Earnings call transcript Q4 2022

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Operator

Thank you for standing by. Welcome to APA Corporation's Fourth Quarter 2022 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Clark, conference Relations. Vice like speaker to now Gary today, President would hand over the your I of Investor go ahead. Please

Gary Clark

Corporation's call. Good us XXXX you thank and fourth APA financial conference morning, full-year quarter results for operational and and on joining

the provide an overview questions begin Also our and further John color and of by and President on with President Vice Executive Executive Vice Tracey Development, Exploration; Vice Executive Pursell, and Dave outlook. answer Riney, and on are Steve Vice call available the CFO, of will Clay Bretches, CEO President, of We Christmann. will Operations. to Executive call then results President Henderson, President

allotted I XX our yesterday's be on remarks Our financial our Investor for in hope prepared can In hour approximately website supplement, minutes press investor.apacorp.com. and found had quarter conjunction and review you with to with operational the opportunity which at the have release, length XXXX will full-year Q&A. fourth remainder the Relations of be

that supplemental website. note measures, of non-GAAP financial financial non-GAAP these most discuss we on provided in and certain reconciliation the between differences found the be comparable measures GAAP the can directly measures. financial information our A may Please

Consistent today's in to numbers exclude previous Egypt barrels. practices, non-controlling and cited with the call adjusted production interest reporting in are adjusted Egypt tax

reasonable contain and assumptions estimates expectations. discussion based forward-looking to current like will that our views everyone I'd and today's remind on

could cause on with today. information factors results the of discuss located A from website. number a is we our differ disclaimer However, actual to materially full what supplemental

call the I And over will turn with John. to that,

John Christmann

joining us. you thank and for morning, Good

and key XXXX quarter on an and the overview of today, performance, our plans accomplishments XXXX, in comment will fourth On call I provide our objectives. review

levels in differentiated pursuit emphasized investment, activity value of XXXX, opportunities for the deliver creation, business most growth, conservative the pragmatic the our established selective moderate of notably, that and plan budgeting, organization production strengthening balance returns-focused and right-sizing to exploration. sustainable we the a sheet, long-term pandemic, Ahead for

XXXX are hard and actions our returned work, world commodity The on which second of annual demand generated debt allocated some flow necessary and reduction primarily in highest business. oil XX-year cash free XXXX, required In preserve few company's XXXX that a followed plan. we After years the this we to a we shareholders. have difficult in and returns to and and delivering price long-term dislocations history, to our to cash

pace of We a growth that in also sustained rig U.S. capable generating increased our activity both production to now and the is Egypt

bond of adjusted of $XX in billion quarter which annual cash achievements year doubling outstanding $X.X of flow returned of billion, $X.X reduction oil XX% at XXXX $X.X production dividend, represents our free billion per the an of the exit price from or first increase stock The and in to since XXXX. share oil less to the of than repurchase notable increase exit fourth more fourth XXXX, rate rate our quarter production a debt, to past the the of include common of average generation XX% Some which an was shareholders.

appraisal was oil. two with tested. resource million combined GOR position a successful test flow our Suriname, to of two legacy integration indicated the our An compliments low expectations. wells which of exceed Basin which Krabdagu, of flow of Delaware is appraisal At also importantly, South, in the in underway Block Delaware and successfully now The XXX than well place at Texas XX on barrels more acquisition, Sapakara tuck-in discovery rigs. And continues

the at XX, Additionally, was oil on is which discovery in Baja, Block first trend Krabdagu. made with

a the than million significant was eliminating our Egypt annualized by tons XXXX. equivalent XX%. is on upstream And routine front, reduced X COX This of goal ESG emissions lastly, more the toward in step flaring by end of of

results. quarter fourth Moving on to

production quarter period delays operational was year, Egypt the a expectations in costs while in we CapEx North some to slightly facilities Midland note. Basin from as in above guidance on some in ended XXXX facilities with volumes the shifts of for properties. Fourth due our in activity guidance, in quarters on substantial and unexpected benefited exceeded and small timing. in continued performance strong the North the first downtime production and production from project efficiencies Egypt three improve Sea runtime. were improvement Following U.S. to oil line Delaware execution strong strengthened continue we a Oil and and drilling Sea

of to while we to efficiencies optionality to to XXXX, forward portfolio taking within price costs advantage the our driving commodity and also respond Looking will continue managing focus on movements.

recent to gas and the substantial in flow portfolio the not volume. production for we Specifically, with managing cash drop prices, natural regard and are

growth entirely by will our driven in XXXX oil. Accordingly, be

and deliver We to We are our we reiterating the in range. to this budget capital billion, $X back what early is November. believe of billion ability remain reflects with within in confident year our which $X.X indicated potential for inflationary consistent coming this impacts appropriately

decrease on November Egypt in both Oil contributors in natural call. investment level we current adjusted discussed and XX% volumes to BOE of primary of our the BOE is and to growth than than in oil growth be anticipate more the this At X%. year-over-year preliminary will offsetting strip regions. gas we and the X% guidance assuming This U.S. a more prices, growth consistent with production

a also decrease oil driven primarily Basin our expecting cadence. call, by our U.S. we sequential This are fourth noted November we As is well completion first to Permian quarter production on quarter. in from

natural and also reductions volume the However, during curtailments ethane January with contributors. are liquids High Alpine of rejection gas associated at significant month

