Q1 2025 APA Corp (US) Earnings Call Transcript
Key Points
- APA Corp (APA) delivered strong first quarter results with production in line and lower capital investment relative to guidance.
- Significant improvements in drilling performance led to capital coming in below guidance, particularly in the Permian.
- In Egypt, gas production exceeded guidance due to outperformance from recent development programs and optimized infrastructure.
- The company announced a second discovery, Sockeye-2, in the Brookian play, indicating promising exploration potential.
- APA Corp (APA) is making substantial progress on cost reduction initiatives, increasing 2025 savings targets to $130 million and annualized run rate savings to $225 million.
- The company is experiencing upward pressure on certain operating costs in the Permian, such as water handling and compression.
- Despite progress, achieving meaningful LOE savings is proving challenging due to inflationary pressures in areas like compression and water disposal.
- The asset sale of New Mexico Permian properties, while strategic, represents a full exit from New Mexico, potentially limiting future opportunities in that region.
- There is a need for extended execution time frames to achieve substantial long-term cost reductions in certain areas.
- The company faces volatility in Waha pricing, impacting the economic viability of drilling in Alpine High.
Good day. Thank you for standing by. Welcome to the APA Corporation's first quarter 2025 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 today, Ben Rogers, Senior Vice President of Finance and Treasurer. Please go ahead.
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Good morning, and thank you for joining us on APA Corporation's first quarter 2025 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. Tracey Henderson, Executive Vice President of Exploration, is also on the call and available to answer questions. We will start with prepared remarks and allocate the remainder of time to Q&A.
In conjunction with yesterday's press release, I hope you've had the opportunity to review our financial and
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