10-K – 2026-02-26 – apa-20251231.htm

• The most significant assumptions relate to the estimated fair values assigned to proved oil and natural gas properties. The fair value of proved oil and natural gas properties as of the acquisition date were estimated using the income approach, where fair value was determined based on the expected future cash flows from estimated proved oil, natural gas, and NGL reserves and related discounted future net cash flows as of that date. Significant inputs to the fair value estimate included estimates of future production volumes, future operating and development costs, future commodity prices, and a weighted-average cost of capital discount rate.
• The fair value of unproved properties was estimated mainly using the market approach, based on acreage costs in areas where Callon acreage was acquired.
• The fair value of most other current assets and current liabilities were determined to be equivalent to the carrying value due to their short-term nature.
• The fair value of debt was based on the estimated cost to retire Callon’s debt instruments.
• Estimated deferred taxes were based on available information concerning the fair values assigned to acquired assets and liabilities and their respective tax basis and tax-related carryforwards at the acquisition date.
Refer to Note 2—Acquisitions and Divestitures for further detail regarding the Company’s fair value measurements recorded related to the Callon acquisition.
Revenue Recognition
The Company’s oil and gas segments primarily generate revenue from contracts with customers from the sale of its crude oil, natural gas, and natural gas liquids production volumes. In addition to APA-related production volumes, the Company also sells commodity volumes purchased from third parties to provide flexibility to fulfill sales obligations and commitments. Under these commodity sales contracts, the physical delivery of each unit of quantity represents a single, distinct performance obligation on behalf of the Company. Contract prices are determined based on market-indexed prices, adjusted for quality, transportation, and other market-reflective differentials. Revenue is measured by allocating an entirely variable market price to each performance obligation and recognized at a point in time when control is transferred to the customer. The Company considers a variety of facts and circumstances in assessing the point of control transfer, including but not limited to: whether the purchaser can direct the use of the hydrocarbons, the transfer of significant risks and rewards, and the Company’s right to payment. Control typically transfers to customers upon the physical delivery at specified locations within each contract and the transfer of title.
APA’s Egypt operations are conducted pursuant to production-sharing contracts (PSCs). Under the terms of the Company’s PSCs, the Company is the contractor partner (Contractor) with the Egyptian General Petroleum Corporation (EGPC) and bears the risk and cost of exploration, development, and production activities. In return, if exploration is successful, the Contractor receives entitlement to variable physical volumes of hydrocarbons, representing recovery of the costs incurred and a stipulated share of production after cost recovery. Additionally, the Contractor’s income taxes, which remain the liability of the Contractor under domestic law, are paid by EGPC on behalf of the Contractor out of EGPC’s production entitlement. Income taxes paid to the Arab Republic of Egypt on behalf of the Contractor are recognized as oil and gas sales revenue and income tax expense and reflected as production and estimated reserves. Because Contractor cost recovery entitlement and income taxes paid on its behalf are determined as a monetary amount, the quantities of production entitlement and estimated reserves attributable to these monetary amounts will fluctuate with commodity prices. In addition, because the Contractor income taxes are paid by EGPC, the amount of the income tax has no economic impact on the Company’s Egypt operations despite impacting the Company’s production and reserves.
Refer to Note 16—Business Segment Information for a disaggregation of revenue by product and reporting segment.
F-12

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Payment Terms and Contract Balances
Receivables from contracts with customers, including receivables for purchased oil and gas sales and net of allowance for credit losses, were $ 826  million and $ 1.7 billion as of December 31, 2025 and 2024, respectively. Payments under all contracts with customers are typically due and received within a short-term period of one year or less, after physical delivery of the product or service has been rendered. During 2025, the Company observed a meaningful improvement in the timing of payments from the Egyptian General Petroleum Corporation (EGPC). As a result of more consistent remittances during the year, the Company’s outstanding receivable balance from this customer was current as of December 31, 2025. This improvement follows several periods prior to 2025 during which EGPC payments were delayed and the receivable balance increased. While recent collections have been timely, the Company continues to closely monitor its exposure to EGPC, as payment patterns may vary over time.
In accordance with the provisions of ASC 606, “Revenue from Contracts with Customers,” variable market prices for each short-term commodity sale are allocated entirely to each performance obligation as the terms of payment relate specifically to the Company’s efforts to satisfy its obligations. As such, the Company has elected the practical expedients available under the standard to not disclose the aggregate transaction price allocated to unsatisfied, or partially unsatisfied, performance obligations as of the end of the reporting period.
Cash and Cash Equivalents
The Company considers all highly liquid short-term investments with a maturity of three months or less at the time of purchase to be cash equivalents. These investments are carried at cost, which approximates fair value. As of December 31, 2025 and 2024, the Company had $ 516  million and $ 625  million, respectively, of cash and cash equivalents. The Company had no restricted cash as of December 31, 2025 and 2024.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are stated at amortized cost net of an allowance for credit losses. The Company routinely assesses the collectability of its financial assets measured at amortized cost. The Company monitors the credit quality of its counterparties through review of collections, credit ratings, and other analyses. The Company develops its estimated allowance for expected credit losses primarily using an aging method and analyses of historical loss rates as well as consideration of current and future conditions that could impact its counterparties’ credit quality and liquidity.
The following table presents changes to the Company’s allowance for credit loss:

For the Year Ended December 31,
2025 2024 2023

(In millions)
Allowance for credit loss at beginning of year $ 123   $ 114   $ 117  
Additional provisions for the year 20   9   16  
Uncollectible accounts written off, net of recoveries ( 3 ) —   ( 19 )
Allowance for credit loss at end of year $ 140   $ 123   $ 114  

Inventories
Inventories consist principally of tubular goods and equipment and are stated at the lower of weighted-average cost or net realizable value. Oil produced but not sold, primarily in the North Sea, is also recorded to inventory and is stated at the lower of the cost to produce or net realizable value.
During 2025, the Company recorded $ 7  million of inventory impairments in the North Sea. During 2024, the Company recorded $ 18  million of inventory impairments, including $ 13  million in the North Sea and $ 5  million in the U.S. During 2023, the Company recorded impairments of approximately $ 50  million in connection with valuations of drilling and operations equipment inventory upon the Company’s decision to suspend drilling operations in the North Sea.
Property and Equipment
The carrying value of the Company’s property and equipment represents the cost incurred to acquire the property and equipment, including capitalized interest, net of any impairments. For business combinations and acquisitions, property and equipment cost is based on the fair values at the acquisition date.
F-13

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Oil and Gas Property
The Company follows the successful efforts method of accounting for its oil and gas property. Under this method of accounting, exploration costs, such as exploratory geological and geophysical costs, delay rentals, and exploration overhead, are expensed as incurred. All costs related to production, general corporate overhead, and similar activities are expensed as incurred. If an exploratory well provides evidence to justify potential development of reserves, drilling costs associated with the well are initially capitalized, or suspended, pending a determination as to whether a commercially sufficient quantity of proved reserves can be attributed to the area as a result of drilling. This determination may take longer than one year in certain areas depending on, among other things, the amount of hydrocarbons discovered, the outcome of planned geological and engineering studies, the need for additional appraisal drilling activities to determine whether the discovery is sufficient to support an economic development plan, and government sanctioning of development activities in certain international locations. At the end of each quarter, management reviews the status of all suspended exploratory well costs in light of ongoing exploration activities; in particular, whether the Company is making sufficient progress in its ongoing exploration and appraisal efforts or, in the case of discoveries requiring government sanctioning, whether development negotiations are underway and proceeding as planned. If management determines that future appraisal drilling or development activities are unlikely to occur, associated suspended exploratory well costs are expensed.
Acquisition costs of unproved properties are assessed for impairment at least annually and are transferred to proved oil and gas properties to the extent the costs are associated with successful exploration activities. Significant undeveloped leases are assessed individually for impairment based on the Company’s current exploration plans. Unproved oil and gas properties with individually insignificant lease acquisition costs are amortized on a group basis over the average lease term at rates that provide for full amortization of unsuccessful leases upon lease expiration or abandonment. Costs of expired or abandoned leases are charged to exploration expense, while costs of productive leases are transferred to proved oil and gas properties. Costs of maintaining and retaining unproved properties, as well as amortization of individually insignificant leases and impairment of unsuccessful leases, are included in exploration costs in the statement of consolidated operations.
The following table represents non-cash impairment charges of the carrying value of the Company’s proved and unproved properties:

For the Year Ended December 31,
2025 2024 2023

(In millions)
Proved properties:
U.S. $ —   $ 315   $ —  
Egypt 18   —   —  
North Sea —   796   —  
Total proved properties $ 18   $ 1,111   $ —  

Unproved properties:
U.S. $ —   $ 34   $ 10  
Egypt 2   —   —  
North Sea —   —   11  
Other International
—   1   1  
Total unproved properties $ 2   $ 35   $ 22  

Costs to develop proved reserves, including the costs of all development wells and related equipment used in the production of crude oil and natural gas, are capitalized. Depreciation of the cost of proved oil and gas properties is calculated using the unit-of-production (UOP) method. The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the carrying value of associated proved oil and gas properties. The reserve base used to calculate depreciation for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. The reserve base used to calculate the depreciation for capitalized well costs is the sum of proved developed reserves only. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are included in the depreciable cost.
Oil and gas properties are grouped for depreciation in accordance with ASC 932, “Extractive Activities—Oil and Gas.” The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field.
F-14

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

When circumstances indicate that the carrying value of proved oil and gas properties may not be recoverable, the Company compares unamortized capitalized costs to the expected undiscounted pre-tax future cash flows for the associated assets grouped at the lowest level for which identifiable cash flows are independent of cash flows of other assets. If the expected undiscounted pre-tax future cash flows, based on the Company’s estimate of future crude oil and natural gas prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally estimated using the income approach described in ASC 820. The expected future cash flows used for impairment reviews and related fair value calculations are typically based on judgmental assessments, a Level 3 fair value measurement. During the year ended December 31, 2025, the Company recorded $ 18 million of impairments to its proved properties in Egypt.
During 2024, the Company updated its cessation-of-production dates for its North Sea operations, as discussed above in “Fair Value Measurements.” This change significantly altered the Company’s remaining oil and gas reserves in the North Sea and triggered an impairment assessment of the Company’s proved oil and gas properties at the end of the third quarter of 2024. Future production volumes and estimated future commodity prices are the largest drivers in the variability of future cash flows. Expected cash flows were estimated based on management’s views of forward pricing as of the balance sheet dates. A discount rate based on a market-based weighted-average cost of capital estimate was applied to the undiscounted cash flow estimate to value the Company’s North Sea assets. In connection with this assessment, the Company recorded impairments totaling $ 796 million on certain of the Company’s North Sea proved properties to an aggregate fair value of $ 263  million.
Additionally, in the third quarter of 2024, the Company entered into an agreement to sell certain non-core U.S. oil and gas producing properties in the Permian Basin. As a result, a separate impairment analysis was performed for each of the assets within the disposal group. The analyses were based on the agreed-upon proceeds less costs to sell for the transaction, a Level 1 fair value measurement. The historical carrying value of the net assets to be divested exceeded the fair value implied by the expected net proceeds, resulting in an impairment totaling $ 315  million on the Company’s proved properties in the U.S. Refer to Note 2—Acquisitions and Divestitures for more detail.
For the year ended December 31, 2023, the Company recorded no impairments of proved properties.
Gains and losses on divestitures of the Company’s oil and gas properties are recognized in the statement of consolidated operations upon closing of the transaction. Refer to Note 2—Acquisitions and Divestitures for more detail.
Gathering, Processing, and Transmission (GPT) Facilities
GPT facilities totaled $ 445 million and $ 433 million at December 31, 2025 and 2024, respectively, with accumulated depreciation for these assets totaling $ 383 million and $ 364 million for the respective periods. GPT facilities are depreciated on a straight-line basis over the estimated useful lives of the assets. The estimation of useful life takes into consideration anticipated production lives from the fields serviced by the GPT assets, whether APA-operated or third party-operated, as well as potential development plans by the Company for undeveloped acreage within, or close to, those fields.
For the year ended December 31, 2025, the Company recorded $ 1  million in impairments of GPT facilities in Egypt. For each of the years ended December 31, 2024 and 2023, the Company recorded no impairments of GPT facilities.
Other Property and Equipment
Other property and equipment includes computer software and equipment, buildings, vehicles, furniture and fixtures, land, and other equipment. These assets are depreciated on a straight-line basis over the estimated useful lives of the assets, which range from 3 to 20 years. Other property and equipment, net of accumulated depreciation totaled $ 146  million and $ 183  million at December 31, 2025 and 2024, respectively.
For the year ended December 31, 2025, the Company recorded an $ 18  million impairment for the anticipated sale of an office building.
F-15