U.S. February, will in lead of the oil through Permian to half higher cadence in quarter oil accelerate our the fourth second quarter. significantly should production which well second the Importantly, completion

as Sea. Sea. turnaround North half other three and in a have made The tax the release UK within other drilling this less returns recent a We opportunities investment Ocean permanent rig coming the anticipate the completion changes in evaluated campaign production reallocation mid-year, following drilling Patriot is rebound of to first capital the North to attractive our than online to being with of scheduled year a We Turning wells scheduled this portfolio. in areas plan maintenance times. around shorter semi-submersible the moderate new

In focused drilling XXXX Suriname, Krabdagu subsequent half at testing. activity appraisal and is two wells on flow first the

Following that, also planned. on is XX test Block exploration another

contract gas around with average prices down by are oil trending While his bolstered should more impact to provide free detail Steve the relative of gas and XXXX, APA’s contract will year remarks. this flow sales be cash expected this in our Cheniere.

least cash free gas debt. cash and while most a considerable we flow be or balance the volatility, In returned all industry used our that on share oil and committed to flow a outlook free will constructive not the experiencing fully remain to hydrocarbons. mix have buybacks. dividends also remains the supply we returning short-term anticipate price of priority, of shareholders long-term and Strengthening of to We and XX% for at a is reduce shareholders demand through our to sheet closing,

and activity exploration Over our capital plan cycle, remain the portfolio opportunities. case the to of next percentage several APA’s the within portfolio to years, value continue unique. are shift relatively our highest opportunities. to plan level appropriate an is high-quality capital differential also we budget yet allocating a investment the to to flexible constant maintain Through

oil natural capital investment we and allocate from to or both growth generate the gas either Within Permian or can Basin, commodities.

third-party capacity, purchase and transportation considerable our hold for gas utilizes marketing gas to which team resale profit. we Additionally, a long-term

that this to access long-term We pricing. Cheniere have international commencing gas provide index sales summer will to

Suriname, terms, operations joint-venture on potential. projects area exposure potential large partnership Egypt tremendous Our opportunity PSC consistent with Brent limited growth of our scale premium prices, XX an oil in to And investment. offer to modernized the and generate and enables with capital appraisal Block an in development

We the decade believe that the hydrocarbons beyond. positioned well deliver APA profitably to is needs and world for next help

while environmental to stewards. this doing and reducing are intensity good committed carbon We being

And Steve call I that, will with over the turn Riney. to

Stephen Riney

the performance APA quarter delivered environment. the strong as benefited John. in a price from for financial albeit very volatile full-year we Thanks, fourth good and

For the net share. per or common months consolidated of last three diluted million was $X.XX income $XXX XXXX,

decommissioning the and of estimated the to costs. results Gulf the net in producing of for of increase most outside flow The items As in combination life are of of liability reflects changes was the former the future decommissioning items earnings. Mexico. a asset contingent a of that Fieldwood usual, properties The cash increase during core charge include million $XXX these pre-tax significant these

offset of evaluation $XX release $XX was million on This allowance by and derivatives a pre-tax tax million partially a unrealized assets. gain deferred on

other items, was Excluding these quarter the million and diluted smaller common adjusted income per fourth net for $X.XX or share. $XXX

and million shares million flow the During outstanding in approximately generated than XX common stock, XXX at shares of $XXX repurchased cash year-end. million APA more quarter, resulting free fourth of

Underlying for around the million. remained $XX G&A quarter costs

well accruals by anticipated as $XXX was guidance. an to However, a in for previously These quarter incentive mark-to-market will plan in higher lesser payouts, though recurring compensation as resulted also be was in LOE caused increase accrued million, expected total the paid This above stock-based than that which expense, our compensation G&A and G&A. out the fourth exploration future. was than extent much

Exploration Sea. non-commercial for expense well costs the and Awari million combined Suriname hole was as exploration prospect elevated North recorded also dry the $XX of we a in in

free about the the cash Looking the capital and higher Cheniere at from increased impact flow and XXXX prices of continued would would program. production ahead contract expect Growing At offset in strong be prices, generation. the to volumes XXXX, as strip current same XXXX. we sales gas cash cash production in growth and the John outlined, flow free XXXX flow taxes as UK

the second for diversified sales will to the naturally free with portfolio in XX% primarily half more agreement we gas the flow used with enjoy and gas aggregate through diversified into cash with dividends to contract reducing remaining prices minimum Cheniere oil We return shareholders similar of the of aligning again We XXXX. prices debt. will net XXXX financial of a The with of through the commence once buybacks portfolio. the outcomes in entered of purpose a XX% share

asked flow sensitivity free and Gas We frequently its and LNG about U.S. to expected in Global prices. the cash movements contracts are

flow half of of the price At we contribution project second strip cash XXXX. $XXX roughly in current million levels, free

let free range you to two If realistic put you me potential want a cash annualized give inputs. on as outcomes forward-looking flows,

