APA Corporation (NASDAQ:APA) Q4 2023 Earnings Call Transcript

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Tracey Henderson: Yes, I’ll just comment, I think, on a little on both pieces, which is the Block 53 exit. I think we saw — we mentioned on the previous call that we really saw the prospectivity in Block 58 as being more prospective than what we saw in Block 53. So what you’re seeing with that exit really is strategic portfolio management and continuous high-grading of the portfolio where we saw more prospectivity both in Block 58 and in other opportunities that we had in front of us. And I would just echo what John said on Alaska. There’s — we have a range because these are exploration prospects that have risk associated with them. But clearly, what interested us in the block is that we do see materiality with these prospects that we — warranted expiration.

Leo Mariani: Okay. That’s helpful. And I just wanted to follow up on some of the comments that you guys made here. I just wanted to make sure I understood this. Did I hear a comment that APA might be adjusting its headcount a little bit downward in response to some of the lower activity levels? I know clearly that once you guys integrate Callon, I’m sure you’ll have to take a fresh look at the whole organization. But did I hear that right, but perhaps you think that maybe you might cut some of the APA headcount here at some point?

John Christmann: I mean, I’ll just say, we’re always looking to rightsize organization with activity levels. I think the comment in the prepared remarks was that we find ourselves in a much lower price environment. We’re always wanting to reduce activity and associated staff if we need to do so. But we have gone through an exercise in the North Sea as we’re kind of rightsizing for late life. And so we have gone through some steps there. But we’re, quite frankly, very excited about integrating the Callon assets and pulling those into the organization. And we do see some synergies there, but activity levels are still going to be strong and relatively close to where we were last year.

Operator: Thank you. I’m showing no further questions at this time. I would now like to turn it back to John Christmann, CEO, for closing remarks.

John Christmann: Yes. Thank you. We have chosen to reduce our capital this year and maintain roughly flat production given the potential for a lower commodity price environment while still funding our strategic initiatives. We have intentionally directed more capital towards the Permian, which is performing at an extremely high level. And we look forward to integrating the Callon assets into our Permian operations as well. And lastly, we will keep you up to date on our progress in Suriname and our other exploration plays. Thank you, operator.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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