AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 3/6 · 18/10/2026
Moat25
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 1/4 · Acreage and improved Egyptian terms have economic value, but intense competition and commodity price exposure leave the position fragile. No comparative cost or protected-market advantage is demonstrated.
durability · 1/4 · Established Egyptian operations support continuity, but superior economics lack disclosed contractual duration or protection. Production declines and realized regulatory impairment weaken the durability case.
customer dependency · 1/4 · Repeated EGPC purchases demonstrate an ongoing relationship, but no customer switching friction or dependence on APA specifically is established. The disclosed concentration more clearly exposes APA to its buyer.
erosion resilience · 1/4 · Cash generation and debt reduction provide financial resilience, but negative U.S. gas prices and the North Sea impairment demonstrate exposure to external erosion. Potential gas-spread compression is a prospective risk, not a realized loss.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Observed pricing is mixed: second-quarter 2026 oil prices rose 50% and Egyptian gas prices rose 22%, while U.S. gas prices became negative and total gas prices fell 74%. These outcomes demonstrate commodity exposure rather than sustained issuer-controlled pricing.
retention · 2/4 · EGPC generated material sales in 2023–2025, and substantially all Egyptian gas moved under the updated agreement in 2025. This indirectly demonstrates repeat demand, without establishing renewal security, switching barriers or a retention rate.
margin resilience · 2/4 · Production operations remained profitable in 2023–2025 and first-half 2026 operating cash flow was broadly stable year over year. Resilience is mixed because regional outcomes vary, prior impairments matter, and higher oil prices supported recent results. Profitability alone does not demonstrate pricing power.
contractual freedom · 1/4 · The enhanced Egyptian agreement demonstrates some ability to negotiate economics. Broad dependence on commodity prices and actual negative U.S. gas realizations indicate weak practical control over pricing. Detailed price formulas and unilateral repricing rights are absent.
Predictability—
Missing exact annual revenue, free cash flow or FCF margin; operating cash flow and capex must both be reported for all five years.
Financial strength—
Missing required inputs: debtFcfGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- netDebtEbitGrade
- 74.23
- interestCoverageGrade
- 77.79
- currentRatioGrade
- 6.00
- Net debt / operating income (x)
- 1.29
- Interest coverage (x)
- 9.56
- Current ratio (x)
- 0.82
Capital allocation—
Missing required inputs: sbcRevenue, cashConversionGrade. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 32.80
- 3-year average dilution (%)
- 3.03
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 3/4 · Debt fell from $6.044 billion at year-end 2024 to $4.493 billion in 2025 and approximately $3.743 billion in June 2026. First-half 2026 operating cash of $2.260 billion exceeded $1.111 billion of upstream additions while funding debt repayment and shareholder distributions. Decommissioning liabilities and incomplete acquisition-return evidence limit the conclusion.
incentive alignment · 2/4 · Actual compensation includes multiyear performance awards, options and restricted stock, with most target executive compensation at risk. Alignment is mixed because incentive cash flow excludes specified expenses and individual awards allow substantial discretion. Executive ownership is not established by the supplied table fragments.
execution · 3/4 · The disclosed 2025 scorecard shows production above its maximum goal and development spending below target; reserve recovery improvements and subsequent cash generation corroborate operating delivery. This is issuer-reported achievement against internal targets, tempered by Egyptian production decline and lower second-quarter 2026 oil sales volumes.
governance · 2/4 · Disclosed independent compensation oversight, CEO exclusion from his own pay deliberations and actual auditor-service pre-approval support functioning controls. Broad incentive discretion limits the assessment; the passages do not establish comprehensive board effectiveness. Later shareholder approval establishes adoption of the plan amendment, not its performance outcomes.
Evidence
15 Competitive Conditions The oil and gas industry is highly competitive in the exploration for and acquisitions of reserves, the acquisition of oil and gas leases, equipment, and personnel required to find and produce reserves, and the gathering and marketing of oil, gas, and NGLs.
Competitive Conditions: competition across reserves, leases, inputs and marketing · Filed 26/02/2026
Certain of the Company’s competitors may possess financial or other resources substantially larger than the Company possesses or have established strategic long-term positions and maintain strong governmental relationships in countries in which the Company may seek new entry.
