APA will report results on Wednesday, August 2nd after the market close
We are modeling adj. EPS of $0.63, below consensus of $0.79. Please note that it published a pre-earnings supplement on July 10th with estimated price and hedge realizations, dry hole expense, G&A expense, gas marketing as well as the diluted share count. Notably, it expects oil production to exceed expectations while it did curtail gas production due to price realizations. Based upon this, we are projecting adj production (ex-Egyptian tax barrels) of 326 Mboe d versus guidance of 323-325 Mboe/d. Items to watch include: • Outlook: APA has guided to 2023 capex to $1.9-$2bn with expected adjusted production (ex-Egyptian tax barrels) of 330-334 Mboe/d. Please note that it did drop a floater in the North Sea at the end of June. With the respect to potential deflation, looking 2024 it is more likely to occur in the US than probably in Egypt where there are still labor pressures. • Egypt. There was some concern at 1Q results on APA’s ability to get cash out of the country after the currency devaluation. During the quarter, we believe it did receive payments from Egypt – and going forward, APA will likely exercise its option to export barrels and ‘in country’. Watch for a decline in working capital receivables this quarter. • Suriname. The industry does not test dry holes – and with the drillship still on location we look for positive qualitative guidance on Krabdagu progress and a path to future development. We continue to believe a development, similar in scale to Guyana, could be material to APA (~$8/sh or 20%) given that 75% of the capital is funded by TTE BofA Global Research
