APA Corporation: PO $47 Unhedged rate of change in free cash flow from Egypt and continued balance sheet recovery: 23% free cash yield, and commitment to return 60% of fcf to shareholders. Suriname is a free option that can be a step change catalyst for the share price in 2022. PSC modernization in Egypt expands what is already one of the highest free cash yields in the sector. APA is committed to return 60% of free cash to investors, equivalent to over 20% of its mkt cap at current strip prices. By our estimates fair value excluding any value for ongoing exploration in Suriname is reasonably ~$35, implying 30% upside from current levels with Suriname a ‘free option’ at current levels. Critically, a capital structure 40% debt / 60% equity amplifies equity beta but ignores a long-dated maturity profile, providing management with significant fire-power to exploit the value gap. BofA Global Research