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APA sells New Mexico assets at $608 million following quarterly profit success

APA Corp announced on Wednesday it would sell New Mexico Permian assets to focus on its core business. This was in an effort for the company to streamline its operations and concentrate on areas of strength. It also beat Wall Street's expectations for first-quarter profits.

These assets, which generate about 12,400 barrels equivalent of oil per day (boepd), are less than 5% APA's overall Permian production.

The company stated that the deal with Permian Resource is expected to close by the end of the second quarter and proceeds will be used to reduce the debt.

This move comes after APA acquired rival Callon Petroleum in West Texas and New Mexico last year.

APA reported that its quarterly production was 468,978 bpd, compared with 389,157 bpd last year.

The increase in production allowed the oil and gas company to counteract a sharp decline in crude price.

Crude oil fell in price during the first quarter as investors prepared for an increase in production from OPEC+. They also expressed concern over President Donald Trump’s tariffs, which could slow down global economic growth.

APA's average price per barrel was $73.73 in the quarter January-March, down from $80.65 in the same period of last year.

The company has also reduced its number of rigs to six due to the current market conditions.

In February, APA stated that

Planned

Eight rigs will be used in the Permian, and 12 in Egypt.

APA has also reduced its budget for 2025 capital development by $150 million.

The company said that it also expects to save $130 million by 2025, which is more than twice its previous estimate.

According to LSEG, the Houston-based company reported an adjusted profit of $1.06 per common share for three months ending March 31. This was higher than analysts' average estimates of 83c per share. (Reporting by Arunima Kumar in Bengaluru; Editing by Mohammed Safi Shamsi)

(source: Reuters)