APA Corporation: New $9 Billion Project, And Significantly Undervalued

(16min)

Summary

  • APA Corporation's $9 billion Suriname project with TotalEnergies and recent Callon Petroleum acquisition promise significant cost synergies and efficiency improvements, making the stock undervalued at $16.
  • The company's diversified asset base in the U.S., Egypt, and the U.K. reduces revenue volatility compared to competitors operating solely in the U.S.
  • Stock repurchases at $23-$24 indicate substantial undervaluation at $16 per share.
  • Risks include changes in Egypt's government relationship, oil price fluctuations, tariffs, and the recent headcount reduction impacting future free cash flow growth.

Metal oil barrel with 100 US dollar bills in the background

Max Zolotukhin/iStock via Getty Images

APA Corporation (NASDAQ:APA) could soon deliver beneficial information with regard to the $9 billion project in Suriname and its relationship with TotalEnergies (TTE). Besides, the recent acquisition of Callon Petroleum

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London Stock Market Research is a service offered by an ex-investment banker from the city of London. After around 11 years in the industry, I decided to drop out, and made dollars out of what I learned in business. I appreciate value investments, and I usually buy companies that trade at close to 10x earnings, and offer dividend yield. I mainly research small caps, and mid caps from the United States, Canada, South America, UK, France, and Germany.-------------------------------------------------------------------------------------Disclaimer: I do not offer financial advice. This is only my opinion about the price of stocks. Readers may want to hire an investment adviser. My articles may also include mistakes about future EPS forecasts, EBITDA forecasts, net sales forecasts, and other expectations. My valuation models may also include assumptions about the cost of capital, cost of equity, or future growth. These assumptions may be too optimistic, or too pessimistic.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of APA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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