[10-Q] APA Corp Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
APA Corporation reported stronger results for the quarter ended September 30, 2025. Total revenues were $2,115 million, and net income attributable to common stock was $205 million (diluted EPS $0.57), compared with a loss of $223 million (EPS $(0.60)) a year ago. Year to date, net income attributable to common stock reached $1,155 million.
Operating cash flow for the first nine months was $3,737 million, funding $2,156 million of upstream additions and supporting balance sheet improvements. Total debt fell to $4,488 million from $6,044 million at year-end, aided by note redemptions, open‑market repurchases, and a $135 million gain related to January exchange and tender activity. Financing costs, net, declined sharply versus 2024.
Portfolio actions included selling New Mexico Permian assets for $573 million, generating a $282 million gain, with proceeds used primarily for debt reduction. APA recorded a quarterly derivative loss of $97 million but realized gains for the period. The company also received an award of two million net exploration acres in Egypt with a $25 million signature bonus, and reported significant collections from EGPC, with substantially all remaining balances current.
Positive
- None.
Negative
- None.
Insights
Profitability improved, leverage reduced; commodity and hedge swings remain a factor.
APA posted quarterly net income of
Results still reflect commodity and hedge dynamics: Q3 derivative instrument loss of
Notable business moves include $573M Permian divestiture proceeds (gain
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
Commission File Number: 1-40144
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) (Zip Code)
(713 ) 296-6000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of shares of registrant’s common stock outstanding as of October 31, 2025 | |||||
TABLE OF CONTENTS
| Item | Page | ||||||||||
PART I - FINANCIAL INFORMATION | |||||||||||
| 1. | FINANCIAL STATEMENTS | 1 | |||||||||
STATEMENT OF CONSOLIDATED OPERATIONS | 1 | ||||||||||
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME | 2 | ||||||||||
STATEMENT OF CONSOLIDATED CASH FLOWS | 3 | ||||||||||
CONSOLIDATED BALANCE SHEET | 4 | ||||||||||
STATEMENT OF CONSOLIDATED CHANGES IN EQUITY AND NONCONTROLLING INTERESTS | 5 | ||||||||||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 7 | ||||||||||
| 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 27 | |||||||||
| 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 43 | |||||||||
| 4. | CONTROLS AND PROCEDURES | 44 | |||||||||
PART II - OTHER INFORMATION | |||||||||||
| 1. | LEGAL PROCEEDINGS | 45 | |||||||||
| 1A. | RISK FACTORS | 45 | |||||||||
| 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 45 | |||||||||
5. | OTHER INFORMATION | 45 | |||||||||
| 6. | EXHIBITS | 46 | |||||||||
FORWARD-LOOKING STATEMENTS AND RISKS
This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding the Company’s future financial position, business strategy, budgets, projected revenues, projected costs, and plans and objectives of management for future operations and capital returns framework, are forward-looking statements. Such forward-looking statements are based on the Company’s examination of historical operating trends, the information that was used to prepare its estimate of proved reserves as of December 31, 2024, and other data in the Company’s possession or available from third parties. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “could,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “continue,” “seek,” “guidance,” “goal,” “might,” “outlook,” “possibly,” “potential,” “predict,” “prospect,” “should,” “would,” or similar terminology or the negative of these terms, but the absence of these words does not mean that a statement is not forward looking. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable under the circumstances, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, its assumptions about:
•changes in local, regional, national, and international economic conditions, including as a result of any epidemics or pandemics;
•the market prices of oil, natural gas, natural gas liquids (NGLs), and other products or services, including the prices received for natural gas purchased from third parties to sell and deliver to a U.S. LNG export facility;
•the Company’s commodity hedging arrangements;
•the supply and demand for oil, natural gas, NGLs, and other products or services;
•production and reserve levels;
•drilling risks;
•economic and competitive conditions, including market and macro-economic disruptions resulting from trade tensions between the U.S. and other countries, the Russian war in Ukraine, the armed conflicts in Israel, Gaza, and Iran, and actions taken by foreign oil and gas producing nations, including the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members that participate in OPEC initiatives (OPEC+);
•the availability of capital resources;
•capital expenditures and other contractual obligations;
•asset retirement and decommissioning obligations, including changes to applicable regulatory and industry standards, the timing of related activities, and potential obligations to decommission previously owned assets;
•currency exchange rates;
•weather conditions;
•inflation rates;
•the impact of changes in tax legislation;
•the impact of international or domestic trade policy changes, including tariffs, import/export controls, and sanctions;
•the availability of goods and services;
•the impact of political pressure and the influence of environmental groups and other stakeholders on decisions and policies related to the industries in which the Company and its affiliates operate;
•legislative, regulatory, or policy changes, including initiatives addressing the impact of global climate change or further regulating hydraulic fracturing, methane emissions, flaring, or water disposal;
•the Company’s performance on environmental, social, and governance measures;
•cyberattacks and terrorism;
•the Company’s ability to access the capital markets;
•market-related risks, such as general credit, liquidity, and interest-rate risks;
•the ability to retain and hire key personnel;
•property acquisitions or divestitures;
•the integration of acquisitions;
•other factors disclosed under Items 1 and 2—Business and Properties—Estimated Proved Reserves and Future Net Cash Flows, Item 1A—Risk Factors, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 7A—Quantitative and Qualitative Disclosures About Market Risk and elsewhere in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024;
•other risks and uncertainties disclosed in the Company’s third-quarter 2025 earnings release;
•other factors disclosed under Part II, Item 1A—Risk Factors of this Quarterly Report on Form 10-Q; and
•other factors disclosed in the other filings that the Company makes with the Securities and Exchange Commission.
Other factors or events that could cause the Company’s actual results to differ materially from the Company’s expectations may emerge from time to time, and it is not possible for the Company to predict all such factors or events. All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements. All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, the Company disclaims any obligation to update or revise these statements, whether based on changes in internal estimates or expectations, new information, future developments, or otherwise.
DEFINITIONS
All defined terms under Rule 4-10(a) of Regulation S-X shall have their statutorily prescribed meanings when used in this Quarterly Report on Form 10-Q. As used herein:
“b/d” means barrels of oil or NGLs per day.
“bbl” or “bbls” means barrel or barrels of oil or NGLs.
“bcf” means billion cubic feet of natural gas.
“bcf/d” means one bcf per day.
“boe” means barrel of oil equivalent, determined by using the ratio of one barrel of oil or NGLs to six Mcf of gas.
“boe/d” means boe per day.
“Btu” means a British thermal unit, a measure of heating value.
“liquids” means oil and NGLs.
“LNG” means liquefied natural gas.
“Mb/d” means Mbbls per day.
“Mbbls” means thousand barrels of oil or NGLs.
“Mboe” means thousand boe.
“Mboe/d” means Mboe per day.
“Mcf” means thousand cubic feet of natural gas.
“Mcf/d” means Mcf per day.
“MMbbls” means million barrels of oil or NGLs.
“MMboe” means million boe.
“MMBtu” means million Btu.
“MMBtu/d” means MMBtu per day.
“MMcf” means million cubic feet of natural gas.
“MMcf/d” means MMcf per day.
“NGL” or “NGLs” means natural gas liquids, which are expressed in barrels.
“NYMEX” means New York Mercantile Exchange.
“oil” includes crude oil and condensate.
“PUD” means proved undeveloped.
“SEC” means the United States Securities and Exchange Commission.
“Tcf” means trillion cubic feet of natural gas.
“U.K.” means United Kingdom.
“U.S.” means United States.
With respect to information relating to the Company’s working interest in wells or acreage, “net” oil and gas wells or acreage is determined by multiplying gross wells or acreage by the Company’s working interest therein. Unless otherwise specified, all references to wells and acres are gross.
References to “APA,” the “Company,” “we,” “us,” and “our” refer to APA Corporation and its consolidated subsidiaries, including Apache Corporation, unless otherwise specifically stated. References to “Apache” refer to Apache Corporation, the Company’s wholly owned subsidiary, and its consolidated subsidiaries, unless otherwise specifically stated.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
APA CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED OPERATIONS
(Unaudited)
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (In millions, except share data) | ||||||||||||||||||||||||||
| REVENUES AND OTHER: | ||||||||||||||||||||||||||
Oil, natural gas, and natural gas liquids production revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Purchased oil and gas sales | ||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||
Derivative instrument gains (losses), net | ( | ( | ( | |||||||||||||||||||||||
Gain on divestitures, net | ||||||||||||||||||||||||||
Loss on previously sold Gulf of America properties | ( | |||||||||||||||||||||||||
| Other, net | ( | |||||||||||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||||||||
Lease operating expenses | ||||||||||||||||||||||||||
Gathering, processing, and transmission | ||||||||||||||||||||||||||
Purchased oil and gas costs | ||||||||||||||||||||||||||
| Taxes other than income | ||||||||||||||||||||||||||
| Exploration | ||||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
| Transaction, reorganization, and separation | ||||||||||||||||||||||||||
| Depreciation, depletion, and amortization | ||||||||||||||||||||||||||
| Asset retirement obligation accretion | ||||||||||||||||||||||||||
| Impairments | ||||||||||||||||||||||||||
| Financing costs, net | ||||||||||||||||||||||||||
NET INCOME (LOSS) BEFORE INCOME TAXES | ( | |||||||||||||||||||||||||
| Current income tax provision | ||||||||||||||||||||||||||
Deferred income tax provision (benefit) | ( | ( | ||||||||||||||||||||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | ( | |||||||||||||||||||||||||
Net income attributable to noncontrolling interest | ||||||||||||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK | $ | $ | ( | $ | $ | |||||||||||||||||||||
NET INCOME (LOSS) PER COMMON SHARE: | ||||||||||||||||||||||||||
| Basic | $ | $ | ( | $ | $ | |||||||||||||||||||||
| Diluted | $ | $ | ( | $ | $ | |||||||||||||||||||||
| WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
The accompanying notes to consolidated financial statements are an integral part of this statement.
1
APA CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME
(Unaudited)
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | $ | $ | ( | $ | $ | |||||||||||||||||||||
OTHER COMPREHENSIVE LOSS, NET OF TAX: | ||||||||||||||||||||||||||
| Pension and postretirement benefit plan | ( | ( | ||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | ( | |||||||||||||||||||||||||
Comprehensive income attributable to noncontrolling interest | ||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK | $ | $ | ( | $ | $ | |||||||||||||||||||||
The accompanying notes to consolidated financial statements are an integral part of this statement.
2
APA CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
For the Nine Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (In millions) | ||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||
| Net income including noncontrolling interests | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Unrealized derivative instrument losses, net | ||||||||||||||
Gain on divestitures, net | ( | ( | ||||||||||||
| Exploratory dry hole expense and unproved leasehold impairments | ||||||||||||||
| Depreciation, depletion, and amortization | ||||||||||||||
| Asset retirement obligation accretion | ||||||||||||||
| Impairments | ||||||||||||||
Provision for (benefit from) deferred income taxes | ( | |||||||||||||
Gain on extinguishment of debt | ( | |||||||||||||
Loss on previously sold Gulf of America properties | ||||||||||||||
| Other, net | ( | |||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Receivables | ||||||||||||||
| Inventories | ( | |||||||||||||
| Drilling advances and other current assets | ||||||||||||||
| Deferred charges and other long-term assets | ( | |||||||||||||
| Accounts payable | ( | ( | ||||||||||||
| Accrued expenses | ( | ( | ||||||||||||
| Deferred credits and noncurrent liabilities | ( | |||||||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||
| Additions to upstream oil and gas property | ( | ( | ||||||||||||
| Leasehold and property acquisitions | ( | ( | ||||||||||||
| Proceeds from asset divestitures | ||||||||||||||
Proceeds from sale of Kinetik Shares | ||||||||||||||
| Other, net | ||||||||||||||
| NET CASH USED IN INVESTING ACTIVITIES | ( | ( | ||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||
Proceeds from (payments on) commercial paper and revolving credit facilities, net | ( | |||||||||||||
Proceeds from term loan facility | ||||||||||||||
Payments on term loan facility | ( | ( | ||||||||||||
Payment on Callon Credit Agreement | ( | |||||||||||||
| Fixed-rate debt borrowings | ||||||||||||||
Payments on fixed-rate debt | ( | ( | ||||||||||||
Distributions to noncontrolling interest | ( | ( | ||||||||||||
| Treasury stock activity, net | ( | ( | ||||||||||||
| Dividends paid to APA common stockholders | ( | ( | ||||||||||||
| Other, net | ( | ( | ||||||||||||
| NET CASH USED IN FINANCING ACTIVITIES | ( | ( | ||||||||||||
| NET DECREASE IN CASH AND CASH EQUIVALENTS | ( | ( | ||||||||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | ||||||||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | $ | ||||||||||||
| SUPPLEMENTARY CASH FLOW DATA: | ||||||||||||||
| Interest paid, net of capitalized interest | $ | $ | ||||||||||||
| Income taxes paid, net of refunds | ||||||||||||||
The accompanying notes to consolidated financial statements are an integral part of this statement.
3
APA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
September 30, 2025 | December 31, 2024 | |||||||||||||
| (In millions, except share data) | ||||||||||||||
| ASSETS | ||||||||||||||
| CURRENT ASSETS: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
Receivables, net of allowance of $ | ||||||||||||||
Other current assets (Note 5) | ||||||||||||||
| PROPERTY AND EQUIPMENT: | ||||||||||||||
| Oil and gas properties | ||||||||||||||
| Gathering, processing, and transmission facilities | ||||||||||||||
| Other | ||||||||||||||
| Less: Accumulated depreciation, depletion, and amortization | ( | ( | ||||||||||||
| OTHER ASSETS: | ||||||||||||||
Decommissioning security for sold Gulf of America properties (Note 10) | ||||||||||||||
Deferred tax asset (Note 9) | ||||||||||||||
| Deferred charges and other | ||||||||||||||
| $ | $ | |||||||||||||
LIABILITIES, NONCONTROLLING INTERESTS, AND EQUITY | ||||||||||||||
| CURRENT LIABILITIES: | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Current debt | ||||||||||||||
Other current liabilities (Note 6) | ||||||||||||||
LONG-TERM DEBT (Note 8) | ||||||||||||||
| DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES: | ||||||||||||||
Deferred tax liability (Note 9) | ||||||||||||||
Asset retirement obligation (Note 7) | ||||||||||||||
Decommissioning contingency for sold Gulf of America properties (Note 10) | ||||||||||||||
| Other | ||||||||||||||
EQUITY: | ||||||||||||||
Common stock, $ | ||||||||||||||
| Paid-in capital | ||||||||||||||
| Accumulated deficit | ( | ( | ||||||||||||
Treasury stock, at cost, | ( | ( | ||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
| APA SHAREHOLDERS’ EQUITY | ||||||||||||||
Noncontrolling interest | ||||||||||||||
| TOTAL EQUITY | ||||||||||||||
| $ | $ | |||||||||||||
The accompanying notes to consolidated financial statements are an integral part of this statement.
4
APA CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CHANGES IN EQUITY AND NONCONTROLLING INTERESTS
(Unaudited)
| Common Stock | Paid-In Capital | Accumulated Deficit | Treasury Stock | Accumulated Other Comprehensive Income | APA SHAREHOLDERS’ EQUITY | Noncontrolling Interest | TOTAL EQUITY | |||||||||||||||||||||||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
For the Quarter Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net loss attributable to common stock | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Common dividends declared ($ | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Treasury stock activity, net | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
For the Quarter Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income attributable to common stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Common dividends declared ($ | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Treasury stock activity, net | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
The accompanying notes to consolidated financial statements are an integral part of this statement.
5
APA CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CHANGES IN EQUITY AND NONCONTROLLING INTERESTS - Continued
(Unaudited)
| Common Stock | Paid-In Capital | Accumulated Deficit | Treasury Stock | Accumulated Other Comprehensive Income | APA SHAREHOLDERS’ EQUITY | Noncontrolling Interest | TOTAL EQUITY | |||||||||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
For the Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Net income attributable to common stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interest – Egypt | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest – Egypt | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Common dividends declared ($ | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock activity, net | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
For the Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Net income attributable to common stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interest – Egypt | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest – Egypt | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Common dividends declared ($ | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Treasury stock activity, net | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
The accompanying notes to consolidated financial statements are an integral part of this statement.
6
APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
These consolidated financial statements have been prepared by APA Corporation (APA or the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). They reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods, on a basis consistent with the annual audited financial statements, with the exception of any recently adopted accounting pronouncements. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10-Q should be read along with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which contains a summary of the Company’s significant accounting policies and other disclosures.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
As of September 30, 2025, the Company's significant accounting policies are consistent with those discussed in Note 1—Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The Company’s financial statements for prior periods may include reclassifications that were made to conform to the current-year presentation.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of APA and its subsidiaries after elimination of intercompany balances and transactions.
The Company’s undivided interests in oil and gas exploration and production ventures and partnerships are proportionately consolidated. The Company consolidates all other investments in which, either through direct or indirect ownership, it has more than a 50 percent voting interest or controls the financial and operating decisions.
Use of Estimates
Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of the Company’s financial statements, and changes in these estimates are recorded when known.
Significant estimates with regard to these financial statements include the estimates of fair value for long-lived assets (refer to “Fair Value Measurements” and “Property and Equipment” sections in this Note 1 below), the fair value determination of acquired assets and liabilities (refer to Note 2—Acquisitions and Divestitures), the assessment of asset retirement obligations (refer to Note 7—Asset Retirement Obligation), the estimate of income taxes (refer to Note 9—Income Taxes), the estimation of the contingent liability representing Apache’s potential decommissioning obligations on sold properties in the Gulf of America (refer to Note 10—Commitments and Contingencies), and the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom.
