Slides
Page 1
Financial and Operational Supplement November 5, 2025 Third-Quarter 2025
Page 2
APA CORPORAT ION Notice to Investors 2 Forward-looking Statements: Certain statements in this earnings supplement contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, expectations, beliefs, plans, and objectives regarding anticipated financial and operating results, cost reductions, rig counts, asset divestitures, estimated reserves, drilling locations, inventory life, capital expenditures, asset retirement and decommissioning obligations and spending, price estimates, tax savings, first oil in Suriname, typical well results and well profiles, type curve, and production and operating expense guidance included in this earnings supplement. Any matters that are not historical facts are forward looking and, accordingly, involve estimates, assumptions, risks, and uncertainties, including, without limitation, risks, uncertainties, and other factors discussed in our most recently filed Annual Report on Form 10-K, recently filed Quarterly Reports on Form 10-Q, and recently filed Current Reports on Form 8-K, available on our website at www.apacorp.com, and in our other public filings and press releases. These forward-looking statements are based on APA Corporation’s (APA) current expectations, estimates, and projections about the company, its industry, management’s beliefs, and certain assumptions made by management. No assurance can be given that such expectations, estimates, or projections will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results, or other expectations expressed in this earnings supplement, including the company’s ability to meet its production targets, successfully manage its capital expenditures, complete, test, and produce the wells and prospects identified in this earnings supplement, successfully plan, secure necessary government approvals for, finance, build, operate, and maintain the necessary infrastructure, achieve its production and budget expectations on its projects, and achieve its cost reduction goals, including for both run-rate and realized savings. Such factors also include commodity price volatility, regulatory and tax changes, trade policies, sanctions, and geopolitical risks. Whenever possible, these “forward-looking statements” are identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “continues,” “could,” “estimates,” “expects,” “goals,” “guidance,” “may,” “might,” “outlook,” “possible,” “potential,” “projects,” “prospects,” “should,” “would,” “will,” and similar phrases, but the absence of these words does not mean that a statement is not forward-looking. Because such statements involve risks and uncertainties, the company’s actual results and performance may differ materially from the results expressed or implied by such forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Unless legally required, we assume no duty to update these statements as of any future date. However, you should review carefully reports and documents that the company files periodically with the United States Securities and Exchange Commission (SEC). Cautionary Note to Investors: The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SEC’s definitions for such terms. We may use certain terms in this earnings supplement, such as “resource,” “resource potential,” “net resource potential,” “potential resource,” “resource base,” “identified resources,” “potential net recoverable,” “potential reserves,” “unbooked resources,” “economic resources,” “net resources,” “undeveloped resource,” “net risked resources,” “inventory,” “upside,” and other similar terms that the SEC guidelines strictly prohibit us from including in filings with the SEC. Such terms do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality, and other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in APA’s most recently filed Annual Report on Form 10-K, available at apacorp.com or by writing to: 2000 W. Sam Houston Pkwy. S., Suite 200, Houston, Texas 77042 (Attn: Corporate Secretary). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC’s website at www.sec.gov. Non-GAAP Measures: Certain information may be provided in this earnings supplement that includes financial measurements that are not required by, or presented in accordance with, generally accepted accounting principles (GAAP). These non-GAAP measures should not be considered as alternatives to GAAP measures, such as net income, total debt, or net cash provided by operating activities, and may be calculated differently from, and therefore may not be comparable to, similarly titled measures used at other companies. For a reconciliation to the most directly comparable GAAP financial measures, please refer to APA’s third-quarter 2025 earnings release at apacorp.com and “Non-GAAP Reconciliations” of this earnings supplement. Unaudited Information: None of the information contained in this document has been audited by any independent auditor. This earnings supplement is prepared as a convenience for securities analysts and investors and may be useful as a reference tool. We may elect to modify the format or discontinue publication at any time, without notice to securities analysts or investors. About APA: APA owns consolidated subsidiaries that explore for and produce oil and natural gas in the United States, Egypt, and the United Kingdom and that explore for oil and natural gas offshore Suriname and elsewhere. APA posts announcements, operational updates, investor information and press releases on its website at apacorp.com.
