APA Corp said on Wednesday that it would sell its New Mexico Permian assets for $608 million as part of an effort to streamline operations and focus on core areas, after it beat Wall Street estimates for first-quarter profit.
The assets, which produce about 12,400 barrels of oil equivalent per day (boepd), represent less than 5% of APA’s total Permian output.
The deal with Permian Resources is expected to close in the second quarter, with proceeds expected to reduce debt, the company said.
The move follows APA’s acquisition of rival Callon Petroleum last year, which expanded its operations in the Permian shale basin of West Texas and New Mexico.
APA said its quarterly production stood at 468,978 boepd, compared to 389,157 boepd the previous year.
The rise in production helped the oil and gas producer to offset a steep decline in crude prices.
Crude oil prices fell in the first-quarter as investors braced for a production increase from OPEC+ and expressed concerns over U.S. President Donald Trump’s tariffs potentially slowing global economic growth and reducing fuel demand.
APA’s average oil price per barrel stood at $73.73 per barrel in the January-March quarter, down from $80.65 per barrel in the same period last year.
Given current market conditions, the company is also reducing its rig count to six.
In February, APA said it planned, to run eight rigs in the Permian and 12 rigs in Egypt.
APA also cut its 2025 development capital budget by $150 million.
The company also said it now expects $130 million in cost savings for 2025, more than double its earlier estimate.
The Houston, Texas-based company said adjusted profit was $1.06 per share for the three months ended March 31, surpassing analysts’ average estimate of 83 cents per share, according to data compiled by LSEG.
Source: Reuters.com