$XX LNG of would prices and annualized Channel, average free Houston cash $XXX flow expected $X Ship the approximately million. Assuming be

Assuming annualized would flow $X.XX prices Ship to and Channel, LNG higher free cash Houston $XX the billion. average increase $X approximately of

purchase the volatile Clearly, cash the It to to plan environment substantial changes will given is costs the cash to to of gas budget believe supply incurred the profile. Cheniere. numbers and continue Despite that flow scale in conservatively we there this, note exposure. associated price upside these price important and gas is we to include flow the

taxes. through XXXX. of XX% energy and the extended now March Turning increased its period recently profits XX% The to to levy from income UK effective

close fairly combined this the XX%, be now that, rate year. the tax rate With to result, and tax $XXX strip effective is expect in tax a our we well. current million XXXX to current of As at statutory prices, this expense expect million as we for UK UK $XXX will

In accumulated items be tax more the for federal corporate supplement Please taxable tax and we a expect in to offset to year income subject both financial the taxes as for quarter the do alternative full consult therefore, for suite and U.S., full-year minimum not anticipate current projected our income. operational guidance and no XXXX XXXX. first losses than XX% of

program, exceeded per bond wrap was return XX% to while billion company's reduced great average shares an progress shareholders we of buyback of the outstanding roughly cash share. year We $X.X and commitment share. attractive annual up, free to $X balance price the Through repurchased our the returning improved the per $XX sheet. by outstanding and To flow significantly of minimum XXXX base also shareholder a dividend at debt of we restoring XX% as

financial to as an you rating strong with more balance more look repurchases, share the progresses. of forward performance We another investment-grade toward anticipate rating all we XXXX, agencies. of and year progress achieving sheet with more objective deleveraging In our the updating

I with that, to over will for the And the Q&A. turn call operator

Operator

over Instructions] [Operator you. the I'll turn now Mr. Gary call to Thank Clark.

Gary Clark

for be needs Thanks, to to as he operator. a One available Riney family unfortunately attend not will note, Q&A quick matter. Steve administrative

Midstream us your of questions Marketing and financial Senior to marketing So address transportation. President, topics Head related he and our will and able Ben has Treasurer to Rodgers, be and gas Vice joined and

So give Q&A. it you the we'll back to for operator

Operator

comes question Raymond first of our Freeman John with And Instructions] [Operator line you. the from James. Thank

now line Your is open.

John Freeman

Good morning, guys.

John Christmann

Good John. morning,

John Freeman

in Egypt efficiency a in that related solid looking to looking rate of that, forward? indicate Egypt at year at in that the obviously, sense are XQ. else guess you had the topic, better of really and was of that is would get going had the just rig couple a Nice of was maybe higher success XXXX really, the versus in years, XXXX. a see Or And First quarter prior you some doing to I trying gains. about done I rate the rate XX% how to I'm success maybe in is average you sustainable that meaningfully much anything ago? seismic Egypt, success

John Christmann

drilled John, types, side. Yes, say constant. pretty been multitude and development both the on really I'd the well the a We of program exploration different side has

is I the being were some modernized those not the from we're prioritize the think because seeing things forward impact what there that of and you're there some terms, able to pull of were pursued them. and modernization,

higher the get we success low some on of So as that initially. you're running rate hanging a little fruit

John Freeman

the presentation, do the mean and the of the plan, a comes bit sort and sort be exploration, the the what looking – kind then as a it's of at two out Suriname, I determine detail Has of then after the more we one please. is where appraisals. entirety just half of want XXXX let's you plan? been little And of of Just Suriname. it on the in And on follow-up laid a to wells? two year of was well the that Great. see second exploration appraisals think that appraisal will which identified the

John Christmann

that a year, say just first wells would partner at and Krabdagu, to and two of priority is be, the and but do we which going still well are one wells worked got I that with then good that's Yes. debating one. exploration It's is drilling still part today, matter now. take And will which multiple a on slot the we've the that's there of identified. the of have where portion appraisal that being just we're we're

plan. now, obviously, year. readdress And that the the So that for we'll is throughout

John Freeman

Great. Thanks, John.

John Christmann

Thank you.

Operator

Thank with comes next you. our Barclays. Wai from [Operator Instructions] Jeanine question And

now Your line open. is

Jeanine Wai

Thanks everyone. for questions. Hi. morning, our Good taking

John Christmann

You bet, Jeanine.

