APA Corporation (APA), an independent energy company, 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 ma...
APA Corporation (APA), an independent energy company, 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.
Business Strategy
APA maintains a diversified asset portfolio, including conventional and unconventional, onshore and offshore, oil and natural gas exploration and production interests. In the U.S., operations are primarily focused in the Permian Basin of West Texas. Internationally, the company has conventional onshore assets in Egypt’s Western Desert, as well as offshore assets on the U.K.’s Continental Shelf.
The company wants to be a part of the solution as society works to meet global demand for reliable and affordable energy.
The company remains committed to invest for long-term returns, in pursuit of moderate, sustainable production growth. APA’s diversified portfolio provides the company the ability to timely respond to near-term price volatility and effectively manage its investment programs.
Exploration and Production
Operating Areas
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. APA also has active development, exploration, and appraisal operations in Suriname, as well as exploration interests in Uruguay and other international locations that may, over time, result in reportable discoveries and development opportunities.
The United States
In 2024, the company’s U.S. oil and gas operations contributed approximately 62 percent of production, 53 percent of oil and gas revenues, and 72 percent of estimated year-end proved reserves. APA has access to significant liquid hydrocarbons across its 2.7 million gross acres (1.4 million net acres) in the U.S., 77 percent of which are undeveloped.
The company’s U.S. producing assets are primarily located in the Permian Basin in West Texas, including the Midland and Delaware sub-basins. Examples of shale plays being developed within these sub-basins include the Woodford, Barnett, Pennsylvanian, Cline, Wolfcamp, Bone Spring, and Spraberry. The company operates approximately 4,300 gross oil and gas wells across its acreage, with additional interests in approximately 800 non-operated wells. APA also has legacy operations located offshore in the Gulf of America.
Highlights of the company’s operations in the U.S. include:
Southern Midland Basin
APA holds approximately 386,000 gross acres (275,000 net acres) in the Southern Midland Basin in Texas. During 2024, the company primarily targeted oil plays in the Wolfcamp and Spraberry formations.
Delaware Basin
APA holds approximately 282,000 gross acres (203,000 net acres) in the Delaware Basin, including opportunities in the Bone Spring and other formations of eastern New Mexico and bordering West Texas, and the Alpine High play in the southern portion of the Permian Basin, primarily in Reeves County, Texas.
Legacy Assets
APA holds approximately 1.7 million gross acres (0.7 million net acres) in legacy properties, of which approximately 561,000 gross acres are in the offshore waters of the Gulf of America. During 2024, the company divested certain non-core producing properties located in the Central Basin Platform, Texas and New Mexico Shelf, and Northwest Shelf. The company also divested certain non-core mineral and royalty interests in the Permian Basin during 2024. Consistent with the company’s broader portfolio management efforts, certain non-strategic leasehold positions on its legacy acreage holdings provide additional monetization opportunities that continue to be evaluated.
New Venture Assets
APA holds approximately 325,000 gross acres (163,000 net acres) of undeveloped acreage on the North Slope of Alaska. During 2024, the company completed a three-well exploration program in Alaska, confirming a working petroleum system on the company’s acreage. The company holds a 50 percent ownership interest in the project.
The U.S. Marketing
The company sells its U.S. natural gas production at liquid index sales points within the U.S., at either monthly or daily index-based prices. The tenor of the company’s sales contracts spans from daily to multi-year transactions. Natural gas is sold to a variety of customers that include local distribution, utility, and midstream companies, as well as end-users, marketers, and integrated major oil companies.
APA primarily markets its U.S. crude oil production to integrated major oil companies, marketing and transportation companies, and refiners based on West Texas Intermediate (WTI) pricing indices (e.g., WTI Houston, West Texas Sour (WTS), WTI Midland, or West Texas Light (WTL) Midland), and some predominately Brent-related international pricing indices, adjusted for quality, transportation, and a market-reflective differential. The company will enter into physical term sales contracts. These term contracts typically have a firm transportation commitment.
APA’s U.S. NGL production is sold under contracts with prices based on Gulf Coast supply and demand conditions, less the costs for transportation and fractionation, or on a weighted-average sales price received by the purchaser.
The U.S. Delivery Commitments
The company has long-term delivery commitments for natural gas and crude oil that require APA to deliver an average of 161 Bcf of natural gas per year for the period from 2025 through 2029, an average of 49 Bcf of natural gas per year for the period from 2030 through 2037, 4.2 MMbbls of crude oil in 2025, and an average of 1.8 MMbbls of crude oil per year for the period from 2026 through 2029, in each case, at variable, domestic and/or international, market-based pricing.
