APA Corp Cuts Drilling Rigs by Half While Increasing Oil Production Forecast
In the second quarter of 2026, APA Corporation (NASDAQ:APA) demonstrated strong operational efficiency and financial performance. The company reduced its drilling rigs in the Permian Basin from eight to four while still raising full-year U.S. oil production guidance by 3,000 barrels per day to 123,000 bpd. Despite higher input costs like diesel prices, APA maintained a $1.3 billion capital budget and increased its annualized cost savings target to $500 million. APA's free cash flow reached $738 million in Q2, with the first half of 2026 generating over $1.2 billion—surpassing previous three-year totals. The company returned nearly $190 million to shareholders through dividends and share repurchases. Its balance sheet improved significantly as well, reducing net debt by $2.3 billion since year-end 2024. Looking ahead, APA is expanding beyond its core Permian Basin operations with new ventures in Alaska, Uruguay, Suriname, and Egypt. However, some exploration timelines have been delayed due to cost pressures and operational adjustments.
Tickers: $APA
Topics: capital budgeting debt reduction free cash flow oil production