Competitive Conditions: competitors' resources and governmental relationships · Filed 26/02/2026
However, the Company believes its diversified portfolio of core assets, which comprises large acreage positions and well-established production bases across multiple geographic areas, its balanced production mix between oil and gas, its management and incentive systems, and its experienced personnel give it a strong competitive position relative to many of the Company’s competitors who do not possess similar geographic and production diversity.
Competitive Conditions: management's claimed portfolio and organizational advantages · Filed 26/02/2026
Effective January 2025, substantially all of the Company’s natural gas production was sold to EGPC under the terms of this agreement.
International: Egyptian gas sales under the agreement effective January 2025 · Filed 26/02/2026
The agreement provides the Company with enhanced economic terms that support increased natural gas exploration and development activity and the potential addition of significant new drilling inventory with expected returns comparable to those of the Company’s oil program.
International: enhanced gas economics and prospective drilling returns · Filed 26/02/2026
•During the third quarter of 2025, the Government of Egypt awarded the Company an additional two million net exploration acres in the Western Desert.
International: additional Egyptian exploration acreage awarded in 2025 · Filed 26/02/2026
The 2025 gross and net production from the Company’s Egypt assets decreased 2 percent and 6 percent, respectively, from 2024.
International: 2025 Egyptian gross and net production declines · Filed 26/02/2026
The Government also helped facilitate significant payments in the third quarter of 2025, nearly eliminating past due receivables.
International: payments nearly eliminating past due receivables · Filed 26/02/2026
During 2024 and 2023, sales to EGPC accounted for approximately 17 percent and 15 percent, respectively, of the Company’s worldwide crude oil, natural gas, and NGLs revenues.
Note 14, Major Customers: EGPC sales in 2024 and 2023 · Filed 26/02/2026
In addition to a signature bonus of $25 million, the Company has committed to a drilling program on the acreage that the Company believes it will be able to meet in the normal course of operations.
International: acreage signature bonus and drilling commitment · Filed 26/02/2026
The Company’s revenues, operating results, future rate of growth, and carrying value of its oil and gas properties depend highly upon the prices it receives for its sales of crude oil, natural gas, and NGL products.
Commodity price risks: dependence of operating results and asset values on received prices · Filed 26/02/2026
As additional gas pipeline takeaway capacity in the Permian Basin comes online, the spread between Permian and Gulf Coast gas prices may compress, which would reduce the Company’s gain on third-party oil and gas purchases and sales.
Commodity price risks: potential compression of Permian-to-Gulf Coast gas spreads · Filed 26/02/2026
For example, during 2024, the Company recorded $796 million of impairments for certain of its North Sea proved properties as a result of several new regulatory guidelines and obligations in the U.K.
Reserve estimation risks: realized 2024 North Sea impairment following regulatory changes · Filed 26/02/2026
26 Pricing The Company’s average selling prices by country were as follows: For the Quarter Ended June 30, For the Six Months Ended June 30, 2026 Increase (Decrease) 2025 2026 Increase (Decrease) 2025 Average Oil Price – Per barrel United States $ 98.46 52% $ 64.84 $ 85.54 25% $ 68.64 Egypt 95.95 45% 66.39 90.48 28% 70.70 North Sea 110.78 66% 66.56 93.36 30% 71.61 Total 98.24 50% 65.58 87.89 26% 69.72 Average Natural Gas Price – Per Mcf United States $ (2.98) (389)% $ 1.03 $ (1.64) (206)% $ 1.54 Egypt 4.23 22% 3.48 4.12 23% 3.34 North Sea 15.88 36% 11.69 14.89 11% 13.42 Total 0.60 (74)% 2.28 1.39 (45)% 2.55 Average NGL Price – Per barrel United States $ 24.59 24% $ 19.87 $ 22.26 (7)% $ 23.91 North Sea 67.50 62% 41.62 55.59 20% 46.28 Total 25.41 24% 20.49 23.19 (6)% 24.54 Second-Quarter 2026 compared to Second-Quarter 2025 Crude Oil Crude oil revenues for the second quarter of 2026 totaled $1.8 billion, a $445 million increase from the comparative 2025 quarter.
MD&A, Pricing: realized oil, natural gas and NGL prices by geography · Filed 06/08/2026
A 50 percent increase in average realized prices increased second-quarter 2026 oil revenues by $688 million compared to the second quarter of 2025, while 10 percent lower average daily sales volumes decreased revenues by $243 million.