Page 3
APA CORPORAT ION Defined Capital Allocation Strategy with Improving Balance Sheet ⎻ Return at least 60% of free cash flow to investors through base dividend and share repurchases ⎻ Continue to strengthen balance sheet and debt rating metrics ⎻ Initiated long-term net debt target of $3.0 billion ⎻ Strong liquidity and advantageous long-dated debt maturity profile Differentiated Exploration Upside as Demonstrated by Suriname Success ⎻ Announced FID on Block 58 Suriname; significant FCF growth upside starting in 2028 ⎻ Balanced exploration portfolio across basin maturity and risk profile, from step-out focus in the Permian & Egypt to play-opening opportunities in Uruguay & Alaska ⎻ Pursuing scalable and impactful opportunities with attractive cost of supply Building a Sustainable Base, Anchored by Permian and Egypt ⎻ Permian Basin ~75% of total adjusted production ⎻ Transformed Permian into large-scale, focused unconventional position ⎻ Egypt oil (2021) & gas (2024) terms renegotiated, improving economics and increasing duration ⎻ Egypt gas at parity with mid-cycle Brent price economics; significant potential for long-term success Permian and Egypt Durability with Visible Growth 3
Page 4
APA CORPORAT ION 2025 2026 2027 $350 Million YE25 Run-Rate Note: Controllable Spend excludes items such as: GPT, interest expense, cash taxes, TRS, Incentive and Stock Compensation, and Suriname + Exploration Capital. (1) Items may not reconcile with changes to guidance due to timing of capital spend and stock-linked compensation. 4 Additional Upside $400 - $450 Million YE26 Run-Rate YTD 2025 Controllable Spend Progress ($ in millions) Feb-2025 Initiation Nov-2025 Update FY25 Realized Savings $60 $300 YE25 Run-Rate Savings $100 - $125 $350 ($ in millions) Feb-2025 Nov-2025 DC&F Capex $20 $230 Lease Operating Expense $20 ($10) General & Administrative Expense $20 $80 Total $60 $300 Breakdown of FY25 Realized Savings(1) – Raising YE25 realized savings target to $300 million – Expect to achieve $350 million in run-rate savings by YE25, two years sooner than initially anticipated – Increasing expected savings targets in 2026+ Continued Acceleration of Controllable Spend Initiatives
Page 5
APA CORPORAT ION 4Q20 2Q24 2Q25 3Q25 Long-Term Target Robust and Balanced Capital Returns Approach Exiting Covid ~$8.5 Bn ~$4.0 Bn $3.0 Bn Net Debt Reduction Progress Balanced Capital Returns Approach Since YE20 Net Debt Reduction ~$4.5 Billion Share Repurchases ~$3.1 Billion Base Dividends ~$1.2 Billion 5 After Callon Close ~$6.6 Bn – Remain committed to return 60% of free cash flow to shareholders through base dividends and share repurchases – Up to 40% of free cash flow reserved for net debt reduction – $3.0 billion long-term net debt target initiated in August-2025 – Firm commitment to balance sheet conservatism and investment grade metrics – Reduces net financing costs; YTD 2025 savings of ~$75MM(1) – Reduces volatility and stabilizes discount rate – Offers optionality to capitalize on strategic opportunities Capital Allocation Structure Rationale for Further Deleveraging (1) Financing costs, net (excludes gain on extinguishment of debt) ~$4.4 Bn
Page 6
APA CORPORAT ION APA has structurally reshaped its cost structure and operating capabilities in 2025 leading to sustainable free cash flow generation and value accretion over time Resilient Free Cash Flow Generation Changes in FY25 Consensus Free Cash Flow Estimates (2) (Mar-2025 to Oct-2025) 1% 0% (3%) (9%) (15%) (17%) (22%) (31%) Feb-2025 Nov-2025 % Delta 2025 WTI Strip ($/Bbl) $72 $65 (10%) 2025 Waha Strip ($/Mcf) $1.83 $0.99 (46%) 2025 Henry Hub Strip ($/Mcf) $4.30 $3.48 (19%) Preserving Free Cash Flow Despite Lower Commodity Prices $ in millions unless otherwise stated Feb-2025(1) Nov-2025 (Current) % Delta DC&F Capital (1) $2,250 $2,000 (11%) G&A Expense $415 $350 (16%) LOE (1) $1,535 $1,535 0% U.S. / U.K. Current Income Tax $375 $140 (63%) Egypt Gas Price ($/Mcf) $3.31 $3.60 9% 3rd Party Marketing $600 $630 5% FY25 Outlook FY25 Guidance 6 (1) February guidance excludes 2H25 contribution from the New Mexico divestiture that closed in June. (2) Source: FactSet. Percent change in FY25 consensus cash flow from operations less capex from 3/1/2025 to 10/20/2025. APA adjusted per its definition of free cash flow. Peers include: CHRD, CTRA, DVN, FANG, MTDR, OVV, PR.