Jeanine Wai

John. morning, Good

just The keeping along resource place. with oil for question is Sapakara estimate Suriname. of now in on XXX First barrels maybe over John's at million

question of FID, get is, and to as So to overall I know And our doing ton estimate? confidence much how guess this Krabdagu a well? of at that project year required appraisal level what's resource is we the a you're

John Christmann

in flow really one good tested It's Yes. is Sapakara, We at volumes terms estimate of I oil there's really rock. main got confidence. those low the high-quality package. and mean GOR – sand

a component a big high a potentially and it going it's project. So recovery will have to be of key future

we've drilled great at two got have we So now. appraisal right confidence wells there. being that And are Krabdagu then the

terms development In size and of so forth.

right towards said, we're at right As pending it's anything talk moving it's we've of we're appraisal which results working excited a and first project. premature Krabdagu, the really, along. about now, And about to very

Jeanine Wai

those Maybe the We'll Okay. results. U.S. for stay tuned to moving appraisal

this is that your cash oil in for not portfolio flow and driven by prepared mentioned and remarks You managing you're so XX% production year. the

And the Thank Alpine you. so you some what in High? gas production Can curtailments you also at on curtailed color January. any price High is of natural further sensitivity Alpine provide

David Pursell

good a It's Pursell. Dave question. is This Yes.

were curtailments volatility. a when small, – Waha had relatively lot earlier Our but of in Waha the has year

basis, we Waha to negative, and those so as going down get sometimes weekly. and So making it's daily decisions we're low

lot versus So There's we but it look gas. been January as through of at flowing wet gas depends it Alpine, that now, full February. into and goes on most out we've dry a it,

every and price team. to every a specific looking it, going give at pretty week not day extensively So marketing the marker, but you we're with

Operator

comes Charles you. Thank Instructions] And question Johnson our Rice. from [Operator next with Meade

Your open. line now is

Charles Meade

the drive – the point I outside And the I you a to Good about most you wanted see Apache near-term? in, we logs, It appraisals not think in those my still have ongoing. the in appraisals. to to guess make? have are ask for looking there. looks two question – get to just guys to get flow of test. that two recognize is the to and you trying decision people to But but appraisals are inference have that you fair the with get to with Krabdagu designed data and you're that morning, the like to what from John whole team get seat, really to important you a a the about guys And I data have I

John Christmann

you And mean, there, at two move those modeled X appraisal And Krabdagu the we Charles, of kind anxious right. we're I with from we've appraisal and saw Sapakara with in and as very at pleased the wells prioritized projected Krabdagu. Sapakara us results. and obviously results came had for

program say. the fair to And prioritized so appraisal fact, now. we've is it its right And

Charles Meade

you Thank to. on for going Krabdagu flow the one, set to be quick a expectations you at about test, when would same second John. we follow-up trying Or to Right. And what that, the our about? hear thinking just That's should me. we're for the time? what both we're How get

John Christmann

clearly, has I the spudding the would any that is ahead one been of the just location and second Charles, of wells one say second time now. on

lag. we'll what in see and back But will there decide timing. as So possible, with to both moving quickly it's come important a just work as what those information. on of we do we to be terms and Total of we're with and have very And

Operator

Thank comes Cheng with of Instructions] from next the Scotiabank. you. Our [Operator line question Paul

now open. Your line is

Paul Cheng

Thank you. morning, guys. Good

John Christmann

Good morning, Paul.

Paul Cheng

of John, seems sort and questions. having a one in write little it and us in what your term. I Alpine go then of years long think can bit down guys edited having is like longer-term portfolio? you think point you pipe at High ago, Two a more role several I better, it's gas remind you the that – become sort role back

XX acquisitions bolt-on at should also, how is have think the I XX, question Alpine not the that we guys in look the second any And months. High? But last done you

at years? next or guys Is a that so. or role also – could effort has you How acquisition and bolt-on pay focusing over your that the that in level should activity two for Some more of Egypt. be three in in you a we exploration look Suriname you. will done peers reasonable the Thank

John Christmann

optionality on first I good got we kind we wells on on But then and to. is to we're allocate Basin. can a So really it Paul. U.S. is be see tend the nice we and that you'll year the two to bringing got capital five And break gas, be the at wells no Permian volumes, there's part mean that. year-end. beyond High for our will us of portfolio, the piece XXXX look of be you've given really first during something leverage and incremental then this bottlenecks but it's is really open Waha three thing levers basin coming a look going some having Alpine would prepping We've up. is have, opportunity and weakness when questions, about optionality and the the reason quarter. of And in you bringing toggle it's of one to we'll as seen that Delaware the And the and what that we've say to I of at

a invest have to plan. we So us, we and the and a the game such that's optionality be it's use it place been for will toggle and plan this to

looking we first tuck-in when is the your I acquisition. one have assets was question year in in as step – the acquisitions, that nice did in do our at to you bolt-on second acquisition the think related market. we very constantly market things we're a Delaware, It back last in

