APA Corporation’s Quarterly Check-Up by RBC Capital

RBC Capital provided their quarterly check-up for Q3 on APA Corporation (NASDAQ:APA), noting that the operational performance continues to be mixed, but the optionality on international gas price exposure and Suriname could be catalysts in mid-2023.

The analysts believe the key investor debates are probability and timing for Suriname FID, the next steps in Suriname and status with the two wells currently drilling, the value impact from international price exposure, and the pace of buybacks to hit 60% free cash flow return.

The analyst adjusted their Q3 EPS/CFPS estimates by $0.02/($0.02) to $1.69/$3.62 reflecting slight changes to their cash operating costs and exploration expenses estimates.

The analysts expect Q3 capital spending of $510 million, slightly below the $520 million Street estimate and the $515 million guidance. The analysts reiterated their sector perform rating and $50 price target.