MD&A, Crude Oil: realized price increase and sales-volume decline · Filed 06/08/2026
2 APA CORPORATION AND SUBSIDIARIES STATEMENT OF CONSOLIDATED CASH FLOWS (Unaudited) For the Six Months Ended June 30, 2026 2025 (In millions) CASH FLOWS FROM OPERATING ACTIVITIES: Net income including noncontrolling interests $ 1,370 $ 1,083 Adjustments to reconcile net income to net cash provided by operating activities: Unrealized derivative instrument gains, net (70) (108) (Gain) loss on divestitures, net 2 (280) Exploratory dry hole expense and unproved leasehold impairments 56 43 Depreciation, depletion, and amortization 1,057 1,173 Asset retirement obligation accretion 85 78 Provision for deferred income taxes 201 170 (Gain) loss on extinguishment of debt 4 (145) Other, net (6) 18 Changes in operating assets and liabilities: Receivables (147) 433 Inventories (26) 5 Drilling advances and other current assets (33) 222 Deferred charges and other long-term assets (3) 1 Accounts payable (123) (153) Accrued expenses (50) (204) Deferred credits and noncurrent liabilities (57) (59) NET CASH PROVIDED BY OPERATING ACTIVITIES 2,260 2,277 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to upstream oil and gas property (1,111) (1,437) Leasehold and property acquisitions (6) (20) Proceeds from asset divestitures — 571 Other, net (16) 5 NET CASH USED IN INVESTING ACTIVITIES (1,133) (881) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on commercial paper and revolving credit facilities, net — (333) Payments on term loan facility — (900) Fixed-rate debt borrowings — 846 Payments on fixed-rate debt (754) (954) Distributions to noncontrolling interest (164) (217) Treasury stock activity, net (100) (150) Dividends paid to APA common stockholders (177) (181) Other, net (4) (25) NET CASH USED IN FINANCING ACTIVITIES (1,199) (1,914) NET DECREASE IN CASH AND CASH EQUIVALENTS (72) (518) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 516 625 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 444 $ 107 SUPPLEMENTARY CASH FLOW DATA: Interest paid, net of capitalized interest $ 117 $ 155 Income taxes paid, net of refunds 477 542 The accompanying notes to consolidated financial statements are an integral part of this statement.
Statement of Consolidated Cash Flows: first-half 2026 operating cash, investment and financing · Filed 06/08/2026
Liquidity The following table presents a summary of the Company’s key financial indicators as of December 31: 2025 2024 (In millions) Cash and cash equivalents $ 516 $ 625 Total debt – APA and Apache 4,493 6,044 Total equity 7,003 6,362 Available committed borrowing capacity under syndicated credit facilities 4,020 2,966 Cash and Cash Equivalents As of December 31, 2025, the Company had $516 million in cash and cash equivalents.
Liquidity: year-end 2025 and 2024 debt, cash and borrowing capacity · Filed 26/02/2026
3 APA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Unaudited) June 30, 2026 December 31, 2025 (In millions, except share data) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 444 $ 516 Receivables, net of allowance of $125 and $140 1,222 1,062 Other current assets (Note 5) 611 543 2,277 2,121 PROPERTY AND EQUIPMENT: Oil and gas properties 46,724 45,507 Gathering, processing, and transmission facilities 445 445 Other 535 536 Less: Accumulated depreciation, depletion, and amortization (34,805) (33,740) 12,899 12,748 OTHER ASSETS: Deferred tax asset (Note 9) 2,126 2,328 Deferred charges and other 671 564 $ 17,973 $ 17,761 LIABILITIES, NONCONTROLLING INTERESTS, AND EQUITY CURRENT LIABILITIES: Accounts payable $ 730 $ 871 Current debt 2 213 Other current liabilities (Note 6) 1,675 1,487 2,407 2,571 LONG-TERM DEBT (Note 8) 3,741 4,280 DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES: Asset retirement obligation (Note 7) 2,723 2,699 Decommissioning contingency for sold Gulf of America properties (Note 10) 677 782 Other 481 426 3,881 3,907 EQUITY: Common stock, $0.625 par, 860,000,000 shares authorized, 492,577,134 and 492,038,127 shares issued, respectively 308 308 Paid-in capital 12,741 12,816 Retained earnings (accumulated deficit) 384 (721) Treasury stock, at cost, 141,910,293 and 139,073,481 shares, respectively (6,421) (6,320) Accumulated other comprehensive income 9 10 APA SHAREHOLDERS’ EQUITY 7,021 6,093 Noncontrolling interest 923 910 TOTAL EQUITY 7,944 7,003 $ 17,973 $ 17,761 The accompanying notes to consolidated financial statements are an integral part of this statement.
