APA Corporation has reduced total debt by $2.3 billion since the end of 2024, cutting annualized interest expense by more than $155 million as stronger cash generation and cost reductions reshape the exploration and production company’s balance sheet.
During the first half of 2026, APA repaid $752 million of near-term bond debt, including $673 million during Q2. Net debt stood at approximately $3.3 billion at quarter-end.
The company’s cost-reduction program is also outperforming its previous target. APA now expects to exit 2026 with approximately $500 million of run-rate savings, up from its prior $450 million target, reflecting field-level operating efficiencies, well-cost reductions and continued corporate streamlining.
Cash generation accelerated substantially in Q2. Net cash provided by operating activities reached $1.706 billion compared with $1.181 billion a year earlier, while free cash flow increased to $738 million from $134 million. First-half free cash flow reached approximately $1.2 billion.
APA returned $189 million to shareholders during Q2 through dividends and repurchases, including the purchase of 2.8 million shares at an average price of $35.26. First-half shareholder returns totaled $277 million, and the company continues to expect to return at least 60% of 2026 free cash flow while strengthening the balance sheet.
Operational performance also exceeded expectations. Q2 reported production was approximately 410,000 barrels of oil equivalent per day, while adjusted production was 347,000 BOE per day. U.S. oil production averaged 123,500 barrels per day, about 2,500 barrels above guidance.
APA raised its full-year U.S. oil production outlook to 123,000 barrels per day while keeping U.S. capital spending at $1.3 billion. Total upstream capital investment is expected to be approximately $2.07 billion, while lease operating expense guidance was reduced by $25 million to $1.5 billion.
The company is also expanding its exploration portfolio through a planned $70 million upfront acquisition of Savant Alaska and a new partnership with Eni in offshore Uruguay, where APA will retain a 60% working interest and Eni will fund most of the initial exploration well planned for 2027.
KEY QUOTES:
“We’re sustaining top-tier operational performance and driving stronger production, lower costs and lower capital intensity. These results reflect the structural improvements we’ve made over the past two years to become a cost leader and drive higher capital efficiency across the Permian and Egypt.”
“APA is in a great position with a strengthening balance sheet, a highly capital-efficient base business, a clear path to organic oil production growth led by GranMorgu and multiple high-quality investment opportunities in exploration.”
John J. Christmann IV, Chief Executive Officer of APA Corporation
