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APA Q3 Earnings Beat on Strong Oil Prices and U.S. Output
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Key Takeaways
APA's Q3 adjusted EPS rose 108.6% to $1.94, topping the $1.44 consensus as revenues climbed 39.3%.
U.S. production rose 4.7% and crude realizations jumped 36.5%, offsetting weaker Egypt and North Sea output.
APA raised its 2026 free cash flow outlook by $600M to $2.9B and returned $537M to shareholders in Q3.
APA Corporation (APA - Free Report) reported third-quarter 2026 adjusted earnings of $1.94 per share, up 108.6% from 93 cents a year ago. The bottom line topped the Zacks Consensus Estimate of $1.44 by 34.72%, supported by stronger realized commodity prices and resilient U.S. production.
Revenues and other income climbed 39.3% year over year to $2.81 billion from $2.02 billion and exceeded the Zacks Consensus Estimate of $2.37 billion by 18.50%. U.S. oil output averaged 128,371 barrels per day, surpassing management's guidance amid high uptime and improved well performance.
Worldwide production averaged 450,276 barrels of oil equivalent per day (BOE/d), down 2.9% from 463,815 BOE/d a year ago. Adjusted production, which excludes Egypt's noncontrolling interest and tax barrels, was 380,568 BOE/d versus 386,992 BOE/d last year.
U.S. production increased 4.7% to 294,268 BOE/d. However, Egyptian output declined 12% to 133,610 BOE/d, while North Sea volumes fell 27.3% to 22,398 BOE/d. Higher prices reduced cost-recovery volumes under Egypt's production-sharing arrangements, while natural declines weighed on North Sea output.
APA Corp's Realized Prices Lift Production Revenue
Oil production revenues advanced to $1.93 billion from $1.47 billion in the prior-year period. Average realized crude prices increased 36.5% to $92.02 per barrel from $67.43, more than offsetting reduced oil volumes.
Natural gas revenues grew to $236 million from $192 million as average gas realizations improved to $2.87 per Mcf from $2.25. NGL revenues reached $190 million versus $142 million. Purchased oil and gas sales rose to $409 million from $311 million, primarily reflecting higher gas prices. Derivative instruments swung to a $30 million gain from a $97 million loss.
APA's Q3 Costs Climb as Expense Mix Shifts
Lease operating expenses rose 11.2% to $418 million from $376 million. APA attributed the increase to higher operating costs, workover activity and the timing of North Sea liftings. Overall expenses reported in the consolidated operating statement increased to $1.61 billion from $1.51 billion.
Exploration expenses more than doubled to $51 million from $22 million, largely due to higher dry-hole costs in Egypt. General and administrative expenses increased to $112 million from $95 million, reflecting stock-based compensation. In contrast, depreciation, depletion and amortization declined to $556 million from $565 million. APA reiterated its target of $500 million in annualized controllable cost savings by year-end 2026.
APA Corp's Cash Generation Fuels Capital Returns
The Zacks Rank #2 (Buy) company generated $1.38 billion of operating cash flow, compared with $1.46 billion a year earlier. Nevertheless, free cash flow increased to $699 million from $339 million, aided by stronger cash generation before working-capital changes and lower upstream capital investment of $466 million versus $542 million.
The company returned $537 million to shareholders, including $450 million in repurchases and $87 million in dividends. It also repaid $451 million in debt. At Sept. 30, cash totaled $75 million, long-term debt stood at $3.29 billion and net debt was $3.22 billion. Management expects to reach its earlier $3 billion net debt target by year-end and has established a new $2 billion goal.
APA's Revised 2026 Outlook Lifts Cash Flow
APA increased its full-year U.S. oil production guidance to 124,000 barrels daily from 123,000 barrels. Fourth-quarter upstream capital spending is projected at around $525 million as Permian activity accelerates and some GranMorgu outlays shift from the third quarter. Full-year upstream investment is now budgeted at about $2.1 billion.
The company raised its 2026 free cash flow forecast by $600 million to approximately $2.9 billion, reflecting stronger operations and commodity prices. APA expects its gas trading portfolio to contribute approximately $1.1 billion in pretax cash flow this year. It plans to return at least 60% of annual free cash flow to shareholders. Lease operating expense guidance increased $25 million to $1.53 billion, mainly because of stock-based compensation; abandonment spending guidance declined $15 million to $285 million.
APA Corp's 2027 Plan Advances Suriname Development
Preliminary upstream spending for 2027 is $2.5 billion, $400 million above 2026. About 60% of the increase is earmarked for exploration and GranMorgu development, with the balance supporting higher Permian activity and inflation. Management expects U.S. and Egyptian production to remain broadly stable year over year.
GranMorgu remains on schedule for first oil in mid-2028. Under its Suriname venture, APA retains a 40% working interest while funding just 10% of development capital through its carry arrangement. In 2027, the company plans two exploration wells in Suriname, an exploration and an appraisal well in Alaska, and drilling with Eni offshore Uruguay.
