Apa Corp,
Fiscal Year 2024 Q2.

Impairments During the three and six months ended June 30, 2023, the Company recorded $46 million of impairments in connection with valuations of drilling and operations equipment inventory upon the Company's decision to suspend drilling operations in the North Sea. There were no impairments recorded during the three and six months ended June 30, 2024. 36

Other, net36 25 Total Uses of Cash and Cash Equivalents3,892 1,662 Increase (Decrease) in Cash and Cash Equivalents $73 $(103) Sources of Cash and Cash Equivalents Net Cash Provided by Operating Activities Operating cash flows are the Company's primary source of capital and liquidity and are impacted, both in the short term and the long term, by volatile commodity prices. The factors that determine operating cash flows are largely the same as those that affect net earnings, with the exception of non-cash expenses such as DD&A, exploratory dry hole expense, asset impairments, asset retirement obligation accretion, and deferred income tax expense. Net cash provided by operating activities during the first six months of 2024 totaled $1.2 billion, down $90 million from the first six months of 2023, primarily the result of timing of working capital items. For a detailed discussion of commodity prices, production, and operating expenses, refer to "Results of Operations" in this Item 2. For additional detail on the changes in operating assets and liabilities and the non-cash expenses that do not impact net cash provided by operating activities, refer to the Statement of Consolidated Cash Flows in the Consolidated Financial Statements set forth in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q. 38 Proceeds from Commercial Paper and Revolving Credit Facilities, Net As of June 30, 2024, outstanding borrowings under the Company's commercial paper and U.S. dollar denominated syndicated credit facility were $435 million, an increase of $63 million since December 31, 2023. During the six months ended June 30, 2023, the Company had net borrowings of $196 million under the Company's U.S. dollar denominated syndicated credit facility. Proceeds from Term Loan Facility On April 1, 2024, the Company borrowed an aggregate $1.5 billion under a syndicated credit agreement. Loan proceeds were used to refinance certain indebtedness of Callon upon the closing of the Callon acquisition. For additional details of the credit agreement, see "Term Loan Credit Agreement" in the section below under Liquidity. As of June 30, 2024, $1.5 billion remained outstanding under the term loan facility governed by the Term Loan Credit Agreement. Proceeds from Asset Divestitures The Company received $729 million and $28 million in proceeds from the divestiture of certain non-core assets during the first six months of 2024 and 2023, respectively. For more information regarding the Company's acquisitions and divestitures, refer to Note 2-Acquisitions and Divestitures in the Notes to Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. Proceeds from Sale of Kinetik Shares The Company received $428 million of cash proceeds from the sale of its remaining shares of Kinetik Class A Common Stock in March 2024. For more information regarding the Company's equity method interests, refer to Note 6-Equity Method Interests in the Notes to Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Critical Accounting Estimates The Company prepares its financial statements and accompanying notes in conformity with accounting principles generally accepted in the U.S., which require management to make estimates and assumptions about future events that affect reported amounts in the financial statements and the accompanying notes. The Company identifies certain accounting policies involving estimation as critical accounting estimates based on, among other things, their impact on the portrayal of the Company's financial condition, results of operations, or liquidity, as well as the degree of difficulty, subjectivity, and complexity in their deployment. Critical accounting estimates address accounting matters that are inherently uncertain due to unknown future resolution of such matters. Management routinely discusses the development, selection, and disclosure of each critical accounting estimate. For a discussion of the Company's most critical accounting estimates, please see the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023. For the six months ended June 30, 2024, the Company notes the following additional critical accounting estimate:

Overview APA is an independent energy company that owns consolidated subsidiaries that explore for, develop, and produce natural gas, crude oil, and natural gas liquids (NGLs). The Company's upstream business has oil and gas operations in three geographic areas: the U.S., Egypt, and offshore the U.K. in the North Sea (North Sea). APA also has active exploration and appraisal operations ongoing in Suriname, as well as interests in Uruguay and other international locations that may, over time, result in reportable discoveries and development opportunities. Prior to the BCP Business Combination (as defined in the Notes to the Company's Consolidated Financial Statements set forth in Part IV, Item 15 of this Annual Report on Form 10-K), the Company's midstream business was operated by Altus Midstream Company (ALTM) through its subsidiary Altus Midstream LP (collectively, Altus). APA believes energy underpins global progress, and the Company wants to be a part of the solution as society works to meet growing global demand for reliable and affordable energy. APA strives to meet those challenges while creating value for all its stakeholders. Uncertainties in the global supply chain and financial markets, including the impact of inflation and rising interest rates, and actions taken by foreign oil and gas producing nations, including OPEC+, continue to impact oil supply and demand and contribute to commodity price volatility. Despite these uncertainties, the Company remains committed to its longer-term objectives: (1) to invest for long-term returns in pursuit of moderate, sustainable production growth; (2) to strengthen the balance sheet to underpin the generation of cash flow in excess of its upstream exploration, appraisal, and development capital program that can be directed to debt reduction, share repurchases, and other return of capital to its shareholders; and (3) to responsibly manage its cost structure regardless of the oil price environment. The Company closely monitors hydrocarbon pricing fundamentals to reallocate capital as part of its ongoing planning process. APA's diversified asset portfolio and operational flexibility provide it the ability to timely respond to near-term price volatility and effectively manage its investment programs accordingly. For example, the Company deferred drilling and completion activity at Alpine High in the second quarter of 2023 in response to weakness in Waha natural gas and NGL prices but accelerated the completion of eight Permian Basin oil producing wells. The Company also suspended drilling activity in the North Sea during the second quarter of 2023, as increasing cost and tax burdens have impacted the competitiveness of these assets within the Company's portfolio. Capital investment plans were then aligned across other areas of the portfolio while maintaining a focus on the Company's capital returns framework established in 2021. 35

