Apache missed analyst estimates in the final quarter of the year after a slide in North Sea production caused by outages at key fields.
Apache (NASDAQ:APA) reported net income of $2.9 billion for full-year 2023, but missed quarterly earnings and production estimates following work to repair facilities at its Beryl Alpha and Forties platforms.
The firm said production for the quarter had come in below guidance due to “additional compressor-related downtime” at both fields.
Compressor repairs at Beryl were completed in late January, it noted.
Q4 2023 production held at 414,000 barrels per day while total adjusted production for 2023 is expected to be “relatively flat” year-over-year, it said.
In 2024, APA plans to invest between $1.9-2 billion in global upstream, though no new investment will be committed to the UK.
A presentation accompanying its results confirms UK assets will remain in a state of managed production decline, and the group has “no drilling planned”.
That’s likely to result in a year-over-year production decline of around 20% through the rest of 2024.
A large maintenance turnaround will also affect production in across both Q2 and Q3, with production guidance set at 35,000-37,000 barrels of oil equivalent per day for the year – below the 41,000-43,000 in Q1 2024.
In November the firm announced plans to trim up to 15% of its 600-strong workforce, launching consultations that would see a “maximum” of 90 redundancies at its onshore Aberdeen office – though it noted at the time this was “one speculative scenario”.
It also plans to bring forward the shutdown of the Forties oilfield by 11 years amid a wider £200m slash to UK spending.
In its most recent update, Apache maintained it has a portfolio of “technically attractive drilling prospects that are not currently economic” under the current Energy Profits Levy tax framework.
It says it now has a “right-sized organization to align with lower planned activity levels.”
Meanwhile its modest global investment plans reflect a strategy to moderate activity levels during periods of lower commodity prices.
$100 million of its upstream budget will be routed toward exploration activities, predominantly in Alaska, and $50 million toward progressing a large scale FPSO project in Suriname, it said.
CEO John J. Christmann IV said: “Given the potential for lower year-over-year commodity prices, we will prudently manage costs and high-grade capital to our most strategic opportunities.”
In Egypt the company’s drilling program “continues to perform well”, with a success rate of 84% (26 of 31 wells) in the fourth quarter of 2023.
The results follow an announcement at the start of the year to acquire shale driller Callon Petroleum for $4.5bn.
Mr Christmann added: “Following closing, we are confident in our ability to create substantial shareholder value through our proven workflows and Permian operating model.
“This will drive enhanced operational performance and capital productivity in addition to planned cost synergies.”
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