Page 7
APA CORPORAT ION 7 Recent Highlights and Asset Overview
Page 8
APA CORPORAT ION 8 3Q 2025 Global Portfolio Global 463,815 BOE/D Reported Production 58 Gross, 57 Net Drilled & Completed Wells 51% / 16% / 33% Oil / NGL / Gas 18 Average Rigs $178 Million Net Gain on Third-Party Oil & Gas Trading Activities(1) Corporate ⎻ Further accelerated controllable spend targets on continued improvement to capital and overhead cost structures ⎻ Reduced net debt by $431 million while returning $154 million to shareholders through dividends & buybacks Permian ⎻ Consistent execution delivered oil production above guidance ⎻ Sustained momentum on well cost reductions ⎻ Lowered rig count to 5 while maintaining 2025 TIL pace ⎻ Raising 4Q production outlook on strong operational execution Egypt ⎻ In July, secured presidential approval for the direct award of ~2 million acres, increasing Egypt footprint by >35% ⎻ Strong well productivity and infrastructure optimization delivered gas volumes ahead of guidance ⎻ Raising 4Q outlook for gas production and price realizations North Sea ⎻ Continued operational outperformance in the North Sea led to another quarter with higher production and lower costs Highlights 281,145 BOE/D Reported Production United States 6 Average Rigs (Permian) 42 Gross, 42 Net Drilled & Completed Wells 43% / 26% / 31% Oil / NGL / Gas 182,670 BOE/D Reported Production International 12 Average Rigs (Egypt) 16 Gross, 15 Net Drilled & Completed Wells 62% / 1% / 37% Oil / NGL / Gas Recent Highlights (1) Includes third-party net gain on oil and gas purchases and sales and realized gain / loss on commodity derivatives.
Page 9
APA CORPORAT ION – Significantly high-graded acreage position over the past five years – Improved operational efficiency and revised development strategy has extended inventory life well into the 2030s – Leveraging acreage trades to bolster position and extend inventory duration Delaware Basin 168,000 Net Acres Midland Basin 284,000 Net Acres 9 Permian Unconventional Footprint
Page 10
APA CORPORAT ION 396 462 350 245 439 486 125 124 121 123 120 119 40 50 60 70 80 90 100 110 120 130 0 100 200 300 400 500 600 700 800 1Q25 2Q25 3Q25 4Q25E New Mexico Capital ($MM) Permian Capital, Excl. NM ($MM) U.S. Oil Production (Mbo/d) U.S. Oil Production, Excl. NM (Mbo/d) 10 2025 Permian Activity Cadence Permian TIL Count, Excl. New Mexico (Gross / Net) 1Q25 2Q25 3Q25 4Q25E 28 / 23 36 / 33 42 / 42 31 / 29 Relentless focus on operational efficiency is driving sustained value creation in the Permian – Strong 2025 execution, on track to deliver oil production at high end of original guidance for ~$210 million less capital than anticipated in February – Operational efficiency improvements leading to more DUCs than originally planned with fewer drilling rigs – Maintaining flexibility to optimize activity amid a volatile price environment FY25 oil volume of ~121 Mbo/d, excl. New Mexico NM TILs removed Permian Activity and U.S. Oil Production Excluding New Mexico Asset Sale
Page 11
APA CORPORAT ION $625 Peer D $845 $800 $750 Peer A Peer B Peer C 11 Competitive Development Costs Drilling & Completion Cost Per Lateral Foot(1) Significant Permian Capital Efficiency Improvement (1) APA Delaware and APA Midland represent 2025E D&C costs per foot. Peers A, B, C and D, companies that publish Delaware and Midland D&C costs. D&C Cost Reductions Driven By: 1) Successful integration and synergy capture of Callon acquisition 2) Smaller frac size, expanded application of simulfrac and improved drill out efficiencies 3) Slim hole and casing designs and general drilling optimizations $590 - $640 $780 - $830 25% reduction in per-foot D&C costs since 1H24, enhancing capital efficiency Delaware Basin Midland Basin