7
Fair Value Measurements
Certain assets and liabilities are reported at fair value on a recurring basis in the Company’s consolidated balance sheet. Accounting Standards Codification (ASC) 820-10-35, “Fair Value Measurement” (ASC 820), provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority.
The valuation techniques that may be used to measure fair value include a market approach, an income approach, and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models, and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).
Refer to Note 4—Derivative Instruments and Hedging Activities and Note 8—Debt and Financing Costs for further detail regarding the Company’s fair value measurements recorded on a recurring basis.
The Company also uses fair value measurements on a nonrecurring basis when certain qualitative assessments of its assets indicate a potential impairment or when allocating the purchase price for acquired assets and liabilities in a business combination.
The Company recorded no
During the nine months ended September 30, 2024, the Company performed an economic assessment of its North Sea assets in light of several new regulatory guidelines and obligations surrounding significant tax levies and modernization of aging infrastructure. The Company determined that expected returns did not economically support making investments required under the combined impact of the regulations and expects to cease production at its facilities in the North Sea prior to 2030. As a result, the Company performed a fair value assessment of the present value of its oil and gas assets in the North Sea as of September 30, 2024. Accordingly, in the third quarter of 2024, the Company recognized impairments of $793 million on certain proved properties in the North Sea, which were written down to their estimated fair values. This impairment is discussed in further detail below in “Property and Equipment — Oil and Gas Property.”
Additionally, in the third quarter of 2024, the Company entered into an agreement to sell certain non-core U.S. oil and gas producing properties in the Permian Basin. As a result, a separate impairment analysis was performed for each of the assets within the disposal group. The analyses were based on the agreed-upon proceeds less costs to sell for the transaction, a Level 1 fair value measurement. The historical carrying value of the net assets to be divested exceeded the fair value implied by the expected net proceeds, resulting in an impairment totaling $315 million on the Company’s proved properties in the U.S.
Revenue Recognition
Receivables from contracts with customers, including receivables for purchased oil and gas sales and net of allowance for credit losses, were $862 million and $1.7 billion as of September 30, 2025 and December 31, 2024, respectively. Payments under all contracts with customers are typically due and received within a short-term period of one year or less, after physical delivery of the product or service has been rendered. During the third quarter of 2025, the Company collected a significant portion of its accounts receivable balance with the Egyptian General Petroleum Corporation (EGPC). As of the date of filing, substantially all remaining balances with EGPC are current.
Oil and gas production revenues include income taxes that will be paid to the Arab Republic of Egypt by EGPC on behalf of the Company. Revenue and associated expenses related to such tax volumes are recorded as “Oil, natural gas, and natural gas liquids production revenues” and “Current income tax provision,” respectively, in the Company’s statement of consolidated operations.
Refer to Note 12—Business Segment Information for a disaggregation of oil, gas, and natural gas liquids production revenue by product and reporting segment.
8
Inventories
Property and Equipment
Oil and Gas Property
The Company follows the successful efforts method of accounting for its oil and gas property. Under this method of accounting, exploration costs, production costs, general corporate overhead, and similar activities are expensed as incurred. If an exploratory well provides evidence to justify potential development of reserves, drilling costs associated with the well are initially capitalized, or suspended, pending a determination as to whether a commercially sufficient quantity of proved reserves can be attributed to the area as a result of drilling. At the end of each quarter, management reviews the status of all suspended exploratory well costs in light of ongoing exploration activities, and if management determines that future appraisal drilling or development activities are unlikely to occur, associated suspended exploratory well costs are expensed.
Costs to develop proved reserves, including the costs of all development wells and related equipment used in the production of crude oil and natural gas, are capitalized. Depreciation of the cost of proved oil and gas properties is calculated using the unit-of-production (UOP) method. The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the carrying value of associated proved oil and gas properties.
When circumstances indicate that the carrying value of proved oil and gas properties may not be recoverable, the Company compares unamortized capitalized costs to the expected undiscounted pre-tax future cash flows for the associated assets grouped at the lowest level for which identifiable cash flows are independent of cash flows of other assets. If the expected undiscounted pre-tax future cash flows, based on the Company’s estimate of future crude oil and natural gas prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. The Company recorded no
During the nine months ended September 30, 2024, the Company updated its cessation-of-production dates for its North Sea operations, as discussed above in “Fair Value Measurements.” This change significantly altered the Company’s remaining oil and gas reserves in the North Sea and triggered an impairment assessment of the Company’s proved oil and gas properties at the end of the third quarter of 2024. Future production volumes and estimated future commodity prices are the largest drivers in the variability of future cash flows. Expected cash flows were estimated based on management’s views of forward pricing as of the balance sheet dates. A discount rate based on a market-based weighted-average cost of capital estimate was applied to the undiscounted cash flow estimate to value the Company’s North Sea assets. In connection with this assessment, the Company recognized impairments totaling $793 million on certain of the Company’s North Sea proved properties to an aggregate fair value of $263 million.
Additionally, during the third quarter of 2024, the Company recorded impairments totaling $315 million in connection with an agreement to sell certain non-core producing properties in the Permian Basin. These impairments are discussed in further detail above in “Fair Value Measurements” and in Note 2—Acquisitions and Divestitures.
9
Transaction, Reorganization, and Separation (TRS)
The Company recorded $18 million and $66 million of TRS costs during the third quarter and the first nine months of 2025, respectively, and $14 million and $156 million of TRS costs during the third quarter and the first nine months of 2024, respectively. TRS costs incurred in the first nine months of 2025 comprised primarily employee separations and other cost-saving initiatives. TRS costs incurred in the first nine months of 2024 were primarily a result of transaction and separation costs related to the Callon acquisition coupled with separation costs in the North Sea.
New Pronouncements Issued But Not Yet Adopted
There were no changes in recently issued or adopted accounting standards from those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 that would have an expected material effect on the Company.
2. ACQUISITIONS AND DIVESTITURES
2025 Activity
Leasehold and Property Acquisitions
During the first nine months of 2025, the Company completed leasehold acquisitions, primarily in the Permian Basin, for aggregate cash consideration of approximately $20 million.
During the third quarter of 2025, the Government of Egypt awarded the Company an additional two million net exploration acres in the Western Desert. In addition to a signature bonus of $25 million, the Company has committed to a drilling program on the acreage that the Company believes it will be able to meet in the normal course of operations.
U.S. Divestiture
During the second quarter of 2025, the Company completed the sale of all of its New Mexico Permian assets. The assets had a carrying value of $300 million and associated retirement obligation of $9 million, which were exchanged for total cash consideration of $573 million, inclusive of post-closing adjustments. The Company recognized a gain of $282 million during the second quarter of 2025 in association with this sale. Proceeds from the transaction were used primarily for debt reduction.
2024 Activity
Callon Petroleum Company Acquisition
On April 1, 2024, APA completed its acquisition of Callon Petroleum Company (Callon) in an all-stock transaction valued at approximately $4.5 billion, inclusive of Callon’s debt (the Callon acquisition). The transaction was approved by APA and Callon shareholders at special meetings held on March 27, 2024.
Subject to the terms of the merger agreement, each share of Callon common stock was converted into the right to receive 1.0425 shares of APA common stock, with cash in lieu of fractional shares. As a result, APA issued approximately 70 million shares of APA common stock in connection with the transaction, and following the acquisition, Callon common stock is no longer listed for trading on the NYSE.
Upon completing the acquisition, APA refinanced substantially all of Callon’s debt by borrowing under APA’s US dollar denominated syndicated credit facilities. Refer to Note 8—Debt and Financing Costs for further detail.
Recording of Assets Acquired and Liabilities Assumed
The transaction was accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The Company has finalized the valuation of the assets acquired and liabilities assumed.
10
(In millions) | ||||||||
Current assets | $ | |||||||
Property and equipment | ||||||||
Deferred tax asset | ||||||||
| Other assets | ||||||||
| Total assets acquired | $ | |||||||
| Current liabilities | $ | |||||||
Long-term debt | ||||||||
| Asset retirement obligation | ||||||||
| Other long-term obligations | ||||||||
| Total liabilities assumed | $ | |||||||
| Net assets acquired | $ | |||||||
The following unaudited pro forma combined results for the third quarter and the first nine months ended September 30, 2024 reflect the consolidated results of operations of the Company as if the Callon acquisition had occurred on January 1, 2023. The unaudited pro forma information includes certain accounting adjustments for transaction costs, depreciation, depletion, and amortization expense, and estimated tax impacts of the pro forma adjustments.
| For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2024 | 2024 | |||||||||||||||||||||||||
| (In millions, except share data) | ||||||||||||||||||||||||||
Revenues | $ | $ | ||||||||||||||||||||||||
Net income (loss) attributable to common stock | ( | |||||||||||||||||||||||||
Net income (loss) per common share – basic | ( | |||||||||||||||||||||||||
Net income (loss) per common share – diluted | ( | |||||||||||||||||||||||||
From the date of the acquisition through September 30, 2024, revenues and net income attributable to common stockholders associated with Callon assets totaled $840 million and $192 million, respectively.
The unaudited pro forma condensed consolidated financial information has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the transactions taken place on the dates indicated. The unaudited pro forma results are also not intended to be a projection of future results and do not include any future cost savings or other synergies that may result from the Callon acquisition or any estimated costs that have not yet been incurred.
Leasehold and Property Acquisitions
During the third quarter and the first nine months of 2024, in addition to the Callon acquisition, the Company completed other leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of approximately $1 million and $64 million, respectively.
U.S. Divestitures
During the first nine months of 2024, the Company completed the sale of non-core acreage in the East Texas Austin Chalk and Eagle Ford plays that had a carrying value of $347 million for aggregate cash proceeds of $253 million and the assumption of asset retirement obligations of $48 million. The Company recognized a $46 million loss during the first nine months of 2024 in association with this sale.
During the first nine months of 2024, the Company also completed the sale of non-core mineral and royalty interests in the Permian Basin that had a carrying value of $71 million for approximately $392 million after post-closing adjustments. The Company recognized a gain of $321 million during the first nine months of 2024 in association with this sale.
Additionally, during the third quarter and the first nine months of 2024, the Company completed the sale of non-core assets and leasehold in multiple transactions for aggregate cash proceeds of $1 million and $73 million, respectively, recognizing a gain of approximately $1 million and $9 million, respectively, upon closing of these transactions.
11
On December 31, 2024, APA completed the sale of non-core producing properties in the Permian Basin that had a carrying value of $1.1 billion and associated asset retirement obligation of $224 million for total cash proceeds of $869 million after closing adjustments. The properties are located in the Central Basin Platform, Texas and New Mexico Shelf, and Northwest Shelf. The effective date of the transaction is July 1, 2024. As a result of the transaction, the Company performed a fair value assessment of the associated assets and liabilities and recorded an impairment of $315 million to the carrying value of the associated oil and gas properties during the third quarter of 2024. During the fourth quarter of 2024, the Company recorded a loss of $5 million upon closing of the transaction.
Sale of Kinetik Shares
On March 18, 2024, the Company sold its remaining shares of Kinetik Holdings Inc. (Kinetik) Class A Common Stock (Kinetik Shares) for cash proceeds of $428 million.
3. CAPITALIZED EXPLORATORY WELL COSTS
The Company’s capitalized exploratory well costs were $314 million and $237 million as of September 30, 2025 and December 31, 2024, respectively. The increase is attributable to additional drilling activity in Egypt and Alaska. Approximately $8 million of suspended exploratory well costs previously capitalized for greater than one year at December 31, 2024 were charged to dry hole expense during the first nine months of 2025. During the first nine months of 2024, approximately $51 million of suspended well costs previously capitalized for greater than one year at December 31, 2023 were charged to dry hole expense.
Projects with suspended exploratory well costs capitalized for a period greater than one year since the completion of drilling are those identified by management as exhibiting sufficient quantities of hydrocarbons to justify potential development. Management is actively pursuing efforts to assess whether proved reserves can be attributed to these projects.
4. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Objectives and Strategies
The Company is exposed to fluctuations in crude oil and natural gas prices on the majority of its worldwide production, as well as fluctuations in exchange rates in connection with transactions denominated in foreign currencies. The Company manages the variability in its cash flows by occasionally entering into derivative transactions on a portion of its crude oil and natural gas production and foreign currency transactions. The Company utilizes various types of derivative financial instruments, including forward contracts, futures contracts, swaps, and options, to manage fluctuations in cash flows resulting from changes in commodity prices or foreign currency values. The Company has elected not to designate any of its derivative contracts as cash flow hedges.
Counterparty Risk
The use of derivative instruments exposes the Company to credit loss in the event of nonperformance by the counterparty. To reduce the concentration of exposure to any individual counterparty, the Company utilizes a diversified group of investment-grade rated counterparties, primarily financial institutions, for its derivative transactions. As of September 30, 2025, the Company had derivative positions with 11 counterparties. The Company monitors counterparty creditworthiness on an ongoing basis; however, it cannot predict sudden changes in counterparties’ creditworthiness. In addition, even if such changes are not sudden, the Company may be limited in its ability to mitigate an increase in counterparty credit risk. Should one of these counterparties not perform, the Company may not realize the benefit of some of its derivative instruments resulting from lower commodity prices.
12
Derivative Instruments
Commodity Derivative Instruments
As of September 30, 2025, the Company had the following open natural gas financial basis swap contracts:
| Basis Swap Purchased | Basis Swap Sold | |||||||||||||||||||||||||||||||
| Production Period | Settlement Index | MMBtu (in 000’s) | Weighted Average Price Differential | MMBtu (in 000’s) | Weighted Average Price Differential | |||||||||||||||||||||||||||
October—December 2025 | NYMEX Henry Hub/IF Waha | $( | ||||||||||||||||||||||||||||||
October—December 2025 | NYMEX Henry Hub/IF HSC | $( | ||||||||||||||||||||||||||||||
January—December 2026 | NYMEX Henry Hub/IF Waha | $( | ||||||||||||||||||||||||||||||
Subsequent to September 30, 2025, the Company entered into basis swap contracts purchasing NYMEX Henry Hub/Waha totaling 18,250,000 MMBtu with a weighted average strike price of $(2.04 ) for January to December 2026.
Embedded Derivatives
As a result of the Callon acquisition, the Company assumed an earn-out obligation from Callon, where the Company could be required to pay up to $25 million in the aggregate if the average daily settlement price of WTI crude oil exceeds $60.00 per barrel for the 2025 calendar year. The Company determined that the earn-out obligation was not clearly and closely related to the underlying agreement and therefore bifurcated this embedded feature and recorded the derivative at fair value.
Fair Value Measurements
The following table presents the Company’s derivative assets and liabilities measured at fair value on a recurring basis:
| Fair Value Measurements Using | ||||||||||||||||||||||||||||||||||||||
| Quoted Price in Active Markets (Level 1) | Significant Other Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | Netting(1) | Carrying Amount | |||||||||||||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||||||||||||||
September 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||
| Commodity derivative instruments | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||
| Commodity derivative instruments | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Contingent consideration arrangements | ||||||||||||||||||||||||||||||||||||||
December 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||
Contingent consideration arrangements | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
(1) The derivative fair values are based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties.
The fair values of the Company’s commodity derivative instruments are not actively quoted in the open market. The Company primarily uses a market approach to estimate the fair values of these derivatives on a recurring basis, utilizing futures pricing for the underlying positions provided by a reputable third party, a Level 2 fair value measurement.
13
Derivative Activity Recorded in the Consolidated Balance Sheet
All derivative instruments are reflected as either assets or liabilities at fair value in the consolidated balance sheet. These fair values are recorded by netting asset and liability positions where counterparty master netting arrangements contain provisions for net settlement. The carrying value of the Company’s derivative assets and/or liabilities and their locations on the consolidated balance sheet are as follows:
September 30, 2025 | December 31, 2024 | |||||||||||||
| (In millions) | ||||||||||||||
| Other Assets: Deferred charges and other | ||||||||||||||
| Total derivative assets | $ | $ | ||||||||||||
| Current Liabilities: Other current liabilities | $ | $ | ||||||||||||
Deferred Credit and Other Noncurrent Liabilities: Other | ||||||||||||||
| Total derivative liabilities | $ | $ | ||||||||||||
Derivative Activity Recorded in the Statement of Consolidated Operations
The following table summarizes the effect of derivative instruments on the Company’s statement of consolidated operations:
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Realized: | ||||||||||||||||||||||||||
| Commodity derivative instruments | $ | $ | $ | $ | ||||||||||||||||||||||
Realized gains, net | ||||||||||||||||||||||||||
| Unrealized: | ||||||||||||||||||||||||||
| Commodity derivative instruments | ( | ( | ( | ( | ||||||||||||||||||||||
| Contingent consideration arrangements | ( | ( | ( | ( | ||||||||||||||||||||||
Unrealized losses, net | ( | ( | ( | ( | ||||||||||||||||||||||
Derivative instrument gains (losses), net | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||
Derivative instrument gains and losses are recorded in “Derivative instrument gains (losses), net” under “Revenues and Other” in the Company’s statement of consolidated operations. Unrealized gains and losses for derivative activity recorded in the statement of consolidated operations are reflected in the statement of consolidated cash flows separately as “Unrealized derivative instrument losses, net” under “Adjustments to reconcile net income to net cash provided by operating activities.”
