agreement committed an aggregate $2.0 billion for senior unsecured delayed-draw term loans to APA available for borrowing only once upon the date of the closings under the Merger Agreement and Term Loan Credit Agreement, of which $1.5 billion was for term loans that would mature three years after the date of such closings (3-Year Tranche Loans) and $500 million was for term loans that would mature 364 days after the date of such closings (364-Day Tranche Loans). APA elected to borrow only under the 3-Year Tranche Loans and to allow the lender commitments for the 364-Day Tranche Loans to expire.