Page 12
APA CORPORAT ION Large Egypt Acreage Position Supported by Infrastructure ⎻ APA holds the largest onshore oil and gas leasehold position in Egypt ⎻ Strong partnership of over three decades with the Egyptian government ⎻ Acreage position largely underexplored for natural gas, creating long-term upside ⎻ Gas production growth supported by 800 MMcf/d of existing, operated gas processing capacity and >700 miles of gas pipeline infrastructure 12 Leasehold Oil Pipelines Gas Pipelines Operated Gas Processing Facilities Third-Party Gas Processing Facilities APA Egypt Acreage: ~7.5 Million Acres
Page 13
APA CORPORAT ION $3.10 $3.15 $3.45 $3.55 $2.94 $3.19 $3.48 $3.75 $3.90 FY24 1Q25 2Q25 3Q25 4Q25E 430 410 430 415 444 457 479 508 515 FY24 1Q25 2Q25 3Q25 4Q25E Egypt Gas Materially Outperforming Original Guidance Beat and Raised Guidance for the Third Consecutive Quarter on Strong Productivity and Infrastructure Utilization Egypt Realized Gas Price(1) ($/Mcf) – Expect ~100 MMcf/d of growth from 4Q24 to 4Q25, more than 20% – New gas wells exceeding expectations – Completed key infrastructure projects ahead of schedule, enabling new well tie-ins – New pricing agreement allocates higher fixed price to incremental volumes above pre-determined PDP decline New price effective 1/1/25 Expected Gross Gas Production (MMcf/d) Original Guidance (Feb-2025)Actual / Updated Guidance Original Guidance (Feb-2025)Actual / Updated Guidance 13 535 (1) Applies to all Merged Concession volumes, including associated gas 4Q25 planned downtime of ~20 MMcf/d
Page 14
APA CORPORAT ION Exploration Portfolio Led by Suriname Block 58 P E R M I A N S U R I N A M E E G Y P T A L A S K A U R U G U A Y $0 $500 $1,000 2028 2029 2030 2031 2032 $60 Brent Scenario $80 Brent Scenario (1) Net to APA. Reflects 20% participation by Staatsolie. Includes first oil payment and royalty payment per barrel contemplated in JV agreement. Please refer to the glossary of referenced terms for the definition of free cash flow. 14 $MMSuriname ⎻ 220,000 B/d oil project underway with partner TotalEnergies ⎻ APA’s carry agreement significantly reduces capital exposure ⎻ First oil expected in 2028 with APA net production growth into the 2030s ⎻ Near-field exploration targets have potential to extend production plateau ⎻ Exploration phase extended Alaska ⎻ Conducted flow test on Sockeye-2 discovery in 1H25, confirming attractive rock properties compared to regional offsets ⎻ Sockeye prospect is amplitude supported across 25,000 to 30,000 acres Egypt ⎻ Initial gas development / appraisal drilling exceeding expectations ⎻ Leveraging existing infrastructure, evaluating expansion needs pending exploration success Permian ⎻ Delineation of secondary / step-out zones Uruguay ⎻ Ownership in two large offshore blocks with low cost of entry Suriname Expected Free Cash Flow Profile(1)Exploration Portfolio Highlights Global Exploration Portfolio
Page 15
APA CORPORAT ION Suriname GranMorgu: Project Update ⎻ FY25 Suriname capital guidance of $275MM ⎻ Project costs remain in-line with estimates provided at FID ⎻ Progressing FPSO topsides construction ⎻ Rig contracts secured at attractive day rates ⎻ Drilling expected to commence in late-2026 ⎻ Near field exploration prospects could extend plateau or anchor additional development Project Delivery on Track for Mid-2028 First Oil >750 MMBO Estimated Recoverable Resource 220 MBO/D Oil Production Capacity Mid-2028 Expected First Oil 40% WI Carry Agreement Reduces Capital Exposure Project Stats 15