5. OTHER CURRENT ASSETS
The following table provides detail of the Company’s other current assets:
September 30, 2025 | December 31, 2024 | |||||||||||||
| (In millions) | ||||||||||||||
| Inventories | $ | $ | ||||||||||||
| Drilling advances | ||||||||||||||
Current decommissioning security for sold Gulf of America assets | ||||||||||||||
| Prepaid assets and other | ||||||||||||||
| Total Other current assets | $ | $ | ||||||||||||
14
6. OTHER CURRENT LIABILITIES
The following table provides detail of the Company’s other current liabilities:
September 30, 2025 | December 31, 2024 | |||||||||||||
| (In millions) | ||||||||||||||
| Accrued operating expenses | $ | $ | ||||||||||||
| Accrued exploration and development | ||||||||||||||
| Accrued compensation and benefits | ||||||||||||||
| Accrued interest | ||||||||||||||
| Accrued income taxes | ||||||||||||||
| Current asset retirement obligation | ||||||||||||||
| Current operating lease liability | ||||||||||||||
Current decommissioning contingency for sold Gulf of America properties | ||||||||||||||
| Other | ||||||||||||||
| Total Other current liabilities | $ | $ | ||||||||||||
7. ASSET RETIREMENT OBLIGATION
The following table describes changes to the Company’s asset retirement obligation (ARO) liability:
September 30, 2025 | ||||||||
| (In millions) | ||||||||
Asset retirement obligation, December 31, 2024 | $ | |||||||
| Liabilities incurred | ||||||||
| Liabilities settled | ( | |||||||
| Liabilities divested | ( | |||||||
| Accretion expense | ||||||||
| Revisions in estimated liabilities | ||||||||
Asset retirement obligation, September 30, 2025 | ||||||||
| Less current portion | ( | |||||||
| Asset retirement obligation, long-term | $ | |||||||
8. DEBT AND FINANCING COSTS
The following table presents the carrying values of the Company’s debt:
September 30, 2025 | December 31, 2024 | |||||||||||||
| (In millions) | ||||||||||||||
APA notes and debentures before unamortized discount and debt issuance costs(1) | $ | $ | ||||||||||||
Apache notes and debentures before unamortized discount and debt issuance costs(2) | ||||||||||||||
APA commercial paper, term loan, and revolving credit facilities(3) | ||||||||||||||
| Apache finance lease obligations | ||||||||||||||
| Unamortized discount | ( | ( | ||||||||||||
| Debt issuance costs | ( | ( | ||||||||||||
| Total debt | ||||||||||||||
| Current maturities | ( | ( | ||||||||||||
| Long-term debt | $ | $ | ||||||||||||
(1) The fair values of the APA notes and debentures were $3.4 billion as of September 30, 2025. There was no APA indenture debt outstanding on December 31, 2024.
(2) The fair values of the Apache notes and debentures were $880 million and $4.4 billion as of September 30, 2025 and December 31, 2024, respectively. The Company uses a market approach to determine the fair values of its notes and debentures using estimates provided by an independent investment financial data services firm (a Level 2 fair value measurement).
(3) The carrying value of borrowings on the commercial paper, term loan, and revolving credit facilities approximates fair value because interest rates are variable and reflective of market rates.
15
At each of September 30, 2025 and December 31, 2024, current debt included $2 211
Financing Costs, Net
The following table presents the components of the Company’s financing costs, net:
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Interest expense | $ | $ | $ | $ | ||||||||||||||||||||||
| Amortization of debt issuance costs | ||||||||||||||||||||||||||
| Capitalized interest | ( | ( | ( | ( | ||||||||||||||||||||||
Gain on extinguishment of debt | ( | ( | ||||||||||||||||||||||||
| Interest income | ( | ( | ( | ( | ||||||||||||||||||||||
| Financing costs, net | $ | $ | $ | $ | ||||||||||||||||||||||
Indenture Debt Activity
On August 20, 2025, Apache redeemed the outstanding $51 million principal amount of 4.625 % Notes due 2025, at a redemption price equal to 100 percent of their principal amount, plus accrued and unpaid interest to the redemption date.
Also during the third quarter of 2025, the Company purchased in the open market and had canceled indebtedness issued under indentures of APA and Apache in an aggregate principal amount of $14 million for an aggregate purchase price of $12 million in cash, including accrued interest and broker fees, reflecting a discount to par of an aggregate $3 million. The Company recognized a $2 million gain on these repurchases.
During the first nine months of 2025, the Company purchased in the open market and had canceled indebtedness issued under indentures of APA and Apache in an aggregate principal amount of $122 million for an aggregate purchase price of $112 million in cash, including accrued interest and broker fees, reflecting a discount to par of an aggregate $13 million. The Company recognized a $12 million gain on these repurchases.
The repurchases were partially financed by APA’s borrowing under the Company’s commercial paper program. Refer to discussion of APA exchange and tender offers for Apache indenture debt below for further details regarding the gain on extinguishment of debt during the quarter ended March 31, 2025.
APA Exchange and Tender Offers for Apache Indenture Debt
On January 10, 2025, the Company settled its private exchange and cash tender offers for certain notes and debentures issued by Apache under its indentures. The Company also then settled its private offering of new notes to fund in part its purchase of Apache notes in APA’s cash tender offers. In settling these offerings pursuant to their respective terms:
•APA issued new notes and debentures under its indentures in aggregate principal amounts of (i) $2.5 billion in exchange for Apache notes and debentures tendered and accepted in APA’s exchange offers, (ii) $203 million in exchange for Apache notes tendered in the cash tender offers in excess of the stated maximum purchase amount or series caps, and (iii) $850 million in the new notes offering, comprised of $350 million aggregate principal amount of APA’s 6.10 % Notes due 2035 and $500 million aggregate principal amount of APA’s 6.75 % Notes due 2055.
•In addition to issuing the APA notes in the exchange offers, APA paid a total of $2.5 million in cash as part of the exchange consideration.
•APA paid a total of $869 million in cash in the tender offers (comprised of tender offer consideration, exchange consideration for tendered notes exchanged, early participation premium, and accrued interest) for the aggregate $1 billion in principal amount of Apache notes tendered and accepted in the cash tender offers. The Company recognized a gain of $135 million on these purchases, including broker fees and loan costs.
•Net proceeds from the sale of the notes in APA’s new notes offering, after deducting the initial purchasers’ discounts and estimated offering expenses, were approximately $839 million and were used to fund in part APA’s purchase of Apache notes in APA’s cash tender offers.
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•Each series of APA notes and debentures issued in settlement of the exchange and tender offers had the same interest rate, maturity date, and interest payment dates and the same optional redemption prices (if any) as the corresponding series of Apache notes and debentures for which they were exchanged.
•Each series of APA notes and debentures issued in settlement of the exchange and tender offers and new notes offering were fully and unconditionally guaranteed by Apache until the first time that the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures was less than $1 billion, which occurred in May 2025, after which Apache’s guarantees were terminated in accordance with their terms on May 16, 2025.
•APA entered into two registration rights agreements, one covering notes and debentures issued in APA’s exchange and tender offers and one covering notes issued in APA’s new notes offering (each a Registration Rights Agreement). These offerings were not registered under the Securities Act of 1933, as amended (Securities Act), in reliance upon an exemption therefrom, and the APA notes and debentures issued pursuant to such offers are subject to certain transfer restrictions (collectively, the Unregistered Notes). Each Registration Rights Agreement required APA to use commercially reasonable efforts to cause to be filed and become effective under the Securities Act, a registration statement with respect to a registered offer to exchange each series of Unregistered Notes for registered notes and debentures issued by APA containing terms substantially identical in all material respects to the applicable series of Unregistered Notes (except that the registered notes and debentures do not contain terms with respect to transfer restrictions, registration rights applicable to the Unregistered Notes, or any increase in annual interest rate for failure to comply with such registration rights). In August 2025, APA filed such registration statement, and it became effective. On September 18, 2025, APA settled the exchange offers covered by such registration statement, issuing registered notes and debentures in the same aggregate principal amount as the Unregistered Notes accepted for exchange and canceled. Of the $3.6 billion aggregate principal amount of Unregistered Notes covered by the exchange offers, 99 percent was exchanged for registered notes and debentures, and the remaining Unregistered Notes remained outstanding.
Unsecured 2025 Committed Credit Facilities
On January 15, 2025, the Company entered into two unsecured syndicated credit agreements for general corporate purposes:
•One agreement is denominated in US dollars (the 2025 USD Agreement) and provides for an unsecured five-year revolving credit facility for loans and letters of credit, with aggregate commitments of US$2.0 billion (including a letter of credit subfacility of up to US$750 million, of which US$250 million currently is committed). APA may increase commitments up to an aggregate US$2.5 billion by adding new lenders or obtaining the consent of any increasing existing lenders. This facility matures in January 2030, subject to the Company’s two , one-year extension options.
•The second agreement is denominated in pounds sterling (the 2025 GBP Agreement) and provides for an unsecured five-year revolving credit facility, with aggregate commitments of £1.5 billion for loans and letters of credit. This facility matures in January 2030, subject to the Company’s two , one-year extension options.
Apache guaranteed obligations under each of the 2025 USD Agreement and 2025 GBP Agreement (each, a 2025 Agreement) effective until the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures first was less than US$1.0 billion, which occurred in May 2025, after which Apache’s guarantees were terminated in accordance with their terms on May 16, 2025.
The 2025 Agreements replaced on substantially the same terms two syndicated credit agreements that the Company entered in April 2022:
•One agreement was denominated in US dollars (the 2022 USD Agreement) and provided for an unsecured five-year revolving credit facility, with aggregate commitments of US$1.8 billion (including a letter of credit subfacility of up to US$750 million, of which US$150 million was committed).
•The second agreement was denominated in pounds sterling (the 2022 GBP Agreement) and provided for an unsecured five-year revolving credit facility, with aggregate commitments of £1.5 billion for loans and letters of credit.
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On January 15, 2025, the Company terminated commitments under both the 2022 USD Agreement and 2022 GBP Agreement in connection with entry into the 2025 Agreements.
As of September 30, 2025, there were no borrowings or letters of credit outstanding under the 2025 USD Agreement and an aggregate £1 million in letters of credit outstanding under the 2025 GBP Agreement. As of December 31, 2024, there were $10 million of borrowings and no letters of credit outstanding under the 2022 USD Agreement and an aggregate £303 million in letters of credit outstanding under the 2022 GBP Agreement.
Uncommitted Lines of Credit
Each of the Company and Apache, from time to time, has and uses uncommitted credit and letter of credit facilities for working capital and credit support purposes. As of September 30, 2025 and December 31, 2024, there were no 817 million and $11 million in letters of credit outstanding under these facilities. As of December 31, 2024, there were £640 million and $11 million in letters of credit outstanding under these facilities.
Commercial Paper Program
The Company has a commercial paper program under which it from time to time may issue in private placements exempt from registration under the Securities Act short-term unsecured promissory notes (CP Notes) up to a maximum aggregate face amount of $2.0 billion outstanding at any time. The program was established in December 2023, and the maximum aggregate face amount of CP Notes issuable thereunder was increased to $2.0 billion from $1.8 billion on June 20, 2025. The maturities of CP Notes may vary but may not exceed 397 days from the date of issuance. Outstanding CP Notes are supported by available borrowing capacity under the Company’s committed revolving credit facilities for general corporate purposes, which as of September 30, 2025, included the $2.0 billion 2025 USD Agreement.
Payment of CP Notes was unconditionally guaranteed on an unsecured basis by Apache, such guarantee effective until the first time that the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures was less than US$1.0 billion, which occurred in May 2025, after which Apache’s guarantees were terminated in accordance with their terms on June 20, 2025.
The CP Notes are sold under customary market terms in the U.S. commercial paper market at a discount from par or at par and bear interest at rates determined at the time of issuance.
As of September 30, 2025, the Company had no CP Notes outstanding. As of December 31, 2024, the Company had $323 million in aggregate face amount of CP Notes outstanding, which was classified as long-term debt.
Unsecured Committed Term Loan Facility
On January 30, 2024, APA entered into a syndicated credit agreement under which the lenders committed an aggregate $2.0 billion for senior unsecured delayed-draw term loans to APA (Term Loan Credit Agreement), the proceeds of which could be used to refinance certain indebtedness of Callon upon closings of APA’s acquisition of Callon and the Term Loan Credit Agreement. Of such aggregate commitments, $1.5 billion was for term loans that would mature three years after the date of such closings (3 -Year Tranche Loans) and $500 million was for term loans that would mature 364 days after the date of such closings (364 -Day Tranche Loans).
On April 1, 2024, APA acquired Callon and closed the transactions under the Term Loan Credit Agreement, electing to borrow an aggregate $1.5 billion in 3 -Year Tranche Loans maturing April 1, 2027 and to allow the lender commitments for the 364 -Day Tranche Loans to expire.
As of December 31, 2024, there were $900 million in 3-Year Tranche Loans remaining outstanding under the Term Loan Credit Agreement. APA could at any time prepay loans under the Term Loan Credit Agreement, which it elected to do on March 10, 2025, when APA fully repaid amounts outstanding under the Term Loan Credit Agreement. The repayment was partially financed with borrowings under APA’s 2025 USD Agreement and commercial paper program.
9. INCOME TAXES
The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Non-cash impairments on the carrying value of the Company’s oil and gas properties, gains and losses on the sale of assets, statutory tax rate changes, and other significant or unusual items are recognized as discrete items in the quarter in which they occur.
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The Company’s effective income tax rate for the three and nine months ended September 30, 2025 differed from the U.S. federal statutory income tax rate of 21 percent due to taxes on foreign operations and a deferred tax expense related to the remeasurement of taxes in the U.K. as a result of the enactment of Finance Act 2025 on March 20, 2025. The Company’s effective income tax rate for the three and nine months ended September 30, 2024 differed from the U.S. federal statutory income tax rate of 21 percent due to taxes on foreign operations.
On March 20, 2025, Finance Act 2025 was enacted, receiving Royal Assent, and included amendments to the Energy (Oil and Gas) Profits Levy Act of 2022, increasing the levy from a 35 percent rate to a 38 percent rate, among other changes, effective for the period of November 1, 2024 through March 31, 2030. Under GAAP, the financial statement impact of new legislation is recorded in the period of enactment. Therefore, in the first quarter of 2025, the Company recorded a deferred tax expense of $76 million related to the remeasurement of the December 31, 2024 U.K. deferred tax liability.
On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act of 2025 (OBBBA). Among other changes, the OBBBA expanded and made permanent 100 percent bonus depreciation for eligible assets acquired and placed in service after January 19, 2025, and aligned the treatment of intangible drilling costs for corporate alternative minimum tax (CAMT) purposes with regular tax treatment starting in 2026. The Company does not expect the OBBBA to have a material impact on total tax expense for the year ended December 31, 2025, as impacts to current tax expense are offset by impacts to deferred tax expense. In the third quarter of 2025, the Company has recorded a current tax benefit of $29 million fully offset by a deferred tax expense of the same amount.
On September 30, 2025, the Internal Revenue Service issued further interim guidance on CAMT. Among other changes, the guidance provided for a reduction to CAMT related to net operating loss utilization for regular federal income tax purposes. The Company does not expect this guidance to have a material impact on total tax expense for the year ended December 31, 2025, as impacts to current tax expense are offset by impacts to deferred tax expense. In the third quarter of 2025, the Company has recorded a current tax benefit of $60 million, fully offset by a deferred tax expense of the same amount.
In December 2021, the Organisation for Economic Co-operation and Development issued Pillar Two Model Rules introducing a new global minimum tax of 15 percent on a country-by-country basis, with certain aspects effective in certain jurisdictions on January 1, 2024. Although the Company continues to monitor enacted legislation to implement these rules in countries where the Company could be impacted, the Company does not expect that the Pillar Two framework will have a material impact on its consolidated financial statements.
The Company and its subsidiaries are subject to U.S. federal income tax as well as income or capital taxes in various states and foreign jurisdictions. The Company’s tax reserves are related to tax years that may be subject to examination by the relevant taxing authority.
10. COMMITMENTS AND CONTINGENCIES
Legal Matters
The Company is party to various legal actions arising in the ordinary course of business, including litigation and governmental and regulatory controls, which also may include controls related to the potential impacts of climate change. As of September 30, 2025, the Company has an accrued liability of approximately $15 million for all legal contingencies that are deemed to be probable of occurring and can be reasonably estimated. The Company’s estimates are based on information known about the matters and its experience in contesting, litigating, and settling similar matters. Although actual amounts could differ from management’s estimate, none of the actions are believed by management to involve future amounts that would be material to the Company’s financial position, results of operations, or liquidity after consideration of recorded accruals. With respect to material matters for which the Company believes an unfavorable outcome is reasonably possible, the Company has disclosed the nature of the matter and a range of potential exposure, unless an estimate cannot be made at this time. It is management’s opinion that the loss for any other litigation matters and claims that are reasonably possible to occur will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity.
For additional information on Legal Matters described below, refer to Note 11—Commitments and Contingencies to the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
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Louisiana Restoration
As more fully described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, Louisiana surface owners often file lawsuits or assert claims against oil and gas companies, including the Company, claiming that operators and working interest owners in the chain of title are liable for environmental damages on the leased premises, including damages measured by the cost of restoration of the leased premises to its original condition, regardless of the value of the underlying property. From time to time, restoration lawsuits and claims are resolved by the Company for amounts that are not material to the Company, while new lawsuits and claims are asserted against the Company. With respect to each of the pending lawsuits and claims, the amount claimed is not currently determinable or is not material. Further, the overall exposure related to these lawsuits and claims is not currently determinable. While adverse judgments against the Company are possible, the Company intends to actively defend these lawsuits and claims.
