Industry: Oil & Gas Exploration, Development & Production

Sector:

About Company:

APA Corporation (parent of Apache Corporation) is an independent oil and gas operator with upstream and midstream operations across the U.S. (Permian Basin), Egypt, the U.K. North Sea, Canada, Argentina, Australia, and Suriname. The company focuses on generating strong free cash flow through upstream production of crude oil, natural gas, and NGLs.

Company History:

• Founded in 1954 by Truman Anderson, Raymond Plank, and Charles Arnao as Apache Oil Corporation in Minneapolis, later headquartered in Houston, Texas.
• Over decades, APA evolved through global expansion, including entry into North Sea and deepwater fields.
• In 2024, APA acquired Callon Petroleum for ~$4.5B, enhancing Permian Basin exposure.

Company Advantage Over Competitors:

• Strong presence in high-return, low-cost basins, particularly the Permian Basin.
• Enhanced balance sheet and improved capital discipline demonstrate industry-leading free cash flow generation.
• Pure-play upstream profile gives focus and operational leverage, distinguishing it from diversified majors.
• Substantial insider and institutional confidence, including recent board-level share purchases.

Risk Factors You May Want to Consider:

• Commodity price sensitivity: Curtailment of ~10 MMcf/d gas production and 750 bpd in NGLs in Q2 2025 due to depressed Waha hub pricing.
• Asset sale dilution of volume: A New Mexico asset sale in June 2025 removed ~1.8 MBoe/d from production (~33% oil), impacting near-term output.
• Industry cyclicality and geopolitical exposure, with operations across multiple jurisdictions, including Egypt and Suriname.
• Regulatory and tariff risk: Historical price downturns, including a 16% share drop after tariff announcements; though insiders used the dip to increase positions.

What Makes This Company Special or a Good Investment?

• Runway for shareholder returns: Strong institutional bullish sentiment—Barron’s reported that APA trades at ~7× 2025 projected earnings, with value investors like the Smead Value Fund building sizable positions.
• Operational discipline: The company generated $158M net gain on commodity derivatives and completed a $575M asset sale, strengthening liquidity and flexibility.
• Recurring dividend income: APA declared a $0.25/share quarterly dividend payable August 22, 2025.
• Focus on value creation: As a pure upstream plays without diversification drag, APA is positioned to deliver strong returns when commodity pricing rebounds.