APA Corp (APA.O): 3Q CFPS Beat; '27 Guidance Shows Capital Increasing, Production Flat

APA reported 3q CFPS of $4.15, 3%/12% above Citi/LSEG consensus, driven by higher-than-expected production of 450 kboe/d, 2% above Citi/consensus. US production was supported by high uptime, earlier TILs and robust new well performance. D&C capex of $466mm was 6%/11% below Citi/consensus and Gran Morgu spend was shifted into 4q. Further, both LOE and GP&T came in better-than-expected. In light of the likelihood of reaching the $3bn net debt target by YE, APA has presented a new target of $2bn. APA also provided preliminary guidance for '27; upstream capex was guided to $2.5bn, with 60% of the YoY increase driven by exploration capital and GranMorgu development, with the balance owing to service cost inflation, while production in the U.S. and Egypt is expected flat. Overall, we see the release are neutral for the stock and look to the call for additional color on APA's exploration initiatives.