Currently, the State of Louisiana, a number of coastal parishes in Louisiana, and the City of New Orleans, as plaintiffs, are all pursuing various lawsuits against many oil and gas producers with current or historic operations in Louisiana. In these cases, the plaintiffs allege that defendants’ oil and gas exploration, production, and transportation operations in specified fields were conducted in violation of the State and Local Coastal Resources Management Act of 1978, as amended, and applicable regulations, rules, orders, and ordinances promulgated or adopted thereunder by the Parish or the State of Louisiana. Plaintiffs allege that defendants caused substantial damage to land and water bodies located in the coastal zone of Louisiana. Plaintiffs seek, among other things, unspecified damages for alleged violations of applicable law within the coastal zone, the payment of costs necessary to clear, re-vegetate, detoxify, and otherwise restore the subject coastal zone as near as practicable to its original condition, and actual restoration of the coastal zone to its original condition. Following its settlement with the plaintiff parishes, the state, and the City of New Orleans, the Company has now resolved all lawsuits and potential liabilities related to the pending coastal zone litigation. The recent settlement with the City of New Orleans is not material and will not have an adverse impact on the Company’s financial position or liquidity.
Apollo Exploration Lawsuit
In a case captioned Apollo Exploration, LLC, Cogent Exploration, Ltd. Co. & SellmoCo, LLC v. Apache Corporation, Cause No. CV50538 in the 385th Judicial District Court, Midland County, Texas, plaintiffs alleged damages in excess of $200 million (having previously claimed in excess of $1.1 billion) relating to purchase and sale agreements, mineral leases, and area of mutual interest agreements concerning properties located in Hartley, Moore, Potter, and Oldham Counties, Texas. The trial court entered final judgment in favor of the Company, ruling that the plaintiffs take nothing by their claims and awarding the Company its attorneys’ fees and costs incurred in defending the lawsuit. The court of appeals affirmed in part and reversed in part the trial court’s judgment thereby reinstating some of plaintiffs’ claims. The Texas Supreme Court granted the Company’s petition for review and heard oral argument in October 2022. On April 28, 2023, the Texas Supreme Court reversed the court of appeals’ decision and remanded the case back to the court of appeals for further proceedings. After plaintiffs’ request for rehearing, on July 21, 2023, the Texas Supreme Court reaffirmed its reversal of the court of appeals’ decision and remand of the case back to the court of appeals for further proceedings. Upon remand, on March 6, 2025, the court of appeals affirmed the entirety of the trial courts’ orders resulting in final judgment in favor of the Company, plaintiffs taking nothing by their claims, and awarding the Company its attorneys’ fees and costs incurred in defending the lawsuit. The plaintiffs did not appeal the court of appeals’ March 6, 2025 opinion, meaning that the judgment in favor of the Company is final.
Australian Operations Divestiture Dispute
Pursuant to a Sale and Purchase Agreement dated April 9, 2015 (Quadrant SPA), the Company and its subsidiaries divested Australian operations to Quadrant Energy Pty Ltd (Quadrant). Closing occurred on June 5, 2015. In April 2017, the Company filed suit against Quadrant for breach of the Quadrant SPA. In its suit, the Company seeks approximately AUD $80 million. In December 2017, Quadrant filed a defense of equitable set-off to the Company’s claim and a counterclaim seeking approximately AUD $200 million in the aggregate. In 2018, Quadrant was acquired by Australian oil and gas company Santos, Ltd., who assumed Quadrant’s place in the ongoing litigation. In early 2025, Santos amended the pending counterclaims to abandon a number of claims that had been asserted against the Company but maintaining counterclaims for approximately AUD $57 million. Santos then filed a new lawsuit in the Supreme Court of Western Australia contending that it may be liable to the Australian Taxation Office for assessments, penalties, and interest related to the 2014 and 2015 tax years of approximately AUD $133 million and asserting that, if such amounts must be paid, the Company is liable to Santos for those amounts under the Quadrant SPA. All lawsuits related to the Quadrant SPA have now been consolidated into the same proceeding. The Company will vigorously prosecute its claim while vigorously defending against any counterclaims.
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Delaware Litigation
On September 10, 2020, the State of Delaware filed suit, individually and on behalf of the people of the State of Delaware, against over 25 oil and gas companies alleging damages as a result of global warming. Plaintiffs seek unspecified damages and abatement under various tort theories. The Company is vigorously defending the suit.
Kulp Minerals Lawsuit
On or about April 7, 2023, Apache was sued in a purported class action in New Mexico styled Kulp Minerals LLC v. Apache Corporation, Case No. D-506-CV-2023-00352 in the Fifth Judicial District. The Kulp Minerals case has not been certified and seeks to represent a group of owners allegedly owed statutory interest under New Mexico law as a result of purported late oil and gas payments. The amount of this claim is not yet reasonably determinable. The Company intends to vigorously defend against the claims asserted in this lawsuit.
Environmental Matters
The Company is not aware of any environmental claims existing as of September 30, 2025, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity. There can be no assurance, however, that current regulatory requirements will not change or past non-compliance with environmental laws will not be discovered on the Company’s properties.
Potential Decommissioning Obligations on Sold Properties
In 2013, Apache sold its Gulf of America (GOA) Shelf operations and properties and its GOA operating subsidiary, GOM Shelf LLC (GOM Shelf) to Fieldwood Energy LLC (Fieldwood). Fieldwood assumed the obligation to decommission the properties held by GOM Shelf and the properties acquired from Apache and its other subsidiaries (collectively, the Legacy GOA Assets). On February 14, 2018, Fieldwood filed for (and subsequently emerged from) Chapter 11 bankruptcy protection. On August 3, 2020, Fieldwood filed for (and subsequently emerged from) Chapter 11 bankruptcy protection for a second time. Upon emergence from this second bankruptcy, the Legacy GOA Assets were separated into a standalone company, which was subsequently merged into GOM Shelf. Under GOM Shelf’s limited liability company agreement, the proceeds of production of the Legacy GOA Assets are to be used to fund the operation of GOM Shelf and the decommissioning of Legacy GOA Assets. Pursuant to the terms of the original transaction, as amended in the first bankruptcy, the securing of the asset retirement obligations for the Legacy GOA Assets as and when Apache is required to perform or pay for any such decommissioning was accomplished through the posting of letters of credit in favor of Apache (Letters of Credit), the provision of two bonds (Bonds) in favor of Apache, and the establishment of a trust account of which Apache was a beneficiary and which was funded by net profits interests (NPIs) depending on future oil prices. In addition, after such sources have been exhausted, Apache agreed upon resolution of GOM Shelf’s second bankruptcy to GOM Shelf loans of up to $400 million to perform decommissioning, with such loans and related obligations secured by first and prior liens on the Legacy GOA Assets.
By letter dated April 5, 2022 (replacing two earlier letters) and by subsequent letter dated March 1, 2023, GOM Shelf notified the Bureau of Safety and Environmental Enforcement (BSEE) that it was unable to fund the decommissioning obligations that it was obligated to perform on certain of the Legacy GOA Assets. As a result, Apache and other current and former owners in these assets have received orders from BSEE and demands from third parties to decommission certain of the Legacy GOA Assets included in GOM Shelf’s notifications to BSEE. Apache expects to receive similar orders and demands on the other Legacy GOA Assets included in GOM Shelf’s notification letters. Apache has also received orders to decommission other Legacy GOA Assets that were not included in GOM Shelf’s notification letters. Further, Apache anticipates that GOM Shelf may send additional such notices to BSEE in the future and that it may receive additional orders from BSEE requiring it to decommission other Legacy GOA Assets.
On June 21, 2023, two sureties that issued Bonds directly to Apache and two sureties that issued bonds to the issuing bank on the Letters of Credit filed suit against Apache in a case styled Zurich American Insurance Company, HCC International Insurance Company PLC, Philadelphia Indemnity Insurance Company and Everest Reinsurance Company (Insurers) v. Apache Corporation, Cause No. 2023-38238 in the 281st Judicial District Court, Harris County Texas. The sureties sought to prevent Apache from drawing on the $148 million in Bonds and $350 million in Letters of Credit and further alleged that they are discharged from their reimbursement obligations related to decommissioning costs and are entitled to other relief. The parties settled their dispute in the first quarter of 2025, which resulted in, among other things, mutual releases, the retention by Apache of all amounts drawn on the Letters of Credit, and payment to Apache of $140 million under the Bonds.
As of September 30, 2025, the Company recorded an asset of $40 million representing the remaining amount the Company expects to be reimbursed from security related to these decommissioning costs.
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The Company has also recorded contingent liabilities in the amounts of $1.0
The Company recognized $83 million in the first nine months of 2024, respectively, of losses for estimated decommissioning costs on GOA properties previously sold to Fieldwood and other GOA operators.
11. CAPITAL STOCK
Net Income (Loss) per Common Share
The following table presents a reconciliation of the components of basic and diluted net income (loss) per common share in the consolidated financial statements:
For the Quarter Ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||
Income | Shares | Per Share | Loss | Shares | Per Share | |||||||||||||||||||||||||||||||||
| (In millions, except per share amounts) | ||||||||||||||||||||||||||||||||||||||
| Basic: | ||||||||||||||||||||||||||||||||||||||
| Income (loss) attributable to common stock | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
| Effect of Dilutive Securities: | ||||||||||||||||||||||||||||||||||||||
| Stock compensation awards | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Diluted: | ||||||||||||||||||||||||||||||||||||||
| Income (loss) attributable to common stock | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||
| Income | Shares | Per Share | Income | Shares | Per Share | |||||||||||||||||||||||||||||||||
| (In millions, except per share amounts) | ||||||||||||||||||||||||||||||||||||||
| Basic: | ||||||||||||||||||||||||||||||||||||||
| Income attributable to common stock | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Effect of Dilutive Securities: | ||||||||||||||||||||||||||||||||||||||
| Stock options and other | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||
| Diluted: | ||||||||||||||||||||||||||||||||||||||
| Income attributable to common stock | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
The diluted earnings per share calculation excludes 3.2 million and 1.9 million of options and restricted stock units that were anti-dilutive during the third quarters of 2025 and 2024, respectively, and 3.5 million and 2.0 million during the first nine months of 2025 and 2024, respectively.
Stock Repurchase Program
In the third quarter of 2025, the Company repurchased approximately 3.1 million shares at an average price of $20.78 per share. During the nine months ended September 30, 2025, the Company repurchased 10.2 million shares at an average price of $21.08 per share, and as of September 30, 2025, the Company had remaining authorization to repurchase up to 24.6 million shares. In the third quarter of 2024, the Company repurchased approximately 0.1 million shares at an average price of $29.33 per share. During the nine months ended September 30, 2024, the Company repurchased 4.6 million shares at an average price of $31.72 per share.
The Company repurchased 1.0 million shares at an average price of $23.53 per share in October 2025, and as of October 31, 2025, the Company had remaining authorization to repurchase up to 23.6 million shares.
The Company is not obligated to acquire any additional shares. Shares may be purchased either in the open market or through privately negotiated transactions.
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Common Stock Dividend
For the quarters ended September 30, 2025 and September 30, 2024, the Company paid $90 million and $92 million, respectively, in dividends on its common stock. For the nine months ended September 30, 2025 and September 30, 2024, the Company paid $271 million and $260 million, respectively, in dividends on its common stock.
Common Stock Issuance
In the second quarter of 2024, in connection with the Callon acquisition, the Company issued approximately 70 million shares of common stock in exchange for Callon common stock. The total value of stock consideration was approximately $2.4 billion based on APA’s stock price on the closing date of the acquisition.
12. BUSINESS SEGMENT INFORMATION
As of September 30, 2025, the Company’s consolidated subsidiaries are engaged in exploration, development, and/or production across four operating segments: the U.S., Egypt, North Sea, and Suriname. The Company’s business explores for, develops, and produces crude oil, natural gas, and natural gas liquids. The Company also has exploration interests in Alaska, Uruguay, and other international locations that may, over time, result in reportable discoveries and development opportunities.
The Chief Operating Decision Maker (CODM) is a function (not necessarily an individual) that allocates the resources of the reporting entity and assesses the performance of its segments. Decisions to assess performance and allocate resources are made by the Company’s Chief Executive Officer (CEO), Mr. John J. Christmann, IV. Therefore, management has concluded that the CEO of the Company is the CODM. The information regularly reviewed by the CODM to assess performance and allocate resources is primarily associated with operating income from each segment and the resulting free cash flow, amongst other metrics. The Company concluded that the most comparable measure under GAAP is operating income.
Financial information for each segment is presented below:
| U.S. | Egypt(1) | North Sea | Intersegment Eliminations & Other(2) | Total(3) | ||||||||||||||||||||||||||||
For the Quarter Ended September 30, 2025 | (In millions) | |||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||
| Oil revenues | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Natural gas revenues | ||||||||||||||||||||||||||||||||
| Natural gas liquids revenues | ||||||||||||||||||||||||||||||||
| Oil, natural gas, and natural gas liquids production revenues | ||||||||||||||||||||||||||||||||
| Purchased oil and gas sales | ||||||||||||||||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||||||||
Lease operating expenses(4) | ||||||||||||||||||||||||||||||||
Gathering, processing, and transmission(4) | ||||||||||||||||||||||||||||||||
| Purchased oil and gas costs | ||||||||||||||||||||||||||||||||
Taxes other than income(4) | ||||||||||||||||||||||||||||||||
Exploration(5) | ||||||||||||||||||||||||||||||||
Depreciation, depletion, and amortization(4) | ||||||||||||||||||||||||||||||||
| Asset retirement obligation accretion | ||||||||||||||||||||||||||||||||
Operating Income (Loss)(6) | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||||||||||
Derivative instrument losses, net | ( | |||||||||||||||||||||||||||||||
Gain on divestitures, net | ||||||||||||||||||||||||||||||||
| Other, net | ( | |||||||||||||||||||||||||||||||
| General and administrative | ( | |||||||||||||||||||||||||||||||
| Transaction, reorganization, and separation | ( | |||||||||||||||||||||||||||||||
| Financing costs, net | ( | |||||||||||||||||||||||||||||||
Income Before Income Taxes | $ | |||||||||||||||||||||||||||||||
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| U.S. | Egypt(1) | North Sea | Intersegment Eliminations & Other(2) | Total(3) | ||||||||||||||||||||||||||||
For the Nine Months Ended September 30, 2025 | (In millions) | |||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||
| Oil revenues | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Natural gas revenues | ||||||||||||||||||||||||||||||||
| Natural gas liquids revenues | ||||||||||||||||||||||||||||||||
| Oil, natural gas, and natural gas liquids production revenues | ||||||||||||||||||||||||||||||||
| Purchased oil and gas sales | ||||||||||||||||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||||||||
Lease operating expenses(4) | ||||||||||||||||||||||||||||||||
Gathering, processing, and transmission(4) | ||||||||||||||||||||||||||||||||
| Purchased oil and gas costs | ||||||||||||||||||||||||||||||||
Taxes other than income(4) | ||||||||||||||||||||||||||||||||
Exploration(5) | ||||||||||||||||||||||||||||||||
Depreciation, depletion, and amortization(4) | ||||||||||||||||||||||||||||||||
| Asset retirement obligation accretion | ||||||||||||||||||||||||||||||||
Operating Income (Loss)(6) | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||||||||||
Derivative instrument gains, net | ||||||||||||||||||||||||||||||||
| Gain on divestitures, net | ||||||||||||||||||||||||||||||||
| Other, net | ||||||||||||||||||||||||||||||||
| General and administrative | ( | |||||||||||||||||||||||||||||||
| Transaction, reorganization, and separation | ( | |||||||||||||||||||||||||||||||
| Financing costs, net | ( | |||||||||||||||||||||||||||||||
| Income Before Income Taxes | $ | |||||||||||||||||||||||||||||||
Total Assets(7) | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
24
| U.S. | Egypt(1) | North Sea | Intersegment Eliminations & Other(2) | Total(3) | ||||||||||||||||||||||||||||
For the Quarter Ended September 30, 2024 | (In millions) | |||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||
| Oil revenues | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Natural gas revenues | ||||||||||||||||||||||||||||||||
| Natural gas liquids revenues | ||||||||||||||||||||||||||||||||
| Oil, natural gas, and natural gas liquids production revenues | ||||||||||||||||||||||||||||||||
| Purchased oil and gas sales | ||||||||||||||||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||||||||
Lease operating expenses(4) | ||||||||||||||||||||||||||||||||
Gathering, processing, and transmission(4) | ||||||||||||||||||||||||||||||||
| Purchased oil and gas costs | ||||||||||||||||||||||||||||||||
Taxes other than income(4) | ||||||||||||||||||||||||||||||||
Exploration(5) | ( | |||||||||||||||||||||||||||||||
Depreciation, depletion, and amortization(4) | ||||||||||||||||||||||||||||||||
| Asset retirement obligation accretion | ||||||||||||||||||||||||||||||||
| Impairments | ||||||||||||||||||||||||||||||||
Operating Income (Loss)(6) | $ | $ | $ | ( | $ | ( | ( | |||||||||||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||||||||||
Derivative instrument losses, net | ( | |||||||||||||||||||||||||||||||
Gain on divestitures, net | ||||||||||||||||||||||||||||||||
| Other, net | ||||||||||||||||||||||||||||||||
| General and administrative | ( | |||||||||||||||||||||||||||||||
| Transaction, reorganization, and separation | ( | |||||||||||||||||||||||||||||||
| Financing costs, net | ( | |||||||||||||||||||||||||||||||
Loss Before Income Taxes | $ | ( | ||||||||||||||||||||||||||||||
25
| U.S. | Egypt(1) | North Sea | Intersegment Eliminations & Other(2) | Total(3) | ||||||||||||||||||||||||||||
For the Nine Months Ended September 30, 2024 | (In millions) | |||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||
| Oil revenues | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Natural gas revenues | ||||||||||||||||||||||||||||||||
| Natural gas liquids revenues | ||||||||||||||||||||||||||||||||
| Oil, natural gas, and natural gas liquids production revenues | ||||||||||||||||||||||||||||||||
| Purchased oil and gas sales | ||||||||||||||||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||||||||
Lease operating expenses(4) | ||||||||||||||||||||||||||||||||
Gathering, processing, and transmission(4) | ||||||||||||||||||||||||||||||||
| Purchased oil and gas costs | ||||||||||||||||||||||||||||||||
Taxes other than income(4) | ||||||||||||||||||||||||||||||||
Exploration(5) | ||||||||||||||||||||||||||||||||
Depreciation, depletion, and amortization(4) | ||||||||||||||||||||||||||||||||
| Asset retirement obligation accretion | ||||||||||||||||||||||||||||||||
| Impairments | ||||||||||||||||||||||||||||||||
Operating Income (Loss)(6) | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||||||||||
Derivative instrument losses, net | ( | |||||||||||||||||||||||||||||||
| Loss on previously sold Gulf of America properties | ( | |||||||||||||||||||||||||||||||
| Gain on divestitures, net | ||||||||||||||||||||||||||||||||
| Other, net | ||||||||||||||||||||||||||||||||
| General and administrative | ( | |||||||||||||||||||||||||||||||
| Transaction, reorganization, and separation | ( | |||||||||||||||||||||||||||||||
| Financing costs, net | ( | |||||||||||||||||||||||||||||||
| Income Before Income Taxes | $ | |||||||||||||||||||||||||||||||
Total Assets(7) | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
(1)Includes oil and gas production revenue that will be paid as taxes by EGPC on behalf of the Company for the quarters and nine months ended September 30, 2025 and September 30, 2024 of:
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Oil | $ | $ | $ | $ | ||||||||||||||||||||||
| Natural gas | ||||||||||||||||||||||||||
(2)Includes Suriname operating expenses as the operating segment has not met the quantitative thresholds to be separately reported.