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Asset Retirement Costs and Obligations
The initial estimated asset retirement obligation related to property and equipment and subsequent revisions are recorded as a liability at fair value, with an offsetting asset retirement cost recorded as an increase to the associated property and equipment on the consolidated balance sheet. Revisions in estimated liabilities can result from changes in estimated inflation rates, changes in service and equipment costs and changes in the estimated timing of an asset’s retirement. Asset retirement costs are depreciated using a systematic and rational method similar to that used for the associated property and equipment. Accretion expense on the liability is recognized over the estimated productive life of the related assets.
Capitalized Interest
For significant projects, interest is capitalized as part of the historical cost of developing and constructing assets. Significant oil and gas investments in unproved properties actively being explored and significant exploration and development projects that have not commenced production that are undergoing the construction of assets that have not commenced principal operations qualify for interest capitalization. Interest is capitalized until the asset is ready for service. Capitalized interest is determined by multiplying the Company’s weighted-average borrowing cost on debt by the average amount of qualifying costs incurred. Once an asset subject to interest capitalization is completed and placed in service, the associated capitalized interest is expensed through depreciation.
Commitments and Contingencies
Accruals for loss contingencies arising from claims, assessments, litigation, environmental, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. For more information regarding loss contingencies, refer to Note 10—Commitments and Contingencies .
Derivative Instruments and Hedging Activities
The Company periodically enters into derivative contracts to manage its exposure to commodity price, interest rate, and/or foreign exchange risk. These derivative contracts, which are generally placed with major financial institutions, may take the form of forward contracts, futures contracts, swaps, or options.
All derivative instruments, other than those that meet the normal purchases and sales exception, are recorded on the Company’s consolidated balance sheet as either an asset or liability measured at fair value. The Company does not apply hedge accounting to any of its derivative instruments. As a result, gains and losses from the change in fair value of derivative instruments are reported in current-period income as “Derivative instrument gains (losses), net” under “Revenues and Other” in the statement of consolidated operations. Refer to Note 4—Derivative Instruments and Hedging Activities for further information.
Income Taxes
The Company records deferred tax assets and liabilities to account for the expected future tax consequences of events that have been recognized in the financial statements and tax returns. The Company routinely assesses the ability to realize its deferred tax assets. If the Company concludes that it is more likely than not that some or all of the deferred tax assets will not be realized, the tax asset is reduced by a valuation allowance. Numerous judgments and assumptions are inherent in the determination of future taxable income, including factors such as future operating conditions (particularly as related to prevailing oil and gas prices) and changing tax laws. Refer to Note 9—Income Taxes for further information.
In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 is intended to improve income tax disclosures primarily through enhanced disclosure of income tax rate reconciliation items, and disaggregation of income from continuing operations, income tax (expense) benefit, and income taxes paid, net disclosures by federal, state and foreign jurisdictions, among other items. This ASU is effective for annual reporting periods beginning after December 15, 2024. ASU 2023-09 should be applied on a prospective basis, although retrospective application is permitted. The Company adopted ASU 2023-09 retrospectively for the year ended December 31, 2025, and it did not have a material impact on the Company’s financial statements.
F-16

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Earnings Per Share
The Company’s basic earnings per share (EPS) amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects potential dilution, using the treasury stock method, which assumes that options were exercised and restricted stock was fully vested.
Stock-Based Compensation
The Company grants various types of stock-based awards including stock options, restricted stock, cash-settled restricted stock units, and performance-based awards. Stock compensation equity awards granted are valued on the date of grant and are expensed over the required vesting service period. Cash-settled awards are recorded as a liability based on the Company’s stock price and remeasured at the end of each reporting period over the vesting terms. The Company has elected to account for forfeitures as they occur rather than estimate expected forfeitures. The Company’s stock-based compensation plans and related accounting policies are defined and described more fully in Note 12—Capital Stock .
Treasury Stock
The Company follows the weighted-average-cost method of accounting for treasury stock transactions.
Transaction, Reorganization, and Separation (TRS)
The Company recorded TRS costs in 2025 totaling $ 102 million, which comprised primarily employee separations in the U.S. and organization restructuring in the North Sea.
The Company recorded TRS costs in 2024 totaling $ 168 million, which primarily comprised $ 147  million associated with the Callon acquisition, including $ 76  million of separation costs and $ 71  million of transaction and integration costs.
The Company recorded TRS costs in 2023 totaling $ 15 million including $ 7  million related to consulting and separation costs in international operations.
New Pronouncements Issued But Not Yet Adopted
In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40),” which expands disclosures around a public entity’s costs and expenses of specific items (i.e. employee compensation, DD&A), requires the inclusion of amounts that are required to be disclosed under GAAP in the same disclosure as other disaggregation requirements, requires qualitative descriptions of amounts remaining in expense captions that are not separately disaggregated quantitatively, and requires disclosure of total selling expenses, and in annual periods, the definition of selling expenses. The amendment does not change or remove existing disclosure requirements. The amendment is effective for fiscal years beginning after December 15, 2026, and interim periods with fiscal years beginning after December 15, 2027. Early adoption is permitted, and the amendment can be adopted prospectively or retrospectively to any or all periods presented in the financial statements. The Company is currently assessing the impact of adopting this standard.
F-17

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

2.    ACQUISITIONS AND DIVESTITURES
2025 Activity
Leasehold and Property Acquisitions
During 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. Divestitures
During 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 Activity
Callon Petroleum Company Acquisition
On 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 Assumed
The 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.

(In millions)

Current assets
$ 287  
Property and equipment
4,502  
Deferred tax asset
565  
Other assets 12  
Total assets acquired $ 5,366  
Current liabilities $ 632  
Long-term debt
2,113  
Asset retirement obligation 136  

Other long-term obligations 48  
Total liabilities assumed $ 2,929  
Net assets acquired $ 2,437  

F-18

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following unaudited pro forma combined results for the years ended December 31, 2024 and 2023 reflect the consolidated results of operations of the Company as if the Callon acquisition had occurred on January 1, 2023. The unaudited pro forma information includes certain accounting adjustments for transaction costs, depreciation, depletion, and amortization expense, and estimated tax impacts of the pro forma adjustments.

For the Year Ended December 31,

2024 2023

(In millions)

Revenues
$ 10,300   $ 10,578  
Net income attributable to common stock
909   4,021  
Net income per common share – basic
2.45   10.66  
Net income per common share – diluted
2.45   10.63  

From the date of the acquisition through December 31, 2024, revenues and net income attributable to common stockholders associated with Callon assets totaled $ 1.2  billion and $ 262  million, respectively.
The unaudited pro forma condensed consolidated financial information has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the transactions taken place on the dates indicated. The unaudited pro forma results are also not intended to be a projection of future results and do not include any future cost savings or other synergies that may result from the Callon acquisition or any estimated costs that have not yet been incurred.
Leasehold and Property Acquisitions
During 2024, in addition to the Callon acquisition, the Company completed other leasehold and property acquisitions, primarily in the Permian Basin, for aggregate cash consideration of approximately $ 60  million.
U.S. Divestitures
During 2024, the Company completed the sale of non-core acreage in the East Texas Austin Chalk and Eagle Ford plays that had a carrying value of $ 347  million for aggregate cash proceeds of $ 255  million and the assumption of asset retirement obligations of $ 42  million. The Company recognized a $ 50  million loss during 2024 in association with this sale.
During 2024, the Company also completed the sale of non-core mineral and royalty interests in the Permian Basin that had a carrying value of $ 71  million for approximately $ 394  million subject to post-closing adjustments. The Company recognized a gain of $ 321  million in association with this sale.
Additionally, the Company completed the sale of non-core assets and leasehold in multiple transactions for aggregate cash proceeds of $ 91  million, recognizing a gain of approximately $ 22  million upon closing of these transactions.
On December 31, 2024, APA completed the sale of non-core producing properties in the Permian Basin that had a carrying value of $ 1.1  billion and associated asset retirement obligation of $ 224  million for total cash proceeds of $ 869  million after closing adjustments. The properties are located in the Central Basin Platform, Texas and New Mexico Shelf, and Northwest Shelf. The effective date of the transaction was July 1, 2024. As a result of the transaction, the Company performed a fair value assessment of the associated assets and liabilities and recorded an impairment of $ 315  million to the carrying value of the associated oil and gas properties during the third quarter of 2024. During the fourth quarter of 2024, the Company recorded a loss of $ 5 million upon closing of the transaction.
Sale of Kinetik Shares
On March 18, 2024, the Company sold its remaining shares of Kinetik Holdings Inc. (Kinetik) Class A Common Stock (Kinetik Shares) for cash proceeds of $ 428  million.
F-19

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table represents related party sales and costs associated with Kinetik, when the Company was considered to have had significant influence over Kinetik prior to the Company’s sale of its remaining Kinetik Shares and the resignation of the Company’s designated director from the Kinetik board of directors:

For the Year Ended
December 31,

2024 2023

(In millions)

Natural gas and NGLs sales $ 13   $ 92  
Purchased oil and gas sales 22   29  
$ 35   $ 121  

Gathering, processing, and transmission costs $ 23   $ 108  
Purchased oil and gas costs 23   80  
Lease operating expenses
2   7  
$ 48   $ 195  

2023 Activity
Sale of Kinetik Shares
In December 2023, the Company sold 7.5  million of its Kinetik Shares for cash proceeds of $ 228  million.
Leasehold and Property Acquisitions
During 2023, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of approximately $ 20  million.
U.S. Divestitures
During 2023, the Company completed the sale of non-core assets and leasehold in multiple transactions for total cash proceeds of $ 29  million, recognizing an aggregate gain of approximately $ 8  million upon closing of these transactions.

3.    CAPITALIZED EXPLORATORY WELL COSTS
The following summarizes the changes in capitalized exploratory well costs for the years ended December 31, 2025, 2024, and 2023. Additions pending the determination of proved reserves excludes amounts capitalized and subsequently charged to expense within the same year.

For the Year Ended December 31,
2025 2024 2023

(In millions)
Capitalized well costs at beginning of year $ 237   $ 586   $ 474  
Additions pending determination of proved reserves 234   240   265  

Reclassifications to proved properties ( 118 ) ( 506 ) ( 135 )
Charged to exploration expense ( 15 ) ( 83 ) ( 18 )
Capitalized well costs at end of year $ 338   $ 237   $ 586  

F-20

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following provides an aging of capitalized exploratory well costs and the number of projects for which exploratory well costs have been capitalized for a period greater than one year since the completion of drilling as of December 31:

2025 2024 2023

(In millions)
Exploratory well costs capitalized for a period of one year or less $ 158   $ 107   $ 156  
Exploratory well costs capitalized for a period greater than one year 180   130   430  
Capitalized well costs at end of year $ 338   $ 237   $ 586  

Number of projects with exploratory well costs capitalized for a period greater than one year 7   12   33  

Projects with exploratory well costs capitalized for a period greater than one year since the completion of drilling are those identified by management as exhibiting sufficient quantities of hydrocarbons to justify potential development. Management is actively pursuing efforts to assess whether reserves can be attributed to these projects. Exploratory well costs capitalized for a period greater than one year since completion of drilling were $ 180  million at December 31, 2025, with $ 121  million related to Suriname exploration and appraisal. Analysis of well results and appraisal activity is ongoing. The remaining projects pertain to onshore drilling activity in Egypt and Alaska, for which continued testing and evaluation is being performed.
Dry hole expenses from suspended exploratory well costs previously capitalized for greater than one year at December 31, 2024 totaled $ 8  million. These expenses pertained to projects in Egypt.
The following table summarizes aging by geographic area of those exploratory well costs that, as of December 31, 2025, have been capitalized for a period greater than one year, categorized by the year in which drilling was completed:

Total 2024 2023 2022
and Prior

(In millions)
Suriname $ 121   $ —   $ 60   $ 61  
United States
48   48   —   —  
Egypt 11   7   4   —  

$ 180   $ 55   $ 64   $ 61  

4.     DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Objectives and Strategies
The Company is exposed to fluctuations in crude oil and natural gas prices on the majority of its worldwide production, as well as fluctuations in exchange rates in connection with transactions denominated in foreign currencies. The Company manages the variability in its cash flows by occasionally entering into derivative transactions on a portion of its crude oil and natural gas production and foreign currency transactions. The Company utilizes various types of derivative financial instruments, including forward contracts, futures contracts, swaps, and options, to manage fluctuations in cash flows resulting from changes in commodity prices or foreign currency values. The Company elected not to designate any of its derivative contracts as cash flow hedges.
Counterparty Risk
The use of derivative instruments exposes the Company to credit loss in the event of nonperformance by the counterparty. To reduce the concentration of exposure to any individual counterparty, the Company utilizes a diversified group of investment-grade rated counterparties, primarily financial institutions, for its derivative transactions. As of December 31, 2025, the Company had derivative positions with 10 counterparties. The Company monitors counterparty creditworthiness on an ongoing basis; however, it cannot predict sudden changes in counterparties’ creditworthiness. In addition, even if such changes are not sudden, the Company may be limited in its ability to mitigate an increase in counterparty credit risk. Should one of these counterparties not perform, the Company may not realize the benefit of some of its derivative instruments resulting from lower commodity prices.
F-21

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Derivative Instruments
Commodity Derivative Instruments
As of December 31, 2025, the Company had the following open natural gas financial basis swap contracts:

Basis Swap Purchased Basis Swap Sold
Production Period Settlement Index MMBtu
(in 000’s) Weighted Average Price Differential MMBtu
(in 000’s) Weighted Average Price Differential

January—December 2026
NYMEX Henry Hub/IF Waha 89,425 $( 1.96 ) — —

Foreign Currency Derivative Instruments
Subsequent to December 31, 2025, the Company entered into foreign currency costless collar contracts in GBP/USD for £ 12  million per each calendar month for March through December 2026, with a weighted average floor and ceiling price of $ 1.32 and $ 1.40 , respectively.
Fair Value Measurements
The following table presents the Company’s derivative assets and liabilities measured at fair value on a recurring basis:

Fair Value Measurements Using
Quoted Price in Active Markets
(Level 1) Significant Other Inputs
(Level 2) Significant Unobservable Inputs
(Level 3) Total
Fair Value Netting (1)
Carrying Amount

(In millions)
December 31, 2025

Liabilities:
Commodity derivative instruments
$ —   $ 77   $ —   $ 77   $ —   $ 77  

December 31, 2024

Liabilities:

Contingent consideration arrangements
$ —   $ 18   $ —   $ 18   $ —   $ 18  

(1)    The derivative fair values are based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties.
The fair values of the Company’s commodity derivative instruments are not actively quoted in the open market. The Company primarily uses a market approach to estimate the fair values of these derivatives on a recurring basis, utilizing futures pricing for the underlying positions provided by a reputable third party, a Level 2 fair value measurement.
Derivative Activity Recorded in the Consolidated Balance Sheet
All derivative instruments are reflected as either assets or liabilities at fair value in the consolidated balance sheet. These fair values are recorded by netting asset and liability positions where counterparty master netting arrangements contain provisions for net settlement. The carrying value of the Company’s derivative assets and liabilities and their locations on the consolidated balance sheet are as follows:

For the Year Ended December 31,
2025 2024

(In millions)

Current Liabilities: Other current liabilities $ 77   $ —  
Deferred Credits and Other Noncurrent Liabilities: Other $ —   $ 18  
Total derivative liabilities $ 77   $ 18  

F-22

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Derivative Activity Recorded in the Statement of Consolidated Operations
The following table summarizes the effect of derivative instruments on the Company’s statement of consolidated operations:

  For the Year Ended December 31,
2025 2024 2023

  (In millions)
Realized:
Commodity derivative instruments $ 31   $ 2   $ 48  
Contingent consideration arrangements
( 7 ) ( 4 ) —  

Realized gains (losses), net
24   ( 2 ) 48  
Unrealized:
Commodity derivative instruments ( 77 ) ( 6 ) 51  
Contingent consideration arrangements
—   ( 2 ) —  

Unrealized gains (losses), net
( 77 ) ( 8 ) 51  
Derivative instrument gains (losses), net $ ( 53 ) $ ( 10 ) $ 99  

Derivative instrument gains and losses are recorded in “Derivative instrument gains (losses), net” under “Revenues and Other” in the Company’s statement of consolidated operations. Unrealized gains (losses) for derivative activity recorded in the statement of consolidated operations are reflected in the statement of consolidated cash flows separately as “Unrealized derivative instrument (gains) losses, net” under “Adjustments to reconcile net income to net cash provided by operating activities.”

5.     OTHER CURRENT ASSETS
The following table provides detail of the Company’s other current assets as of December 31:

2025 2024

  (In millions)
Inventories $ 351   $ 425  
Drilling advances 93   184  

Current decommissioning security for sold Gulf of America assets
19   157  
Prepaid assets and other
80   54  
Total Other current assets $ 543   $ 820  

6.     OTHER CURRENT LIABILITIES
The following table provides detail of the Company’s other current liabilities as of December 31:

  2025 2024

  (In millions)
Accrued operating expenses $ 129   $ 204  
Accrued exploration and development 289   460  

Accrued compensation and benefits 265   223  
Accrued interest 88   93  
Accrued income taxes 112   221  
Current asset retirement obligation 181   103  
Current operating lease liability 97   118  

Current decommissioning contingency for sold Gulf of America properties
99   88  
Other 227   168  
Total Other current liabilities $ 1,487   $ 1,678  

F-23

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

7.     ASSET RETIREMENT OBLIGATION
The following table describes changes to the Company’s asset retirement obligation (ARO) liability for the years ended December 31, 2025 and 2024:

For the Year Ended December 31,
2025 2024

  (In millions)
Asset retirement obligation at beginning of the year $ 2,694   $ 2,438  
Liabilities incurred 23   15  
Liabilities acquired —   136  
Liabilities divested ( 8 ) ( 272 )
Liabilities settled ( 100 ) ( 70 )
Accretion expense 158   148  
Revisions in estimated liabilities 113   299  

Asset retirement obligation at end of the year 2,880   2,694  
Less current portion ( 181 ) ( 103 )
Asset retirement obligation, long-term $ 2,699   $ 2,591  

The ARO liability reflects the estimated present value of the amount of dismantlement, removal, site reclamation, and similar activities associated with the Company’s oil and gas properties and other long-lived assets. The Company utilizes current retirement costs to estimate the expected cash outflows for retirement obligations. The Company estimates the ultimate productive life of the properties, a risk-adjusted discount rate, and an inflation factor in order to determine the current present value of this obligation. To the extent future revisions to these assumptions impact the present value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property or other long-lived asset balance.
During 2025 and 2024, the Company recorded $ 23 million and $ 15 million, respectively, in abandonment liabilities resulting from the Company’s exploration and development capital program. Liabilities settled primarily relate to individual properties, platforms, and facilities plugged and abandoned during the period. During 2025 and 2024, net abandonment costs were revised upward by approximately $ 113 million and $ 299  million, respectively, primarily reflecting changes in estimates of timing and activity costs in the U.S. and North Sea, in addition to foreign currency exchange rates on service costs.
F-24

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

8.     DEBT AND FINANCING COSTS
Overview
The 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,        
  2025 2024

  (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 obligations 28   30  
Unamortized discount ( 23 ) ( 25 )
Debt issuance costs ( 23 ) ( 29 )
Total debt 4,493   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. The aggregate amount as of December 31, 2024 is comprised solely of Apache indenture debt; there was no APA indenture debt on December 31, 2024.
(6) The fair values of the notes and debentures were $ 4.3 billion and $ 4.4 billion as of December 31, 2025 and 2024, respectively. The Company uses a market approach to determine the fair value of its notes and debentures using estimates provided by an independent investment financial data services firm (a Level 2 fair value measurement).
(7) The carrying amount of borrowings on credit facilities approximates fair value because the interest rates are variable and reflective of market rates.
F-25

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Maturities for the Company’s notes and debentures excluding discount and debt issuance costs as of December 31, 2025 are as follows:

  (In millions)
2026 $ 211  
2027 108  
2028 315  
2029 232  
2030 475  
Thereafter 3,170  
Notes and debentures, excluding discounts and debt issuance costs $ 4,511  

Financing Costs, Net
The following table presents the components of the Company’s financing costs, net:

  For the Year Ended December 31,    
  2025 2024 2023

  (In millions)
Interest expense $ 323   $ 402   $ 351  
Amortization of debt issuance costs 7   6   4  
Capitalized interest ( 45 ) ( 29 ) ( 24 )
Gain on extinguishment of debt
( 147 ) —   ( 9 )
Interest income ( 25 ) ( 12 ) ( 10 )
Financing costs, net $ 113   $ 367   $ 312  

Indenture Debt Activity
On August 20, 2025, Apache redeemed the outstanding $ 51  million principal amount of 4.625 % Notes due 2025, at a redemption price equal to 100 percent of their principal amount, plus accrued and unpaid interest to the redemption date.
During 2025, the Company purchased in the open market and had canceled indebtedness issued under indentures of APA and Apache in an aggregate principal amount of $ 122 million for an aggregate purchase price of $ 112  million in cash, including accrued interest and broker fees, reflecting a discount to par of an aggregate $ 13  million. The Company recognized a $ 12  million gain on these repurchases. The repurchases were partially financed by APA’s borrowing under the Company’s commercial paper program. Refer to discussion of APA exchange and tender offers for Apache indenture debt below for further details regarding the gain on extinguishment of debt during the quarter ended March 31, 2025.
During 2023, Apache purchased in the open market and canceled senior notes issued under its indentures in an aggregate principal amount of $ 74  million for an aggregate purchase price of $ 65  million in cash, including accrued interest and broker fees, reflecting a discount to par of an aggregate $ 10  million. The Company recognized a $ 9  million gain on these repurchases. The repurchases were partially financed by Apache’s borrowing under the Company’s US dollar-denominated revolving credit facility.
The indentures under which APA has issued senior notes and debentures restrict it from issuing or guaranteeing certain secured indebtedness, consolidating with or merging into another person, and transferring or leasing its properties and assets as an entirety or substantially as an entirety to any person. Indentures of APA and Apache do not contain prepayment obligations in the event of a decline in credit ratings. In connection with the transactions summarized below under “APA Exchange and Tender Offers for Apache Indenture Debt”, Apache’s indentures were amended on January 10, 2025 to remove certain restrictive and reporting covenants, except those applicable to certain notes maturing in 2026 and 2027.
F-26