APA expects to fulfill its delivery commitments primarily with production from its proved reserves and from continued development. In addition, to satisfy certain delivery commitments, the company purchases third-party natural gas and crude oil to sell and deliver under existing pipeline agreements and sales contracts. APA may also enter into contractual arrangements to reduce its delivery commitments.
International
APA has two international locations with ongoing production operations:
Egypt, which includes onshore conventional assets located in Egypt’s Western Desert; and
The North Sea, which includes offshore assets based in the U.K.
Egypt
APA has decades of exploration, development, and operations experience in Egypt and is the largest acreage holder in Egypt’s Western Desert. At year-end 2024, the company held 5.3 million gross acres in six separate concessions. The company’s acreage is primarily held under one merged concession agreement (MCA) that resulted from the ratification of an MCA in 2021 with the Government of Egypt and EGPC. The MCA consolidated 98 percent of gross acreage and 90 percent of gross production under one concession agreement and refreshed the existing development lease terms for 20 years and exploration leases for 5 years. Approximately 67 percent of the company’s gross acreage in Egypt is undeveloped, providing APA with considerable exploration and development opportunities for the future.
APA’s Egypt operations are conducted pursuant to production-sharing contracts (PSCs). Under the terms of the company’s PSCs, the company is the contractor partner (Contractor) with EGPC and bears the risk and cost of exploration, development, and production activities.
The APA subsidiary that is the sole Contractor under the MCA is owned by an APA-operated joint venture owned two-thirds by the company and one-third by Sinopec International Petroleum Exploration and Production Corporation (Sinopec).
The company’s estimated proved reserves in Egypt are reported under the economic interest method and exclude the host country’s share of reserves. Through the joint venture, Sinopec holds a one-third minority participation interest in the company’s oil and gas operations in Egypt.
A key component of the company’s success has been the ability to acquire and evaluate 3-D seismic surveys that enable the company’s technical teams to consistently high-grade existing prospects and identify new targets across multiple pay horizons in the Cretaceous, Jurassic, and deeper Paleozoic formations. The company has completed seismic surveys covering three million acres, which has led to recent discoveries that build and enhance the company’s drilling inventory in Egypt.
North Sea
The company has interests in approximately 176,000 gross acres in the U.K. North Sea. These assets contributed 8 percent of the company’s 2024 production and approximately 3 percent of year-end 2024 estimated proved reserves.
The company entered the North Sea in 2003 after acquiring an approximate 97 percent working interest in the Forties field (Forties). In 2011, the company acquired Mobil North Sea Limited, which included operated interests in the Beryl, Ness, Nevis, Nevis South, Skene, and Buckland fields, and a non-operated interest in the Maclure field. The company also has a non-operated interest in the Nelson field acquired in 2011. During the second quarter of 2023, the company suspended all new drilling activity in the North Sea. During the third quarter of 2024, the company continued its 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’s investment program in the North Sea is now directed toward asset safety and integrity.
International Marketing
The company’s natural gas production in Egypt is sold to EGPC primarily under an industry-pricing formula, a sliding scale based on Dated Brent crude oil. In the fourth quarter 2024, the company entered into a new gas sales agreement, which could result in improved pricing if certain production thresholds are met. The new gas sales agreement, which is effective beginning January 2025, creates the potential for significant new drilling inventory with returns on par with oil. Crude oil production is sold to third parties in the export market or to EGPC when called upon to supply domestic demand. Oil production sold to third parties is sold and exported from one of two terminals on the northern coast of Egypt. Oil production sold to EGPC is sold at prices related to the export market.
The company’s North Sea crude oil production is sold under term, entitlement volume contracts, and spot variable volume contracts with a market-based index price plus a differential to capture the higher market value under each type of arrangement. Natural gas from the Beryl field is processed through the Scottish Area Gas Evacuation (SAGE) gas plant, operated by Ancala Midstream Acquisitions Limited. Natural gas is sold to a third party at the St. Fergus entry point of the national grid on a National Balancing Point index price basis. The condensate mix from the SAGE plant is processed further downstream. The split streams of propane, butane, and condensate are sold separately on a monthly entitlement basis at the Braefoot Bay terminal using index pricing less transportation.
Other International
New Ventures
APA’s international New Ventures acreage provides exposure to new growth opportunities outside of the company’s traditional core areas and provides higher-risk, higher-reward exploration opportunities located in frontier basins, as well as new plays in more mature basins.