Page 16
APA CORPORAT ION $0 $15 $30 $45 $60 APA’s Interest in GranMorgu Equates to 400 Midland Basin Locations at ~30% of the Cost Suriname GranMorgu: World Class Opportunity 16 Top Tier Cash Field Margin(2)(3)(4) ($ / BOE) Shale Pure-Play Peers GranMorgu (1) Source data: Enverus, TX RRC. Average of all hz wells turned in-line in the Midland Basin between 2022 – Feb-2025. Assumes $9MM gross well costs. (2) Reflects per BOE: Realized price less LOE, GPT and production & ad valorem taxes. (3) U.S. shale peer data reflects FY24 actuals. GranMorgu data reflects FY24 average Brent oil price and expected full-life average operating costs. (4) Shale peers include CHRD, CIVI, DVN, FANG, OVV, PR. Highly attractive project economics enhanced by carry structure GranMorgu (APA Net) Midland Basin (Average Well)(1) EUR (Oil) 180 MMBO + 180 MMBO Total Capital Invested ~$1.1 Billion ~$3.6 Billion Well Locations 32 ~400 First-Year Decline Rate Flat ~60%
Page 17
APA CORPORAT ION APA’s Differential Gas Trading Portfolio Expect Third-Party Purchases & Sales to Generate $630 million of Pre-Tax Cash Flow in 2025 Cheniere Global LNG ContractPermian Firm Transport Contracts Projected Annual Cash Flow Sensitivity Global LNG ($/Mcf) $10 $15 $20 HSC ($/MCF) $2 $140 MM $360 MM $570 MM $3 $90 MM $310 MM $520 MM $4 $40 MM $260 MM $470 MM ⎻ 140,000 MMbtu/d contract volume ⎻ Contract began in Aug-2023, ends Dec-2037 ⎻ Buy 3rd party gas on Gulf Coast, sell to Cheniere at global LNG pricing, net of certain costs ⎻ ~750,000 MMbtu/d of contracted firm capacity ⎻ Extension optionality into the late 2030s ⎻ Buy 3rd party gas at Waha, sell at Gulf Coast pricing, net of pipeline transport fee ⎻ Favorable basis hedges in 2025, began hedging 2026 MMbtu/d Index Spread 4Q25 Hedged 510,000 ($2.93)(2) 4Q25 Unhedged 238,000 Waha / HSC FY 2026 Hedged 245,000 ($1.96)(2) FY 2026 Unhedged 503,000 Waha / HSC Firm Transport Book(1) (1) Derivative positions as of 11/4/25. (2) Weighted average pricing; Please refer to the appendix for details on outstanding commodity derivatives. 17
Page 18
APA CORPORAT ION 18 Guidance
Page 19
APA CORPORAT ION Corporate Items ($ in millions) 4Q 2025 FY 2025 Lease Operating Expense $385 $1,535 Gathering, Processing & Transmission Expense $100 $420 General & Administrative Expense $90 $350 DD&A Expense $565 $2,300 Oil and Gas Purchases and Sales, Net(1)(3) $170 $630 Cash ARO & Decommissioning Spend $65 $190 U.S. & U.K. Current Income Tax Expense(1) $5 $140 19 Guidance Average Daily Production (‘000) 4Q 2025 FY 2025 Total Company Reported (Oil / BOE)(1) 230 / 446 234 / 461 Total Company Adjusted (Oil / BOE)(1) 190 / 377 191 / 389 U.S. (Oil / BOE) 123 / 274 123 / 286 Egypt Reported (BOE)(1) 144 (60% oil) 145 (60% oil) Egypt Adjusted (BOE)(1) 75 (60% oil) 73 (60% oil) Capital Investment ($ in millions) 4Q 2025 FY 2025 DC&F Capital (Permian, Egypt, North Sea) $360 $2,000 Suriname Development Capital $75 $275 Exploration Capital $5 $65 Upstream Capital Investment(2) $440 $2,340 (1) Guidance based on FY25 commodity strip pricing as of 10/30/2025. (2) Refer to glossary of referenced terms for definition of Upstream Capital Investment. (3) Reflects third-party gain on oil and gas purchases