Consolidated Balance Sheet: June 2026 debt and decommissioning obligations · Filed 06/08/2026
Egypt realized positive revisions of 38 MMboe from gas infrastructure optimization and improved recovery projects.
Supplemental Oil and Gas Disclosures: Egyptian reserve revisions from infrastructure optimization and recovery · Filed 26/02/2026
[Remainder of Page Intentionally Left Blank] 24 APA Corporation The MD&C Committee’s Final Scorecard 2025 Corporate Performance Metrics Performance Goals and Results Objectives/Metrics Weight Threshold 50% Payout Target 100% Payout Maximum 200% Payout Payout Financial/Operational Free Cash Flow ($MM)(1) — focuses leadership on conservative budgeting and strict cost management; represents cash remaining after capital expenditures, highlighting our capacity to reinvest in the business or return funds to shareholders 20% Result: $1,534 40.0% $606 $806 $1,006 Lifting + Workover Costs ($MM)(2) — focuses management on controlling direct operating expenses associated with production and maintenance activity, reinforcing cost discipline in daily operations and ensuring capital is deployed efficiently to maximize margins and free cash flow 15% Result: $1,219 19.8% $1,250 $1,235 $1,185 Gross Department Costs ($MM)(3) — keeps management accountable for overhead and administrative cost control across the organization, promoting efficiency in support functions and sustaining financial discipline in all areas of the business 15% Result: $464 30.0% $540 $525 $500 Development Capital Expenditures ($MM)(4) — directs management to maintain disciplined investment in drilling and development projects, balancing growth opportunities with returns and ensuring capital is allocated to maximize long-term value creation 10% Result: $1,957 20.0% $2,135 $2,110 $2,060 Net Production (MBOE/D)(5) — measures the Company’s ability to reliably deliver production volumes in line with plan, reflecting execution across drilling, development, and operational performance that underpins both cash flow generation and shareholder returns 10% Result: 399 20.0% 379 388 395 EH&S Air — focuses management on reducing routine flaring across U.S.
Compensation: 2025 corporate scorecard targets and achieved financial and operating results · Filed 09/04/2026
20 APA Corporation Components of Executive Compensation The following primary components of compensation support our executive compensation philosophy: Component Purpose Key Features Base Salary Provide market-competitive base pay, reflective of an executive officer’s role, responsibilities, and individual performance to attract and retain top talent ● Reviewed annually based on market data, internal equity, job responsibilities, and individual performance Annual Incentive Compensation Focus executive officers on achieving annual financial, operational, and other key short-term strategic goals that align with APA’s business strategy and drive long-term results ● Based on the achievement of pre-determined corporate performance metrics measured against a mix of quantitative goals (weighted 90%) and qualitative goals (weighted 10%) ● Driven by challenging targets that balance financial, operational, and strategic priorities (e.g., capital discipline, cost management, reliable production delivery, EH&S) with market realities (e.g., continuously fluctuating commodity prices, geopolitical influences, operational risks, and limits of oil and gas reserves) Long-Term Incentive Compensation Provides incentives for executive officers to execute on longer-term financial/strategic goals that drive shareholder value creation, and supports APA’s talent retention objectives ● Performance awards (60%): earned based on the achievement of relative and absolute metrics at the end of a three-year performance period; vests 50% at the end of year three and 50% at the end of year four ● Stock options (20%): vest in three equal installments over the first three anniversaries of the grant date; 10-year term ● RSUs (20%): vest ratably over three years Compensation Mix The target annual total direct compensation of our CEO and the average for our other NEOs for fiscal year 2025 is shown below, illustrating that a majority of executive compensation is at risk, with 89.7% for our CEO and an average of 83.3% for our other NEOs.
