APA Corp.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 5 August 2026: press release. Guidance figures: 1 raised, 1 lowered, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Production exceeded guidance: Reported production was about 410,000 BOE per day and adjusted production 347,000 BOE per day, both above guidance. U.S. oil ran 2,500 barrels per day above guidance. Source
• Free cash flow of $738 million: Free cash flow was $738 million in the quarter, against $134 million a year earlier, and $1.2 billion for the first half. Net cash provided by operating activities was $1.7 billion. Source
• U.S. oil ahead of guidance: U.S. oil output was attributed to drilling and completion efficiency gains and base production performance in the Permian Basin. Source
• Field costs and corporate streamlining: The higher savings target was attributed to field-level operating efficiencies, well cost reductions and corporate streamlining, which lower the underlying cost structure. Source
• Debt down $2.3 billion since 2024: Repaid $752 million of near-term bonds in the first half, including $673 million in the second quarter. Net debt was $3.3 billion at June 30. Source
• Savant Alaska acquisition pending: The Savant Alaska acquisition, with $70 million upfront plus contingent payments, secures midstream, pipeline and field infrastructure next to APA's eastern North Slope acreage. Source
• Uruguay Block 6 partnership with Eni: APA signed Eni S.p.A as a strategic partner in offshore Block 6, retaining a 60% working interest in the block. Source

“These results reflect the structural improvements we’ve made over the past two years to become a cost leader and drive higher capital efficiency across the Permian and Egypt.”

John J. Christmann IV, APA’s CEO

Guidance

What changed from last quarter

• Guidance raised: U.S. oil production guidance raised to 123,000 barrels of oil per day for 2026. Source
• Guidance raised: Exit 2026 run-rate cost savings target raised to $500 million from $450 million. Source
• Guidance lowered: Lease operating expense guidance lowered by $25 million to $1.5 billion. Source
• Guidance kept: U.S. capital guidance maintained at $1.3 billion. Source
• New: Strategic partnership with Eni S.p.A in offshore Uruguay Block 6, with APA retaining a 60% working interest. Source
• New: Nearly half of Egypt gas production now benefits from a revised pricing agreement. Source

Results and growth drivers

• Production exceeded guidance: Reported production was about 410,000 BOE per day and adjusted production 347,000 BOE per day, both above guidance. U.S. oil ran 2,500 barrels per day above guidance. Source
• Earnings per diluted share: Net income attributable to common stock was $747 million, or $2.11 per diluted share, against $1.67 a year earlier. Adjusted earnings were $669 million, or $1.89 per diluted share. Source
• Free cash flow of $738 million: Free cash flow was $738 million in the quarter, against $134 million a year earlier, and $1.2 billion for the first half. Net cash provided by operating activities was $1.7 billion. Source

Production by region

• U.S. oil ahead of guidance: U.S. oil output was attributed to drilling and completion efficiency gains and base production performance in the Permian Basin. Source
• Egypt in line with guidance: Egypt adjusted production averaged 61,000 BOE per day. Gross production was 207,000 BOE per day, including gross gas of 539 MMcf per day. Source
• Egypt gas moved to revised pricing: Gross gas production rose on the gas-focused development program. Nearly half of Egypt gas production now falls under the revised pricing agreement. Source
• North Sea output declined: North Sea BOE per day was 22,085, down 19% from the first quarter and 30% from the second quarter of 2025. Source

“We’re sustaining top-tier operational performance and driving stronger production, lower costs and lower capital intensity.”

John J. Christmann IV, APA’s CEO

Costs, pricing and margins

• Field costs and corporate streamlining: The higher savings target was attributed to field-level operating efficiencies, well cost reductions and corporate streamlining, which lower the underlying cost structure. Source
• Realized oil price rose to $98.46: Realized U.S. oil price was $98.46 per barrel, up from $72.53 in the first quarter and $64.84 a year earlier. Source
• Realized gas price turned negative: Realized U.S. natural gas price was $(2.98) per Mcf, against $(0.32) in the first quarter and $1.03 a year earlier. Source

Capital and operating spend

• Upstream capital below guidance: Second-quarter upstream capital investment was $546 million, against $648 million a year earlier, and lease operating expense was $353 million. Both were below guidance. Source
• Suriname exploration timing shifts: Full-year total upstream capital is $2.07 billion, with slightly lower exploration spend from a shift in Suriname Block 58 exploration timing. Source
• Investing outflow of $591 million: Net cash used in investing activities was $591 million, including $569 million of additions to upstream oil and gas property. Source

“APA is in a great position with a strengthening balance sheet, a highly capital-efficient base business, a clear path to organic oil production growth led by GranMorgu and multiple high-quality investment opportunities in exploration.”

John J. Christmann IV, APA’s CEO

Debt and shareholder returns

• Debt down $2.3 billion since 2024: Repaid $752 million of near-term bonds in the first half, including $673 million in the second quarter. Net debt was $3.3 billion at June 30. Source
• Shareholder returns in the quarter: APA returned $189 million through dividends and repurchases of 2.8 million shares at an average of $35.26. The July supplemental gave the average as $35.25. Source
• First-half returns total $277 million: Cumulative first-half returns to shareholders totaled $277 million. Source

Exploration and strategy

• Savant Alaska acquisition pending: The Savant Alaska acquisition, with $70 million upfront plus contingent payments, secures midstream, pipeline and field infrastructure next to APA's eastern North Slope acreage. Source
• Uruguay Block 6 partnership with Eni: APA signed Eni S.p.A as a strategic partner in offshore Block 6, retaining a 60% working interest in the block. Source
• GranMorgu leads oil growth path: Management described a clear path to organic oil production growth led by GranMorgu, alongside exploration investments. Source

Supplemental disclosures from July

• Waha prices curtailed U.S. gas: In the second quarter APA curtailed about 137 MMcf/d of U.S. gas and 12,300 barrels per day of U.S. NGL production because of negative Waha hub prices.
• General and administrative estimate: The July supplemental estimated G&A at $65 million. Reported G&A was $68 million, and about $10 million of stock-based compensation reflected share price mark-to-market.
• Egypt tax barrels estimated in July: The July supplemental estimated Egypt tax barrels at 36 MBoe/d, dry hole costs at $41 million before tax, and a net gain on purchases and sales of $345 million before tax.

Coming up, as management said on 5 August 2026

• Savant closing by year-end 2026: Closing of the Savant Alaska acquisition is expected by year-end 2026, subject to regulatory approval and customary closing conditions. Source
• Eni-funded Uruguay well planned for 2027: Eni is expected to fund most of the initial exploration well in Uruguay, planned for 2027, with APA keeping a 60% working interest. Source

Figures management reported

Risks management discussed

• External: Waha hub prices, including negative levels, led APA to curtail U.S. gas and NGL production in the second quarter.
• Regulatory: Closing of the pending Savant Alaska acquisition depends on regulatory approval and customary closing conditions. Source

Earlier plans management reported on

• Ahead: Reported and adjusted production both exceeded second-quarter guidance. Source
• Ahead: U.S. oil production was 2,500 barrels per day above the quarterly guidance. Source
• Met: Egypt adjusted production was in line with guidance. Source
• Not stated: The exit 2026 run-rate savings target was increased from $450 million to $500 million, which management tied to continued momentum. Source
• Not stated: Management said the company expects to return at least 60% of free cash flow in 2026, consistent with prior years. Source
• Not stated: Second-quarter upstream capital and lease operating expense were both below guidance. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 results
• Q3 FY2025 results
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.