The Company remains committed to its capital return framework for equity holders to participate more directly and materially in cash returns. •The Company believes returning 60 percent of cash flow over capital investment creates a good balance for providing near-term cash returns to shareholders while still recognizing the importance of longer-term balance sheet strengthening. •The Company's quarterly dividend was increased in the third quarter of 2022 from $0.125 per share to $0.25 per share, representing a return to pre-COVID-19 dividend levels. •Beginning in the fourth quarter of 2021 and through the end of 2023, the Company has repurchased 76.1 million shares of the Company's common stock. Subsequent to year-end 2023 and through the date of this filing on February 22, 2024, the Company repurchased 3.0 million shares, and as of February 22, 2024, the Company had remaining authorization to repurchase up to 40.9 million shares under the Company's share repurchase programs.

Operating Expenses The table below presents a comparison of the Company's operating expenses for the years ended December 31, 2023, 2022, and 2021. All operating expenses include costs attributable to a noncontrolling interest in Egypt and Altus. For the Year Ended December 31,

Depreciation, depletion, and amortization: Oil and gas property and equipment582 354 1,001 679 Gathering, processing, and transmission assets1 1 3 3

Capital Resources and Liquidity Operating cash flows are the Company's primary source of liquidity. The Company's short-term and long-term operating cash flows are impacted by highly volatile commodity prices, as well as production costs and sales volumes. Significant changes in commodity prices impact the Company's revenues, earnings, and cash flows. These changes potentially impact the Company's liquidity if costs do not trend with sustained decreases in commodity prices. Historically, costs have trended with commodity prices, albeit on a lag. Sales volumes also impact cash flows; however, they have a less volatile impact in the short term. The Company's long-term operating cash flows are dependent on reserve replacement and the level of costs required for ongoing operations. Cash investments are required to fund activity necessary to offset the inherent declines in production and proved crude oil and natural gas reserves. Future success in maintaining and growing reserves and production is highly dependent on the success of the Company's drilling program and its ability to add reserves economically. Changes in commodity prices also impact estimated quantities of proved reserves. 37 Following the completion of the Callon acquisition, the Company revised its full-year 2024 estimated upstream capital investment to approximately $2.7 billion and remains committed to its capital return framework for equity holders to participate more directly and materially in cash returns through dividends and share repurchases. The Company believes its available liquidity and capital resource alternatives, combined with proactive measures to adjust its capital budget to reflect volatile commodity prices and anticipated operating cash flows, will be adequate to fund short-term and long-term operations, including the Company's capital development program, repayment of debt maturities, payment of dividends, share buy-back activity, and amounts that may ultimately be paid in connection with commitments and contingencies. The Company may also elect to utilize available cash on hand, committed borrowing capacity, access to both debt and equity capital markets, or proceeds from the sale of nonstrategic assets for all other liquidity and capital resource needs. For additional information, refer to Part I, Items 1 and 2-Business and Properties, and Item 1A-Risk Factors, in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Sources and Uses of Cash The following table presents the sources and uses of the Company's cash and cash equivalents for the periods presented: For the Six Months Ended June 30,

20242023 (In millions) Sources of Cash and Cash Equivalents: Net cash provided by operating activities$1,245 $1,335 Proceeds from commercial paper and revolving credit facilities, net

The Company expects that Apache will continue to reduce debt outstanding under its indentures from time to time. Dividends Paid to APA Common Stockholders The Company paid $168 million and $155 million during the first six months of 2024 and 2023, respectively, for dividends on its common stock. Distributions to Noncontrolling Interest Sinopec International Petroleum Exploration and Production Corporation (Sinopec) holds a one-third minority participation interest in the Company's oil and gas operations in Egypt. The Company paid $123 million and $100 million during the first six months of 2024 and 2023, respectively, in cash distributions to Sinopec. Treasury Stock Activity, net In the first six months of 2024, the Company repurchased 4.5 million shares at an average price of $31.77 per share and an aggregate purchase price of approximately $144 million, and as of June 30, 2024, the Company had remaining authorization to repurchase 39.4 million shares. In the first six months of 2023, the Company repurchased 5 million shares at an average price of $37.53 per share and an aggregate purchase price of approximately $188 million. 39

Liquidity The following table presents a summary of the Company's key financial indicators: June 30, 2024 December 31, 2023 (In millions) Cash and cash equivalents$160 $87

Results of Operations Oil, Natural Gas, and Natural Gas Liquids Production Revenues Revenue The Company's production revenues and respective contribution to total revenues by country were as follows: