APA Corporation APA recently announced that it curtailed natural gas and natural gas liquids (“NGL”) production during the second quarter, in a strategic move to counter plunging U.S. natural gas prices. The company reduced its U.S. natural gas output by approximately 10 million cubic feet per day (cf/d) and scaled back NGL production by about 750 barrels per day (b/d). This response was triggered by weak or even negative pricing at the Waha hub.
U.S. natural gas prices came under pressure in the second quarter amid rising supply and subdued demand. Thereby, APA anticipates an average realized price of $1 per thousand cubic feet (Mcf) for U.S. natural gas in the second quarter, marking a drop of about 50% from the previous quarter. For natural gas liquids, the company expects to report an average price of $19.80 per barrel, down from $28 during the last quarter. For oil, APA Corporation’s second quarter anticipation for price realization is $64.85 per barrel. However, in international markets, APA realized stronger prices, $66.20 per barrel for oil, $41.60 for NGL and $4 per thousand cubic feet for gas.
Divestment to Sharpen Focus
APA Corporation also wrapped up the previously announced sale of its New Mexico assets in June. The deal, first disclosed in May, contributed to a further dip in the second quarter production by around 1,800 barrels of oil equivalent per day, one-third of which was oil. The transaction netted APA $575 million in proceeds and reflects its ongoing efforts to streamline portfolio and concentrate capital where returns are higher.
Looking Ahead
As price volatility continues to shape operational decisions across the energy sector, APA’s second-quarter actions highlight a strategy focused on capital discipline and asset optimization. The dual approach, cutting low-margin volumes and monetizing non-core assets, shows the company’s intent to remain resilient amid shifting market conditions.
APA’s Zacks Rank & Key Picks
Houston, TX-based APA Corporation is one of the world's leading independent energy companies engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. Currently, APA has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like BKV Corporation BKV, Flotek Industries, Inc. FTK and MPLX LP MPLX. While BKV and Flotek currently sport a Zacks Rank #1 (Strong Buy) each, MPLX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BKV Corporation is an energy company that produces natural gas from its owned and operated upstream businesses. The Zacks Consensus Estimate for BKV’s 2025 earnings indicates 338.18% year-over-year growth.
In the oil and gas sector, Flotek serves major and independent energy producers and oilfield service companies, both domestic and international. The Zacks Consensus Estimate for FTK’s 2025 earnings indicates 64.71% year-over-year growth.
Findlay, OH-based MPLX is a master limited partnership engaged in providing a wide range of midstream energy services, including fuel distribution solutions. The Zacks Consensus Estimate for MPLX’s 2025 earnings indicates 5.23% year-over-year growth.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
APA Corporation (APA): Free Stock Analysis Report MPLX LP (MPLX): Free Stock Analysis Report Flotek Industries, Inc. (FTK): Free Stock Analysis Report BKV Corporation (BKV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