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

APA Exchange and Tender Offers for Apache Indenture Debt
On January 10, 2025, the Company settled its private exchange and cash tender offers for certain notes and debentures issued by Apache under its indentures. The Company also then settled its private offering of new notes to fund in part its purchase of Apache notes in APA’s cash tender offers. In settling these offerings pursuant to their respective terms:
• A PA issued new notes and debentures under its indentures in aggregate principal amounts of (i) $ 2.5 billion in exchange for Apache notes and debentures tendered and accepted in APA’s exchange offers, (ii) $ 203  million in exchange for Apache notes tendered in the cash tender offers in excess of the stated maximum purchase amount or series caps, and (iii) $ 850  million in the new notes offering, comprised of $ 350  million aggregate principal amount of APA’s 6.10 % Notes due 2035 and $ 500  million aggregate principal amount of APA’s 6.75 % Notes due 2055.
• In addition to issuing the APA notes in the exchange offers, APA paid a total of $ 2.5  million in cash as part of the exchange consideration.
• APA paid a total of $ 869  million in cash in the tender offers (comprised of tender offer consideration, exchange consideration for tendered notes exchanged, early participation premium, and accrued interest) for the aggregate $ 1  billion in principal amount of Apache notes tendered and accepted in the cash tender offers. The Company recognized a gain of $ 135  million on these purchases, including broker fees and loan costs.
• Net proceeds from the sale of the notes in APA’s new notes offering, after deducting the initial purchasers’ discounts and estimated offering expenses, were approximately $ 839  million and used to fund in part APA’s purchase of Apache notes in APA’s cash tender offers.
• Each series of APA notes and debentures issued in settlement of the exchange and tender offers had the same interest rate, maturity date, and interest payment dates and the same optional redemption prices (if any) as the corresponding series of Apache notes and debentures for which they were exchanged.
• Each series of APA notes and debentures issued in settlement of the exchange and tender offers and new notes offering were fully and unconditionally guaranteed by Apache until the first time that the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures was less than $ 1  billion, which occurred in May 2025, after which Apache’s guarantees were terminated in accordance with their terms on May 16, 2025.
• APA entered into two registration rights agreements pursuant to which APA agreed to register under the Securities Act of 1933, as amended, the notes and debentures that APA issued in the exchange and tender offers and new notes offering (collectively, the Unregistered Notes). On September 18, 2025, APA settled registered exchange offers for the Unregistered Notes, issuing registered notes and debentures in the same aggregate principal amount as the Unregistered Notes accepted for exchange and canceled and otherwise on terms substantially identical in all material respects to the applicable series of Unregistered Notes. Of the $ 3.6  billion aggregate principal amount of Unregistered Notes covered by the registered exchange offers, 99 percent was exchanged for registered notes and debentures, and the remaining Unregistered Notes remained outstanding.
Unsecured 2025 Committed Bank Credit Facilities
On January 15, 2025, the Company entered into two unsecured syndicated credit agreements for general corporate purposes:
• One agreement is denominated in US dollars (the 2025 USD Agreement) and provides for an unsecured five-year revolving credit facility for loans and letters of credit, with aggregate commitments of US$ 2.0  billion (including a letter of credit subfacility of up to US$ 750  million, of which US$ 250  million currently is committed). APA may increase commitments up to an aggregate US$ 2.5  billion by adding new lenders or obtaining the consent of any increasing existing lenders. This facility matures in January 2030, subject to the Company’s two , one-year extension options.
• The second agreement is denominated in pounds sterling (the 2025 GBP Agreement) and provides for an unsecured five-year revolving credit facility, with aggregate commitments of £ 1.5  billion for loans and letters of credit. This facility matures in January 2030, subject to the Company’s two , one-year extension options.
F-27

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Apache guaranteed obligations under each of the 2025 USD Agreement and 2025 GBP Agreement (each, a 2025 Agreement) effective until the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures first was less than US$ 1.0  billion, which occurred in May 2025, after which Apache’s guarantees were terminated in accordance with their terms on May 16, 2025.
The 2025 Agreements replaced on substantially the same terms two syndicated credit agreements that the Company entered in April 2022, one of which was denominated in US dollars with aggregate commitments of US$ 1.8  billion (the 2022 USD Agreement) and second of which was denominated in pounds sterling with aggregate commitments of £ 1.5  billion (the 2022 GBP Agreement). On January 15, 2025, the Company terminated commitments under both the 2022 USD Agreement and 2022 GBP Agreement in connection with entry into the 2025 Agreements.
As of December 31, 2025, there were no borrowings or letters of credit outstanding under the 2025 USD Agreement and no borrowings and an aggregate £ 1.0  million in letters of credit outstanding under the 2025 GBP Agreement. As of December 31, 2024, there were $ 10  million of borrowings and no letters of credit outstanding under the 2022 USD Agreement and no borrowings and an aggregate £ 303  million in letters of credit outstanding under the 2022 GBP Agreement.
All borrowings under the 2025 USD Agreement bear interest at one of two per annum rate options selected by the borrower, being either an alternate base rate (as defined), plus a margin varying from 0.0 % to 0.675 % (Base Rate Margin), or an adjusted term SOFR rate (as defined), plus a margin varying from 1.00 % to 1.675 % (Applicable Margin). All borrowings under the 2025 GBP Agreement bear interest with respect to any business day at an adjusted rate per annum determined by reference to the Sterling Overnight Index Average with respect to such business day published by the Bank of England, plus the Applicable Margin.
Each 2025 Agreement also requires the borrower to pay quarterly (i) a facility fee on total commitments at a per annum rate that varies from 0.125 % to 0.325 % and (ii) a commission on the face amount of each outstanding letter of credit at a per annum rate equal to the Applicable Margin then in effect. Customary letter of credit fronting fees and other charges are payable to issuing banks.
Margins and facility fees are at varying rates per annum determined by reference to the senior, unsecured, non-credit enhanced, long-term indebtedness for borrowed money of APA (Long-Term Debt Rating). The current Base Rate Margin is 0.30 %, the Applicable Margin is 1.30 %, and the facility fee is 0.20 %.
Borrowers under each 2025 Agreement, which include certain subsidiaries of APA, may borrow, prepay, and reborrow loans and obtain letters of credit, and APA may obtain letters of credit for the account of its subsidiaries, in each case subject to representations and warranties, covenants, and events of default, such as:
• A financial covenant requires APA to maintain an adjusted debt-to-capital ratio of not greater than 65 % at the end of any fiscal quarter.
• A negative covenant restricts the ability of APA and its subsidiaries to create liens securing debt on their hydrocarbon-related assets, with customary exceptions and exceptions for liens on subsidiary assets located outside of the U. S. and Canada; liens on assets also are permitted if debt secured thereby does not exceed 15 % of APA’s consolidated net tangible assets.
• Negative covenants restrict APA’s ability to merge with another entity unless it is the surviving entity, a borrower’s disposition of substantially all of its assets, prohibitions on the ability of certain subsidiaries to make payments to borrowers, and guarantees by APA or certain subsidiaries of debt of non-consolidated entities in excess of the stated threshold.
• Lenders may accelerate payment maturity and terminate lending and issuance commitments for nonpayment and other breaches; if a borrower or certain subsidiaries defaults on other indebtedness in excess of the stated threshold, has any unpaid, non-appealable judgment against it for payment of money in excess of the stated threshold, or has specified pension plan liabilities in excess of the stated threshold; or APA undergoes a specified change in control. Such acceleration and termination are automatic upon specified insolvency events of a borrower or certain subsidiaries.
The 2025 Agreements do not require collateral, do not have a borrowing base, do not permit lenders to accelerate maturity or refuse to lend based on unspecified material adverse changes, and do not have borrowing restrictions or prepayment obligations in the event of a decline in credit ratings.
F-28

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company was in compliance with the terms of the 2025 Agreements as of December 31, 2025.
Uncommitted Lines of Credit
Each of the Company and Apache, from time to time, has and uses uncommitted credit and letter of credit facilities for working capital and credit support purposes. As of December 31, 2025 and 2024, there were no outstanding borrowings under these facilities. As of December 31, 2025, there were £ 901  million and $ 10  million in letters of credit outstanding under these facilities. As of December 31, 2024, there were £ 640  million and $ 11  million in letters of credit outstanding under these facilities.
Commercial Paper Program
The Company has a commercial paper program under which it from time to time may issue in private placements exempt from registration under the Securities Act short-term unsecured promissory notes (CP Notes) up to a maximum aggregate face amount of $ 2.0  billion outstanding at any time. The program was established in December 2023, and the maximum aggregate face amount of CP Notes issuable thereunder was increased to $ 2.0  billion from $ 1.8  billion on June 20, 2025. The maturities of CP Notes may vary but may not exceed 397 days from the date of issuance. Outstanding CP Notes are supported by available borrowing capacity under the Company’s committed revolving credit facilities for general corporate purposes, which as of December 31, 2025, included the $ 2.0  billion 2025 USD Agreement.
Payment of CP Notes was unconditionally guaranteed on an unsecured basis by Apache, such guarantee effective until the first time that the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures was less than US$ 1.0  billion, which occurred in May 2025, after which Apache’s guarantees were terminated in accordance with their terms on June 20, 2025.
The CP Notes are sold under customary market terms in the U.S. commercial paper market at a discount from par or at par and bear interest at rates determined at the time of issuance.
As of December 31, 2025, the Company had no CP Notes outstanding. As of December 31, 2024, the Company had $ 323  million in aggregate face amount of CP Notes outstanding, which was classified as long-term debt.
Unsecured Committed Term Loan Facility
On January 30, 2024, APA entered into a syndicated credit agreement providing for committed senior unsecured delayed-draw term loans to APA, the proceeds of which could be used to refinance certain indebtedness of Callon.
On April 1, 2024, APA acquired Callon and borrowed $ 1.5  billion under this credit agreement maturing April 1, 2027, of which $ 900  million remained outstanding as of December 31, 2024. APA fully prepaid this credit agreement on March 10, 2025. The repayment was partially financed with borrowings under APA’s 2025 USD Agreement and commercial paper program.

9. INCOME TAXES
Net income before income taxes was composed of the following:

  For the Year Ended December 31,    
  2025 2024 2023

  (In millions)
U.S. $ 1,488   $ 705   $ 627  
Foreign 1,303   830   2,256  
Total $ 2,791   $ 1,535   $ 2,883  

F-29

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The total income tax provision (benefit) consisted of the following:

  For the Year Ended December 31,    
  2025 2024 2023

  (In millions)
Current income taxes:
Federal $ ( 104 ) $ 76   $ 2  
State ( 1 ) 2   6  
Foreign 844   1,075   1,330  
739   1,153   1,338  
Deferred income taxes:
Federal 384   ( 96 ) ( 1,708 )
State 41   3   ( 32 )
Foreign ( 65 ) ( 643 ) 78  
360   ( 736 ) ( 1,662 )
Total $ 1,099   $ 417   $ ( 324 )

F-30

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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,

  2025 2024 2023

Amount
% of Income Before Income Taxes
Amount
% of Income Before Income Taxes
Amount
% 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 contracts
75   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 law 78   2.8   % —   —   % 174   6.0   %
Annual Energy Profits Levy deferred adjustment
30   1.1   % 200   13.0   % 78   2.7   %
Accretion expense 44   1.6   % 37   2.4   % 27   0.9   %
Financing activities ( 43 ) ( 1.5 ) % ( 46 ) ( 3.0 ) % ( 39 ) ( 1.3 ) %
Changes in valuation allowances 23   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   %
Other 20   0.7   % 13   0.8   % 9   0.3   %
Other foreign jurisdictions 10   0.4   % 9   0.6   % 9   0.3   %

Cross-border tax laws 1   —   % 1   0.1   % 1   —   %
Tax credits:

Corporate alternative minimum tax credit 71   2.5   % ( 74 ) ( 4.8 ) % —   —   %
Other tax credits ( 1 ) —   % ( 3 ) ( 0.2 ) % —   —   %
Foreign tax credits
269   9.6   % —   —   % —   —   %
Changes in valuation allowances ( 273 ) ( 9.8 ) % —   —   % ( 1,852 ) ( 64.2 ) %
Non-taxable or non-deductible items:

Stock compensation 1   —   % 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   0.2   %
Other adjustments:

Corporate alternative minimum tax ( 71 ) ( 2.5 ) % 74   4.8   % —   —   %
Other adjustments ( 3 ) ( 0.1 ) % 3   0.2   % —   —   %
Total income tax provision (benefit)
$ 1,099   39.4   % $ 417   27.2   % $ ( 324 ) ( 11.2 ) %

(1) Taxes in Texas and New Mexico represented greater than 50 percent of the total state and local income tax effect.
F-31

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The net deferred income tax asset reflects the net tax impact of temporary differences between the asset and liability amounts carried on the balance sheet under GAAP and amounts utilized for income tax purposes. The net deferred income tax asset consisted of the following as of December 31:

  2025 2024

  (In millions)
Deferred tax assets:

U.S. and state net operating losses $ 2,298   $ 2,487  
Capital losses 13   14  
Foreign net operating losses 76   55  
Tax credits and other tax incentives 36   105  
Foreign tax credits 1,935   2,204  
Accrued expenses and liabilities 96   76  
Asset retirement obligation 1,021   952  
Property and equipment 16   45  
Equity investments 1   1  
Net interest expense limitation 130   287  
Lease liability 93   114  
Decommissioning contingency for sold Gulf of America properties
200   232  
Other 51   —  
Total deferred tax assets 5,966   6,572  
Valuation allowance ( 2,401 ) ( 2,623 )
Net deferred tax assets 3,565   3,949  
Deferred tax liabilities:

