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APA Q1 Earnings and Revenues Beat Estimates, Increase Y/Y

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U.S. energy explorer  APA Corporation  (APA - Free Report) reported first-quarter 2021 earnings per share — excluding one-time items — of 91 cents, beating the Zacks Consensus Estimate of 74 cents. However, the year-earlier quarter reported a loss of 13 cents per share. The outperformance reflects better-than-expected production and tightening of costs. Precisely, the average daily U.S. output came in at 210,091 barrels of oil-equivalent per day (BOE/d), beating the Zacks Consensus Estimate of 208,000 BOE/d.

Revenues of $1.87 billion outpaced the Zacks Consensus Estimate of $1.53 billion million and also rose 46.1% from the year-ago quarter’s sales of $1.28 billion.

Production & Selling Prices

Production of oil and natural gas averaged 382,401 BOE/d, which comprises 64% liquids. The figure dropped 18% from the year-ago quarter.

The U.S. output (accounting for 55% of the total) fell 26% year over year to 210,091 BOE/d while production from the company’s international operations decreased 7% to 172,310 BOE/d. APA’s oil and natural gas liquids (NGLs) production was 243,150 barrels per day (Bbl/d). Natural gas output totaled 835,506 thousand cubic feet per day (Mcf/d).

The average realized crude oil price during the first quarter was $59.62 per barrel, up 23.4% from the year-ago realization of $48.31. However, the number fell short of the Zacks Consensus Estimate of $60. Meanwhile, the average realized natural gas price increased to $4.14 per thousand cubic feet (Mcf) from $1.47 in the year-ago period and also topped the Zacks Consensus Estimate of $4.11.

Costs & Financial Position

APA’s first-quarter lease operating expenses totaled $264 million, down 21.2% from the year-ago period. Moreover, total operating expenses plunged 74.8% from the corresponding period of 2020 to $1.47 billion. Apart from a significant drop in lease operating expenses, the improvement came on the back of lower depreciation and amortization expenses and the absence of the year-ago quarter’s impairment charges.

During the quarter under review, APA generated $671 million of cash from operating activities. On the flip side, it spent $243 million on upstream capital expenditures. The company reported an adjusted operating cash flow of $846 million in the first quarter.

As of Mar 31, APA had approximately $538 million worth cash and cash equivalents, and $8.05 billion of long-term debt.

APA Corporation Price, Consensus and EPS Surprise

APA Corporation Price, Consensus and EPS Surprise

APA Corporation price-consensus-eps-surprise-chart | APA Corporation Quote


Looking forward, the company reiterates its 2021 outlook and expects to generate at least $1 billion as free cash flow this year, majority of which will be used to pay down its net debt.

For the second quarter of 2021, APA projects production of oil and natural gas at 340,000 BOE/d.

Zacks Rank & Other Key Picks

APA currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked players in the  energy  space include Whiting Petroleum Corporation (WLL - Free Report) , Matador Resources Company (MTDR - Free Report) and Continental Resources, Inc. (CLR - Free Report) , each presently flaunting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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