and sales and realized gain / loss on commodity derivatives. FY25 decrease due to cost savings and other one-time items Contemplates ~10 Mboe/d of gas & NGL related price curtailments in 4Q25 FY25 G&A guidance includes ~$75 million of stock-linked comp Decision to accelerate small amount of spend for financial efficiency Includes FY25 North Sea production of 24 Mbo/d & 31 Mboe/d Equates to reported production less tax & NCI barrels ~($60) in the US; ~$200 in the UK Guidance includes the impact of commodity derivatives
Page 20
APA CORPORAT ION 20 Appendix
Page 21
APA CORPORAT ION Upstream Capital Investment ($ in millions) 1Q 2025 2Q 2025 3Q 2025 United States – Lower 48 $439 $486 $350 Egypt (excluding noncontrolling interest) $112 $115 $131 North Sea $2 -- $5 DC&F Capital (Permian, Egypt, North Sea) $553 $601 $486 Suriname $116 $31 $53 United States – Alaska $41 $16 $3 Upstream Capital Investment $710 $648 $542 21Note: Please refer to the glossary of referenced terms for the definition of Upstream Capital Investment.
Page 22
APA CORPORAT ION Egypt Production Detail 22 2Q 2025 3Q 2025 Oil (Bbls/d) Gas (Mcf/d) Boe/d Oil (Bbls/d) Gas (Mcf/d) Boe/d Gross Production 123,852 479,235 203,724 124,944 508,346 209,668 Reported Production 86,210 345,649 143,818 89,493 374,236 151,866 % Gross 70% 72% 71% 72% 74% 72% Less: Tax Barrels 20,820 82,960 34,647 23,090 97,273 39,302 Net Production Excluding Tax Barrels 65,390 262,689 109,171 66,403 276,963 112,564 % Gross 53% 55% 54% 53% 54% 54% Less: Noncontrolling Interest 21,797 87,563 36,390 22,134 92,321 37,521 Adjusted Production 43,593 175,126 72,781 44,269 184,642 75,043 % Gross 35% 37% 36% 35% 36% 36% 2023 2024 2025 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Gross Production (Mboe/d) 232 227 223 220 214 211 211 208 204 204 210 Reported Production (Mboe/d) 147 144 139 144 135 133 142 140 139 144 152 Adjusted Production (Mboe/d) 71 70 66 70 66 65 69 70 68 72 75 Realized Oil Price ($/Bbl) $78 $77 $89 $84 $83 $84 $80 $75 $75 $66 $69 Realized Gas Price ($/Mcf) $2.89 $2.95 $2.91 $2.89 $2.93 $2.92 $2.93 $2.97 $3.19 $3.48 $3.75
Page 23
APA CORPORAT ION Commodity Derivative Instruments 23 Production Period Settlement Index MMBtu (in 000’s) Weighted Average Price Differential MMBtu (in 000’s) Weighted Average Price Differential October – December 2025 NYMEX Henry Hub / IF Waha 46,920 $(3.16) - - October – December 2025 NYMEX Henry Hub / IF HSC - - 21,160 $(0.51) January – December 2026(1) NYMEX Henry Hub / IF Waha 89,425 $(1.96) - - Basis Swap Purchased Basis Swap Sold (1) Derivative positions as of 11/4/25.
Page 24
APA CORPORAT ION 24 Glossary of Referenced Terms ⎻ Upstream Capital Investment: Includes exploration, development, gathering, processing, and transmission capital, and capitalized overhead. Excludes capital investment for property and leasehold acquisitions, non-cash asset retirement additions and revisions, capitalized interest, certain exploration expenses, and Egypt noncontrolling interest. ⎻ Free Cash Flow: Cash flow from operations before changes in operating assets and liabilities (including Egypt noncontrolling interest) ⎻ Minus: ⎻ Upstream Capital Investment (including Egypt minority interest) ⎻ Abandonment and decommissioning spend ⎻ Leasehold acquisitions and non-oil and gas capital investment ⎻ Distributions to noncontrolling interest (Egypt) ⎻ In addition to the terms above, a list of commonly used definitions and abbreviations can be found in APA Corporation’s Form 10-K.
