JP Morgan Expects Solid Q1 Oil Output For APA, But Sees March Shut-Ins To Impact Volumes Slightly

JP Morgan analyst Arun Jayaram expects a strong first-quarter result for APA Corporation APA.

The analyst expects overall volumes to align with the company’s guidance and sees financial results slightly ahead of Street expectations.

Jayaram forecasts adjusted oil production at 398 MBoe/d, with U.S. oil output expected to land near the lower end of the 125–127 MBoe/d guidance range.

Total volumes are expected to be slightly impacted by 11 mmcfe/d of gas/NGL shut-ins in March, roughly 73% of which is gas, due to negative Waha pricing, he added.

The analyst projects U.S. production at 298 MBoe/d in the quarter, slightly below the 300 MBoe/d guidance due to shut-ins at Alpine High.

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Jayaram anticipates a capital expenditure (CAPEX) of $776 million, just above the guidance of $765 million, largely due to the timing of Suriname-related spending.

For 2025, the analyst expects the Suriname CAPEX of $200 million, with $125 million allocated in the first quarter (versus the guided $100 million).

This reflects long-cycle investment in the GranMorgu project, which aims for its first oil in 2028.

Under a scenario with WTI oil at $50 per barrel and U.S. gas at $3.50 per Mcf, Jayaram estimates free cash flow (FCF) yields of 9.2% for 2025 and 1.4% for 2026.

Finally, Jayaram projects first-quarter EPS of $0.76 vs. the Street estimate of $0.77 and EBITDAX of $1.408 billion (3% above consensus of $1.366 billion).

The company plans to release first-quarter 2025 results on May 8.

Price Action: APA shares are down 0.03% at $15.03 at the last check on Monday.

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