Components of Executive Compensation: adopted compensation mix, performance awards and vesting · Filed 09/04/2026
Roles in the Executive Compensation Decision-Making Process Full Board MD&C Committee Executive Management Independent Consultant Independent board members review, modify as needed, and approve the MD&C Committee’s recommendations for the CEO’s total compensation Works closely with executive management and its independent consultant to monitor throughout the year the effectiveness of APA’s executive compensation program Reviews and approves non-CEO executive compensation, including evaluating performance against corporate goals, advising on incentive plans, and administering equity-based compensation awards CEO reviews with the MD&C Committee his compensation recommendations for the other NEOs, providing management input, transparency, and oversight CEO does not participate in the deliberations of the MD&C Committee regarding his own compensation MD&C Committee engages an independent compensation consultant to provide expertise on competitive pay practices, program design, and an objective assessment of any inherent risks of any programs The MD&C Committee engaged Pearl Meyer & Partners, LLC and determined it was independent during 2025 Pearl Meyer reports directly to the MD&C Committee and does not provide any additional services to management 2026 Proxy Statement 21 Compensation Peer Group The MD&C Committee regularly assesses the market competitiveness of the Company’s executive compensation program based on data from a comparator peer group (called “the compensation peer group”).
Executive compensation decision-making: independent oversight and consultant arrangements · Filed 09/04/2026
After the corporate performance results determine the initial payout, the MD&C Committee may adjust an NEO’s award upward or downward by applying a multiplier ranging from 0% to 200%.
Annual incentives: committee discretion to adjust individual awards · Filed 09/04/2026
It is then adjusted to add back impacts from stock compensation, Transaction, Reorganization, and Separation (TRS) expense, and Gulf of America decommissioning spend.
Compensation goal metrics: expense and decommissioning adjustments to free cash flow · Filed 09/04/2026
All audit, audit-related, tax, and other services were pre-approved by the Audit Committee, which concluded that the provision of such services by EY was compatible with the firm’s independence in the conduct of its auditing functions.
Audit oversight: actual pre-approval of auditor services · Filed 09/04/2026
8-K 3.1 2/8/2023 001-40144 †10.1 Third Amendment to the 2016 Omnibus Compensation Plan, approved by shareholders May 21, 2026.
Exhibits: compensation plan amendment approved by shareholders May 21, 2026 · Filed 06/08/2026
United States Egypt(1) North Sea Other International Total(1) (In millions, except per boe) 2025 Oil and gas production revenues $ 3,819 $ 2,637 $ 773 $ — $ 7,229 Operating cost: Depreciation, depletion, and amortization(2) 1,411 625 239 — 2,275 Asset retirement obligation accretion 41 — 117 — 158 Lease operating expenses 724 447 333 — 1,504 Gathering, processing, and transmission 346 24 54 — 424 Exploration expenses 9 101 1 20 131 Impairments related to oil and gas properties — 18 — — 18 Production taxes(3) 227 — — — 227 Income tax 234 640 23 — 897 2,992 1,855 767 20 5,634 Results of operations $ 827 $ 782 $ 6 $ (20) $ 1,595 2024 Oil and gas production revenues $ 4,315 $ 2,933 $ 948 $ — $ 8,196 Operating cost: Depreciation, depletion, and amortization(2) 1,314 621 300 — 2,235 Asset retirement obligation accretion 42 — 106 — 148 Lease operating expenses 820 464 406 — 1,690 Gathering, processing, and transmission 354 25 53 — 432 Exploration expenses 134 112 1 66 313 Impairments related to oil and gas properties 315 — 796 — 1,111 Production taxes(3) 268 — — — 268 Income tax 235 770 (536) — 469 3,482 1,992 1,126 66 6,666 Results of operations $ 833 $ 941 $ (178) $ (66) $ 1,530 2023 Oil and gas production revenues $ 3,018 $ 3,029 $ 1,338 $ — $ 7,385 Operating cost: Depreciation, depletion, and amortization(2) 709 521 270 — 1,500 Asset retirement obligation accretion 40 — 76 — 116 Lease operating expenses 593 474 369 — 1,436 Gathering, processing, and transmission 249 33 52 — 334 Exploration expenses 14 119 19 43 195 Production taxes(3) 204 — — — 204 Income tax 254 828 414 — 1,496 2,063 1,975 1,200 43 5,281 Results of operations $ 955 $ 1,054 $ 138 $ (43) $ 2,104 (1)Includes a noncontrolling interest in Egypt.
Supplemental Oil and Gas Disclosures: 2023–2025 production revenues, costs and operating results · Filed 26/02/2026
During 2025, sales to EGPC in Egypt accounted for approximately 15 percent of the Company’s worldwide crude oil, natural gas, and NGLs revenues.
Note 14, Major Customers: EGPC share of 2025 production revenues · Filed 26/02/2026