Important Earnings at a Glance
While we have discussed APA’s third-quarter results in detail, let us take a look at three other key reports in this space.
Cheniere Energy, Inc. (LNG - Free Report) reported third-quarter 2026 adjusted earnings of $3.62 per share, missing the Zacks Consensus Estimate of $4.20 by 13.81%.
Revenues totaled $6.17 billion, beating the Zacks Consensus Estimate of $5.38 billion by 14.85%. The top line increased 39% from the year-ago quarter's $4.44 billion. Stronger LNG pricing and sales volumes supported revenue growth, with the company exporting a record 188 LNG cargoes during the quarter.
As of Sept. 30, 2026, the company had cash and cash equivalents of $1.66 billion, compared with $1.10 billion at the end of 2025. Long-term debt amounted to $22.58 billion, while total available liquidity stood at approximately $8.08 billion.
Crescent Energy Company (CRGY - Free Report) reported third-quarter 2026 adjusted earnings of 77 cents per share, beating the Zacks Consensus Estimate of 59 cents by 30.5%. Earnings climbed 113.9% year over year, supported by higher oil realizations and increased production.
The Houston, TX-based producer's revenues of $1.35 billion rose 55.9% from $866.6 million a year earlier and topped the Zacks Consensus Estimate of $1.15 billion by 17.1%. Production averaged 328 thousand barrels of oil equivalent per day (MBoe/d), up from 253 MBoe/d.
The company ended September with approximately $2 billion of liquidity, $4.71 billion in net debt and consolidated net leverage of 1.5 times. The board declared a quarterly dividend of 12 cents per share, with $336 million remaining under the share-repurchase authorization.
Diamondback Energy, Inc. (FANG - Free Report) reported third-quarter 2026 adjusted earnings per share of $5.86, beating the Zacks Consensus Estimate of $4.92 by 19.1%. GAAP earnings increased 62.1% year over year to $5.69 per share from $3.51, supported by higher realized oil prices and increased production volumes.
The Midland, TX-based energy company's revenues of $5.43 billion surged 38.4% year over year and surpassed the Zacks Consensus Estimate of $4.30 billion by 26.5%. Total production averaged 1,033,967 barrels of oil equivalent per day (“BOE/d”), reflecting higher oil, natural gas and natural gas liquids output.
FANG generated $2.6 billion in net cash from operating activities and $3.2 billion in operating cash flow before working capital changes. Free cash flow totaled $2.15 billion, while adjusted free cash flow reached $2.15 billion. Consolidated adjusted EBITDA stood at $3.75 billion.
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APA Q3 Earnings Beat on Strong Oil Prices and U.S. Output
Key Takeaways
APA Corporation (APA - Free Report) reported third-quarter 2026 adjusted earnings of $1.94 per share, up 108.6% from 93 cents a year ago. The bottom line topped the Zacks Consensus Estimate of $1.44 by 34.72%, supported by stronger realized commodity prices and resilient U.S. production.
Revenues and other income climbed 39.3% year over year to $2.81 billion from $2.02 billion and exceeded the Zacks Consensus Estimate of $2.37 billion by 18.50%. U.S. oil output averaged 128,371 barrels per day, surpassing management's guidance amid high uptime and improved well performance.
APA Corporation Price, Consensus and EPS Surprise
APA Corporation price-consensus-eps-surprise-chart | APA Corporation Quote
APA's Q3 Production Reflects Regional Divergence
Worldwide production averaged 450,276 barrels of oil equivalent per day (BOE/d), down 2.9% from 463,815 BOE/d a year ago. Adjusted production, which excludes Egypt's noncontrolling interest and tax barrels, was 380,568 BOE/d versus 386,992 BOE/d last year.
U.S. production increased 4.7% to 294,268 BOE/d. However, Egyptian output declined 12% to 133,610 BOE/d, while North Sea volumes fell 27.3% to 22,398 BOE/d. Higher prices reduced cost-recovery volumes under Egypt's production-sharing arrangements, while natural declines weighed on North Sea output.
APA Corp's Realized Prices Lift Production Revenue
Oil production revenues advanced to $1.93 billion from $1.47 billion in the prior-year period. Average realized crude prices increased 36.5% to $92.02 per barrel from $67.43, more than offsetting reduced oil volumes.
Natural gas revenues grew to $236 million from $192 million as average gas realizations improved to $2.87 per Mcf from $2.25. NGL revenues reached $190 million versus $142 million. Purchased oil and gas sales rose to $409 million from $311 million, primarily reflecting higher gas prices. Derivative instruments swung to a $30 million gain from a $97 million loss.
APA's Q3 Costs Climb as Expense Mix Shifts
Lease operating expenses rose 11.2% to $418 million from $376 million. APA attributed the increase to higher operating costs, workover activity and the timing of North Sea liftings. Overall expenses reported in the consolidated operating statement increased to $1.61 billion from $1.51 billion.