Property and equipment 1,108   1,060  
Right-of-use asset 87   111  
Decommissioning security for sold Gulf of America properties
9   40  
Other 33   49  
Total deferred tax liabilities 1,237   1,260  
Net deferred income tax asset
$ 2,328   $ 2,689  

Net deferred tax assets and liabilities are included in the consolidated balance sheet as of December 31 as follows:

  2025 2024

  (In millions)
Assets:
Other assets

Deferred tax asset
$ 2,328   $ 2,703  
Liabilities:
Deferred credits and other noncurrent liabilities

Deferred tax liability
—   14  
Net deferred income tax asset
$ 2,328   $ 2,689  

On April 1, 2024, the Company completed its acquisition of Callon in an all-stock transaction. The Company’s deferred tax asset increased by approximately $ 565  million as part of the assets assumed through the Callon acquisition. Refer to Note 2— Acquisitions and Divestitures for further detail.
On January 10, 2023, Finance Act 2023 was enacted, receiving Royal Assent, and included amendments to the Energy (Oil and Gas) Profits Levy Act of 2022 (the Energy Profits Levy), increasing the levy from a 25 percent rate to a 35 percent rate, effective for the period of January 1, 2023 through March 31, 2028. On March 20, 2025, Finance Act 2025 was enacted, receiving Royal Assent, and included further amendments to the Energy Profits Levy, increasing the levy from a 35 percent rate to a 38 percent rate, among other changes, effective for the period of November 1, 2024 through March 31, 2030. Under U.S. GAAP, the financial statement impact of new legislation is recorded in the period of enactment. As a result, the Company recorded tax expense of $ 78  million and $ 174  million related to the change in tax law in 2025 and 2023, respectively.
F-32

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022 (IRA). The IRA includes a new 15 percent corporate alternative minimum tax (CAMT) on applicable corporations with an average annual adjusted financial statement income that exceeds $1.0 billion for any three consecutive years preceding the tax year at issue. The CAMT is effective for tax years beginning after December 31, 2022. The Company became an applicable corporation subject to CAMT beginning on January 1, 2024. On September 12, 2024, the U.S. Department of Treasury and the Internal Revenue Service released proposed regulations relating to the application and implementation of CAMT. In 2025, the Company recorded a current tax benefit of $ 71  million related to the 2024 return-to-accrual adjustment, with an offsetting deferred tax expense of the same amount for the change in CAMT credits.
On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act of 2025 (OBBBA). Among other changes, the OBBBA expanded and made permanent 100 percent bonus depreciation for eligible assets acquired and placed in service after January 19, 2025, and aligned the treatment of intangible drilling costs for CAMT purposes with regular tax treatment starting in 2026. OBBBA did not have a material impact on total tax expense for the year ended December 31, 2025, as impacts to current tax expense are offset by impacts to deferred tax expense. In 2025, the law change resulted in a current tax benefit of $ 42  million fully offset by a deferred tax expense of the same amount.
On September 30, 2025, the Internal Revenue Service issued further interim guidance on CAMT. Among other changes, the guidance provided for a reduction to CAMT related to net operating loss utilization for regular federal income tax purposes. This guidance did not have a material impact on total tax expense for the year ended December 31, 2025, as impacts to current tax expense are offset by impacts to deferred tax expense. In 2025, the guidance resulted in a current tax benefit of $ 72  million, fully offset by a deferred tax expense of the same amount.
In December 2021, the Organisation for Economic Co-operation and Development issued Pillar Two Model Rules introducing a new global minimum tax of 15 percent on a country-by-country basis, with certain aspects effective in certain jurisdictions on January 1, 2024. Although the Company continues to monitor enacted legislation to implement these rules in countries where the Company could be impacted, the Company does not expect that the Pillar Two framework will have a material impact on its consolidated financial statements.
Deferred tax assets are recorded for future deductible amounts and certain other tax benefits, such as net operating losses, tax credits and other tax attributes, provided that the Company assesses the utilization of such assets to be “more likely than not.” The Company assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to realize the existing deferred tax assets. Based on this assessment, the Company has recorded valuation allowances for certain net operating losses, foreign tax credits and capital loss carryforwards that it does not believe are more likely than not to be realized.
During the fourth quarter of 2023, as a result of increases in projections of future taxable income and the absence of objective negative evidence such as a cumulative loss in recent years, the Company determined there was sufficient positive evidence to release a majority of the U.S. valuation allowance, which resulted in a non-cash deferred income tax benefit of $ 1.7  billion.
F-33

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In 2025, 2024, and 2023, the Company’s valuation allowance decreased by $ 222 million, $ 7  million and $ 2.3  billion, respectively, as detailed in the table below:

2025 2024 2023

  (In millions)
Balance at beginning of year $ 2,623   $ 2,630   $ 4,918  
State (1)
33   ( 51 ) ( 63 )
U.S. ( 270 ) 26   ( 2,235 )
Foreign 15   18   10  

Balance at end of year $ 2,401   $ 2,623   $ 2,630  

(1) Reported as a component of state income taxes.
On December 31, 2025, the Company had net operating losses as follows:

  Amount     Expiration    
  (In millions)  
U.S. $ 9,463   2029 - Indefinite
State 6,523   Various
Foreign 211   2026 - Indefinite

The Company has a U.S. net operating loss carryforward of $ 9.5 billion, which includes $ 2.1 billion of net operating loss subject to annual limitation under Section 382 of the Internal Revenue Code (Code). Net operating losses generated in tax years beginning after 2017 are subject to an 80 percent taxable income limitation with indefinite carryover under the 2017 Tax Cuts and Jobs Act. The Company also has state net operating losses of $ 6.5  billion, foreign net operating losses of $ 211  million, and a net interest expense carryover of $ 607 million under Section 163(j) of the Code with indefinite carryover. The Company has recorded a valuation allowance against some of the U.S. net operating losses, the state net operating losses, the foreign net operating losses, and the U.S. capital loss because it is more likely than not that these net operating losses and the capital loss carryforward will not be realized. The Company believes it is more likely than not that the deferred tax assets related to the remaining U.S. net operating losses and the net interest expense carryover will be utilized prior to their expiration.
On December 31, 2025, the Company had foreign tax credits as follows:

  Amount     Expiration    
  (In millions)  
Foreign tax credits $ 1,935   2026

The Company has a $ 1.9 billion U.S. foreign tax credit carryforward. The Company has recorded a valuation allowance against the U.S. foreign tax credits listed above because it is more likely than not that these attributes will expire unutilized.
The Company accounts for income taxes in accordance with ASC Topic 740, “Income Taxes,” which prescribes a minimum recognition threshold a tax position must meet before being recognized in the financial statements. Tax positions generally refer to a position taken in a previously filed income tax return or expected to be included in a tax return to be filed in the future that is reflected in the measurement of current and deferred income tax assets and liabilities. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

2025 2024 2023

  (In millions)
Balance at beginning of year $ 89   $ 93   $ 89  
Additions based on tax positions related to prior year —   1   4  

Reductions for tax positions of prior years ( 25 ) ( 5 ) —  
Balance at end of year $ 64   $ 89   $ 93  

The Company records interest and penalties related to unrecognized tax benefits as a component of income tax expense. Each quarter, the Company assesses the amounts provided for and, as a result, may increase or reduce the amount of interest and penalties. During the year ended December 31, 2025, the Company recorded an income tax benefit of $ 8.2 million for interest and penalties. In each of the years ended December 31, 2024 and 2023, the Company recorded tax expense of $ 2  million, respectively, for interest and penalties. At December 31, 2025, 2024, and 2023, the Company had an accrued liability for interest and penalties of nil , $ 9  million, and $ 7  million, respectively.
F-34

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Income taxes paid (net of refunds) for the year ended December 31, 2025 were as follows:

Amount
(In millions)
U.S. Federal
$ 92  
U.S. State and Local
( 15 )

Foreign:

Egypt
650  
U.K.
272  
Foreign subtotal
922  
Total
$ 999  

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in various states and foreign jurisdictions. The Company’s uncertain tax positions are related to tax years that may be subject to examination by the relevant taxing authority. The Company’s earliest open tax years in its key jurisdictions are as follows:
Jurisdiction

U.S. 2014
Egypt 2007
U.K. 2022

10.     COMMITMENTS AND CONTINGENCIES
Legal Matters
The 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 Dispute
Pursuant 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. Santos then filed a new lawsuit in the Supreme Court of Western Australia contending that it may be liable to the Australian Taxation Office for assessments, penalties, and interest related to the 2014 and 2015 tax years of approximately AUD $ 133  million and asserting that, if such amounts must be paid, the Company is liable to Santos for those amounts under the Quadrant SPA. All lawsuits related to the Quadrant SPA have now been consolidated into the same proceeding. The Company will vigorously prosecute its claim while vigorously defending against any counterclaims.
F-35

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Delaware Litigation
On September 10, 2020, the State of Delaware filed suit, individually and on behalf of the people of the State of Delaware, against over 25 oil and gas companies alleging damages as a result of global warming. Plaintiffs seek unspecified damages and abatement under various tort theories. The Company is vigorously defending the suit.
Kulp Minerals Lawsuit
On or about April 7, 2023, Apache was sued in a purported class action in New Mexico styled Kulp Minerals LLC v. Apache Corporation, Case No. D-506-CV-2023-00352 in the Fifth Judicial District. The Kulp Minerals case was not certified and sought to represent a group of owners allegedly owed statutory interest under New Mexico law as a result of purported late oil and gas payments. On December 5, 2025, the plaintiff voluntarily dismissed the case with prejudice.
Environmental Matters
As of December 31, 2025, the Company had an undiscounted reserve for environmental remediation of approximately $ 2 million.
The Company is not aware of any environmental claims existing as of December 31, 2025, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity. There can be no assurance, however, that current regulatory requirements will not change or past non-compliance with environmental laws will not be discovered on the Company’s properties.
Potential Decommissioning Obligations on Sold Properties
In 2013, Apache sold its Gulf of America (GOA) Shelf operations and properties and its GOA operating subsidiary, GOM Shelf LLC (GOM Shelf) to Fieldwood Energy LLC (Fieldwood). Fieldwood assumed the obligation to decommission the properties held by GOM Shelf and the properties acquired from Apache and its other subsidiaries (collectively, the Legacy GOA Assets). On February 14, 2018, Fieldwood filed for (and subsequently emerged from) Chapter 11 bankruptcy protection. On August 3, 2020, Fieldwood filed for (and subsequently emerged from) Chapter 11 bankruptcy protection for a second time. Upon emergence from this second bankruptcy, the Legacy GOA Assets were separated into a standalone company, which was subsequently merged into GOM Shelf. Under GOM Shelf’s limited liability company agreement, the proceeds of production of the Legacy GOA Assets are to be used to fund the operation of GOM Shelf and the decommissioning of Legacy GOA Assets. The decommissioning obligations for the Legacy GOA Assets are partially secured by a trust account of which Apache is a beneficiary and which is funded by net profits interests (NPIs) depending on future oil prices. In addition, after such sources have been exhausted, Apache agreed upon resolution of GOM Shelf’s second bankruptcy to loan GOM Shelf up to $ 400  million to perform decommissioning, with such loans and related obligations secured by first and prior liens on the Legacy GOA Assets.
By letter dated April 5, 2022 (replacing two earlier letters) and by subsequent letter dated March 1, 2023, GOM Shelf notified the Bureau of Safety and Environmental Enforcement (BSEE) that it was unable to fund the decommissioning obligations that it was obligated to perform on certain of the Legacy GOA Assets. As a result, Apache and other current and former owners in these assets have received orders from BSEE and demands from third parties to decommission certain of the Legacy GOA Assets included in GOM Shelf’s notifications to BSEE. Apache expects to receive similar orders and demands on the other Legacy GOA Assets included in GOM Shelf’s notification letters. Apache has also received orders to decommission other Legacy GOA Assets that were not included in GOM Shelf’s notification letters. Further, Apache anticipates that GOM Shelf may send additional such notices to BSEE in the future and that it may receive additional orders from BSEE requiring it to decommission other Legacy GOA Assets.
As of December 31, 2025, the Company recorded an asset of $ 40  million representing the remaining amount the Company expects to be reimbursed from remaining security related to these decommissioning costs. Of the total asset recorded as of December 31, 2025, $ 21 million is reflected under the caption “Decommissioning security for sold Gulf of America properties,” and $ 19 million is reflected under “Other current assets” in the Company’s consolidated balance sheet.
F-36