(3)Includes noncontrolling interests in Egypt.
(4)Represents significant segment expense categories that align with the segment-level information that is regularly provided to the CODM. The remaining expenses that comprise the Operating Income (Loss) amount by segment are deemed to be other segment expense categories necessary to arrive at the segment profit or loss.
(5)Exploration expense under Intersegment Eliminations & Other primarily reflects the Company’s Suriname exploration activities.
(6)Operating income includes no leasehold impairments for the third quarter of 2025. Operating loss of Suriname includes leasehold impairments of $1 million for the third quarter of 2024. Operating income includes no leasehold impairments for the first nine months of 2025. Operating income (loss) of U.S. and Suriname includes leasehold impairments of $10 million and $1 million, respectively, for the first nine months of 2024.
(7)Intercompany balances are excluded from total assets.
26
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion relates to APA Corporation (APA or the Company) and its consolidated subsidiaries and should be read together with the Company’s Consolidated Financial Statements and accompanying notes included in Part I, Item 1—Financial Statements of this Quarterly Report on Form 10-Q, as well as related information set forth in the Company’s Consolidated Financial Statements, accompanying Notes to Consolidated Financial Statements, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Overview
APA is an independent energy company that owns subsidiaries that explore for, develop, and produce crude oil, natural gas, and natural gas liquids (NGLs). The Company’s business has oil and gas operations in three geographic areas: the U.S., Egypt, and offshore the U.K. in the North Sea (North Sea). APA also has active development, exploration and appraisal operations ongoing in Suriname, as well as exploration interests in Uruguay, Alaska, and other international locations that may, over time, result in reportable discoveries and development opportunities. As a holding company, APA Corporation’s primary assets are its ownership interests in its consolidated subsidiaries.
APA believes energy underpins global progress, and the Company wants to be a part of the solution as society works to meet growing global demand for reliable and affordable energy. APA strives to meet those challenges while creating value for all its stakeholders.
Uncertainties in the global supply chain and financial markets impact oil supply and demand and contribute to commodity price volatility. These uncertainties include the impacts of ongoing international conflicts, inflation, current and potential tariffs or other trade barriers, global trade policies, and actions taken by foreign oil and gas producing nations, including OPEC+. Despite these uncertainties, the Company remains committed to its longer-term objectives: (1) to invest for long-term returns in pursuit of moderate, sustainable production growth; (2) to strengthen the balance sheet to underpin the generation of cash flow in excess of its upstream exploration, appraisal, and development capital program that can be directed to debt reduction, share repurchases, and other return of capital to its shareholders; and (3) to responsibly manage its cost structure regardless of the oil price environment.
The Company closely monitors hydrocarbon pricing fundamentals to reallocate capital as part of its ongoing planning process. APA’s diversified asset portfolio and operational flexibility provide the Company the ability to timely respond to near-term price volatility and effectively manage its investment programs accordingly. For additional detail on the Company’s forward capital investment outlook, refer to “Capital Resources and Liquidity” below.
In the first quarter of 2025, the Company announced a significant cost reduction initiative. The Company’s primary objective is to drive sustainable cost savings for the long-term and is targeting $350 million in annualized savings across G&A, LOE, and capital by the end of 2025 and an additional $50 million to $100 million by the end of 2026. This will include reducing the Company’s overhead costs, addressing the capital cost structure for its drilling, completions, and facility investments, and improving efficiencies of day-to-day field operating practices.
The Company remains committed to its capital return framework for equity holders to participate more directly and materially in cash returns. The Company believes returning 60 percent of free cash flow through dividends and share repurchases creates a good balance for providing near-term cash returns to shareholders while still recognizing the importance of longer-term balance sheet strengthening.
•The Company pays a quarterly dividend of $0.25 per share on its common stock.
•Beginning in the fourth quarter of 2021 and through the end of the third quarter of 2025, the Company has repurchased 95.5 million shares of the Company’s common stock. Subsequent to the quarter ended September 30, 2025 through October 31, 2025, the Company repurchased 1.0 million shares, and as of October 31, 2025, the Company had remaining authorization to repurchase up to 23.6 million shares under the Company’s share repurchase programs.
27
Financial and Operational Highlights
In the third quarter of 2025, the Company reported net income attributable to common stock of $205 million, or $0.57 per diluted share, compared to a net loss of $223 million, or $0.60 per diluted share, in the third quarter of 2024. In the first nine months of 2025, the Company reported net income attributable to common stock of $1.2 billion, or $3.20 per diluted share, compared to net income of $450 million, or $1.29 per diluted share, in the first nine months of 2024. The increase in net income in the third quarter and the first nine months of 2025 compared to the same prior-year periods was primarily driven by $1.1 billion of impairments recorded in the prior-year period. Lower operating expenses in the third quarter and first nine months of 2025, resulting largely from focused cost-reduction efforts undertaken in 2025, further contributed to the increase in net income.
The Company generated $3.7 billion of cash from operating activities during the first nine months of 2025, 45 percent higher than the first nine months of 2024. APA’s higher operating cash flows for the first nine months of 2025 were primarily driven by lower overall expenses, collection of outstanding receivables, and timing of other working capital items. The Company repurchased 10.2 million shares of its common stock for $215 million and paid $271 million in dividends to APA common stockholders during the first nine months of 2025. The Company exited the quarter with approximately $4.5 billion of debt, a reduction of $1.6 billion from year-end 2024.
Key operational highlights include:
United States
•Daily boe production from the Company’s U.S. assets, which decreased 7 percent from the third quarter of 2024, accounted for 61 percent of the Company’s worldwide production during the third quarter of 2025. The Company averaged six drilling rigs in the Permian Basin, including four rigs in the Southern Midland Basin and two rigs in the Delaware Basin in the third quarter of 2025. The Company brought online 42 operated wells during the quarter. The Company’s core Permian Basin development program continues to represent the key growth area for its U.S. assets.
•In the Permian Basin, the Company is currently operating five rigs, reflecting improved capital efficiency while sustaining the pace of wells brought online. The Company anticipates continuing this level of activity to deliver consistent year-over-year oil production. Should oil prices decline, the Company may moderate activity in 2026 and further reduce capital spending, with minimal anticipated impact on 2026 oil volumes.
•APA holds approximately 750,000 MMBtu/d of firm capacity on various pipelines. As of September 30, 2025, the Company had open basis swap contracts which purchased NYMEX Henry Hub/Waha and sold NYMEX Henry Hub/HSC on approximately two-thirds of its firm transport capacity for 2025 and including swap contracts entered into subsequent to September 30, 2025, approximately one-third for 2026, thereby locking in a significant portion of cash flows associated with its marketing activities for the near term. Refer to Note 4—Derivative Instruments and Hedging Activities for further discussion of these basis swap agreements.
International
•In Egypt, the Company averaged 12 drilling rigs and drilled 17 new productive wells during the third quarter of 2025. During the same period, the Company averaged 19 workover rigs as it continues to align its drilling and workover activity with a goal of driving improved capital efficiency. Third quarter 2025 gross and net production from the Company’s Egypt assets decreased 1 percent and increased 7 percent, respectively, from the third quarter of 2024.
•In Egypt, following the recent success of the gas program and the relative softening of oil prices, the Company expects one-third of its activities to be gas-focused and anticipates continued strong performance for the rest of the year, with realized gas prices increasing through the period.
•The Government of Egypt awarded the Company an additional two million net exploration acreage in the Western Desert. This new acreage expands on the Company’s existing position in the country. In addition to a signature bonus of $25 million, the Company has committed to a drilling program on the acreage that the Company believes it will be able to meet in the normal course of operations. The Government also helped facilitate significant payments in the third quarter, nearly eliminating EGPC’s past due receivables.
28
Results of Operations
Oil, Natural Gas, and Natural Gas Liquids Production Revenues
Revenue
The Company’s production revenues and respective contribution to total revenues by country were as follows:
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| $ Value | % Contribution | $ Value | % Contribution | $ Value | % Contribution | $ Value | % Contribution | |||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Oil Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| United States | $ | 737 | 50 | % | $ | 1,007 | 56 | % | $ | 2,283 | 51 | % | $ | 2,616 | 51 | % | ||||||||||||||||||||||||||||||||||
Egypt(1) | 565 | 39 | % | 673 | 37 | % | 1,668 | 38 | % | 2,003 | 39 | % | ||||||||||||||||||||||||||||||||||||||
| North Sea | 168 | 11 | % | 117 | 7 | % | 500 | 11 | % | 517 | 10 | % | ||||||||||||||||||||||||||||||||||||||
Total(1) | $ | 1,470 | 100 | % | $ | 1,797 | 100 | % | $ | 4,451 | 100 | % | $ | 5,136 | 100 | % | ||||||||||||||||||||||||||||||||||
Natural Gas Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| United States | $ | 34 | 18 | % | $ | 7 | 7 | % | $ | 186 | 31 | % | $ | 79 | 19 | % | ||||||||||||||||||||||||||||||||||
Egypt(1) | 130 | 68 | % | 81 | 79 | % | 330 | 54 | % | 231 | 56 | % | ||||||||||||||||||||||||||||||||||||||
| North Sea | 28 | 14 | % | 15 | 14 | % | 93 | 15 | % | 104 | 25 | % | ||||||||||||||||||||||||||||||||||||||
Total(1) | $ | 192 | 100 | % | $ | 103 | 100 | % | $ | 609 | 100 | % | $ | 414 | 100 | % | ||||||||||||||||||||||||||||||||||
| NGL Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| United States | $ | 134 | 94 | % | $ | 153 | 97 | % | $ | 474 | 95 | % | $ | 436 | 95 | % | ||||||||||||||||||||||||||||||||||
| North Sea | 8 | 6 | % | 5 | 3 | % | 27 | 5 | % | 21 | 5 | % | ||||||||||||||||||||||||||||||||||||||
Total(1) | $ | 142 | 100 | % | $ | 158 | 100 | % | $ | 501 | 100 | % | $ | 457 | 100 | % | ||||||||||||||||||||||||||||||||||
| Oil and Gas Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| United States | $ | 905 | 50 | % | $ | 1,167 | 56 | % | $ | 2,943 | 53 | % | $ | 3,131 | 52 | % | ||||||||||||||||||||||||||||||||||
Egypt(1) | 695 | 39 | % | 754 | 37 | % | 1,998 | 36 | % | 2,234 | 37 | % | ||||||||||||||||||||||||||||||||||||||
| North Sea | 204 | 11 | % | 137 | 7 | % | 620 | 11 | % | 642 | 11 | % | ||||||||||||||||||||||||||||||||||||||
Total(1) | $ | 1,804 | 100 | % | $ | 2,058 | 100 | % | $ | 5,561 | 100 | % | $ | 6,007 | 100 | % | ||||||||||||||||||||||||||||||||||
(1) Includes revenues attributable to a noncontrolling interest in Egypt.
29
Production
The Company’s production volumes by country were as follows:
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
| 2025 | Increase (Decrease) | 2024 | 2025 | Increase (Decrease) | 2024 | |||||||||||||||||||||||||||||||||
| Oil Volume (b/d) | ||||||||||||||||||||||||||||||||||||||
| United States | 121,225 | (15)% | 143,299 | 123,343 | 1% | 122,138 | ||||||||||||||||||||||||||||||||
Egypt(1)(2) | 89,493 | (2)% | 91,673 | 87,304 | (2)% | 88,725 | ||||||||||||||||||||||||||||||||
| North Sea | 23,518 | 10% | 21,334 | 24,672 | (5)% | 25,888 | ||||||||||||||||||||||||||||||||
| Total | 234,236 | (9)% | 256,306 | 235,319 | (1)% | 236,751 | ||||||||||||||||||||||||||||||||
| Natural Gas Volume (Mcf/d) | ||||||||||||||||||||||||||||||||||||||
| United States | 523,271 | 12% | 467,615 | 538,906 | 14% | 473,997 | ||||||||||||||||||||||||||||||||
Egypt(1)(2) | 374,236 | 25% | 300,418 | 345,907 | 20% | 287,953 | ||||||||||||||||||||||||||||||||
| North Sea | 34,712 | 84% | 18,911 | 31,842 | (22)% | 41,042 | ||||||||||||||||||||||||||||||||
| Total | 932,219 | 18% | 786,944 | 916,655 | 14% | 802,992 | ||||||||||||||||||||||||||||||||
| NGL Volume (b/d) | ||||||||||||||||||||||||||||||||||||||
| United States | 72,709 | (9)% | 79,474 | 76,565 | 7% | 71,690 | ||||||||||||||||||||||||||||||||
| North Sea | 1,501 | 176% | 543 | 1,278 | 10% | 1,164 | ||||||||||||||||||||||||||||||||
| Total | 74,210 | (7)% | 80,017 | 77,843 | 7% | 72,854 | ||||||||||||||||||||||||||||||||
BOE per day(3) | ||||||||||||||||||||||||||||||||||||||
| United States | 281,145 | (7)% | 300,709 | 289,726 | 6% | 272,827 | ||||||||||||||||||||||||||||||||
Egypt(1)(2) | 151,866 | 7% | 141,742 | 144,955 | 6% | 136,718 | ||||||||||||||||||||||||||||||||
North Sea(4) | 30,804 | 23% | 25,029 | 31,257 | (8)% | 33,892 | ||||||||||||||||||||||||||||||||
| Total | 463,815 | (1)% | 467,480 | 465,938 | 5% | 443,437 | ||||||||||||||||||||||||||||||||
(1) Gross oil, natural gas, and NGL production in Egypt were as follows:
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||
| Oil (b/d) | 124,944 | 136,670 | 125,595 | 138,039 | ||||||||||||||||||||||||||||||||||
| Natural Gas (Mcf/d) | 508,346 | 447,173 | 481,700 | 445,397 | ||||||||||||||||||||||||||||||||||
(2) Includes net production volumes per day attributable to a noncontrolling interest in Egypt of:
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||
| Oil (b/d) | 29,860 | 30,579 | 29,127 | 29,596 | ||||||||||||||||||||||||||||||||||
| Natural Gas (Mcf/d) | 124,867 | 100,210 | 115,405 | 96,054 | ||||||||||||||||||||||||||||||||||
(3) The table shows production on a boe basis in which natural gas is converted to an equivalent barrel of oil based on a 6:1 energy equivalent ratio. This ratio is not reflective of the price ratio between the two products.
(4) Average sales volumes from the North Sea for the third quarters of 2025 and 2024 were 32,832 boe/d and 19,374 boe/d, respectively, and 32,503 boe/d and 30,607 boe/d for the first nine months of 2025 and 2024, respectively. Sales volumes may vary from production volumes as a result of the timing of liftings.
30
Pricing
The Company’s average selling prices by country were as follows:
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
| 2025 | Increase (Decrease) | 2024 | 2025 | Increase (Decrease) | 2024 | |||||||||||||||||||||||||||||||||
| Average Oil Price – Per barrel | ||||||||||||||||||||||||||||||||||||||
| United States | $ | 66.03 | (14)% | $ | 76.34 | $ | 67.78 | (13)% | $ | 78.16 | ||||||||||||||||||||||||||||
| Egypt | 68.63 | (14)% | 79.88 | 69.99 | (15)% | 82.41 | ||||||||||||||||||||||||||||||||
| North Sea | 69.78 | (16)% | 83.36 | 70.99 | (15)% | 83.67 | ||||||||||||||||||||||||||||||||
| Total | 67.43 | (14)% | 78.06 | 68.94 | (14)% | 80.31 | ||||||||||||||||||||||||||||||||
| Average Natural Gas Price – Per Mcf | ||||||||||||||||||||||||||||||||||||||
| United States | $ | 0.71 | 344% | $ | 0.16 | $ | 1.27 | 108% | $ | 0.61 | ||||||||||||||||||||||||||||
| Egypt | 3.75 | 28% | 2.93 | 3.49 | 19% | 2.93 | ||||||||||||||||||||||||||||||||
| North Sea | 11.06 | 13% | 9.76 | 12.59 | 27% | 9.89 | ||||||||||||||||||||||||||||||||
| Total | 2.25 | 57% | 1.43 | 2.45 | 30% | 1.89 | ||||||||||||||||||||||||||||||||
| Average NGL Price – Per barrel | ||||||||||||||||||||||||||||||||||||||
| United States | $ | 20.11 | (4)% | $ | 20.91 | $ | 22.69 | 2% | $ | 22.20 | ||||||||||||||||||||||||||||
| North Sea | 40.42 | (12)% | 45.93 | 44.49 | (4)% | 46.47 | ||||||||||||||||||||||||||||||||
| Total | 20.65 | (3)% | 21.29 | 23.30 | 3% | 22.73 | ||||||||||||||||||||||||||||||||
Third-Quarter 2025 compared to Third-Quarter 2024
Crude Oil Crude oil revenues for the third quarter of 2025 totaled $1.5 billion, a $327 million decrease from the comparative 2024 quarter. A 14 percent decrease in average realized prices decreased third-quarter 2025 oil revenues by $245 million compared to the third quarter of 2024, while 9 percent lower average daily production decreased revenues by $82 million. Crude oil revenues accounted for 81 percent of total oil and gas production revenues and 51 percent of worldwide production in the third quarter of 2025. Crude oil prices realized in the third quarter of 2025 averaged $67.43 per barrel, compared with $78.06 per barrel in the comparative prior-year quarter.