something a something very there's We that's is Delaware integrated now package to with, been do. we tuck-in we're and our our The it's exceeding Delaware last to things happy or year our about forecast, transaction did talk acquisition typically in into wait assets. something until

got you just mean it's your you've handle current So got something monitor. I a on I to inventory. think if

and on there handle at a can that cost returns, think we got add attractive not can we to things costs are doing where opposed we're drive that. incremental we You've if then

really we're to But a transaction it's last going years. been a continue only balanced portfolio. high over couple drive why one And to bar, and we've that's the of done

the in are things and exploration of we've lot elsewhere with globe. around a but also We Suriname, just got we program emphasizing tackling do the blocking

Operator

with you. question Instructions] our comes And Leggate Bank Thank of next from America. [Operator Doug

open. Your line is now

Douglas Leggate

good Hi. Hey. morning, Good morning. John, everybody.

John Christmann

Doug. morning, Good

Douglas Leggate

million and of is Sapakara, And like heading what going post more rock, John, looks to as factors, the couple may million, obviously, should I've given to of Krabdagu us looks think of Suriname it but timing tried it this recovery joint scale FID? if like? permeability $XXX I think an you I'm reference the world-class potential some the in to idea opposed terms your give times in past, $XXX a we're we that can development, than what of again. you try

John Christmann

work Great done, we And what we've a of there's lot there's put Doug. do. in but and we of question, a a of also lot work lot have to out, confidence left

color – if are you really then on I So give anything, bit wants add correct. got in and Sapakara Dave to will about you talk to two little a I'm he bring of areas you've going

We when rock are point. sand, forth. are that's where you're say and X.X would GOR at going GOR low talking really different and to one you this both so recoveries. and really, rock, working I'll Krabdagu have you're blocky high-quality They X,XXX all predominantly X.X really high And towards is nice with oil, in our terms bringing Sapakara. partner, potentially talking oil of package, makeup Darcy be to you're the a one in Sapakara a development hub little

before to out into more feed with more want we work study do get come specifics there. You'd and

some the later. that So things come you're are questions will of asking

you've And and there, then that. of in incremental Krabdagu that is process – million the there's referenced is there. the $XXX three It we're targets appraising

zones. there got the of GORs You've range a depending on

And work to is quantify to understand those and doing important scale really potential determining scope. so and we're the those

awaiting as on because impact anxiously going why two So an there. it's to And which those well all have and scope prioritize got We things scale. underway. it, is rigs you've we're

Douglas Leggate

second get but well. FID torn for going try you I'm again. not I question, that, I the timing ask would Suriname we're my you on I told Thank guess as to John. to as I whether

program. think years oil these but I second me let I exploration find water I still, is And what the well multiple to be about do risk on the left an this prospects going on in done? to it is generally this focus, specific going at and this. really trying appraisal obviously, broader you recollect, Or see Did a of you they're contact in you Oil I'm try characterize to basin one How do so think capacity guess development Sapakara. and for longer-term basin? the two, of point? is to, risk I'm program the think the at obviously, window, so on, for exploration if us,

John Christmann

Well, a bunch of questions in there.

So I'll try to extent dip to can. up X an them answer all I was appraisal. of South the Sapakara One,

I confirming terms we So important think there. in confirm was that of what

If you was lobe of go over you, in XX to discovery a the fairway. remind Krabdagu, Waha down-dip I'll and Krabdagu Block a

and levels a multiple are driving also as a pretty Krabdagu appraising. at. of good thing when part updip there appraising what you're which well, at good There's we're chance always you're is So that's

we've get is could see There and working then We we're trap you out, had working, The And we on that great a where go trick get found mean seal beyond potential are had you the look if out if further the Krabdagu block, lot and we've and hub. side there. has I area the been of Sapakara success. as a outboard we hydrocarbons. petroleum you system, today look more also at of and a potential. you just into

I ongoing So believe of is as an have program we there prospectivity. in Suriname a do will lot

Operator

from Neal with Truist. comes line Thank the of you. [Operator Dingmann our question And next Instructions]

Your line is open.

Neal Dingmann

certainly broader time. do feel on what first that this wondering, John. allocation. year still wondering buyback adamant I you I shareholder that? a this minimum or a perspective, just of quarter? have I'm I quarters, return able morning, or anything going to like I'm level just all about a shareholder frame price. about maybe amount if from were capital my kind given with for maybe talking forward you're buyback one specific Thanks last still mean, question, a minimum just mean, really think up? the about a or stock The Good agree pretty cheap you of you John, couple all of to you for

John Christmann

No, good I – think we question. have

minimum put confidence we'll say in a underscore, we I'll do when we on We have forward. great the framework the XX%. buybacks, And of

you think, nature, XX year. to And were out on able year address last in on us of the But that. the feel execute active, just of year, are is us last were see this of gives to in a similar months By on things we volatility you'll As that's see XX%. XX approach XX as what and the you'll balance buyback. ample about because it strongly commodity saw taking well, us That do. back-end the today loaded price. I sheet. it definitely additional We minimum We

So we yes, – that. I'll underscore

Neal Dingmann

No, great point.

