APA Corp (US) APA · USD

BUSINESS SEGMENT INFORMATIONAs of December 31, 2025, the Company’s consolidated subsidiaries are engaged in exploration, development and/or production activities across four operating segments: Egypt, North Sea, Suriname, and the U.S. The Company’s business explores for, develops, and produces crude oil, natural gas, and natural gas liquids. The Company also has exploration interests in Uruguay, Alaska, and other international locations that may, over time, result in reportable discoveries and development opportunities.The Chief Operating Decision Maker (CODM) is a function (not necessarily an individual) that allocates the resources of the reporting entity and assesses the performance of its segments. Decisions to assess performance and allocate resources are made by the Company’s Chief Executive Officer (CEO), Mr. John J. Christmann, IV. Therefore, management has concluded that the CEO of the Company is the CODM. The information regularly reviewed by the CODM to assess performance and allocate resources is primarily associated with operating income from each segment and the resulting free cash flow, amongst other metrics. The Company concluded that the most comparable measure under U.S. GAAP is operating income.Financial information for each segment is presented below:U.S.

COMMITMENTS AND CONTINGENCIESLegal MattersThe Company is party to various legal actions arising in the ordinary course of business, including litigation and governmental and regulatory controls, which also may include controls related to the potential impacts of climate change. As of December 31, 2025, the Company has an accrued liability of approximately $23 million for all legal contingencies that are deemed to be probable of occurring and can be reasonably estimated. The Company’s estimates are based on information known about the matters and its experience in contesting, litigating, and settling similar matters. Although actual amounts could differ from management’s estimate, none of the actions are believed by management to involve future amounts that would be material to the Company’s financial position, results of operations, or liquidity after consideration of recorded accruals. With respect to material matters for which the Company believes an unfavorable outcome is reasonably possible, the Company has disclosed the nature of the matter and a range of potential exposure, unless an estimate cannot be made at this time. It is management’s opinion that the loss for any other litigation matters and claims that are reasonably possible to occur will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity.Australian Operations Divestiture DisputePursuant to a Sale and Purchase Agreement dated April 9, 2015 (Quadrant SPA), the Company and its subsidiaries divested Australian operations to Quadrant Energy Pty Ltd (Quadrant). Closing occurred on June 5, 2015. In April 2017, the Company filed suit against Quadrant for breach of the Quadrant SPA. In its suit, the Company seeks approximately AUD $80 million. In December 2017, Quadrant filed a defense of equitable set-off to the Company’s claim and a counterclaim seeking approximately AUD $200 million in the aggregate. In 2018, Quadrant was acquired by Australian oil and gas company Santos, Ltd., who assumed Quadrant’s place in the ongoing litigation. In early 2025, Santos amended the pending counterclaims to abandon a number of claims that had been asserted against the Company but maintaining counterclaims for approximately AUD $57 million.

DEBT AND FINANCING COSTSOverviewThe debt of APA and Apache is senior unsecured debt and has equal priority with respect to the payment of both principal and interest.The Company records gains and losses on extinguishment of debt in “Financing costs, net” in the Company’s statement of consolidated operations.The following table presents the carrying value of the Company’s debt as of December 31, 2025 and 2024: December 31, 20252024 (In millions)4.625% notes due 2025$— $51 7.70% notes due 2026(1)(3)79 78 7.95% notes due 2026(1)(3)132 132 4.875% notes due 2027(1)(2)108 108 4.375% notes due 2028(1)(2)315 325 7.75% notes due 2029(1)(3)(4)232 235 4.250% notes due 2030(1)(2)475 516 6.10% notes due 2035(2)350 — 6.000% notes due 2037(1)(2)433 443 5.100% notes due 2040(1)(2)763 1,333 5.250% notes due 2042(1)(2)244 399 4.750% notes due 2043(1)(2)217 428 4.250% notes due 2044(1)(2)100 211 7.375% debentures due 2047(1)(3)150 150 5.350% notes due 2049(1)(2)374 387 6.75% notes due 2055(2)500 — 7.625% debentures due 2096(1)(3)39 39 Notes and debentures before unamortized discount and debt issuance costs(5)(6)4,511 4,835 Commercial paper— 323 Term loan facility— 900 Syndicated credit facilities(7)— 10 Apache finance lease obligations28 30 Unamortized discount(23)(25)Debt issuance costs(23)(29)Total debt4,493 6,044 Current maturities(213)(53)Long-term debt$4,280 $5,991 (1)This series of indenture debt includes series separately issued by APA and by Apache (see “APA Exchange and Tender Offers for Apache Indenture Debt” in this Note 8 below). The indicated amount as of December 31, 2025 is an aggregate amount for APA and Apache debt of this series. The indicated amount as of December 31, 2024 is solely Apache debt of this series; there was no APA indenture debt outstanding on December 31, 2024.(2)These notes are redeemable, in whole or in part, at the issuer’s option, subject to a make-whole premium.(3)These notes and debentures are not redeemable, except that the 7.75% notes due 2029 for which Apache is obligated are redeemable in whole for principal and accrued interest in the event of certain Canadian tax law changes. (4)Outstanding 7.75% notes due 2029 for which Apache is obligated were assumed by Apache in August 2017 as permitted by terms of such notes originally issued by a subsidiary and guaranteed by Apache.(5)The aggregate amount as of December 31, 2025 is comprised of $3.6 billion for APA notes and debentures and $932 million for Apache notes and debentures.

