HOUSTON - APA Corporation (NASDAQ: APA), an $8.75 billion oil and gas exploration and production company currently trading at an attractive P/E ratio of 3.58, announced plans to offer a series of senior notes due in 2035 and 2055 in a private offering exempt from registration under the Securities Act of 1933. According to InvestingPro analysis, the company appears undervalued based on its Fair Value calculations. The company aims to use the net proceeds to purchase its subsidiary Apache Corporation (NASDAQ:APA)'s outstanding senior indebtedness in cash tender offers that began on December 3, 2024.
The tender offers, which have a maximum aggregate purchase price of $869 million including accrued interest, are part of APA's broader debt restructuring strategy. The company currently maintains a debt-to-equity ratio of 1.27 and has demonstrated strong financial stability with a 55-year track record of consistent dividend payments, as revealed by InvestingPro data. Any remaining funds from the note issuance will be allocated for general corporate purposes, potentially including further purchases of Apache's outstanding notes.
APA expects the settlement date for these tender offers and associated offers to exchange certain outstanding senior indebtedness for new notes to be January 10, 2025. Initially, Apache Corporation will guarantee the notes until its senior notes and debentures under existing indentures fall below $1 billion. If this threshold is met by the tender settlement date, the guarantees will not be issued.
The notes will be available only to qualified institutional buyers and certain non-U.S. persons outside the United States, in line with Rule 144A under the Securities Act and Regulation S. These securities have not been registered under the Securities Act or any state securities laws and are not to be offered or sold in the U.S. without registration or applicable exemption from registration requirements.
APA Corporation has a presence in the United States, Egypt, the United Kingdom (TADAWUL:4280), offshore Suriname, and other locations. The company's forward-looking statements in this context, such as capital and drilling plans, production expectations, and asset transactions, are subject to various risks and uncertainties that could cause actual results to differ materially from current projections.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, and there will be no sale of the securities in any jurisdiction where such offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of that jurisdiction. With a robust gross profit margin of 70% and positive earnings forecasts, APA continues to demonstrate strong operational performance. For detailed financial analysis and additional ProTips, investors can access the comprehensive Pro Research Report available on InvestingPro.
The information in this news article is based on a press release statement from APA Corporation.
In other recent news, APA Corporation announced significant executive leadership changes. Clay Bretches, Executive Vice President of Operations, is set to retire in July 2025, and Kimberly Warnica has been appointed as Executive Vice President and Chief Legal Officer. These changes are part of APA's ongoing efforts to streamline leadership and support long-term goals.
APA Corporation also recently finalized its acquisition of Callon (NYSE:CPE) Petroleum Company, marking a significant expansion in the energy sector. This strategic merger aims to consolidate APA's industry foothold and capitalize on synergies between the two companies.
In terms of analyst updates, UBS, Evercore ISI, and RBC Capital Markets have adjusted their price targets for APA Corporation. These adjustments follow the company's announcement of a third quarter consolidated net loss of $223 million, primarily due to a $571 million impairment related to its North Sea and non-core Permian assets. However, the adjusted net income stood at $370 million.
In terms of future plans, APA Corporation is strategically focusing on its Permian operations and planning exploration in Alaska for the first half of 2025. The company also plans to sustain production in the Permian and Egypt with a 2025 capital budget of $2.2 billion to $2.3 billion. Amid these recent developments, APA Corporation faces a $2 billion liability in the North Sea and a slight decline in Egyptian production. However, the GranMorgu project in Suriname is expected to contribute significantly from 2028.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.