World Oil
(WO) – On Feb. 21, APA Corp. released its 2023 financial results and 2024 operational outlook. In the report, APA forecasted strong U.S. oil growth in 2024, approximately 8% year-over-year and more than 10% from fourth-quarter 2023 to fourth-quarter 2024. The company has an upstream capital budget of up to $2 billion and will invest to sustain production on a year-over-year basis.
Additionally, the pending acquisition of Callon Petroleum Company adds scale to APA’s existing Delaware basin assets and is expected to be accretive to key financial metrics.
2024 outlook. In 2024, APA plans to invest $1.9 to $2 billion in upstream oil and gas capital. This investment level reflects the company’s strategy of moderating activity levels during periods of lower commodity prices. APA will invest for the long term by directing $100 million of the upstream budget toward exploration activities, predominantly in Alaska, and $50 million toward progressing a large scale FPSO project in Suriname.
“Given the potential for lower year-over-year commodity prices, we will prudently manage costs and high-grade capital to our most strategic opportunities,” said CEO John J. Christmann.
Total company adjusted oil and natural gas production is expected to be relatively flat year-over-year while NGL volumes are anticipated to be lower as the current strip prices would lead to ethane rejection in the U.S. for most of the year.
Proved reserves. Worldwide estimated proved reserves totaled 807 million BOE at year-end 2023, 91% of which were classified as proved developed.
Reported Q4 2023 production was 414,000 boed; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 341,000 boed.
Reported full-year production was 405,000 boed; adjusted production was 331,000 boed.
“The continuation of our exceptional well performance and execution in the Permian basin drove APA’s strong results in 2023,” said Christmann. “We generated nearly $1 billion in free cash flow and returned 66% to shareholders. On the exploration front, our successful appraisal program in Suriname identified an estimated recoverable oil resource of 700 million barrels for Sapakara and Krabdagu, and we added onshore acreage in Alaska and two offshore blocks in Uruguay, which expands and diversifies our exploration portfolio.
“To build scale in the Delaware basin and to further leverage our integrated unconventional expertise, in January, we announced the acquisition of Callon Petroleum Company. Following closing, we are confident in our ability to create substantial shareholder value through our proven workflows and Permian operating model. This will drive enhanced operational performance and capital productivity in addition to planned cost synergies.”