And more clearly, mentioned It's area? even plans this activity. that then on all just fluid been I'm and just domestic maybe Titus activity Just year? or the bit, wanted two little just you for second in question Okay. but Southern having remainder a I'm for How the prices, the wondering, – a rigs. newer asked Could more second half Midland change that this? Basin, on is three Delaware depend of

John Christmann

way you're Southern cadence results Basin, it say the in us and I Yes. good the seeing to a to the we're planning pads and time in NPV our returns. would because really execute and down maximize and gives think it the we're really just Midland about in road, how

Basin. And Midland been where's us has a in We've that's flexibility. at and good Southern Delaware, cadence got so that three program for two-rig the

we of and and Delaware we're Delaware the luxury then integrated portfolio that's projects of And And you've program part we've the seen from – it's the more have the to ours. our so Titus just our oil-weighted in today. those shifting in forecast, really it's

So.

Operator

Roger of from Thank line comes next Instructions] you. Fargo. [Operator the And question our with Read Wells

open. line Your is

Roger Read

Yes. Good morning.

John Christmann

morning, Good Roger.

Roger Read

volatility show X.XX. it at on agreement one to over moves, and European could or other between and Good XXX slump look big Cheniere, in the here here. channel to? move we One which your waiting for the the quick which up Europe, In price When the morning. of do you we comments is prices finally see more price about towards? question outlook Happy big to continued we for you ship in see range per the words, with expect a sensitivity you the

John Christmann

global but any details. I'll It's TTF the Ben to additional more be going provide let or on and JKM,

Ben Rodgers

right. I weakness variables That's offline LNG generally just and mainly ship milder it. Freeport mean being there's in weather. lot this the a seen into from that of We've year, channel go

of second Ship one over a a are variables years. war that to was domestic winter Houston close But winter there had or over point, the of that I third they've warmest Europe, with XX in So the lot think the milder John's in Ukraine it to in the impacting only and – Channel.

side at this barrels just there. a well. It's of good though, flow global into inherently oil was as by our volatility And we very it's significant Sea The entered insert gas it selling back, get uplift to And thing at the market lot Brent-based that oil on the you Egyptian our contract reasons we kind we one free have numbers. pricing. look XXXX to we access of potential North it, does just to of the and think cash to as provide in going step

Roger Read

any that like expectations as you of this in the the in understand guess The it, near to you stuff cadence, to of which for Yes, follow-up What well like is deliver should attention call at reducing other or term. investment cause reason as on question as goals, look gas the underneath that? paying your we growth oil the I I I that But let's kind guidance it sense. in you makes could factors risk be mentioned, come have things volume year. issues, to

John Christmann

timing. underpinned Roger. turn-in three that be the and late, lines I onshore mean seeing little I it Permian. with in they very the mean the But and because had But And quarter bit four the of thing. It's one you're and last the confidence two it's good Chalk. with it's things, areas a first only program, got that U.S. we've Permian, Fourth wells Egypt and quarter in those the year, are exactly will we

lot of going to timing what's function the execution. driven a on of So that's just by the be the

then program. And going in of going things – in rigs Egypt, with have our us projections. get it are key good our that's But it's to took confidence I And the to XX-rig the us lumpy. bit when watch. those to U.S., legs mean a you're five little under the kind But be to we time of running

Operator

question you. Neil Mehta comes Sachs. with Goldman the line of And our next Thank from

line now open. Your is

Neil Mehta

Maybe, Yes. Thanks, lower around much. so budget question John, is little the first bit consensus in came than efficiency. a was. where The capital spend

period of you're U.S. and inflation So in starting move seen could international back what both terms to is real direction? of shoots maybe you that the talk your into Have immense you inflation. green any time, this in seeing about

John Christmann

so good in a ahead and us our lot I question. programs say gives to the visibility time Neil, would spend. contracts Yes, the about of terms our stay we with of year a things a that of spend trying because and

And so half contracts today, you're of pricing. a seeing last is on of lot what based back year the

the So price. little commodity it's our premature a softness seeing any I tied think be from to to perspective

where but the the it upsides to lag to as stays they the bit price of think going to just of if little is follow deck. They you're see structures the cost just play one today, plan will takes catch-up. a follow. It that tend time I of is

of on this shoots in to terms there really nothing anything comment point. So or at green

Neil Mehta

talk the release affected to follow-up tax obviously XX% you broadly it's your North the the well. fair, rate. be How the as rate That's invest willingness would around And The tax is any Sea, region. the was in impact have comments John. maybe can There Ocean about helpful? Patriot you of

