APA APA Corporation

Stock Price & Overview

@Bulldog67 yes $400m in FCF at $60 Brent is quite the needle mover for APA.

@Ronald Ferrie

Excellent comment! Frankly I have never been so confident in my ability to get out of a position I like fundamentally, AND get back in at a lower price!

When I am getting a nice yield to wait, it makes it easy to have the patience to wait for the payoffs we know are coming.

@mydognamedcat yes there is always an opportunity cost but you will have to get in to APA before the broader market prices in the anticipated growth.

When that starts is anyone’s guess but with APA you at least get a decent dividend and some buybacks to increase your equity in Suriname while you wait.

It’s a hard one to nail down because you never know when the market is going to wake up on this one, by late 2026 I think the cat will be out of the bag by then.

Might the same facts be used to justify a strategy of selling now, putting the money to work this year on high-return stocks — then buy APA back in two years when the rewards are within closer reach?

@taz88 some are---but the majority produce or contribute to a whole slew of products, butane, propane,ethane,refridgerants,plastics,lighter fluid,LPG and ones that are blended into gasoline or even anti-freeze.. If anything you could think it should be higher than regular Oil, not way way less and why the difference between the two countries.

It is odd how Canadian companies get double or more for their NGL'S?

@roseofpainx Good high level review of many of the appealing features for APA. I will be looking to pick up some more on the next market scare.

@골드버그58 APA Corporation: 4 Catalysts Behind the Recent Rally

The recent surge in APA Corporation’s (NASDAQ: APA) stock price is not a coincidence. It’s a convergence of four distinct yet reinforcing catalysts that point to both fundamental and technical upside. Here's a concise breakdown:

1. Suriname Catalyst Reignites Momentum
On June 27, TotalEnergies acquired a 25% stake in Block 53, joining APA (45%) and Petronas (30%). This finalized a balanced ownership triangle with APA remaining as operator.

Market interpreted this as de-risking for exploration capex and a major validation of the block’s commercial potential.

Potential synergies with the Gran Mourgu FPSO infrastructure further strengthened development prospects.

[Source: brazilenergyinsight.com, reuters.com]

Additionally, Petronas has launched a 3-well drilling campaign in adjacent Block 52, starting this week. This elevated basin-wide discovery expectations and added a speculative premium to APA shares.

2. Macro Tailwinds: Oil Prices Rebound
On July 7, WTI crude rose 1.4% and Brent 1.9%, driven by:

OPEC+ output increases falling short of guidance.

Record-high U.S. travel demand during the Independence Day week, suggesting robust real demand.

As a pure-play E&P, APA’s earnings are highly correlated with oil price β, making it a direct beneficiary of crude upswings.

[Source: reuters.com]

3. Sell-Side Signals Confirm Upside
Barclays raised its price target from $19 to $21 (+10.5%) on July 7, maintaining an “Equal Weight” rating.

Though the rating remained neutral, the upgrade acted as a technical “floor confirmation” to many traders, injecting short-term momentum.

[Source: gurufocus.com]

Moreover, long theses began surfacing across platforms like Seeking Alpha and Zacks, arguing that APA’s Suriname exposure is underpriced. This attracted passive inflows and retail interest.

[Source: seekingalpha.com]

4. Dividend & Deep Value Appeal
With the record date for APA’s $0.25 quarterly dividend approaching on July 22, short-term income investors have returned. This pushes the forward yield to the mid-5% range.

Valuation remains attractive:

Price-to-cash flow multiple is still under 3x, which reinforces the “deep value” narrative.

[Source: finance.yahoo.com]

Bottom Line
APA is gaining traction as both a fundamental turnaround and technical breakout candidate. If oil remains firm and Suriname continues to deliver operational progress, APA may still be undervalued despite recent gains.

Midcap energy mostly going parabolic today; WTI and Brent are only modestly up, and I'm talking 15 or 20 cents;
What the heck? MUR APA CIVI SM MGY MTDR

@bilocellhi

If you want to compare AR, use other 100% natural gas producers like RRC & EXE.

APA compares more realistically with Oil & Gas producers like PR, DVN, etc.

@Paul Franke Very nice analysis/peer comparisons; however, I don't think AR should have been included--not because it shows 'poorly', but because it is really a pure-play nat gas producer. At that, it is one of the most cost-effective operator/best margins when put up against others, including EQT.

@goldbug58 the company has stated that no significant capital will be spent in Alaska until Suriname is online.

What about that Sockeye-2 discovery in Alaska; 25 feet of net pay oil supported over 25-30,000 acres; VL called it "significant", others I discussed with told me "it's not exactly eye-popping".

I was a buyer on the April dip. We discussed briefly in March that if APA went to a 15-16 range it would be an aggressive move and an opportunity. Not adding here, just a hold for me now. I also like Murphy Oil's prospects in Vietnam, another that I added on the April dip. So I just wait patiently with these two now.

@Joseph V SM also has a much higher pv-10 than most compared to book value. I never really know the management on these companies - maybe talked to some at Conf Calls so with energy companies I go for VALUE - if they have the assets -then the companies should do well unless mgmt is corrupt or Incompetent.

@Bulldog67 Agree! I was fortunate to make APA a somewhat significant holding in April when prices collapsed.

The efficiency gains have made the company significantly stronger outside of potential in Suriname.

@LunaticBull

You may not have confidence in management, but I do!

Paying down debt. (LT debt for Callon acq. Almost paid down in 9 months)
Buying back undervalued stock
Renegotiated natural gas prices APA receives in Egypt
Successful FID on GranMorgu (Suriname)
Two successful exploratory wells in Alaska
Great efficiency improvements on Callon wells in Permian
After Great Britain raised taxes on North Sea production, they made the right decision to milk the cash flow while exiting the NS in a couple of years.

Just because you and Mr. Market don’t always recognize successful management moves does not mean there aren’t any!

What would you have management do differently?

This is well thought and well written.

Had not seen the Block 53 TTE news, but agree that bodes well. Will be interesting to see if we get another appraisal well there, perhaps after the planned production wells in Block 58 are drilled.

@Ronald Ferrie

I have always believed that any successful investor has two traits: discipline and patience. To me, APA is the perfect example of a stock that will separate those with patience from those without!

While I was fortunate to add as low as $14.67 back in the spring, I recently added again at under $18. I did that expecting APA’s EPS and FCF to decline somewhat in 2026 due to lower energy prices. However, receiving a dividend yield of 5%+ makes it easier to have patience in that I get paid while I wait for the payoff in 2028-30.

Those investors who believe long term is next Thursday will never touch a stock like APA. They will only buy at much higher prices after the cash flows increase. I recently calculated that annualizing 1Q25 APA’s FCF (Operating Cash Flow less CapEx) would produce $3.39 per share. At $18 per share, that would be a FCF yield of 18.8%. Now as energy prices soften in 2026, that # will clearly decline. But even with a modest decline, I will be receiving a mid-teens’s FCF yield.

I expect most of the $608 mm in proceeds from the asset sale to Permian Resources to be used for debt pay down. APA is leveraged, and getting the debt/capital down should lead to a higher valuation. As I pointed out in a comment on another APA article, in only 9 months, APA has almost completely paid off the debt used in the Callon merger.

BTW, APA has also had two successful exploratory wells in Alaska. Don’t know the timing of any production there, but another positive in time.

Thanks for the article! There are good things ahead for those with the patience to wait!

i would like to have seen a current NPV-10 estimate but agree APA is a buy. so is SM, AMPY and rei in energy