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of December 31, 2025, Apache estimates that its potential liability to fund the remaining decommissioning of Legacy GOA Assets and assets previously sold to other operators ranges from $ 0.9  billion to $ 1.2  billion on an undiscounted basis. Management does not believe any specific estimate within this range is a better estimate than any other. Accordingly, the Company recorded contingent liabilities in the amounts of $ 881 million and $ 1.0  billion as of December 31, 2025, and December 31, 2024, respectively. Of the total liability recorded as of December 31, 2025, $ 782 million is reflected under the caption “Decommissioning contingency for sold Gulf of America properties” and $ 99 million is reflected under “Other current liabilities” in the Company’s consolidated balance sheet. Changes in significant assumptions impacting Apache’s estimated liability, including expected well decommissioning spread rates, derrick barge rates, planned abandonment logistics, and future cash flows of GOM Shelf, could result in a liability in excess of the amount accrued.
The Company recognized $ 60 million of gains on previously sold Gulf of America properties during 2025 to reflect the net impact of decreased estimated decommissioning costs of Legacy GOA Assets which BSSE may order the Company to decommission. The Company recognized losses on previously sold Gulf of America properties of $ 273 million and 212 million during 2024 and 2023, respectively, in the Company’s statement of consolidated operations.
Leases and Contractual Obligations
The Company determines if an arrangement is an operating or finance lease at the inception of each contract. If the contract is classified as an operating lease, the Company records a Right-of-Use (ROU) asset and corresponding liability reflecting the total remaining present value of fixed lease payments over the expected term of the lease agreement. The expected term of the lease may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. If the Company’s lease does not provide an implicit rate in the contract, the Company uses its incremental borrowing rate when calculating the present value. In the normal course of business, the Company enters into various lease agreements for real estate, drilling rigs, vessels, aircrafts, and equipment related to its exploration and development activities, which are typically classified as operating leases under the provisions of the standard. ROU assets are reflected within “Deferred charges and other assets” on the Company’s consolidated balance sheet, and the associated operating lease liabilities are reflected within “Other current liabilities” and “Other” within “Deferred Credits and Other Noncurrent Liabilities,” as applicable.
Operating lease expense associated with ROU assets is recognized on a straight-line basis over the lease term. Lease expense is reflected on the statement of consolidated operations commensurate with the leased activities and nature of the services performed. Gross fixed operating lease expense, inclusive of amounts billable to partners and other working interest owners, was $ 148  million, $ 170 million, and $ 168  million for the years ended 2025, 2024, and 2023, respectively. As allowed under the standard, the Company accounts for non-lease and lease components as a single lease component for all asset classes and has elected to exclude short-term leases (those with terms of 12 months or less) from the balance sheet presentation. Costs incurred for short-term leases were $ 69  million, $ 85  million, and $ 71  million in 2025, 2024, and 2023, respectively. In 2025 and 2024, these costs primarily related to short term drilling rigs in the U.S. and decommissioning work in the Gulf of America. In 2023 these costs primarily related to decommissioning work in the Gulf of America.
Finance lease assets are included in “Property and Equipment” on the consolidated balance sheet, and the associated finance lease liabilities are reflected within “Current debt” and “Long-term debt,” as applicable. Depreciation on the Company’s finance lease asset was $ 2 million in each of the years 2025, 2024, and 2023. Interest on the Company’s finance lease liability was $ 1  million in each of the years 2025, 2024, and 2023.
The following table represents the Company’s weighted average lease term and discount rate as of December 31, 2025:

Operating Leases Finance Lease
Weighted average remaining lease term 6.8 years 7.7 years
Weighted average discount rate 5.9   % 4.4   %

F-37

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At December 31, 2025, contractual obligations for long-term operating leases, finance leases, and purchase obligations are as follows:

Net Minimum Commitments (1)
Operating Leases (2)
Finance Lease (3)
Purchase Obligations (4)

(In millions)
2026 $ 103   $ 4   $ 243  
2027 70   4   214  
2028 53   4   182  
2029 41   4   156  
2030 25   4   119  
Thereafter 136   14   57  
Total future minimum payments 428   34   $ 971  
Less: imputed interest ( 111 ) ( 6 ) N/A
Total lease liabilities 317   28   N/A
Current portion 97   3   N/A
Non-current portion $ 220   $ 25   N/A

(1) Excludes commitments for jointly owned fields and facilities for which the Company is not the operator.
(2) Amounts represent future payments associated with oil and gas operations inclusive of amounts billable to partners and other working interest owners. Such payments may be capitalized as a component of oil and gas properties and subsequently depreciated, impaired, or written off as exploration expense.
(3) Amounts represent the Company’s finance lease obligation related to the Company’s Midland, Texas regional office building.
(4) Amounts represent any agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms. These include minimum commitments associated with take-or-pay contracts, NGL processing agreements, drilling work program commitments, and agreements to secure capacity rights on third-party pipelines. Amounts exclude certain product purchase obligations related to marketing and trading activities for which there are no minimum purchase requirements or the amounts are not fixed or determinable. Total costs incurred under take-or-pay and throughput obligations were $ 263 million, $ 245 million, and $ 182 million in 2025, 2024, and 2023, respectively.
The lease liability reflected in the table above represents the Company’s fixed minimum payments that are settled in accordance with the lease terms. Actual lease payments during the period may also include variable lease components such as common area maintenance, usage-based sales taxes and rate differentials, or other similar costs that are not determinable at the inception of the lease. Gross variable lease payments, inclusive of amounts billable to partners and other working interest owners were $ 52  million, $ 48 million, and $ 74  million in 2025, 2024, and 2023, respectively.

11.     RETIREMENT AND DEFERRED COMPENSATION PLANS
The Company provides retirement benefits to its U.S. employees through the use of multiple plans: a 401(k) savings plan, a money purchase retirement plan, a non-qualified retirement savings plan, and a non-qualified restorative retirement savings plan. The 401(k) savings plan provides participating employees the ability to elect to contribute up to 50 percent of eligible compensation to the plan with the Company making matching contributions up to a maximum of 8 percent of each employee’s annual eligible compensation. In addition, the Company contributes 6 percent of each participating employee’s annual eligible compensation to a money purchase retirement plan. The 401(k) savings plan and the money purchase retirement plan are subject to certain annually-adjusted, government-mandated restrictions that limit the amount of employee and Company contributions. For certain eligible employees, the Company also provides a non-qualified retirement savings plan or a non-qualified restorative retirement savings plan. These plans allow the deferral of up to 50 percent of each employee’s base salary, up to 75 percent of each employee’s annual bonus (that accepts employee contributions) and the Company’s matching contributions in excess of the government mandated limitations imposed in the 401(k) savings plan and money purchase retirement plan.
Vesting in the Company’s contributions in the 401(k) savings plan, the money purchase retirement plan, the non-qualified retirement savings plan and the non-qualified restorative retirement savings plan occurs at the rate of 20 percent for every completed year of employment. Upon a change in control of ownership of APA, immediate and full vesting occurs.
The aggregate annual cost to the Company of all U.S. and international savings plans, the money purchase retirement plan, non-qualified retirement savings plan, and non-qualified restorative retirement savings plan was $ 44 million, $ 46 million, and $ 44 million for 2025, 2024, and 2023, respectively.
F-38

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company also provides a funded noncontributory defined benefit pension plan (U.K. Pension Plan) covering certain employees of the Company’s North Sea operations in the U.K. The plan provides defined pension benefits based on years of service and final salary. The plan applies only to employees who were part of BP North Sea’s pension plan as of April 2, 2003, prior to the acquisition of BP North Sea by the Company effective July 1, 2003.
Additionally, the Company offers postretirement medical benefits to U.S. employees who meet certain eligibility requirements. Eligible participants receive medical benefits up until the age of 65 or at the date they become eligible for Medicare, provided the participant remits the required portion of the cost of coverage. The plan is contributory with participants’ contributions adjusted annually. The postretirement benefit plan does not cover benefit expenses once a covered participant becomes eligible for Medicare.
The following tables set forth the benefit obligation, fair value of plan assets and funded status as of December 31, 2025, 2024, and 2023, and the underlying weighted average actuarial assumptions used for the U.K. Pension Plan and U.S. postretirement benefit plan. The Company uses a measurement date of December 31 for its pension and postretirement benefit plans.

  2025 2024 2023
  Pension
Benefits Postretirement
Benefits Pension
Benefits Postretirement
Benefits Pension
Benefits Postretirement
Benefits

  (In millions)
Change in Projected Benefit Obligation
Projected benefit obligation at beginning of year $ 107   $ 15   $ 118   $ 15   $ 108   $ 15  
Service cost 1   1   1   1   1   1  
Interest cost 6   1   6   1   5   1  
Foreign currency exchange rates 8   —   ( 2 ) —   6   —  
Actuarial losses (gains) ( 1 ) ( 1 ) ( 11 ) —   3   —  
Plan curtailments
—   —   —   ( 1 ) —   —  
Benefits paid ( 6 ) ( 2 ) ( 5 ) ( 2 ) ( 5 ) ( 3 )
Retiree contributions —   1   —   1   —   1  
Projected benefit obligation at end of year 115   15   107   15   118   15  
Change in Plan Assets
Fair value of plan assets at beginning of year 136   —   150   —   137   —  
Actual return (loss) on plan assets 5   —   ( 8 ) —   8   —  
Foreign currency exchange rates 10   —   ( 3 ) —   8   —  
Employer contributions 2   1   2   1   2   1  

Benefits paid ( 6 ) ( 2 ) ( 5 ) ( 2 ) ( 5 ) ( 3 )
Retiree contributions —   1   —   1   —   2  
Fair value of plan assets at end of year 147   —   136   —   150   —  
Funded status at end of year $ 32   $ ( 15 ) $ 29   $ ( 15 ) $ 32   $ ( 15 )
Amounts recognized in Consolidated Balance Sheet
Current liability $ —   $ ( 1 ) $ —   $ ( 2 ) $ —   $ ( 2 )
Non-current asset (liability) 32   ( 14 ) 29   ( 13 ) 32   ( 13 )
$ 32   $ ( 15 ) $ 29   $ ( 15 ) $ 32   $ ( 15 )
Pre-tax Amounts Recognized in Accumulated Other Comprehensive Income (Loss)
Accumulated gain (loss) $ ( 18 ) $ 14   $ ( 16 ) $ 14   $ ( 12 ) $ 16  

Weighted Average Assumptions used as of December 31
Discount rate 5.60   % 5.18   % 5.60   % 5.49   % 4.80   % 5.00   %
Salary increases 4.50   % N/A 4.70   % N/A 4.60   % N/A
Expected return on assets 5.60   % N/A 5.70   % N/A 4.80   % N/A
Healthcare cost trend
Initial N/A 7.00   % N/A 6.50   % N/A 6.25   %
Ultimate in 2035
N/A 5.25   % N/A 5.25   % N/A 5.25   %

F-39

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of December 31, 2025, 2024, and 2023, the accumulated benefit obligation for the U.K. Pension Plan was $ 111 million, $ 102 million, and $ 112 million, respectively.
The Company’s defined benefit pension plan assets are held by a non-related trustee who has been instructed to invest the assets under a cash flow driven investment strategy. The Company intends to invest in primarily low risk debt securities that will provide a reasonable rate of return focused on cash flow timing such that the benefits promised to members are provided when due. The U.K. Pension Plan policy is to target an ongoing funding level of 100 percent through prudent investments and includes policies and strategies such as investment goals, risk management practices, and permitted and prohibited investments. A breakout of allocations for the Company's plan asset holdings are summarized below:

