Updated Version 3 - Boosted by rising oil prices, shale oil producer APA’s quarterly profit exceeds market expectations

Added details to fourth quarter outlook; charts included

Reuters, Nov 4 - U.S. shale oil producer APA (APA.O) reported third-quarter profit on Wednesday that beat Wall Street expectations, as rising oil prices offset declining production.

The nine-month-long Iran conflict has disrupted Middle Eastern energy supplies and hindered shipping through the Strait of Hormuz — a vital maritime chokepoint.

The benchmark Brent crude oil price averaged $89.27 per barrel in the September quarter, up 31% from a year earlier; APA’s realized price per barrel soared over 36% to $92.02 per barrel.

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The company said that, due to lower production in Egypt and the North Sea, average daily production for the quarter dropped about 3% to 450,276 barrels of oil equivalent per day.

For this quarter, APA expects daily production of 432,000 barrels of oil equivalent, and production for the full year is forecast at 434,000 barrels of oil equivalent per day. Production in Egypt and the U.S. in 2027 is expected to be steady compared to the previous year.

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APA anticipates preliminary capital expenditures of $2.5 billion in 2027, an increase of $400 million over this year’s budget. Nearly 60% of the new investment is expected to be used for exploration and the development of the Suriname GranMorgu offshore oil project.

GranMorgu field’s recoverable resources are estimated to exceed 700 million barrels, with first oil expected in 2028.

The remainder of APA’s investments reflect increased activity in the Permian Basin and expectations of rising costs.

The company expects to generate about $2.9 billion in free cash flow in 2026, supporting large-scale stock repurchases in the fourth quarter while continuing to reduce debt.

As of quarter end, net debt stood at $3.2 billion.
According to data compiled by London Stock Exchange Group (LSEG), the Houston, Texas-headquartered company reported adjusted earnings per share of $1.94 for the three months ended Sept. 30, beating the average analyst estimate of $1.55.

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