INCOME TAXESNet income before income taxes was composed of the following: For the Year Ended December 31, 202520242023 (In millions)U.S.$1,488 $705 $627 Foreign1,303 830 2,256 Total$2,791 $1,535 $2,883 The total income tax provision (benefit) consisted of the following: For the Year Ended December 31, 202520242023 (In millions)Current income taxes:Federal$(104)$76 $2 State(1)2 6 Foreign844 1,075 1,330 739 1,153 1,338 Deferred income taxes:Federal384 (96)(1,708)State41 3 (32)Foreign(65)(643)78 360 (736)(1,662)Total$1,099 $417 $(324)The total income tax provision differs from the amounts computed by applying the U.S. statutory income tax rate to income (loss) before income taxes. A reconciliation of the tax on the Company’s net income before income taxes and total income tax provision (benefit) is shown below: For the Year Ended December 31, 202520242023Amount% of Income Before Income TaxesAmount% of Income Before Income TaxesAmount% of Income Before Income Taxes (In millions)U.S. federal statutory tax rate$586 21.0 %$322 21.0 %$605 21.0 %State and local income taxes, net of federal income tax effect(1)31 1.1 %2 0.1 %(23)(0.8)%Foreign tax effects:Egypt:Statutory tax rate difference between Egypt and U.S.277 9.9 %334 21.8 %366 12.7 %Concessions on production-sharing contracts75 2.8 %77 5.0 %65 2.3 %U.K.:Statutory tax rate difference between U.K. and U.S.4 0.1 %(376)(24.5)%283 9.8 %Enacted changes in tax law78 2.8 %— — %174 6.0 %Annual Energy Profits Levy deferred adjustment30 1.1 %200 13.0 %78 2.7 %Accretion expense44 1.6 %37 2.4 %27 0.9 %Financing activities(43)(1.5)%(46)(3.0)%(39)(1.3)%Changes in valuation allowances23 0.8 %— — %— — %Other— — %5 0.3 %(40)(1.4)%Suriname:Statutory tax rate difference between Suriname and U.S.(5)(0.2)%(13)(0.8)%(8)(0.3)%Changes in valuation allowances(8)(0.3)%18 1.2 %10 0.4 %Other20 0.7 %13 0.8 %9 0.3 %Other foreign jurisdictions10 0.4 %9 0.6 %9 0.3 %Cross-border tax laws1 — %1 0.1 %1 — %Tax credits:Corporate alternative minimum tax credit71 2.5 %(74)(4.8)%— — %Other tax credits(1)— %(3)(0.2)%— — %Foreign tax credits269 9.6 %— — %— — %Changes in valuation allowances(273)(9.8)%— — %(1,852)(64.2)%Non-taxable or non-deductible items:Stock compensation1 — %17 1.1 %(2)(0.1)%Legal reserves— — %14 0.9 %— — %Transaction costs— — %5 0.3 %— — %U.S tax basis of investment in U.K.— — %(214)(13.9)%— — %Other(1)— %10 0.7 %8 0.3 %Changes in unrecognized tax benefits(16)(0.6)%2 0.1 %5 0.

ACQUISITIONS AND DIVESTITURES2025 ActivityLeasehold and Property AcquisitionsDuring 2025, the Company completed leasehold acquisitions, primarily in the Permian Basin, for aggregate cash consideration of approximately $26 million.During the third quarter of 2025, the Government of Egypt awarded the Company an additional two million net exploration acres in the Western Desert. In addition to a signature bonus of $25 million, the Company has committed to a drilling program on the acreage that the Company believes it will be able to meet in the normal course of operations.U.S. DivestituresDuring the second quarter of 2025, the Company completed the sale of all of its New Mexico Permian assets. The assets had a carrying value of $282 million and associated retirement obligation of $9 million, which were exchanged for total cash consideration of $571 million, inclusive of post-closing adjustments. The Company recognized a gain of $299 million in association with this sale. Proceeds from the transaction were used primarily for debt reduction.2024 ActivityCallon Petroleum Company AcquisitionOn April 1, 2024, APA completed its acquisition of Callon in an all-stock transaction valued at approximately $4.5 billion, inclusive of Callon’s debt. Subject to the terms of the merger agreement, each share of Callon common stock was converted into the right to receive 1.0425 shares of APA common stock, with cash in lieu of fractional shares. As a result, APA issued approximately 70 million shares of APA common stock in connection with the transaction, and following the acquisition, Callon common stock is no longer listed for trading on the NYSE.Recording of Assets Acquired and Liabilities AssumedThe transaction was accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The table below presents the finalized value of the assets acquired and liabilities assumed.

