APA
EnergyAPA Corporation
Price Chart
Market Data
Financials
XBRL · SEC EDGAR–(0yr)1. THE BIG PICTURE
APA Corporation is currently undergoing what management calls a "fundamental transformation," which in practice means retreating from aging, high-tax regions to protect its balance sheet. By exiting the North Sea ahead of schedule and integrating Callon Petroleum in the Permian Basin, APA Corporation is trading immediate scale for long-term capital efficiency. The central tension is whether its 10-year inventory in the U.S. and the 2028 Suriname launch can bridge the gap created by falling production elsewhere.
2. WHERE THE RISKS HIT HARDEST
APA Corporation’s "diversified asset portfolio" is being tested by aggressive regulatory shifts that have turned former strengths into liabilities. The decision to cease North Sea production prior to 2030 (10-K Item 1) is a direct result of the U.K. Energy Profits Levy increasing to 38%, illustrating how quickly geographic diversity can become a source of stranded costs rather than operational flexibility. Furthermore, APA Corporation’s "balanced production mix" offers little protection against the sheer scale of commodity volatility; total revenues fell from $2.71 billion to $1.99 billion year-over-year in the fourth quarter (8-K) as NYMEX oil prices bottomed at $55.44 per barrel.
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a company in intentional retreat. While APA Corporation maintains a competitive operating margin of 30.6%—outperforming peers like Baker Hughes (XBRL)—its top-line trajectory is decoupling from the broader industry. While peers like FANG and EQT are growing revenues by 35% to 63%, APA Corporation is forecasting a significant production drop to 371,000 BOE per day in 2026 (8-K), down from 460,000 in late 2025. This contraction is reflected in the high short interest, with 11.9% of the float held by bears (Yahoo Finance). The 10% reduction in planned 2026 capital investment suggests management is prioritizing "financial discipline" over defending its current production volume.
4. IS IT WORTH IT AT THIS PRICE?
At a forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 12.6x, APA Corporation trades at a modest discount to the peer median of 14.1x (Yahoo Finance). This discount is justified by APA Corporation's shrinking production profile and the long lead time for its next major catalyst. The market is currently pricing in a long-term growth rate of just 0.5% (CAPM analysis). While the 3.1% dividend yield is in line with industry leaders like EOG, APA Corporation’s EV/EBITDAEV/EBITDAEnterprise Value divided by EBITDA — a valuation multiple that compares total business value to operating profit, useful for comparing companies with different debt levels of 3.3x—the lowest among its peers—suggests the market is heavily discounting its current cash flow due to the uncertainty of decommissioning obligations and the North Sea exit. If long-term growth were to align with a more standard GDP pace of 2.5%, the justified multiple would rise to 17.0x, but there is little in the 2026 guidance to suggest such a re-rating is imminent.
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if the GranMorgu project in Suriname reaches development milestones ahead of the 2028 target or if the Permian inventory assessment yields higher-than-expected technical upside.
- Cautious if 2026 production volumes fall below the guided 371,000 BOE per day or if U.S. Corporate Alternative Minimum Tax modifications further compress net margins.
6. BOTTOM LINE
Structural Advantage: A consolidated, high-margin position in the Permian Basin and a refreshed cost-recovery agreement in Egypt.
Bottom Line: APA Corporation is a high-yield transition story where investors are being paid to wait for a 2028 production recovery that the market has not yet priced in.
1. Top 5 Material Risks
- Commodity Price Volatility: APA Corporation’s financial performance is highly sensitive to market prices for crude oil, natural gas, and NGLs. In 2025, NYMEX prompt month oil prices fluctuated between $80.73 and $55.44 per barrel, while natural gas ranged from $9.86 to $2.65 per MMBtu. Sustained low prices could limit the ability to fund capital expenditures, reduce proved reserves, and trigger non-cash impairments.
- Operational Hazards: Drilling and production activities involve inherent risks including well blowouts, explosions, and environmental contamination. These events can lead to property damage, personal injury, and significant liability, which may materially and adversely affect cash flows and results of operations.