John Christmann

within just it's Yes. that made our the less I relative would portfolio. competitive Sea say North

things we have that alternatives to seeing places, there's And But environmentally, decision in always us you're need to to safety to performance good to and do we're attractive at still in like cash asset continue integrity we that we we're going maintenance there, asset the and get manage an going as look that other for longer-term put we'll we just and incremental that. places more flow that put because make invest to all dollars and so will.

portfolio. it's drop seeing within less you're a Ocean And And North that's this Sea so later us why year. competitive the basis relative our the Patriot made on rig

Operator

Deckelbaum Thank you. line question from comes the of Cowen. next with [Operator Our Instructions] David

now Your open. line is

David Deckelbaum

for Thanks Hey, today. time the John.

John Christmann

bet. You

David Deckelbaum

we're this view the obviously And declines and and and the sort going then what ramped combination PSC for the XX% understand if into that of Egypt now, ask some this Just the curious till there? the once then modernization of production throughout beyond know a multiyear of of the growth. the there's driving growth fourth opportunity. future challenges expect a be of year. It also in expectations up I of could seems we that should on I was to higher XXXX like the wanted quarter year, production to of cadence, sort since ramp XX but infrastructure rigs curve. XXXX was beginning

John Christmann

No.

robust pretty got see recognize The we've to factors on. two thing here, I you in think Egypt. you'll going program have a

You predominantly program the is and And the the you're that's oil [indiscernible] have seeing with growth, in focused to which discovery are big Egypt. that XX where that's drilling gas rigs a decline. was starting why

what's that see what's growing underpinning is oil that in and you'll program. So well, mix Egypt that's as

at little multi-rig onshore very have that and thing used the is at and flows it's in a We're developments. you But developments program. math. fast folks rock And impactful gotten up from pretty an unconventional you it's nice to U.S. pad bit conventional But material different you this can and hard but is, do that smaller sets the shale the

that. lot confidence in in since So good in We've good XXXX, been confidence the a curve there. Egypt of long-term and

David Deckelbaum

Or does we're there. And necessarily and I one, John. guess own? developed from out intention obviously hub I It Krabdagu you this waiting Suriname. that Sapakara to its being second on results appraisal that necessarily Sapakara appreciate a like support of you for as on combine that, development sounds into one just maximize view potentially system just my kind the and independently? to hub need the would Sapakara a to both economics and wouldn't Krabdagu preclude build

John Christmann

get get-go. boat, the project, your I'll larger the And partner both the our scale motivated the to larger and and the just going – to scope the from are the are us be. correct say better economics the

scale no what to we're – why try really get get these. to right. trying is looking And – so you into how and that's to combine And there's at we're looking scope to because at the you reason could

Operator

Instructions] with Mariani of [Operator next comes question Leo you. from Our line Thank ROTH. the

Your line is now open.

Leo Mariani

it you about North hoping be rate few expect could a of is a It is of tax talk Just certainly drop the for production to making Hi, steady maybe this of sounds years. Should the trying activity? decline? to some what separately the of starting and to Sea. to we the get asset that the sense decision kind guys. more expect Obviously, I that the accelerate rig to dropped little of are you're on quite result the was in high being going of kind ramifications like year. going bit a see we rig later here Should less declines beyond? XXXX

John Christmann

wells I really as out impact it that are come It Yes. into look just the things you that bigger time Ocean from we would say, abandonment this impact general, much time doesn't today. the Patriot. really, play. was some in to subsea frames year, model And that change drilling at take not

– beyond, we're XXXX Barrel. really looking impact, start So or it and doesn't and I XXXXs little a both to XXs it see does bit at mean drive early have for in but still an XXXX

to XXXX. And of back ground you. bought When and in when go XXs that I'll from it remind out XXXX we we BP, bought the in come asset, was scheduled

XX than here to another a XX And so years looking still And years, decade longer. more at decade. are XX we close longer –

productivity good cash the there. and in to be still there's it manage We're going flow investments. future life very just prudent for So about

Leo Mariani

the And helpful. That's U.S. just then over to jumping

there that a XXXX? came Chalk on of all last Just late know guys get in sense the you wells planned I to kind anything is at wanted Austin – year. in had some

any just on to some viewing on update if then of sounds as designs you're little And Alpine have High these several improve. gas up LNG But High follow market next do years like for then the that in on Gulf of facilities? a somewhat – will also you hopefully asset. optionality using you and long-term gas feedstock guys the really bit. Do Alpine as that you there's that on market of So guys have it kind a Coast

John Christmann

contract I mean It's the level deal. is recognize ship with buy channel. corporate a thing deal. I We gas is and separate Cheniere would the say a

what and we our it's that So separate produce. aside equity from gas

do Waha that prices and Waha So at in we basin dictate what in basin. are we sell at going to

are three wells. interest working In have So from don't a In that's drilling there. of we point planned we Chalk, in Today, the to make anything the drilling. interest those where we've on the others Chalk, brought terms there perspective. some year in that some we participate may planned drilling. in, Chalk wells this non-op be non-op nothing got budget But for there our

Operator

[Operator from our Thank you. And JPMorgan question Arun Jayaram Instructions] comes next with Chase.

now Your line is open.