The company has a joint venture agreement with TotalEnergies (formerly Total S.A.) to explore and develop Block 58 offshore Suriname. The company holds a 50 percent working interest in exploration activities in Block 58, which comprises approximately 1.4 million gross acres in water depths ranging from less than 100 meters to more than 2,100 meters. TotalEnergies holds a 50 percent working interest in exploration activities in Block 58 as the operator.
In October 2024, the company announced that its subsidiary reached a positive final investment decision for the first oil development, named GranMorgu, in Block 58 offshore Suriname. This development will include production from the Krabdagu and Sapakara oil discoveries. These fields, located in water depths between 100 and 1,000 meters, will be produced through a system of subsea wells connected to a floating production, storage, and offloading (FPSO) unit located 150 km off the Suriname coast, with an oil production capacity of 220,000 b/d. The GranMorgu FPSO unit is designed to accommodate future tie-back opportunities that would extend its four-year production plateau and will feature technology that minimizes greenhouse gas emissions.
The company is also the operator of Block 53 offshore Suriname and holds a 45 percent working interest in the block. The company, through an extension granted in 2023, holds approximately 13,000 net undeveloped acres for its operated Baja discovery area. Evaluation of the area is ongoing.
During 2023, the company signed a production sharing contract for Block 6 offshore Uruguay covering approximately four million undeveloped acres, where it has an obligation to drill one exploration well. In February 2024, the company also signed a production sharing contract for Block 4 offshore Uruguay, covering approximately 1.2 million net undeveloped acres. The company holds a 50 percent working interest in the project and is the operator.
The company suspended exploration activities in its acreage offshore the Dominican Republic in 2023 and relinquished its net acreage holdings, completing its withdrawal in 2024. The company continues to assess, contract, and potentially explore undeveloped acreage positions in other international locations.
Gross and Net Undeveloped and Developed Acreage
As of December 31, 2024, the company held approximately 17,000 net undeveloped acres that are scheduled to expire by year-end 2025 if production is not established or the company takes no action to extend the terms. Nearly all of the company’s acreage expiring in 2025 is in the Delaware Basin. The company also held approximately 6,000 and 1,000 net undeveloped acres on its U.S. onshore acreage set to expire by year-end 2026 and 2027, respectively. As of December 31, 2024, approximately 80 percent of the U.S. net undeveloped acreage was held by production or owned as undeveloped mineral rights.
Exploration concessions covering the company’s Egyptian acreage were extended in 2021 upon ratification of the MCA with EGPC, and no acreage is scheduled to expire before 2026. The company will continue to pursue acreage extensions and access to new concessions in areas in which exploration opportunities exist. The company strives to extend the terms of many of these licenses and concession areas through operational or administrative actions but cannot assure that such extensions can be achieved on an economic basis or otherwise on terms agreeable to both the company and third parties, including governments.
The company held approximately six million net undeveloped acres as of December 31, 2024, in other international locations separate from positions held in its established U.K. and Egypt locations. Exploration interests include Block 53 and Block 58 offshore Suriname, and Block 4 and Block 6 offshore Uruguay. The company continues to actively evaluate and analyse several discoveries on its Block 58 offshore Suriname exploration acreage with its operator partner, TotalEnergies. Approximately 720,000 net undeveloped acres in Block 58 have an expiration date of June 2031, with an option to extend further.
During 2024, the company relinquished its net acreage holdings offshore the Dominican Republic and completed its withdrawal from the country. The company continues to assess, contract, and potentially explore undeveloped acreage positions in other international locations.
Altus Midstream
On February 22, 2022, Altus Midstream Company (ALTM) closed a transaction to combine with privately owned BCP Raptor Holdco LP in an all-stock transaction, creating an integrated midstream company in the Texas Delaware Basin offering services for residue gas, NGLs, crude oil, and water. Upon closing the transaction, the combined entity was renamed Kinetik Holdings Inc. (Kinetik). Subsequent to the transaction, a subsidiary of APA owned approximately 20 percent of the issued and outstanding shares of Kinetik common stock.
In March 2022, the company sold four million of its Kinetik shares. In December 2023, the company sold an additional 7.5 million of its Kinetik shares. In March 2024, the company sold its remaining Kinetik shares.
Major Customers
During 2024, sales to EGPC accounted for approximately 17 percent of the company’s worldwide crude oil, natural gas, and NGLs revenues.
Community Partnerships
In 2024, the company continued its partnership with the Clean Cooking Alliance (CCA) on a venture accelerator program in Sub-Saharan Africa. APA also provides employees with volunteer service opportunities in collaboration with its Community Partnerships program.
History
APA Corporation, a Delaware corporation, was founded in 1954. The company was incorporated in 1954.