- Regulatory and Tax Changes: Changes in tax regimes, such as the U.K.’s Energy Profits Levy (increased to 38% for the period ending March 31, 2030) and the U.S. Corporate Alternative Minimum Tax (Corporate AMT), directly impact earnings and cash flows. These costs led APA Corporation to expect a cessation of production in the North Sea prior to 2030.
- Decommissioning Obligations: APA Corporation faces significant uncertainty regarding the costs and timing of plugging, abandoning, and decommissioning wells and infrastructure. New regulatory guidance, such as the OPRED consultation on "clear seabed" objectives, could materially increase these financial obligations and reduce available cash flows.
- International Political and Economic Instability: Approximately 38% of 2025 production and 26% of proved reserves (as of December 31, 2025) are located outside the U.S., primarily in Egypt and the U.K. These operations are subject to risks including currency devaluations, expropriation, and payment delays from state-owned entities like the Egyptian General Petroleum Corporation (EGPC).
2. Company-Specific Risks
- Frontier Exploration Exposure: APA Corporation maintains high-risk exploration projects in Alaska, Suriname, and Uruguay, which involve complex permitting and logistical constraints that could result in the complete loss of anticipated asset value.
- Permian Basin Price Compression: As additional gas pipeline takeaway capacity enters the Permian Basin, the spread between Permian and Gulf Coast gas prices may compress, reducing the gain APA Corporation realizes on third-party oil and gas purchases and sales.
- Holding Company Structure: As a holding company, APA Corporation relies entirely on distributions from subsidiaries like Apache to pay dividends, repurchase stock, and service debt; legal or contractual limitations on these subsidiaries could restrict the parent company’s liquidity.
- Cybersecurity Dependency: APA Corporation’s operations are heavily dependent on digital technologies for reserve estimation and financial reporting; unauthorized access could lead to operational disruption and material financial loss.
3. Regulatory/Legal Risks
- Hydraulic Fracturing Regulation: Increased federal, state, or local restrictions on fracturing and water disposal could increase compliance costs or limit production capacity.
- Climate-Related Legislation: Potential GHG cap-and-trade programs, carbon taxes, and methane emission fees could lead to increased operating expenses or require significant capital investments for infrastructure modifications.
- Ownership Change Tax Limitations: If APA Corporation experiences an "ownership change" under Section 382 of the Internal Revenue Code, its ability to utilize substantial net operating loss carryforwards (NOLs) to offset future taxable income could be limited.
4. Financial Impact Map
Commodity Price Volatility → Revenues and Operating Income → Prices for crude oil, natural gas, and NGLs directly determine the carrying value of oil and gas properties and the ability to fund capital expenditures. Operational Hazards → Cash Flows and Results of Operations → Liability for property damage, personal injury, and environmental pollution can result in significant unplanned expenditures. Regulatory and Tax Changes → Earnings and Cash Flows → The U.K. Energy Profits Levy and U.S. Corporate AMT directly reduce net income and available cash for reinvestment. Decommissioning Obligations → Cash Flows and Capital Resources → Higher-than-anticipated costs for plugging and abandonment require increased cash outlays and financial security guarantees. International Political and Economic Instability → Results of Operations and Financial Condition → Currency fluctuations and payment delays from foreign state-owned entities (e.g., EGPC) impact the timing and realization of cash inflows.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Feb 2026 | — |
| 10-Q | Nov 2025 | Sep 2025 |
| 14A | Apr 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
APA Q4 net income $279M, $0.79/share, production 460,000 BOE/day
- ▸Q4 net income $279 million, or $0.79 per share
- ▸Total production 460,000 BOE/day; adjusted production 387,000 BOE/day
- ▸U.S. oil output reached 132,000 barrels per day
- ▸Egypt gas production increased 10% year-over-year
- ▸Proved reserves rose 9% to 1,056 million BOE