  Percentage of
Plan Assets at
Year-End
  2025 2024
Asset Category

Multi-asset credit 61   % 62   %
Nominal bonds 3   % 4   %
Inflation-linked bonds 36   % 33   %
Cash —   % 1   %
Total 100   % 100   %

The plan’s assets do not include any direct ownership of equity or debt securities of the Company. The fair value of plan assets at December 31, 2025 and 2024 are based upon unadjusted quoted prices for identical instruments in active markets, which is a Level 1 fair value measurement. The following table presents the fair values of plan assets for each major asset category based on the nature and significant concentration of risks in plan assets as follows:

December 31,
  2025 2024

  (In millions)
Asset Category

Multi-asset credit 90   84  
Nominal bonds 3   6  
Inflation-linked bonds 53   45  
Cash 1   1  
Total $ 147   $ 136  

The expected long-term rate of return on assets assumptions are derived relative to the yield on long-dated fixed-interest bonds issued by the U.K. government (gilts). For equities, outperformance relative to gilts is assumed to be 1.3 percent per year.
F-40

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following tables set forth the components of the net periodic cost and the underlying weighted average actuarial assumptions used for the pension and postretirement benefit plans as of December 31 as follows: 

  2025 2024 2023
  Pension
Benefits Postretirement
Benefits Pension
Benefits Postretirement
Benefits Pension
Benefits Postretirement
Benefits

  (In millions)
Components of Net Periodic Benefit Cost
Service cost $ 1   $ 1   $ 1   $ 1   $ 1   $ 1  
Interest cost 6   1   6   1   5   1  
Expected return on assets ( 8 ) —   ( 7 ) —   ( 7 ) —  
Amortization of actuarial gain
—   ( 2 ) —   ( 2 ) —   ( 2 )
Curtailment gain
—   —   —   ( 1 ) —   —  

Net periodic benefit cost $ ( 1 ) $ —   $ —   $ ( 1 ) $ ( 1 ) $ —  
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost for the Years Ended December 31
Discount rate 5.60   % 5.49   % 4.80   % 5.00   % 5.00   % 5.29   %
Salary increases 4.70   % N/A 4.60   % N/A 4.70   % N/A
Expected return on assets 5.70   % N/A 4.80   % N/A 4.70   % N/A
Healthcare cost trend
Initial N/A 6.50   % N/A 6.25   % N/A 6.50   %
Ultimate in 2032
N/A 5.25   % N/A 5.25   % N/A 5.25   %

The Company expects to contribute approximately $ 1 million to its pension plan and $ 1 million to its postretirement benefit plan in 2026. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

Pension
Benefits Postretirement
Benefits

  (In millions)
2026 $ 5   $ 1  
2027 7   1  
2028 7   1  
2029 7   1  
2030 7   1  
Years 2031-2035 39   7  

12.     CAPITAL STOCK
Common Stock Outstanding
The 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,
2025 2024 2023
Balance, beginning of year 365,397,149   303,575,901   311,559,149  
Shares issued for stock-based compensation plans:
Treasury shares issued —   —   2,016  
Common shares issued 458,481   70,983,745   725,914  
Treasury shares acquired ( 12,890,984 ) ( 9,162,497 ) ( 8,711,178 )
Balance, end of year 352,964,646   365,397,149   303,575,901  

F-41

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Net Income per Common Share
The 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:

  2025 2024 2023
  Income Shares Per Share Income Shares Per Share Income
Shares Per 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 Program
During 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 Dividend
For the years ended December 31, 2025, 2024, and 2023, the Company declared common stock dividends totaling $ 1.00 per share.
Stock Compensation Plans
The Company maintains several stock-based compensation plans, which include stock options, restricted stock, and conditional restricted stock unit plans.
On May 12, 2016, the Company’s shareholders approved the 2016 Omnibus Compensation Plan (the 2016 Plan), which is used to provide eligible employees with equity-based incentives by granting incentive stock options, non-qualified stock options, performance awards, restricted stock awards, restricted stock units, stock appreciation rights, cash awards, or any combination of the foregoing. As of December 31, 2025, 5.2 million shares were authorized and available for grant under the 2016 Plan. Previously approved plans remain in effect solely for the purpose of governing grants still outstanding that were issued prior to approval of the 2016 Plan. All new grants are issued from the 2016 Plan. In 2018, the Company began issuing cash-settled awards (phantom units) under the restricted stock and conditional restricted stock unit plans. The phantom units represent a hypothetical interest in the Company’s stock and, once vested, are settled in cash.
F-42

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Costs related to the plans are capitalized or expensed to “Lease operating expenses,” “Exploration,” or “General and administrative” in the Company’s statement of consolidated operations based on the nature of each employee’s activities. The following table summarizes the Company’s stock-settled and cash-settled compensation costs for the years ended December 31, 2025, 2024, and 2023:

For the Year Ended December 31,
2025 2024 2023

  (In millions)
Stock-settled and cash-settled compensation expensed:

Lease operating expenses
$ 26   $ 16   $ 27  
Exploration
7   4   7  
General and administrative
74   29   50  
Total stock-settled and cash-settled compensation expensed
107   49   84  
Stock-settled and cash-settled compensation capitalized 15   9   13  
Total stock-settled and cash-settled compensation costs $ 122   $ 58   $ 97  

Stock Options
As of December 31, 2025, the Company had outstanding options to purchase shares of its common stock under the 2016 Plan and the 2011 Omnibus Equity Compensation Plan (the 2011 Plan and, with the 2016 Plan, the Omnibus Plans). The Omnibus Plans were submitted to and approved by the Company’s shareholders. New shares of common stock will be issued for employee stock option exercises. Under the Omnibus Plans, the exercise price of each option equals the closing price of APA’s common stock on the date of grant. Options granted become exercisable ratably over a three-year period and expire 10 years after granted.
During the year ended December 31, 2025, compensation costs related to stock options charged to expense and capitalized were $ 8  million and $ 1  million, respectively.
The following table summarizes stock option activity for the years ended December 31, 2025, 2024, and 2023:

  2025 2024 2023
  Shares
Under Option Weighted Average
Exercise Price
Shares
Under Option Weighted Average
Exercise Price
Shares
Under Option Weighted Average
Exercise Price

(In thousands, except exercise price amounts)
Outstanding, beginning of year 1,416   $ 48.64   1,465   $ 48.48   2,078   $ 57.71  
Granted 1,722   23.26   —   —   —   —  
Exercised —   —   —   —   ( 12 ) 42.38  
Forfeited ( 224 ) 22.86   —   —   —   —  
Expired ( 139 ) 48.47   ( 49 ) 43.91   ( 601 ) 80.53  
Outstanding, end of year (1)
2,775   34.98   1,416   48.64   1,465   48.48  
Expected to vest 1,427   23.33   —   —   —   —  
Exercisable, end of year (1)(2)
1,348   47.30   1,416   48.64   1,465   48.48  

(1) As of December 31, 2025, options exercisable had a weighted average remaining contractual life of 1.5 years and $ 97 thousand aggregate intrinsic value and options outstanding had a weighted average remaining contractual life of 5.4 years and $ 2 million aggregate intrinsic value.
(2) As of December 31, 2025, there was $ 6  million of total unrecognized compensation cost related to 1,426,518 unvested stock options.
During the year ended December 31, 2025, there were 1,721,990 options issued and no options exercised. During the year ended December 31, 2024, there were no options issued or exercised. During the year ended December 31, 2023, there were no options issued and 12,183 options exercised.
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. Assumptions used in the valuation are disclosed in the following table. Expected volatilities are based on historical volatility of the Company’s common stock and other factors. The expected dividend yield is based on historical yields on the date of grant. The expected term of stock options granted represents the period of time that the stock options are expected to be outstanding and is derived from historical exercise behavior, current trends, and values derived from lattice-based models. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant.
F-43

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

2025 2024 2023
Expected volatility
57.37   % N/A
N/A

Expected dividend yields
4.30   % N/A
N/A

Expected term (in years)
6 N/A
N/A

Risk-free rate
4.43   % N/A
N/A

Weighted-average grant-date fair value
$ 9.50 N/A
N/A

In January 2026, the Company issued 1,487,317 options to purchase shares of the Company’s common stock to eligible employees under the Omnibus Plans, at an average fair value of $ 9.75 per share. The total compensation cost of $ 15  million is estimated to be recognized over a three-year vesting period of these options.
Restricted Stock Units and Restricted Stock Phantom Units
The Company has restricted stock unit and restricted stock phantom unit plans for eligible employees, including officers. The value of the stock-settled restricted stock unit awards is established by the market price on the date of grant and is recorded as compensation expense ratably over the vesting terms. The restricted stock phantom unit awards represent a hypothetical interest in the Company’s common stock, and, once vested, are settled in cash. Compensation expense related to the cash-settled awards is recorded as a liability and remeasured at the end of each reporting period over the applicable vesting term.
For the years ended December 31, 2025, 2024, and 2023, compensation costs charged to expense for the restricted stock units and restricted stock phantom units were $ 46 million, $ 53 million, and $ 73 million, respectively. For the years ended December 31, 2025, 2024, and 2023, capitalized compensation costs for the restricted stock units and restricted stock phantom units were $ 10 million, $ 9 million, and $ 11 million, respectively.
The following table summarizes stock-settled restricted stock unit activity for the years ended December 31, 2025, 2024, and 2023:

2025 2024 2023
Units Weighted
Average  Grant-Date  Fair Value Units Weighted
Average  Grant-Date  Fair Value Units Weighted
Average  Grant-Date  Fair Value

(In thousands, except per share amounts)
Non-vested, beginning of year 1,415   $ 35.07   1,480   $ 30.69   1,885   $ 23.08  
Granted 827   23.29   897   33.48   661   41.60  
Assumed awards from Callon acquisition
—   —   1,498   35.43   —   —  
Vested (3)
( 797 ) 32.74   ( 2,295 ) 31.83   ( 975 ) 23.31  
Forfeited ( 282 ) 31.40   ( 165 ) 35.48   ( 69 ) 32.44  
Expired
—   —   —   —   ( 22 ) 27.81  
Non-vested, end of year (1)(2)
1,163   29.19   1,415   35.07   1,480   30.69  

(1) As of December 31, 2025, there was $ 10 million of total unrecognized compensation cost related to 1,163,194 unvested stock-settled restricted stock units.
(2) As of December 31, 2025, the weighted-average remaining life of unvested stock-settled restricted stock units is approximately 0.8 years.
(3) The grant date fair values of the stock-settled awards vested during 2025, 2024, and 2023 were $ 26 million, $ 73 million, and $ 23 million, respectively.
F-44

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table summarizes cash-settled restricted stock phantom unit activity for the years ended December 31, 2025, 2024, and 2023:

For the Year Ended December 31,

2025 2024 2023

(In thousands)
Non-vested, beginning of year 3,917   4,478   5,709  

Granted (1)
2,302   2,369   1,972  
Vested ( 1,887 ) ( 2,568 ) ( 2,851 )
Forfeited ( 914 ) ( 362 ) ( 340 )
Expired
—   —   ( 12 )
Non-vested, end of year (2)
3,418   3,917   4,478  