Exploration expenses more than doubled to $51 million from $22 million, largely due to higher dry-hole costs in Egypt. General and administrative expenses increased to $112 million from $95 million, reflecting stock-based compensation. In contrast, depreciation, depletion and amortization declined to $556 million from $565 million. APA reiterated its target of $500 million in annualized controllable cost savings by year-end 2026.
APA Corp's Cash Generation Fuels Capital Returns
The Zacks Rank #2 (Buy) company generated $1.38 billion of operating cash flow, compared with $1.46 billion a year earlier. Nevertheless, free cash flow increased to $699 million from $339 million, aided by stronger cash generation before working-capital changes and lower upstream capital investment of $466 million versus $542 million.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company returned $537 million to shareholders, including $450 million in repurchases and $87 million in dividends. It also repaid $451 million in debt. At Sept. 30, cash totaled $75 million, long-term debt stood at $3.29 billion and net debt was $3.22 billion. Management expects to reach its earlier $3 billion net debt target by year-end and has established a new $2 billion goal.
APA's Revised 2026 Outlook Lifts Cash Flow
APA increased its full-year U.S. oil production guidance to 124,000 barrels daily from 123,000 barrels. Fourth-quarter upstream capital spending is projected at around $525 million as Permian activity accelerates and some GranMorgu outlays shift from the third quarter. Full-year upstream investment is now budgeted at about $2.1 billion.
The company raised its 2026 free cash flow forecast by $600 million to approximately $2.9 billion, reflecting stronger operations and commodity prices. APA expects its gas trading portfolio to contribute approximately $1.1 billion in pretax cash flow this year. It plans to return at least 60% of annual free cash flow to shareholders. Lease operating expense guidance increased $25 million to $1.53 billion, mainly because of stock-based compensation; abandonment spending guidance declined $15 million to $285 million.
APA Corp's 2027 Plan Advances Suriname Development
Preliminary upstream spending for 2027 is $2.5 billion, $400 million above 2026. About 60% of the increase is earmarked for exploration and GranMorgu development, with the balance supporting higher Permian activity and inflation. Management expects U.S. and Egyptian production to remain broadly stable year over year.
GranMorgu remains on schedule for first oil in mid-2028. Under its Suriname venture, APA retains a 40% working interest while funding just 10% of development capital through its carry arrangement. In 2027, the company plans two exploration wells in Suriname, an exploration and an appraisal well in Alaska, and drilling with Eni offshore Uruguay.
Important Earnings at a Glance
While we have discussed APA’s third-quarter results in detail, let us take a look at three other key reports in this space.
Cheniere Energy, Inc. (LNG - Free Report) reported third-quarter 2026 adjusted earnings of $3.62 per share, missing the Zacks Consensus Estimate of $4.20 by 13.81%.
Revenues totaled $6.17 billion, beating the Zacks Consensus Estimate of $5.38 billion by 14.85%. The top line increased 39% from the year-ago quarter's $4.44 billion. Stronger LNG pricing and sales volumes supported revenue growth, with the company exporting a record 188 LNG cargoes during the quarter.
As of Sept. 30, 2026, the company had cash and cash equivalents of $1.66 billion, compared with $1.10 billion at the end of 2025. Long-term debt amounted to $22.58 billion, while total available liquidity stood at approximately $8.08 billion.
Crescent Energy Company (CRGY - Free Report) reported third-quarter 2026 adjusted earnings of 77 cents per share, beating the Zacks Consensus Estimate of 59 cents by 30.5%. Earnings climbed 113.9% year over year, supported by higher oil realizations and increased production.
The Houston, TX-based producer's revenues of $1.35 billion rose 55.9% from $866.6 million a year earlier and topped the Zacks Consensus Estimate of $1.15 billion by 17.1%. Production averaged 328 thousand barrels of oil equivalent per day (MBoe/d), up from 253 MBoe/d.
The company ended September with approximately $2 billion of liquidity, $4.71 billion in net debt and consolidated net leverage of 1.5 times. The board declared a quarterly dividend of 12 cents per share, with $336 million remaining under the share-repurchase authorization.
Diamondback Energy, Inc. (FANG - Free Report) reported third-quarter 2026 adjusted earnings per share of $5.86, beating the Zacks Consensus Estimate of $4.92 by 19.1%. GAAP earnings increased 62.1% year over year to $5.69 per share from $3.51, supported by higher realized oil prices and increased production volumes.
The Midland, TX-based energy company's revenues of $5.43 billion surged 38.4% year over year and surpassed the Zacks Consensus Estimate of $4.30 billion by 26.5%. Total production averaged 1,033,967 barrels of oil equivalent per day (“BOE/d”), reflecting higher oil, natural gas and natural gas liquids output.
FANG generated $2.6 billion in net cash from operating activities and $3.2 billion in operating cash flow before working capital changes. Free cash flow totaled $2.15 billion, while adjusted free cash flow reached $2.15 billion. Consolidated adjusted EBITDA stood at $3.75 billion.