The Company’s worldwide oil production decreased 22.1 Mb/d to 234.2 Mb/d during the third quarter of 2025 from the comparative prior-year period, primarily a result of the sale of non-core assets in the U.S. and natural production decline in the U.S. and the North Sea. These decreases were offset by drilling activity in the Permian Basin and downtime recovery in the North Sea.
Natural Gas Natural gas revenues for the third quarter of 2025 totaled $192 million, an $89 million increase from the comparative 2024 quarter. A 57 percent increase in average realized prices increased third-quarter 2025 natural gas revenues by $60 million compared to the third quarter of 2024, while 18 percent higher average daily production increased revenues by $29 million. Natural gas revenues accounted for 11 percent of total oil and gas production revenues and 33 percent of worldwide production during the third quarter of 2025.
The Company’s worldwide natural gas production increased 145.3 MMcf/d to 932.2 MMcf/d during the third quarter of 2025 from the comparative prior-year period, primarily a result of increased drilling activity in Egypt and downtime recovery in the North Sea. Natural gas production was also higher as a result of lower volume curtailments at Alpine High compared with the 2024 period in response to extreme Waha basis differentials. These increases were partially offset by the sale of non-core assets in the U.S. and natural production decline in the U.S. and North Sea.
NGL NGL revenues for the third quarter of 2025 totaled $142 million, a $16 million decrease from the comparative 2024 quarter. A 7 percent lower average daily production decreased third-quarter 2025 NGL revenues by $11 million compared to the third quarter of 2024, while a 3 percent decrease in average realized prices decreased revenues by $5 million. NGL revenues accounted for 8 percent of total oil and gas production revenues and 16 percent of worldwide production during the third quarter of 2025.
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The Company’s worldwide NGL production decreased 5.8 Mb/d to 74.2 Mb/d during the third quarter of 2025 from the comparative prior-year period, primarily a result of the sale of non-core assets in the U.S. and natural production decline in the U.S. and the North Sea. These decreases were offset by drilling activity in the Permian Basin and downtime recovery in the North Sea.
Year-to-Date 2025 compared to Year-to-Date 2024
Crude Oil Crude oil revenues for the first nine months of 2025 totaled $4.5 billion, a $685 million decrease from the comparative 2024 period. A 14 percent decrease in average realized prices lowered oil revenues for the 2025 period by $726 million compared to the same prior-year period, while higher sales volumes, despite relatively flat average daily production, increased oil revenues by $41 million. Crude oil revenues accounted for 80 percent of total oil and gas production revenues and 50 percent of worldwide production for the first nine months of 2025. Crude oil prices realized during the first nine months of 2025 averaged $68.94 per barrel, compared to $80.31 per barrel in the comparative prior-year period.
The Company’s worldwide oil production stayed relatively flat in the first nine months of 2025 compared to the same prior-year period, the result of the sale of non-core assets in the U.S. and natural production decline, mostly offset by drilling activity in the Permian Basin and downtime recovery in the North Sea.
Natural Gas Natural gas revenues for the first nine months of 2025 totaled $609 million, a $195 million increase from the comparative 2024 period. A 30 percent increase in average realized prices increased natural gas revenues for the 2025 period by $123 million compared to the same prior-year period, while 14 percent higher average daily production increased revenues by $72 million. Natural gas revenues accounted for 11 percent of total oil and gas production revenues and 33 percent of worldwide production for the first nine months of 2025.
The Company’s worldwide natural gas production increased 113.7 MMcf/d to 917 MMcf/d in the first nine months of 2025 compared to the same prior-year period, primarily a result of increased drilling activity in Egypt and the Permian Basin coupled with the Callon acquisition in the U.S., and downtime recovery in the North Sea. Natural gas production was also higher as a result of reduced volume curtailments at Alpine High compared with the 2024 period in response to extreme Waha basis differentials. These increases were offset by the sale of non-core assets in the U.S., natural production decline in the U.S. and North Sea, and operational downtime in the U.S.
NGL NGL revenues for the first nine months of 2025 totaled $501 million, a $44 million increase from the comparative 2024 period. A 7 percent higher average daily production increased NGL revenues for the 2025 period by $33 million compared to the same prior-year period, while a 3 percent increase in average realized prices increased revenues by $11 million. NGL revenues accounted for 9 percent of total oil and gas production revenues and 17 percent of worldwide production for the first nine months of 2025.
The Company’s worldwide NGL production increased 5.0 Mb/d to 77.8 Mb/d in the first nine months of 2025 compared to the same prior-year period, primarily a result of increased drilling activity in the Permian Basin coupled with the Callon acquisition in the U.S. and downtime recovery in the North Sea. NGL production was also higher as a result of reduced volume curtailments at Alpine High compared with the 2024 period in response to extreme Waha basis differentials. These increases were offset by the sale of non-core assets in the U.S., natural production decline in the U.S. and North Sea, and operational downtime in the U.S.
Purchased Oil and Gas Sales
Purchased oil and gas sales represent volumes primarily attributable to domestic oil and gas purchases that were sold by the Company to fulfill oil and natural gas takeaway obligations and delivery commitments. Sales related to purchased volumes totaled $311 million and $473 million during the third quarters of 2025 and 2024, respectively, and $1.4 billion and $1.0 billion during the first nine months of 2025 and 2024, respectively. Purchased oil and gas sales were partially offset by associated purchase costs of $184 million and $292 million during the third quarters of 2025 and 2024, respectively, and $962 million and $665 million, respectively, during the first nine months of 2025 and 2024, respectively. Gross purchased oil and gas sales values were lower in the third quarter, primarily driven by lower oil volume sales and lower oil prices. Gross purchased oil and gas sales values were higher in the first nine months of 2025, primarily driven by higher natural gas prices and activity associated with the Callon acquisition.
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Operating Expenses
The Company’s operating expenses were as follows and include costs attributable to a noncontrolling interest in Egypt:
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Lease operating expenses | $ | 376 | $ | 418 | $ | 1,150 | $ | 1,216 | ||||||||||||||||||
| Gathering, processing, and transmission | 110 | 123 | 318 | 328 | ||||||||||||||||||||||
| Purchased oil and gas costs | 184 | 292 | 962 | 665 | ||||||||||||||||||||||
| Taxes other than income | 51 | 70 | 179 | 205 | ||||||||||||||||||||||
| Exploration | 22 | 29 | 95 | 248 | ||||||||||||||||||||||
| General and administrative | 95 | 92 | 259 | 270 | ||||||||||||||||||||||
| Transaction, reorganization, and separation | 18 | 14 | 66 | 156 | ||||||||||||||||||||||
| Depreciation, depletion, and amortization: | ||||||||||||||||||||||||||
| Oil and gas property and equipment | 557 | 588 | 1,716 | 1,589 | ||||||||||||||||||||||
| Gathering, processing, and transmission assets | 2 | 2 | 5 | 5 | ||||||||||||||||||||||
| Other assets | 6 | 5 | 17 | 19 | ||||||||||||||||||||||
| Asset retirement obligation accretion | 40 | 36 | 118 | 112 | ||||||||||||||||||||||
| Impairments | — | 1,111 | — | 1,111 | ||||||||||||||||||||||
| Financing costs, net | 46 | 100 | 55 | 276 | ||||||||||||||||||||||
| Total Operating Expenses | $ | 1,507 | $ | 2,880 | $ | 4,940 | $ | 6,200 | ||||||||||||||||||
Lease Operating Expenses (LOE)
LOE decreased $42 million and $66 million from the third quarter and the first nine months of 2024, respectively. On a per-unit basis, LOE decreased 11 percent in each of the third quarter and the first nine months of 2025, respectively, when compared to the third quarter and the first nine months of 2024. The decrease in absolute costs when compared to the same prior-year periods was primarily driven by lower workover activity, continued cost reduction efforts in all operating areas, and the sale of non-core assets in the Permian Basin. The decrease in absolute costs for the first nine months of 2025 was partially offset by a full year of operating cost activity related to the Callon transaction.
Gathering, Processing, and Transmission (GPT)
The Company’s GPT expenses were as follows:
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Third-party processing and transmission costs | $ | 110 | $ | 123 | $ | 318 | $ | 305 | ||||||||||||||||||
| Midstream service costs – Kinetik | — | — | — | 23 | ||||||||||||||||||||||
Total Gathering, processing, and transmission | $ | 110 | $ | 123 | $ | 318 | $ | 328 | ||||||||||||||||||
GPT costs decreased $13 million and $10 million from the third quarter and the first nine months of 2024, respectively. The decrease in third-party costs for the third quarter of 2025 was primarily driven by decreased oil and NGL production volumes in the U.S. partially offset by production volumes resulting from downtime recovery in the North Sea compared to the same prior-year period. The decrease in third-party costs for the first nine months of 2025 was driven by decreases in average transportation rates compared to the same prior-year period.
Purchased Oil and Gas Costs
Purchased oil and gas costs decreased $108 million and increased $297 million from the third quarter and the first nine months of 2024, respectively. The decrease in the third quarter of 2025 was primarily driven by decreased oil volume purchases, compared to the same prior-year periods. The increase in the first nine months of 2025 was primarily driven by increased oil volume purchases and gas volumes purchased at a higher rate coupled with activity associated with the Callon acquisition. With widening margins under third-party gas agreements, purchased oil and gas costs were more than offset by associated sales to fulfill oil and natural gas takeaway obligations and delivery commitments in the third quarter and first nine months of 2025, as discussed above.
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Taxes Other Than Income
Taxes other than income decreased $19 million and $26 million from the third quarter and the first nine months of 2024, respectively, primarily from lower severance taxes driven by lower oil prices and lower ad valorem taxes.
Exploration Expenses
The Company’s exploration expenses were as follows:
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Unproved leasehold impairments | $ | — | $ | 1 | $ | — | $ | 11 | ||||||||||||||||||
| Dry hole expense | 4 | 8 | 47 | 172 | ||||||||||||||||||||||
| Geological and geophysical expense | 3 | 6 | 7 | 22 | ||||||||||||||||||||||
| Exploration overhead and other | 15 | 14 | 41 | 43 | ||||||||||||||||||||||
| Total Exploration | $ | 22 | $ | 29 | $ | 95 | $ | 248 | ||||||||||||||||||
Exploration expenses decreased $7 million and $153 million from the third quarter and the first nine months of 2024, respectively. The decrease in expenses for the third quarter of 2025 was primarily driven by higher dry hole and seismic expenses in Alaska in the prior-year period. The decrease in expenses for the first nine months of 2025 was primarily driven by higher dry hole expenses in Alaska and Suriname in the prior-year period.
General and Administrative (G&A) Expenses
G&A expenses increased $3 million and decreased $11 million from the third quarter and the first nine months of 2024, respectively. The increase in expenses for the third quarter of 2025 compared to the same prior-year period was primarily driven by higher cash-based stock compensation expense resulting from changes in the Company’s stock price and expected payouts for the Company’s performance programs, which were largely offset by the impacts of focused cost-reduction efforts on personnel and other overhead expenses. The decrease in expenses for the first nine months of 2025 compared with the prior-year period was primarily the result of these focused cost-reduction efforts.
Transaction, Reorganization, and Separation (TRS) Costs
TRS costs increased $4 million and decreased $90 million from the third quarter and the first nine months of 2024, respectively. TRS costs for 2025 were primarily associated with employee separations and other cost-saving initiatives, while TRS costs for 2024 comprised primarily expenses associated with the Callon merger.
Depreciation, Depletion, and Amortization (DD&A)
Total DD&A expenses decreased $30 million and increased $125 million from the third quarter and the first nine months of 2024, respectively. The Company’s DD&A rate on its oil and gas properties decreased $0.81 per boe and increased $0.29 per boe from the third quarter and the first nine months of 2024, respectively. The decrease in DD&A absolute expenses and on a per boe basis for the third quarter of 2025 was primarily driven by lower DD&A rates resulting from the sale of non-core assets in the Permian Basin. For the first nine months of 2025, the Company’s higher DD&A rate on its oil and gas properties on a per boe basis was driven by year-end 2024 negative gas price-related reserve revisions in the U.S. Permian Basin. Higher absolute dollar amounts of DD&A for the first nine months of 2025 were directly impacted by these higher rates.
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Financing Costs, Net
The Company’s Financing costs were as follows:
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Interest expense | $ | 72 | $ | 109 | $ | 249 | $ | 302 | ||||||||||||||||||
| Amortization of debt issuance costs | 2 | 1 | 6 | 4 | ||||||||||||||||||||||
| Capitalized interest | (12) | (8) | (32) | (22) | ||||||||||||||||||||||
Gain on extinguishment of debt | (2) | — | (147) | — | ||||||||||||||||||||||
| Interest income | (14) | (2) | (21) | (8) | ||||||||||||||||||||||
| Total Financing costs, net | $ | 46 | $ | 100 | $ | 55 | $ | 276 | ||||||||||||||||||
Net financing costs decreased $54 million and $221 million from the third quarter and the first nine months of 2024, respectively. The lower overall interest expense was primarily a result of lower outstanding credit facility borrowings compared to the prior-year periods. The decrease in net financing costs during the first nine months of 2025 was further driven by gains on extinguishment of debt from the Company’s cash tender purchases during the first quarter of 2025.
Provision for Income Taxes
The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Non-cash impairments on the carrying value of the Company’s oil and gas properties, gains and losses on the sale of assets, statutory tax rate changes, and other significant or unusual items are recognized as discrete items in the quarter in which they occur.
The Company’s effective income tax rate for the three and nine months ended September 30, 2025 differed from the U.S. federal statutory income tax rate of 21 percent due to taxes on foreign operations and a deferred tax expense related to the remeasurement of taxes in the U.K. as a result of the enactment of Finance Act 2025 on March 20, 2025. The Company’s effective income tax rate for the three and nine months ended September 30, 2024 differed from the U.S. federal statutory income tax rate of 21 percent due to taxes on foreign operations.
On March 20, 2025, Finance Act 2025 was enacted, receiving Royal Assent, and included amendments to the Energy (Oil and Gas) Profits Levy Act of 2022, increasing the levy from a 35 percent rate to a 38 percent rate, among other changes, effective for the period of November 1, 2024 through March 31, 2030. Under GAAP, the financial statement impact of new legislation is recorded in the period of enactment. Therefore, in the first quarter of 2025, the Company recorded a deferred tax expense of $76 million related to the remeasurement of the December 31, 2024 U.K. deferred tax liability.
On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act of 2025 (OBBBA). Among other changes, the OBBBA expanded and made permanent 100 percent bonus depreciation for eligible assets acquired and placed in service after January 19, 2025, and aligned the treatment of intangible drilling costs for CAMT purposes with regular tax treatment starting in 2026. The Company does not expect the OBBBA to have a material impact on total tax expense for the year ended December 31, 2025, as impacts to current tax expense are offset by impacts to deferred tax expense. In the third quarter of 2025, the Company has recorded a current tax benefit of $29 million fully offset by a deferred tax expense of the same amount.
On September 30, 2025, the Internal Revenue Service issued further interim guidance on CAMT. Among other changes, the guidance provided for a reduction to CAMT related to net operating loss utilization for regular federal income tax purposes. The Company does not expect this guidance to have a material impact on total tax expense for the year ended December 31, 2025, as impacts to current tax expense are offset by impacts to deferred tax expense. In the third quarter of 2025, the Company has recorded a current tax benefit of $60 million, fully offset by a deferred tax expense of the same amount.
In December 2021, the Organisation for Economic Co-operation and Development issued Pillar Two Model Rules introducing a new global minimum tax of 15 percent on a country-by-country basis, with certain aspects effective in certain jurisdictions on January 1, 2024. Although the Company continues to monitor enacted legislation to implement these rules in countries where the Company could be impacted, the Company does not expect that the Pillar Two framework will have a material impact on its consolidated financial statements.
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The Company and its subsidiaries are subject to U.S. federal income tax as well as income or capital taxes in various states and foreign jurisdictions. The Company’s tax reserves are related to tax years that may be subject to examination by the relevant taxing authority.
Capital Resources and Liquidity
Operating cash flows are the Company’s primary source of liquidity. The Company’s short-term and long-term operating cash flows are impacted by highly volatile commodity prices, as well as production costs and sales volumes. The Company expects commodity prices to continue to be volatile in the near term as a result of macroeconomic uncertainty, current and potential tariffs or trade barriers, supply chain disruptions, and concerns over a potential economic recession. Significant changes in commodity prices impact the Company’s revenues, earnings, and cash flows. These changes potentially impact the Company’s liquidity if costs do not trend with sustained decreases in commodity prices. Historically, costs have trended with commodity prices, albeit on a lag. Sales volumes also impact cash flows; however, they have a less volatile impact in the short term.
