APA efficiencies lead to lift in Permian production forecast
The leaders of APA Corp., Houston, have nudged up their 2026 forecast for oil production from the company’s US assets but kept their capital spending target level.
APA’s production in the Permian basin, Egypt, and the North Sea totaled 410,000 boe/d during the second quarter, which was down from about 465,000 boe/d in the same period of last year as natural gas and international volumes, including by the company’s noncontrolling partner in Egypt, fell. Oil production in the Permian basin, where APA controls 159,000 net acres in the Delaware basin and 287,000 net acres in the Midland basin, was flat year over year at nearly 123,500, beating by 2% the estimates of chief executive officer John Christmann and his team.
Speaking to analysts and investors on Aug. 6, Christmann said that APA’s drilling, completions, and field operations teams are growing more efficient and improving reliability. That, he added, is keeping the company on track for its target of saving $3.5 million per month in its operations by yearend.
It also is letting APA executives tick up their US oil production outlook to 123,000 b/d from 122,000, echoing a similar move from 3 months ago. Projected US capex for the year is still $1.3 billion.
“We’ve worked on adding durability and inventory life to the Permian, where we can run flat for more than 10 years,” Christmann said. “We’re obviously exceeding that with volumes and capital efficiency that we continue to have come through.”
The APA team plans to keep production in the Permian basin and Egypt relatively flat as it prepares for first oil in 2028 from the GranMorgu project offshore Suriname, in which it is a 40% partner along with TotalEnergies (40%) and Staatsolie (20%). APA is putting to work $230 million in capital there this year, with some development drilling scheduled to start during the fourth quarter.
Net production from GranMorgu, which is estimated to hold more than 750 million bbl, is expected to approach 40,000 b/d by 2029. With an average Brent price of $60/bbl, Christmann and his team estimate free cash flows from the project to be about $400 million that year. And that’ll mark the beginning of a ramp.
“We will be back in there with Total [TotalEnergies] next year exploring,” Christmann told analysts. “And we’re looking to either add to the plateau for GranMorgu or potentially more infrastructure.”
APA produced a net profit (excluding noncontrolling interest) of $747 million on revenues of $2.4 billion during the second quarter. A year earlier, those numbers $603 million and $2.6 billion, respectively. Across its operations, the company’s average realized sale price per barrel jumped to more than $98 from about $79 in the first quarter and $65 in second quarter of 2025.
Shares of APA (Ticker: APA) popped 5% on the company’s second-quarter results and executives’ commentary. Since then, they have added to those gains and were changing hands around $39.70 in midday trading Aug. 13. They have climbed 40% over the past 6 months, which has pushed the company’s market capitalization to about $14 billion.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.