APA · 10-Q · 2026Q2 · Full report

Income Tax Rate Changes

APA Corp · 2026-08-06 · Importance 42 · Surprise 50 · In source text

The United Kingdom’s Finance Act 2025 increased the Energy (Oil and Gas) Profits Levy from 35% to 38%, effective for the period from November 1, 2024, through March 31, 2030. The U.S. One Big Beautiful Bill Act of 2025 expanded and made permanent 100% bonus depreciation for eligible assets acquired and placed in service after January 19, 2025. The Act also aligned intangible drilling-cost treatment for corporate alternative minimum tax purposes with regular tax treatment beginning in 2026; APA does not expect a material impact on total 2026 tax expense because current-tax effects are expected to be offset by deferred-tax effects.

Key facts

• The U.S. enacted the One Big Beautiful Bill Act of 2025 (OBBBA) on July 4, 2025, which expanded and made permanent 100 percent bonus depreciation for eligible assets acquired and placed in service after January 19, 2025; the Company does not expect OBBBA to have a material impact on total tax expense for the year ended December 31, 2026. source
• Finance Act 2025, enacted March 20, 2025, increased the Energy (Oil and Gas) Profits Levy Act rate from 35 percent to 38 percent, effective for the period November 1, 2024 through March 31, 2030. source
• Deferred tax asset as of June 30, 2026: $2,126 million (compared to $2,328 million as of December 31, 2025). source
• The Company's effective income tax rate for the six months ended June 30, 2026 differed from the U.S. federal statutory rate of 21 percent due to taxes on foreign operations. source

Impact estimates