The Company’s long-term operating cash flows are dependent on reserve replacement and the level of costs required for ongoing operations. Cash investments are required to fund activity necessary to offset the inherent declines in production and proved crude oil and natural gas reserves. Future success in maintaining and growing reserves and production is highly dependent on the success of the Company’s drilling program and its ability to add reserves economically. Changes in commodity prices also impact estimated quantities of proved reserves.
At this time, the Company is unable to predict to what extent recent and potential changes in trade restrictions and tariffs will impact its business. If inflationary pressures from these and other economic conditions persist or worsen, the Company may incur additional operating costs. The Company will continue to monitor the impact and consequences of these factors on its operations.
The Company expects its full-year 2025 estimated upstream capital investment to be approximately $2.3 billion to $2.4 billion. During the third quarter of 2025, continued efficiency gains allowed the Company to further reduce the Permian rig count to five, while increasing oil production outlook for fourth quarter. In Egypt, following the ongoing momentum of the Company’s gas program and the relative softening of oil prices, the Company expects one-third of its activities to be gas-focused. APA remains committed to its capital return framework for equity holders to participate more directly and materially in cash returns through dividends and share repurchases.
The Company believes its available liquidity and capital resource alternatives, combined with proactive measures to adjust its capital budget to reflect volatile commodity prices and anticipated operating cash flows, will be adequate to fund short-term and long-term operations, including the Company’s capital development program, repayment of debt maturities, payment of dividends, share buy-back activity, and amounts that may ultimately be paid in connection with commitments and contingencies.
The Company may also elect to utilize available cash on hand, committed borrowing capacity, access to both debt and equity capital markets, or proceeds from the sale of nonstrategic assets for all other liquidity and capital resource needs.
For additional information, refer to Part I, Items 1 and 2—Business and Properties, and Item 1A—Risk Factors, in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
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Sources and Uses of Cash
The following table presents the sources and uses of the Company’s cash and cash equivalents for the periods presented:
For the Nine Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (In millions) | ||||||||||||||
| Sources of Cash and Cash Equivalents: | ||||||||||||||
| Net cash provided by operating activities | $ | 3,737 | $ | 2,584 | ||||||||||
| Fixed-rate debt borrowings | 846 | — | ||||||||||||
Proceeds from commercial paper and revolving credit facilities, net | — | 190 | ||||||||||||
Proceeds from term loan facility | — | 1,500 | ||||||||||||
| Proceeds from asset divestitures | 590 | 724 | ||||||||||||
Proceeds from sale of Kinetik Shares | — | 428 | ||||||||||||
| Other | — | 20 | ||||||||||||
| Total Sources of Cash and Cash Equivalents | 5,173 | 5,446 | ||||||||||||
| Uses of Cash and Cash Equivalents: | ||||||||||||||
| Additions to upstream oil and gas property | $ | 2,156 | $ | 2,153 | ||||||||||
| Leasehold and property acquisitions | 20 | 64 | ||||||||||||
Payments on commercial paper and revolving credit facilities, net | 333 | — | ||||||||||||
Payments on term loan facility | 900 | 500 | ||||||||||||
Payment on Callon Credit Agreement | — | 472 | ||||||||||||
Payments on fixed-rate debt | 1,016 | 1,641 | ||||||||||||
| Dividends paid to APA common stockholders | 271 | 260 | ||||||||||||
Distributions to noncontrolling interest | 390 | 233 | ||||||||||||
| Treasury stock activity, net | 215 | 146 | ||||||||||||
| Other, net | 22 | — | ||||||||||||
| Total Uses of Cash and Cash Equivalents | 5,323 | 5,469 | ||||||||||||
Decrease in Cash and Cash Equivalents | $ | (150) | $ | (23) | ||||||||||
Sources of Cash and Cash Equivalents
Net Cash Provided by Operating Activities Operating cash flows are the Company’s primary source of capital and liquidity and are impacted, both in the short term and the long term, by volatile commodity prices. The factors that determine operating cash flows are largely the same as those that affect net earnings, with the exception of non-cash expenses such as DD&A, exploratory dry hole expense, asset impairments, asset retirement obligation accretion, and deferred income tax expense.
Net cash provided by operating activities during the first nine months of 2025 totaled $3.7 billion, $1.1 billion higher from the first nine months of 2024, primarily due to collection of outstanding receivables, lower overall expenses, and timing of other working capital items.
For a detailed discussion of commodity prices, production, and operating expenses, refer to “Results of Operations” in this Item 2. For additional detail on the changes in operating assets and liabilities and the non-cash expenses that do not impact net cash provided by operating activities, refer to the Statement of Consolidated Cash Flows in the Consolidated Financial Statements set forth in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q.
Fixed-Rate Debt Borrowings During the first nine months of 2025, the Company issued new notes for proceeds of $846 million, after deducting discounts and loan costs, to fund in part APA’s purchase of Apache notes in APA’s cash tender offers.
Proceeds from Asset Divestitures The Company received $590 million and $724 million in proceeds from the divestitures of certain non-core assets during the first nine months of 2025 and 2024, respectively. For more information regarding the Company’s acquisitions and divestitures, refer to Note 2—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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Uses of Cash and Cash Equivalents
Additions to Oil & Gas Property During the first nine months of 2025 and 2024, exploration and development cash expenditures were $2.2 billion in each period. The capital investment is reflective of the Company’s plan to streamline capital deployment and the sale of certain non-core assets and leasehold in the Permian Basin. The Company operated an average of approximately 20 drilling rigs during the first nine months of 2025, compared to an average of approximately 23 drilling rigs during the first nine months of 2024.
Leasehold and Property Acquisitions During the first nine months of 2025 and 2024, the Company completed other leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $20 million and $64 million, respectively.
Payments on Commercial Paper and Revolving Credit Facilities, Net During the first nine months of 2025, the Company made net payments of $333 million on its commercial paper and U.S. dollar denominated syndicated credit facility borrowings. As of September 30, 2025, there were no outstanding borrowings under each of the Company’s commercial paper and U.S. dollar denominated syndicated credit facility.
Payments on Term Loan Facility During the first nine months of 2025 and 2024, the Company made a payment of $900 million and $500 million, respectively, on its syndicated term loan credit agreement and fully repaid the term loans. For additional details of this credit agreement, see “Unsecured Committed Term Loan Facility” in the Liquidity section below.
Payments on Fixed-Rate Debt During the first nine months of 2025, the Company settled its private exchange and cash tender offers for certain notes and debentures of Apache and made open market repurchases of indenture debt of APA and Apache, and Apache redeemed certain notes for aggregate cash payments of $1.0 billion, reflecting principal amounts, discount to par, and associated fees.
During the first nine months of 2024, the Company financed Callon’s repayment pursuant to Callon’s cash tender offers for, and redemptions of all senior notes issued under Callon’s indentures for an aggregate cash payment amount of $1.6 billion, reflecting principal amounts, premium to par, and associated fees.
The Company may, and expects that Apache will continue to, reduce debt outstanding under its indentures from time to time.
Dividends Paid to APA Common Stockholders During the first nine months of 2025 and 2024, the Company paid $271 million and $260 million, respectively, for dividends on its common stock.
Distributions to Noncontrolling Interest Sinopec International Petroleum Exploration and Production Corporation (Sinopec) holds a one-third minority participation interest in the Company’s oil and gas operations in Egypt. During the first nine months of 2025 and 2024, the Company paid $390 million and $233 million, respectively, in cash distributions to Sinopec.
Treasury Stock Activity, net In the first nine months of 2025, the Company repurchased 10.2 million shares at an average price of $21.08 per share and an aggregate purchase price of approximately $215 million, and as of September 30, 2025, the Company had remaining authorization to repurchase 24.6 million shares. In the first nine months of 2024, the Company repurchased 4.6 million shares at an average price of $31.72 per share and an aggregate purchase price of approximately $146 million.
Liquidity
The following table presents a summary of the Company’s key financial indicators:
September 30, 2025 | December 31, 2024 | |||||||||||||
| (In millions) | ||||||||||||||
| Cash and cash equivalents | $ | 475 | $ | 625 | ||||||||||
| Total debt – APA and Apache | 4,488 | 6,044 | ||||||||||||
| Total equity | 6,863 | 6,362 | ||||||||||||
| Available committed borrowing capacity under syndicated credit facilities | 4,016 | 2,966 | ||||||||||||
Cash and Cash Equivalents As of September 30, 2025, the Company had $475 million in cash and cash equivalents. The majority of the Company’s cash is invested in highly liquid, investment-grade instruments with maturities of three months or less at the time of purchase.
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Debt As of September 30, 2025, the Company had $4.5 billion in total debt outstanding, which consisted of notes and debentures of APA and Apache and finance lease obligations. As of September 30, 2025, current debt included $2 million of finance lease obligations and $211 million of APA and Apache notes coming due within the next year.
Indenture Debt Activity During the first nine months of 2025, the Company purchased in the open market and had canceled indebtedness issued under indentures of APA and Apache in an aggregate principal amount of $122 million for an aggregate purchase price of $112 million in cash, including accrued interest and broker fees, reflecting a discount to par of an aggregate $13 million. The Company recognized a $12 million gain on these repurchases. The repurchases were partially financed by APA’s borrowing under the Company’s commercial paper program. Refer to discussion of APA exchange and tender offers for Apache indenture debt below for further details regarding the gain on extinguishment of debt during the quarter ended March 31, 2025.
Additionally, on August 20, 2025, Apache redeemed the outstanding $51 million principal amount of 4.625% Notes due 2025, at a redemption price equal to 100 percent of their principal amount, plus accrued and unpaid interest to the redemption date.
APA Exchange and Tender Offers for Apache Indenture Debt On January 10, 2025, the Company settled its private exchange and cash tender offers for certain notes and debentures issued by Apache under its indentures. The Company also then settled its private offering of new notes to fund in part its purchase of Apache notes in APA’s cash tender offers. In settling these offerings pursuant to their respective terms:
•APA issued new notes and debentures under its indentures in aggregate principal amounts of (i) $2.5 billion in exchange for Apache notes and debentures tendered and accepted in APA’s exchange offers, (ii) $203 million in exchange for Apache notes tendered in the cash tender offers in excess of the stated maximum purchase amount or series caps, and (iii) $850 million in the new notes offering, comprised of $350 million aggregate principal amount of APA’s 6.10% Notes due 2035 and $500 million aggregate principal amount of APA’s 6.75% Notes due 2055.
•In addition to issuing the APA notes in the exchange offers, APA paid a total of $2.5 million in cash as part of the exchange consideration.
•APA paid a total of $869 million in cash in the tender offers (comprised of tender offer consideration, exchange consideration for tendered notes exchanged, early participation premium, and accrued interest) for the aggregate $1 billion in principal amount of Apache notes tendered and accepted in the cash tender offers. The Company recognized a gain of $135 million on these purchases, including broker fees and loan costs.
•Net proceeds from the sale of the notes in APA’s new notes offering, after deducting the initial purchasers’ discounts and estimated offering expenses, were approximately $839 million and were used to fund in part APA’s purchase of Apache notes in APA’s cash tender offers.
•Each series of APA notes and debentures issued in settlement of the exchange and tender offers had the same interest rate, maturity date, and interest payment dates and the same optional redemption prices (if any) as the corresponding series of Apache notes and debentures for which they were exchanged.
•Each series of APA notes and debentures issued in settlement of the exchange and tender offers and new notes offering were fully and unconditionally guaranteed by Apache until the first time that the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures was less than $1 billion, which occurred in May 2025, after which Apache’s guarantees were terminated in accordance with their terms on May 16, 2025.
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•APA entered into two registration rights agreements, one covering notes and debentures issued in APA’s exchange and tender offers and one covering notes issued in APA’s new notes offering (each a Registration Rights Agreement). These offerings were not registered under the Securities Act of 1933, as amended (Securities Act), in reliance upon an exemption therefrom, and the APA notes and debentures issued pursuant to such offers are subject to certain transfer restrictions (collectively, the Unregistered Notes). Each Registration Rights Agreement required APA to use commercially reasonable efforts to cause to be filed and become effective under the Securities Act, a registration statement with respect to a registered offer to exchange each series of Unregistered Notes for registered notes and debentures issued by APA containing terms substantially identical in all material respects to the applicable series of Unregistered Notes (except that the registered notes and debentures do not contain terms with respect to transfer restrictions, registration rights applicable to the Unregistered Notes, or any increase in annual interest rate for failure to comply with such registration rights). In August 2025, APA filed such registration statement, and it became effective. On September 18, 2025, APA settled the exchange offers covered by such registration statement, issuing registered notes and debentures in the same aggregate principal amount as the Unregistered Notes accepted for exchange and canceled. Of the $3.6 billion aggregate principal amount of Unregistered Notes covered by the exchange offers, 99 percent was exchanged for registered notes and debentures, and the remaining Unregistered Notes remained outstanding.
Unsecured 2025 Committed Credit Facilities On January 15, 2025, the Company entered into two unsecured syndicated credit agreements for general corporate purposes:
•One agreement is denominated in US dollars (the 2025 USD Agreement) and provides for an unsecured five-year revolving credit facility for loans and letters of credit, with aggregate commitments of US$2.0 billion (including a letter of credit subfacility of up to US$750 million, of which US$250 million currently is committed). APA may increase commitments up to an aggregate US$2.5 billion by adding new lenders or obtaining the consent of any increasing existing lenders. This facility matures in January 2030, subject to the Company’s two, one-year extension options.
•The second agreement is denominated in pounds sterling (the 2025 GBP Agreement) and provides for an unsecured five-year revolving credit facility, with aggregate commitments of £1.5 billion for loans and letters of credit. This facility matures in January 2030, subject to the Company’s two, one-year extension options.
Apache guaranteed obligations under each of the 2025 USD Agreement and 2025 GBP Agreement (each, a 2025 Agreement) effective until the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures first was less than US$1.0 billion, which occurred in May 2025, after which Apache’s guarantees were terminated in accordance with their terms on May 16, 2025.
The 2025 Agreements replaced on substantially the same terms two syndicated credit agreements that the Company entered in April 2022:
•One agreement was denominated in US dollars (the 2022 USD Agreement) and provided for an unsecured five-year revolving credit facility, with aggregate commitments of US$1.8 billion (including a letter of credit subfacility of up to US$750 million, of which US$150 million was committed).
•The second agreement was denominated in pounds sterling (the 2022 GBP Agreement) and provided for an unsecured five-year revolving credit facility, with aggregate commitments of £1.5 billion for loans and letters of credit.
On January 15, 2025, the Company terminated commitments under both the 2022 USD Agreement and 2022 GBP Agreement in connection with entry into the 2025 Agreements.
As of September 30, 2025, there were no borrowings or letters of credit outstanding under the 2025 USD Agreement and an aggregate £1 million in letters of credit outstanding under the 2025 GBP Agreement. As of December 31, 2024, there were $10 million of borrowings and no letters of credit outstanding under the 2022 USD Agreement and an aggregate £303 million in letters of credit outstanding under the 2022 GBP Agreement.
Uncommitted Lines of Credit Each of the Company and Apache, from time to time, has and uses uncommitted credit and letter of credit facilities for working capital and credit support purposes. As of September 30, 2025 and December 31, 2024, there were no outstanding borrowings under these facilities. As of September 30, 2025, there were £817 million and $11 million in letters of credit outstanding under these facilities. As of December 31, 2024, there were £640 million and $11 million in letters of credit outstanding under these facilities.
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Commercial Paper Program The Company has a commercial paper program under which it from time to time may issue in private placements exempt from registration under the Securities Act short-term unsecured promissory notes (CP Notes) up to a maximum aggregate face amount of $2.0 billion outstanding at any time. The program was established in December 2023, and the maximum aggregate face amount of CP Notes issuable thereunder was increased to $2.0 billion from $1.8 billion on June 20, 2025. The maturities of CP Notes may vary but may not exceed 397 days from the date of issuance. Outstanding CP Notes are supported by available borrowing capacity under the Company’s committed revolving credit facilities for general corporate purposes, which as of September 30, 2025, included the $2.0 billion 2025 USD Agreement.
Payment of CP Notes was unconditionally guaranteed on an unsecured basis by Apache, such guarantee effective until the first time that the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures was less than US$1.0 billion, which occurred in May 2025, after which Apache’s guarantees were terminated in accordance with their terms on June 20, 2025.
The CP Notes are sold under customary market terms in the U.S. commercial paper market at a discount from par or at par and bear interest at rates determined at the time of issuance.
As of September 30, 2025, the Company had no CP Notes outstanding. As of December 31, 2024, the Company had $323 million in aggregate face amount of CP Notes outstanding, which was classified as long-term debt.
Unsecured Committed Term Loan Facility On January 30, 2024, APA entered into a syndicated credit agreement under which the lenders committed an aggregate $2.0 billion for senior unsecured delayed-draw term loans to APA (Term Loan Credit Agreement), the proceeds of which could be used to refinance certain indebtedness of Callon upon closings of APA’s acquisition of Callon and the Term Loan Credit Agreement. Of such aggregate commitments, $1.5 billion was for term loans that would mature three years after the date of such closings (3-Year Tranche Loans) and $500 million was for term loans that would mature 364 days after the date of such closings (364-Day Tranche Loans).
On April 1, 2024, APA acquired Callon and closed the transactions under the Term Loan Credit Agreement, electing to borrow an aggregate $1.5 billion in 3-Year Tranche Loans maturing April 1, 2027 and to allow the lender commitments for the 364-Day Tranche Loans to expire.