Page 25
APA CORPORAT ION 25 Non-GAAP Reconciliations
Page 26
APA CORPORAT ION Non – GAAP Reconciliation Adjusted EBITDAX Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDAX Management believes EBITDAX, or earnings before income tax expense, interest expense, depreciation, amortization and exploration expense is a widely accepted financial indicator, and useful for investors, to assess a company's ability to incur and service debt, fund capital expenditures, and make distributions to shareholders. We define adjusted EBITDAX, a non-GAAP financial measure, as EBITDAX adjusted for certain items presented in the accompanying reconciliation. Management uses adjusted EBITDAX to evaluate our ability to fund our capital expenditures, debt services and other operational requirements and to compare our results from period to period by eliminating the impact of certain items that management does not consider to be representative of the Company’s on-going operations. Management also believes adjusted EBITDAX facilitates investors and analysts in evaluating and comparing EBITDAX from period to period by eliminating differences caused by the existence and timing of certain operating expenses that would not otherwise be apparent on a GAAP basis. However, our presentation of adjusted EBITDAX may not be comparable to similar measures of other companies in our industry. 26 ($ in millions)
Page 27
APA CORPORAT ION Non – GAAP Reconciliation Cash Flow Before Changes in Operating Assets & Liabilities and Free Cash Flow Reconciliation of Net Cash Provided by Operating Activities to Cash Flows from Operations before Changes in Operating Assets and Liabilities and Free Cash Flow Cash flows from operations before changes in operating assets and liabilities and free cash flow are non-GAAP financial measures. APA uses these measures internally and provides this information because management believes it is useful in evaluating the company's ability to generate cash to internally fund exploration and development activities, fund dividend programs, and service debt, as well as to compare our results from period to period. We believe these measures are also used by research analysts and investors to value and compare oil and gas exploration and production companies and are frequently included in published research reports when providing investment recommendations. Cash flows from operations before changes in operating assets and liabilities and free cash flow are additional measures of liquidity but are not measures of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing, or financing activities. Additionally, this presentation of free cash flow may not be comparable to similar measures presented by other companies in our industry. 27 ($ in millions)
Page 28
APA CORPORAT ION Non – GAAP Reconciliation Segment Cash Flows Reconciliation of Net Cash Provided by Operating Activities to Cash Flows from Continuing Operations before Changes in Operating Assets and Liabilities Cash flows from operations before changes in operating assets and liabilities is a non-GAAP financial measure. Apache uses it internally and provides the information because management believes it is useful for investors and widely accepted by those following the oil and gas industry as a financial indicator of a company's ability to generate cash to internally fund exploration and development activities, fund dividend programs, and service debt. It is also used by research analysts to value and compare oil and gas exploration and production companies and is frequently included in published research when providing investment recommendations. Cash flows from operations before changes in operating assets and liabilities, therefore, is an additional measure of liquidity but is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing, or financing activities. 28 ($ in millions)
Page 29
APA CORPORAT ION Non – GAAP Reconciliation Net Debt Reconciliation of Debt to Net Debt Net debt, or outstanding debt obligations less cash and cash equivalents, is a non-GAAP financial measure. Management uses net debt as a measure of the Company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. ($ in millions) 29
Page 30
APA CORPORAT ION Non – GAAP Reconciliation Upstream Capital Investment Reconciliation of Costs Incurred to Upstream Capital Investment Management believes the presentation of upstream capital investments is useful for investors to assess APA's expenditures related to our upstream capital activity. We define capital investments as costs incurred for oil and gas activities, adjusted to exclude property and leasehold acquisitions, asset retirement additions and revisions, capitalized interest, and certain exploration expenses. Upstream capital expenditures attributable to a one-third noncontrolling interest in Egypt are also excluded. Management believes this provides a more accurate reflection of APA's cash expenditures related to upstream capital activity and is consistent with how we plan our capital budget. ($ in millions) 30
Page 31
apacorp.com