Q1 2024 APA Corp (US) Earnings Call Transcript
Key Points
- APA Corp (APA) reported a 16% increase in U.S. oil volumes compared to the first quarter of 2023, continuing a trend of meeting or exceeding production guidance.
- The Callon acquisition, closed on April 1, is expected to bring substantial cost synergies, initially estimated at $150 million annually, now increased to $225 million.
- Operational efficiencies and integration of Callon are progressing well, with APA Corp (APA) already implementing changes to enhance capital efficiency and development economics.
- In the North Sea, despite challenges with late-life assets, production was managed effectively with strategic facility run time adjustments.
- APA Corp (APA) remains committed to returning at least 60% of its free cash flow to shareholders through dividends and share repurchases, maintaining a strong focus on shareholder value.
- APA Corp (APA) faced challenges in the Permian Basin with natural gas production, choosing to curtail significant production due to extreme Waha basis differentials.
- In Egypt, production volumes were slightly below guidance due to the PSC impact of higher-than-planned oil prices, indicating sensitivity to external price fluctuations.
- The company experienced operational delays in Alaska, with two exploration wells failing to reach their target objectives within the seasonal time window.
- APA Corp (APA) incurred substantial costs related to the Callon acquisition, with an expected total of $110 million in associated costs, impacting financials in the short term.
- Production guidance in Egypt for 2024 anticipates a slight decrease, reflecting ongoing challenges in optimizing the balance between drilling and workover rigs.
Good day, and thank you for standing by. Welcome to the APA Corporation's First Quarter 2024 Financial and Operational Results Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker for today, Gary Clark, Vice President of Investor Relations. Thank you.
Good morning, and thank you for joining us on APA Corporation's First Quarter 2024 Financial and Operational Results Conference Call. We will begin the call with an overview by CEO, John Christmann. Steve Riney, President and CFO, will then provide further color on our results and outlook. Also on the call and available to answer questions are Tracey Henderson, Executive Vice President of Exploration; and Clay Bretches, Executive Vice President of Operations. Our prepared remarks will be about 15 minutes in length, with the remainder of the hour allotted for Q&A.
In conjunction with yesterday's press release, I hope you have had the
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