The Company maintains a cybersecurity program that establishes safeguards for protecting the confidentiality, integrity, and availability of the Company’s data, technology, and information systems, and the material risks associated with the threats identified from time to time under the cybersecurity program are incorporated into the Company’s corporate risk register. The program includes general controls for managing changes in and access to the Company’s information technology environment, cybersecurity awareness and training programs to help employees identify and mitigate against cybersecurity threats, cybersecurity incident response plans and third-party incident response retainers to help expedite the Company’s response in the event of a cybersecurity incident, and guidelines regarding system vulnerability management, third-party threat intelligence, endpoint detection and response solutions, and network security measures.The program also establishes protocols for identifying and managing material risks related to cybersecurity threats associated with the Company’s use of third-party service providers. The Company monitors and oversees the material risks related to vulnerabilities, threats, and incidents impacting its third-party service providers via onboarding reviews, threat intelligence reports, and annual assessments. As an example of the Company’s efforts to manage third-party cybersecurity risks, when third parties are engaged to provide software-as-a-service offerings, the Company’s standard licensing terms require such third parties to utilize safeguards to protect the Company’s data, in compliance with applicable standards from the International Organization for Standardization (ISO) regarding security techniques, and to notify the Company within 24 hours of becoming aware of a cybersecurity incident impacting the Company’s data.

CAPITAL STOCKCommon Stock OutstandingThe following table provides changes to the Company’s common shares outstanding for the years ended December 31, 2025, 2024, and 2023: For the Year Ended December 31,202520242023Balance, beginning of year365,397,149 303,575,901 311,559,149 Shares issued for stock-based compensation plans:Treasury shares issued— — 2,016 Common shares issued458,481 70,983,745 725,914 Treasury shares acquired(12,890,984)(9,162,497)(8,711,178)Balance, end of year352,964,646 365,397,149 303,575,901 Net Income per Common ShareThe following table provides a reconciliation of the components of basic and diluted net income per common share for the years ended December 31, 2025, 2024, and 2023: 202520242023 IncomeSharesPer ShareIncomeSharesPer ShareIncomeSharesPer Share (In millions, except per share amounts)Basic:Income attributable to common stock$1,434 359 $3.99 $804 353 $2.28 $2,855 308 $9.26 Effect of Dilutive Securities:Stock compensation awards$— — $— $— — $(0.01)$— 1 $(0.01)Diluted:Income attributable to common stock$1,434 359 $3.99 $804 353 $2.27 $2,855 309 $9.25 The diluted EPS calculation excludes options and restricted shares that were anti-dilutive totaling 3.3 million, 2.0 million, and 1.9 million for the years ended December 31, 2025, 2024, and 2023, respectively. Stock Repurchase ProgramDuring the fourth quarter of 2021, the Company’s Board of Directors authorized the purchase of 40 million shares of the Company’s common stock. During the third quarter of 2022, the Company's Board of Directors authorized the purchase of an additional 40 million shares of the Company's common stock. During 2025, the Company repurchased 12.9 million shares at an average price of $21.73 per share, and as of December 31, 2025, the Company had remaining authorization to repurchase 21.9 million shares. During 2024, the Company repurchased 9.2 million shares at an average price of $26.83 per share. During 2023, the Company repurchased 8.7 million shares at an average price of $37.81 per share.The Company is not obligated to acquire any additional shares. Shares may be purchased either in the open market or through privately held negotiated transactions. Common Stock DividendFor the years ended December 31, 2025, 2024, and 2023, the Company declared common stock dividends totaling $1.00 per share.

MAJOR CUSTOMERSThe Company is exposed to credit risk in the event of nonpayment by counterparties, a significant portion of which are concentrated in energy-related industries. The creditworthiness of customers and other counterparties is subject to continuing review, including the use of master netting agreements, where appropriate. During 2025, sales to EGPC in Egypt accounted for approximately 15 percent of the Company’s worldwide crude oil, natural gas, and NGLs revenues. During 2024 and 2023, sales to EGPC accounted for approximately 17 percent and 15 percent, respectively, of the Company’s worldwide crude oil, natural gas, and NGLs revenues.Management does not believe that the loss of any single customer would have a material adverse effect on the results of operations.