As of December 31, 2024, there were $900 million in 3-Year Tranche Loans remaining outstanding under the Term Loan Credit Agreement. APA could at any time prepay loans under the Term Loan Credit Agreement, which it elected to do on March 10, 2025, when APA fully repaid amounts outstanding under the Term Loan Credit Agreement. The repayment was partially financed with borrowings under APA’s 2025 USD Agreement and commercial paper program.
Off-Balance Sheet Arrangements The Company enters into customary agreements in the oil and gas industry for drilling rig commitments, firm transportation agreements, and other obligations that may not be recorded on the Company’s consolidated balance sheet. For more information regarding these and other contractual arrangements, please refer to “Contractual Obligations” in Part II, Item 7 of APA’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There have been no material changes to the contractual obligations described therein.
Potential Decommissioning Obligations on Sold Properties
In 2013, Apache sold its Gulf of America (GOA) Shelf operations and properties and its GOA operating subsidiary, GOM Shelf LLC (GOM Shelf) to Fieldwood Energy LLC (Fieldwood). Fieldwood assumed the obligation to decommission the properties held by GOM Shelf and the properties acquired from Apache and its other subsidiaries (collectively, the Legacy GOA Assets). On February 14, 2018, Fieldwood filed for (and subsequently emerged from) Chapter 11 bankruptcy protection. On August 3, 2020, Fieldwood filed for (and subsequently emerged from) Chapter 11 bankruptcy protection for a second time. Upon emergence from this second bankruptcy, the Legacy GOA Assets were separated into a standalone company, which was subsequently merged into GOM Shelf. Under GOM Shelf’s limited liability company agreement, the proceeds of production of the Legacy GOA Assets are to be used to fund the operation of GOM Shelf and the decommissioning of Legacy GOA Assets. Pursuant to the terms of the original transaction, as amended in the first bankruptcy, the securing of the asset retirement obligations for the Legacy GOA Assets as and when Apache is required to perform or pay for any such decommissioning was accomplished through the posting of letters of credit in favor of Apache (Letters of Credit), the provision of two bonds (Bonds) in favor of Apache, and the establishment of a trust account of which Apache was a beneficiary and which was funded by net profits interests (NPIs) depending on future oil prices. In addition, after such sources have been exhausted, Apache agreed upon resolution of GOM Shelf’s second bankruptcy to GOM Shelf loans of up to $400 million to perform decommissioning, with such loans and related obligations secured by first and prior liens on the Legacy GOA Assets.
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By letter dated April 5, 2022 (replacing two earlier letters) and by subsequent letter dated March 1, 2023, GOM Shelf notified the Bureau of Safety and Environmental Enforcement (BSEE) that it was unable to fund the decommissioning obligations that it was obligated to perform on certain of the Legacy GOA Assets. As a result, Apache and other current and former owners in these assets have received orders from BSEE and demands from third parties to decommission certain of the Legacy GOA Assets included in GOM Shelf’s notifications to BSEE. Apache expects to receive similar orders and demands on the other Legacy GOA Assets included in GOM Shelf’s notification letters. Apache has also received orders to decommission other Legacy GOA Assets that were not included in GOM Shelf’s notification letters. Further, Apache anticipates that GOM Shelf may send additional such notices to BSEE in the future and that it may receive additional orders from BSEE requiring it to decommission other Legacy GOA Assets.
On June 21, 2023, two sureties that issued Bonds directly to Apache and two sureties that issued bonds to the issuing bank on the Letters of Credit filed suit against Apache in a case styled Zurich American Insurance Company, HCC International Insurance Company PLC, Philadelphia Indemnity Insurance Company and Everest Reinsurance Company (Insurers) v. Apache Corporation, Cause No. 2023-38238 in the 281st Judicial District Court, Harris County Texas. The sureties sought to prevent Apache from drawing on the $148 million in Bonds and $350 million in Letters of Credit and further alleged that they are discharged from their reimbursement obligations related to decommissioning costs and are entitled to other relief. The parties settled their dispute in the first quarter of 2025, which resulted in, among other things, mutual releases, the retention by Apache of all amounts drawn on the Letters of Credit, and payment to Apache of $140 million under the Bonds.
As of September 30, 2025, the Company recorded an asset of $40 million, representing the remaining amount the Company expects to be reimbursed from security related to these decommissioning costs.
The Company has also recorded contingent liabilities in the amounts of $1.0 billion for each of the periods ended September 30, 2025 and December 31, 2024, representing the estimated costs of decommissioning it may be required to perform on the Legacy GOA Assets. There have been no other changes in estimates from December 31, 2024 that would have a material impact on the Company’s financial position, results of operations, or liquidity.
The Company recognized $83 million in the first six months of 2024, respectively, of losses for estimated decommissioning costs on GOA properties previously sold to Fieldwood and other GOA operators.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The primary objective of the following information is to provide forward-looking quantitative and qualitative information about the Company’s exposure to market risk. The term market risk relates to the risk of loss arising from adverse changes in oil, natural gas, and NGL prices, interest rates, or foreign currency and adverse governmental actions. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. The forward-looking information provides indicators of how the Company views and manages its ongoing market risk exposures.
Commodity Price Risk
The Company’s revenues, earnings, cash flow, capital investments and, ultimately, future rate of growth are highly dependent on the prices the Company receives for its crude oil, natural gas, and NGLs, which have historically been very volatile because of unpredictable events such as economic growth or retraction, weather, political climate, and global supply and demand. The Company continually monitors its market risk exposure, as oil and gas supply and demand are impacted by uncertainties in the commodity and financial markets associated with ongoing international conflicts, inflation, current and potential tariffs or other trade barriers, global trade policies, actions taken by foreign oil and gas producing nations, including OPEC+, and other current events.
The Company’s average crude oil price realizations decreased 14 percent from $78.06 per barrel to $67.43 per barrel during the third quarters of 2024 and 2025, respectively. The Company’s average natural gas price realizations increased 57 percent from $1.43 per Mcf to $2.25 per Mcf during the third quarters of 2024 and 2025, respectively. The Company’s average NGL price realizations decreased 3 percent from $21.29 per barrel to $20.65 per barrel during the third quarters of 2024 and 2025, respectively. Based on average daily production for the third quarter of 2025, a $1.00 per barrel change in the weighted average realized oil price would have increased or decreased revenues for the quarter by approximately $22 million, a $0.10 per Mcf change in the weighted average realized natural gas price would have increased or decreased revenues for the quarter by approximately $9 million, and a $1.00 per barrel change in the weighted average realized NGL price would have increased or decreased revenues for the quarter by approximately $7 million.
The Company periodically enters into derivative positions on a portion of its projected crude oil and natural gas production through a variety of financial and physical arrangements intended to manage fluctuations in cash flows resulting from changes in commodity prices. Such derivative positions may include the use of futures contracts, swaps, and/or options. The Company does not hold or issue derivative instruments for trading purposes. As of September 30, 2025, the Company had open natural gas derivatives not designated as cash flow hedges in a net liability position with a fair value of $35 million. A 10 percent increase in natural gas prices would decrease the liability by approximately $16 million, while a 10 percent decrease in prices would increase the liability by approximately $16 million. These fair value changes assume volatility based on prevailing market parameters at September 30, 2025. Refer to Note 4—Derivative Instruments and Hedging Activities in the Notes to Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q for notional volumes and terms with the Company’s derivative contracts.
Interest Rate Risk
As of September 30, 2025, the Company had $4.5 billion, net, in outstanding notes and debentures, all of which was fixed-rate debt, with a weighted average interest rate of 5.66 percent. Although near-term changes in interest rates may affect the fair value of fixed-rate debt, such changes do not expose the Company to the risk of earnings or cash flow loss associated with that debt.
The Company is also exposed to interest rate risk related to its interest-bearing cash and cash equivalents balances and amounts outstanding under its term loan facility, commercial paper program, and syndicated credit facilities. As of September 30, 2025, the Company had approximately $475 million in cash and cash equivalents, approximately 97 percent of which was invested in money market funds and short-term investments with major financial institutions. As of September 30, 2025, there were no borrowings outstanding under the Company’s term loan facility, commercial paper program, or syndicated revolving credit facilities. Changes in the interest rate applicable to short-term investments, term loan facility, commercial paper program, and credit facility borrowings are expected to have an immaterial impact on earnings and cash flows but could impact interest costs associated with future debt issuances or any future borrowings.
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Foreign Currency Exchange Rate Risk
The Company’s cash activities relating to certain international operations is based on the U.S. dollar equivalent of cash flows measured in foreign currencies. The Company’s North Sea production is sold under U.S. dollar contracts, while the majority of costs incurred are paid in British pounds. The Company’s Egypt production is sold under U.S. dollar contracts, and the majority of costs incurred are denominated in U.S. dollars. Transactions denominated in British pounds are converted to U.S. dollar equivalents based on the average exchange rates during the period. The Company monitors foreign currency exchange rates of countries in which it is conducting business and may, from time to time, implement measures to protect against foreign currency exchange rate risk.
Foreign currency gains and losses also arise when monetary assets and monetary liabilities denominated in foreign currencies are translated at the end of each month. Foreign currency gains and losses are included as either a component of “Other” under “Revenues and Other” or, as is the case when the Company re-measures its foreign tax liabilities, as a component of the Company’s provision for income tax expense on the statement of consolidated operations. Foreign currency net gain or loss would not be material from a 10 percent weakening or strengthening, respectively, in the British pound as of September 30, 2025.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
John J. Christmann IV, the Company’s Chief Executive Officer, in his capacity as principal executive officer, and Ben C. Rodgers, the Company’s Executive Vice President and Chief Financial Officer, in his capacity as principal financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2025, the end of the period covered by this report. Based on that evaluation and as of the date of that evaluation, these officers concluded that the Company’s disclosure controls and procedures were effective, providing effective means to ensure that the information the Company is required to disclose under applicable laws and regulations is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
The Company periodically reviews the design and effectiveness of its disclosure controls, including compliance with various laws and regulations that apply to its operations, both inside and outside the United States. The Company makes modifications to improve the design and effectiveness of our disclosure controls, and may take other corrective action, if the Company’s reviews identify deficiencies or weaknesses in its controls.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Refer to Part I, Item 3—Legal Proceedings of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and Note 10—Commitments and Contingencies in the Notes to the Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q (which is hereby incorporated by reference herein), for a description of material legal proceedings.
ITEM 1A. RISK FACTORS
Except as set forth herein, there have been no material changes to the risk factors disclosed in Part I, Item 1A—Risk Factors of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
RISKS RELATED TO GOVERNMENTAL REGULATION AND POLITICAL RISKS
Changes to laws, regulations, guidance, and industry standards, or higher than anticipated costs, for asset retirement and decommissioning obligations could adversely affect the Company’s results of operations and cash flows.
The Company is subject to extensive requirements governing the plugging, abandonment, and decommissioning of wells, facilities, sites, and related infrastructure. The cost and timing of these activities are uncertain and may be materially affected by changes in laws, regulations, guidance, or industry standards. Governments in key jurisdictions, including the United States and the United Kingdom, have increased focus on decommissioning requirements, financial assurance, and environmental remediation. New or revised rules or guidance could expand the scope of required activities, alter timelines, or increase financial security obligations, resulting in higher costs and greater cash flow demands.
Additionally, inflation, supply constraints, and limited contractor and vessel availability have also raised decommissioning costs. If decommissioning spending materially exceeds current estimates or the Company’s joint venture partners or current owners of the Company’s previous assets fail to meet their decommissioning obligations, the Company’s cash flows, capital resources, and liquidity could be adversely affected.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table presents information on shares of common stock repurchased by the Company during the quarter ended September 30, 2025:
| Issuer Purchases of Equity Securities | ||||||||||||||||||||||||||
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(1) | ||||||||||||||||||||||
July 1 to July 31, 2025 | 989,196 | 19.31 | 989,196 | 26,693,910 | ||||||||||||||||||||||
August 1 to August 31, 2025 | 1,214,309 | 19.92 | 1,214,309 | 25,479,601 | ||||||||||||||||||||||
September 1 to September 30, 2025 | 910,343 | 23.54 | 910,343 | 24,569,258 | ||||||||||||||||||||||
| Total | 3,113,848 | $ | 20.78 | |||||||||||||||||||||||
ITEM 5. OTHER INFORMATION
During the quarter ended September 30, 2025, none of the Company’s officers or directors adopted terminated
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ITEM 6. EXHIBITS
| Incorporated by Reference | |||||||||||||||||
| EXHIBIT NO. | DESCRIPTION | Form | Exhibit | Filing Date | SEC File No. | ||||||||||||
| 2.1 | Agreement and Plan of Merger, dated as of January 3, 2024, by and among Registrant, Astro Comet Merger Sub Corp., and Callon Petroleum Company. | 8-K | 2.1 | 1/4/2024 | 001-40144 | ||||||||||||
| 3.1 | Amended and Restated Certificate of Incorporation of Registrant, dated March 1, 2021, as filed with the Secretary of State of the State of Delaware on March 1, 2021. | 8-K12B | 3.1 | 3/1/2021 | 001-40144 | ||||||||||||
| 3.2 | Certificate of Amendment of Amended and Restated Certificate of Incorporation of Registrant, dated May 24, 2023, as filed with the Secretary of State of the State of Delaware on May 24, 2023. | 8-K | 3.1 | 5/25/2023 | 001-40144 | ||||||||||||
| 3.3 | Amended and Restated Bylaws of Registrant, dated February 2, 2023. | 8-K | 3.1 | 2/8/2023 | 001-40144 | ||||||||||||
| 4.1 | Indenture, dated as of December 11, 2024, between Registrant and Regions Bank, as trustee. | POSASR | 4.9 | 12/12/2024 | 333-279038 | ||||||||||||
4.2 | Form of 6.10% Notes due 2035. | 8-K | 4.6 | 1/10/2025 | 001-40144 | ||||||||||||
4.3 | Form of 6.75% Notes due 2055. | 8-K | 4.7 | 1/10/2025 | 001-40144 | ||||||||||||
4.4 | Form of 7.70% Notes due 2026. | S-4 | 4.6 | 8/8/2025 | 333-289400 | ||||||||||||
4.5 | Form of 7.95% Notes due 2026. | S-4 | 4.7 | 8/8/2025 | 333-289400 | ||||||||||||
4.6 | Form of 4.875% Notes due 2027. | S-4 | 4.8 | 8/8/2025 | 333-289400 | ||||||||||||
4.7 | Form of 4.375% Notes due 2028. | S-4 | 4.9 | 8/8/2025 | 333-289400 | ||||||||||||
4.8 | Form of 7.75% Notes due December 15, 2029. | S-4 | 4.10 | 8/8/2025 | 333-289400 | ||||||||||||
4.9 | Form of 4.250% Notes due 2030. | S-4 | 4.11 | 8/8/2025 | 333-289400 | ||||||||||||
4.10 | Form of 6.000% Notes due 2037. | S-4 | 4.12 | 8/8/2025 | 333-289400 | ||||||||||||
4.11 | Form of 5.100% Notes due 2040. | S-4 | 4.13 | 8/8/2025 | 333-289400 | ||||||||||||
4.12 | Form of 5.250% Notes due 2042. | S-4 | 4.14 | 8/8/2025 | 333-289400 | ||||||||||||
4.13 | Form of 4.750% Notes due 2043. | S-4 | 4.15 | 8/8/2025 | 333-289400 | ||||||||||||
4.14 | Form of 4.250% Notes due 2044. | S-4 | 4.16 | 8/8/2025 | 333-289400 | ||||||||||||
4.15 | Form of 7.375% Debentures due 2047. | S-4 | 4.17 | 8/8/2025 | 333-289400 | ||||||||||||
4.16 | Form of 5.350% Notes due 2049. | S-4 | 4.18 | 8/8/2025 | 333-289400 | ||||||||||||
4.17 | Form of 7.625% Debentures due 2096. | S-4 | 4.19 | 8/8/2025 | 333-289400 | ||||||||||||
| *31.1 | Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act) by Principal Executive Officer. | ||||||||||||||||
| *31.2 | Certification (pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act) by Principal Financial Officer. | ||||||||||||||||
| **32.1 | Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Executive Officer and Principal Financial Officer. | ||||||||||||||||
| *101 | The following financial statements from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, formatted in Inline XBRL: (i) Statement of Consolidated Operations, (ii) Statement of Consolidated Comprehensive Income, (iii) Statement of Consolidated Cash Flows, (iv) Consolidated Balance Sheet, (v) Statement of Consolidated Changes in Equity and Noncontrolling Interests and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags. | ||||||||||||||||
| *101.SCH | Inline XBRL Taxonomy Schema Document. | ||||||||||||||||
| *101.CAL | Inline XBRL Calculation Linkbase Document. | ||||||||||||||||
| *101.DEF | Inline XBRL Definition Linkbase Document. | ||||||||||||||||
| *101.LAB | Inline XBRL Label Linkbase Document. | ||||||||||||||||
| *101.PRE | Inline XBRL Presentation Linkbase Document. | ||||||||||||||||
| *104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||||||||||||||||
* Filed herewith
** Furnished herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| APA CORPORATION | |||||||||||
| Dated: | November 6, 2025 | /s/ BEN C. RODGERS | |||||||||
Ben C. Rodgers | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
| (Principal Financial Officer) | |||||||||||
| Dated: | November 6, 2025 | /s/ REBECCA A. HOYT | |||||||||
| Rebecca A. Hoyt | |||||||||||
| Senior Vice President, Chief Accounting Officer, and Controller | |||||||||||
| (Principal Accounting Officer) | |||||||||||
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APA Corp (US)
NASDAQ:APA
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Nov 10, 2025
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APA Stock Data
8.45B
348.43M
0.46%
96.24%
11.65%
Oil & Gas E&P
Crude Petroleum & Natural Gas
United States
HOUSTON