Arun Jayaram

with, now incremental plans post the activities of evaluation been are terms guess, John, location exploration in partners' the What the the have of on on Suriname rigs Krabdagu rigs. Hey, good two activity in morning. two more recent with focused results appraisal I you Krabdagu. and at

John Christmann

breach and are Arun, another high you be well spending working There I Awari of Bonboni exploration look at teams we cases because systems if us. both we're both have mean, hydrocarbon grading. several main and of system, prospects. targets are drilled, XX, out will There Both still and there. time, location on back in that The go Block petroleum between and failed working seal.

time, great we've And the there prospectivity the into so way outboard a spending – but is I'd all more to where the lot say teams are side, back success. had

with So onto talk get lines. working to the as a rig partners. that through wells, come we as And in we'll drill those about our position more they

Arun Jayaram

drove company little – Permian. you Permian the XQ looking at what wells just the the And building you XXXX? thoughts will XQ, – I in as about placed think a Were that XXXX outlook we our in think wells sales including modeling, so in John, have place on just I as didn't one and to bit you in one from because a many we shift of or production that as XXXX the… think – growth sales have pretty robust DUCs some in broader it. the your about on follow-up terms as maybe Got program thought

John Christmann

a Midland lumpiness I drilling mean really longer question. the rigs more got great it's just a Basin. it's Arun, We're program. and No, you've two the – laterals of in

so timing. the the timing of the just of the pads and then is completing And a it completion lot working through pads,

rigs, lumpiness to of two whereas more that you're rigs lumpiness normalize. kind starts and see from running only and work were us, itself going we a with out lot to So if

just a really it's with those So longer function timing of laterals. on

Operator

Tudor Pickering. Thank Instructions] the comes from Jeoffrey with Lambujon of question [Operator Next you. line

open. is line Your

Jeoffrey Lambujon

morning good taking my you Hey, Appreciate everyone. all questions.

John Christmann

You bet, Jeff.

Jeoffrey Lambujon

for me squeezing Thanks in. Yes.

solid you Obviously, there, highlighted, Egypt. Just a execution up some follow-ups on all production earlier we here and as showing saw. that's results of in couple to as especially XXXX, relative

XXXX guide. and kind think exit risking there speak was about And of oil you how XXXX as see And running operations tracking program? you move the the or level hoping the in on on execution the might here what terms year? to I growth about room from through we're to that beyond efficiencies from you're of exit. thinking conservatism you in you baked the could you as of as might think about So focusing be

John Christmann

to hit, question. and the we we think high through I'm realistic grade for Well, good But to XXXX. there's question – to things the comfortable the believe the and very with relay. I that response from are high I given we think we've there year. a mean, confidence that you're other drilled I that I and sure believe moving bring lot and get a is time nice as of about to that. I I guides numbers on other know that get ability I a things asked And wells and at response confidence do schedule times spend team. is – what obviously that are We can the on with Egypt try success guide to thing Jeff, there good

Jeoffrey Lambujon

to on Okay. XXXX. and just Great. efficiencies, obviously quite bit move a I as improved guess operations And you then again,

get see that from on room kind focusing improvements you're to for sense what want might you and what a here? of for running perspective Just from

John Christmann

the the about things as and try exploration In improve Egypt, areas and in to excellence It's go. Yes. that drilling new some some learn of with we're there. from all to you seismic operational and we're continuing doing

as before. you've those we things see And should wells – areas more drilled areas, improvement so we within and drill

So that. of some you're seeing

execution better. is And get organization, across the front. the is mean improvement to all details. take and they And functions, it's the thing attention operations. going asset really to trying entire on continuous and I safety and saw about Paying progress everybody teams the great We're the excellence. continue to that continue it across across you the integrate on big focus that to

Operator

the conference back I you. closing over now Thank to would Mr. Christmann hand like remarks. to John for

John Christmann

Yes. call, following leave Thank to you. thoughts. And you the I before today's want with closing

excellence I discipline. First, hard work operational safety, recognize to to dedication to financial and and want committed entire stewardship. our and remains team operational environmental for APA their

focused are on We to leveraging projects. the portfolio the invest in highest return

growth confident XXXX. activity quarter, for will cadence impact we in first our are our While outlook

our appraisal of we forward will progress. in and to at turn accelerated look you the I the keeping informed back to the operator. Lastly, JV has Suriname, call Krabdagu,

Operator

today's conference call. participation. concludes your for you Thank This

a disconnect. may have day. now wonderful Everyone, You

APA (APA) 23 Feb 232022 Q4 Earnings call transcript