APA · 10-Q · 2026Q2 · Full report
Operating Expense Trends
APA Corp · 2026-08-06 · Importance 64 · Surprise 56 · In source text
Total operating expenses declined to $1.1 billion in the second quarter of 2026 from $1.6 billion and to $2.5 billion in the first six months from $3.4 billion. Purchased oil and gas costs decreased $426 million in the quarter and $825 million year to date because Permian Basin gas was purchased at significantly lower prices, including periods of negative prices, and certain third-party contracts expired in 2025. Lease operating expense decreased $14 million in the quarter and $59 million year to date, while gathering, processing, and transmission expense decreased $17 million and $30 million, respectively. DD&A expense decreased $26 million in the quarter and $116 million year to date, primarily due to lower production and, year to date, lower DD&A rates after Permian non-core asset sales.
Key facts
- The Company continued cost reduction efforts and raised its expected annualized savings target to $500 million by the end of 2026, an increase of $50 million from its previous guidance. source
- Accumulated depreciation, depletion, and amortization as of June 30, 2026: $(34,805) million (compared to $(33,740) million as of December 31, 2025). source
- Purchased oil and gas costs decreased $426 million in Q2 2026 and $825 million for the first six months of 2026 compared to the same prior-year periods. source
- Total DD&A expenses decreased $26 million in Q2 2026 and $116 million for the first six months of 2026 compared to the same prior-year periods. source
- During each of the quarters ended June 30, 2026 and June 30, 2025, the Company recorded no asset impairments in connection with fair value assessments. source
- The Company recorded no proved oil and gas property impairments during either of the quarters ended June 30, 2026 and June 30, 2025. source
- During each of the quarters ended June 30, 2026 and June 30, 2025, the Company recorded no inventory impairments. source
- LOE decreased $14 million for Q2 2026 and $59 million for the first six months of 2026 compared to the same periods in 2025; on a per-unit basis LOE increased 10 percent in Q2 2026 and 2 percent for the first six months of 2026. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | positive | realized | +17.1% | Purchased oil and gas costs decreased $426 million in Q2 2026 and $825 million for the first six months of 2026 compared to the same… |
| operating_income | positive | realized | +8.8% | Purchased oil and gas costs decreased $426 million in Q2 2026 and $825 million for the first six months of 2026 compared to the same… |
| assets | negative | realized | -5.9% | Accumulated depreciation, depletion, and amortization as of June 30, 2026: $(34,805) million (compared to $(33,740) million as of December… |
| operating_income | positive | probable | +0.5% | The Company continued cost reduction efforts and raised its expected annualized savings target to $500 million by the end of 2026, an… |