(1) Restricted stock phantom units granted during 2025, 2024, and 2023 included 2,301,540 , 2,369,605 , and 1,972,116 awards, respectively, based on the per-share market price of APA common stock.
(2) The outstanding liability for the unvested cash-settled restricted stock phantom units that had not been recognized as of December 31, 2025 was approximately $ 38 million.
In January 2026, the Company awarded 624,467 restricted stock units and 2,115,116 restricted stock phantom units based on APA’s weighted-average per-share market price of $ 23.88 under the 2016 Plan to eligible employees. Total compensation cost for the restricted stock units and the restricted stock phantom units, absent any forfeitures, is estimated to be $ 15 million and $ 51 million, respectively, and was calculated based on the per-share fair market value of a share of the Company’s common stock as of the grant date. Compensation cost will be recognized over a three-year vesting period for both plans. The restricted stock phantom units will be classified as a liability and remeasured at the end of each reporting period based on the change in fair value of one share of the Company’s common stock, a Level 1 fair value measurement.
Performance Program
To provide long-term incentives for the Company’s employees to deliver competitive shareholder returns, the Company makes annual grants of cash-settled conditional restricted stock phantom units to eligible employees. APA has a performance program for certain eligible employees with payout for a portion of the shares based upon measurement of total shareholder return (TSR) of APA common stock as compared to a designated peer group during a three-year performance period. Payout for the remaining portion of the shares is based on performance and financial objectives as defined in the plan. The overall results of the objectives are calculated at the end of the award’s stated performance period and, if a payout is warranted, applied to the target number of restricted stock units awarded. The performance shares will immediately vest 50 percent at the end of the three-year performance period, with the remaining 50 percent vesting at the end of the following year. Grants from the performance programs outstanding at December 31, 2025, are as described below:
• In January 2022, the Company’s Board of Directors approved the 2022 Performance Program, pursuant to the 2016 Plan. Eligible employees received the initial cash-settled conditional phantom units totaling 1,093,034 units. A total of 713,514 phantom units were outstanding as of December 31, 2025. The results for the performance period yielded a payout of 118 percent of target.
• In January 2023, the Company’s Board of Directors approved the 2023 Performance Program, pursuant to the 2016 Plan. Eligible employees received the initial cash-settled conditional phantom units totaling 822,200 units. The actual number of phantom units awarded will be between zero and 200 percent of target. A total of 636,488 phantom units were outstanding as of December 31, 2025. The results for the performance period yielded a payout of 120 percent of target.
• In January 2024, the Company’s Board of Directors approved the 2024 Performance Program, pursuant to the 2016 Plan. Eligible employees received the initial cash-settled conditional phantom units totaling 645,318 units. The actual number of phantom units awarded will be between zero and 200 percent of target. A total of 468,708 phantom units were outstanding as of December 31, 2025, from which a minimum of zero to a maximum of 937,416 units could be awarded. Eligible employees also received cash incentives as part of the 2024 Performance Program, which totaled $ 11  million as of December 31, 2025. The ultimate payout will range from zero to $ 22  million at the end of a three-year performance period.
F-45

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

• In January 2025, the Company’s Board of Directors approved the 2025 Performance Program, pursuant to the 2016 Plan. Eligible employees received the initial cash-settled conditional phantom units totaling 1,028,112 units. The actual number of phantom units awarded will be between zero and 200 percent of target. A total of 871,793 phantom units were outstanding as of December 31, 2025, from which a minimum of zero to a maximum of 1,743,586 units could be awarded. Eligible employees also received cash incentives as part of the 2025 Performance Program, which totaled $ 14  million as of December 31, 2025. The ultimate payout will range from zero to $ 28  million at the end of a three-year performance period.
Compensation costs related to the conditional cash-settled awards are recorded as a liability and remeasured at the end of each reporting period over the applicable vesting term. Compensation costs charged to expense under the cash-settled performance programs were expenses of $ 45 million and $ 2 million during 2025 and 2023, respectively and a net benefit of $ 13  million during 2024. Capitalized compensation costs under the cash-settled performance programs were expenses of approximately $ 3 million and $ 100 thousand during 2025 and 2023, respectively and a net benefit of approximately $ 1  million during 2024.
The following table summarizes cash-settled conditional restricted stock phantom unit activity for the years ended December 31, 2025, 2024, and 2023:

For the Year Ended December 31,

2025 2024 2023

  (In thousands)
Non-vested, beginning of year 3,972   4,629   4,835  
Granted 1,605   834   1,536  
Assumed awards from Callon acquisition
—   2,934   —  
Vested ( 2,066 ) ( 4,222 ) ( 1,593 )
Forfeited ( 353 ) ( 203 ) ( 99 )
Expired ( 242 ) —   ( 50 )
Non-vested, end of year (1)
2,916   3,972   4,629  

(1) As of December 31, 2025, the outstanding liability for the unvested cash-settled conditional restricted stock phantom units that had not been recognized was approximately $ 14 million.
In January 2026, the Company’s Board of Directors approved the 2026 Performance Program, pursuant to the 2016 Plan. A portion of the award is based upon measurement of TSR similar to prior year awards, and the remaining portion of the award is based on performance and financial objectives as defined in the 2026 Performance Program. Eligible employees received conditional phantom units and cash incentives. The conditional phantom units totaled 904,442 units, with the ultimate units to be awarded ranging from zero to a maximum of 1,808,884 units. These phantom units represent a hypothetical interest in the Company’s common stock, and, once vested, are settled in cash. These phantom units will be classified as a liability and remeasured at the end of each reporting period based on the change in fair value of one share of the Company’s common stock, a Level 1 fair value measurement. The cash incentives totaled $ 14  million, with the ultimate payout ranging from zero to $ 28  million. Final payout of the awards will be determined at the end of a three-year performance period.

13.     ACCUMULATED OTHER COMPREHENSIVE INCOME
Components of accumulated other comprehensive income include the following:

  As of December 31,
  2025 2024 2023

  (In millions)

Pension and postretirement benefit plan ( Note 11 )
$ 10   $ 12   $ 15  
Accumulated other comprehensive income $ 10   $ 12   $ 15  

F-46

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

14.     MAJOR CUSTOMERS
The 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.
F-47

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

15.     BUSINESS SEGMENT INFORMATION
As 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. Egypt (1)
North Sea Intersegment Eliminations & Other (6)
Total (2)

  (In millions)
2025
Oil revenues $ 3,010   $ 2,177   $ 622   $ —   $ 5,809  
Natural gas revenues 193   460   117   —   770  
Natural gas liquids revenues 616   —   34   —   650  
Oil, natural gas, and natural gas liquids production revenues 3,819   2,637   773   —   7,229  
Purchased oil and gas sales 1,691   —   —   —   1,691  
Realized gains on commodity derivative instruments
31   —   —   —   31  
5,541   2,637   773   —   8,951  
Operating Expenses:
Lease operating expenses (5)
724   447   333   —   1,504  
Gathering, processing, and transmission (5)
346   24   54   —   424  
Purchased oil and gas costs (5)
1,070   —   —   —   1,070  
Taxes other than income (5)
229   —   —   —   229  
Exploration (4)
9   101   1   20   131  
Depreciation, depletion, and amortization (5)
1,434   630   240   —   2,304  
Asset retirement obligation accretion 41   —   117   —   158  
Impairments 18   19   7   —   44  
3,871   1,221   752   20   5,864  
Operating Income (Loss) $ 1,670   $ 1,416   $ 21   $ ( 20 ) 3,087  
Other Income (Expense):
Gain on divestitures, net 301  
Gains on previously sold Gulf of America properties
60  
Realized losses on contingent consideration arrangements
( 7 )
Unrealized losses on commodity derivative instruments
( 77 )
Other
( 8 )
General and administrative ( 350 )
Transaction, reorganization, and separation ( 102 )
Financing costs, net ( 113 )
Income Before Income Taxes $ 2,791  

Total Assets (3)
$ 12,568   $ 3,055   $ 1,216   $ 922   $ 17,761  
Net Property and Equipment $ 9,019   $ 2,306   $ 570   $ 853   $ 12,748  
Additions to Net Property and Equipment $ 1,614   $ 747   $ 13   $ 299   $ 2,673  

F-48

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

U.S. Egypt (1)
North Sea Intersegment Eliminations & Other (6)
Total (2)

  (In millions)
2024
Oil revenues $ 3,572   $ 2,620   $ 774   $ —   $ 6,966  
Natural gas revenues 126   313   145   —   584  
Natural gas liquids revenues 617   —   29   —   646  
Oil, natural gas, and natural gas liquids production revenues 4,315   2,933   948   —   8,196  
Purchased oil and gas sales 1,541   —   —   —   1,541  
Realized gains on commodity derivative instruments
2   —   —   —   2  
5,858   2,933   948   —   9,739  
Operating Expenses:
Lease operating expenses (5)
820   464   406   —   1,690  
Gathering, processing, and transmission (5)
354   25   53   —   432  
Purchased oil and gas costs (5)
1,047   —   —   —   1,047  
Taxes other than income (5)
270   —   —   —   270  
Exploration (4)
134   112   1   66   313  
Depreciation, depletion, and amortization (5)
1,340   625   301   —   2,266  
Asset retirement obligation accretion 42   —   106   —   148  
Impairments 320   —   809   —   1,129  
4,327   1,226   1,676   66   7,295  
Operating Income (Loss) $ 1,531   $ 1,707   $ ( 728 ) $ ( 66 ) 2,444  
Other Income (Expense):
Gain on divestitures, net 289  
Losses on previously sold Gulf of America properties
( 273 )
Realized losses on contingent consideration arrangements
( 4 )
Unrealized losses on commodity derivative instruments
( 8 )
Other ( 6 )
General and administrative ( 372 )
Transaction, reorganization, and separation ( 168 )
Financing costs, net ( 367 )
Income Before Income Taxes $ 1,535  

Total Assets (3)
$ 13,870   $ 3,606   $ 1,324   $ 590   $ 19,390  
Net Property and Equipment $ 9,109   $ 2,271   $ 712   $ 554   $ 12,646  
Additions to Net Property and Equipment $ 6,609   $ 765   $ 41   $ 84   $ 7,499  

F-49

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

U.S. Egypt (1)
North Sea Intersegment Eliminations & Other (6)
Total (2)

(In millions)
2023
Oil revenues $ 2,241   $ 2,683   $ 1,073   $ —   $ 5,997  
Natural gas revenues 297   346   237   —   880  
Natural gas liquids revenues 480   —   28   —   508  
Oil, natural gas, and natural gas liquids production revenues 3,018   3,029   1,338   —   7,385  
Purchased oil and gas sales 894   —   —   —   894  
Realized gains on commodity derivative instruments
48   —   —   —   48  
3,960   3,029   1,338   —   8,327  
Operating Expenses:
Lease operating expenses (5)
593   474   369   —   1,436  
Gathering, processing, and transmission (5)
249   33   52   —   334  
Purchased oil and gas costs (5)
742   —   —   —   742  
Taxes other than income (5)
207   —   —   —   207  
Exploration (4)
14   119   19   43   195  
Depreciation, depletion, and amortization (5)
745   524   271   —   1,540  
Asset retirement obligation accretion 40   —   76   —   116  
Impairments 11   —   50   —   61  
2,601   1,150   837   43   4,631  
Operating Income (Loss) $ 1,359   $ 1,879   $ 501   $ ( 43 ) 3,696  
Other Income (Expense):
Gain on divestitures, net 8  
Losses on previously sold Gulf of America properties
( 212 )

Unrealized gains on commodity derivative instruments
51  
Other 18  
General and administrative ( 351 )
Transaction, reorganization, and separation ( 15 )
Financing costs, net ( 312 )
Income Before Income Taxes
$ 2,883  

Total Assets (3)
$ 9,221   $ 3,503   $ 1,970   $ 550   $ 15,244  
Net Property and Equipment $ 5,689   $ 2,209   $ 1,628   $ 512   $ 10,038  
Additions to Net Property and Equipment $ 1,255   $ 834   $ 131   $ 93   $ 2,313  

(1) Includes oil and gas production revenue that will be paid as taxes by EGPC on behalf of the Company for the years ended December 31, 2025, 2024, and 2023 of:

For the Year Ended December 31,
  2025 2024 2023

(In millions)
Oil $ 536   $ 686   $ 729  
Natural gas 114   83   95  

(2) Includes a noncontrolling interest in Egypt for all periods presented.
(3) Intercompany balances are excluded from total assets.
(4) Exploration expense under Intersegment Eliminations & Other primarily reflects the Company’s Suriname exploration activities.
(5) Represents significant segment expense categories that align with the segment-level information that is regularly provided to the CODM. The remaining expenses that comprise the Other Income (Loss) amount by segment are deemed to be other segment expense categories necessary to arrive at the segment profit or loss.
(6) Includes Suriname operating expenses as the operating segment has not met the quantitative thresholds to be separately reported.
F-50

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

16.     SUPPLEMENTAL OIL AND GAS DISCLOSURES (Unaudited)

Oil and Gas Operations
The following table sets forth revenue and direct cost information relating to the Company’s oil and gas exploration and production activities. The Company has no long-term agreements to purchase oil or gas production from foreign governments or authorities.

United
States Egypt (1)
North Sea Other
International Total (1)

  (In millions, except per boe)
2025
Oil and gas production revenues $ 3,819   $ 2,637   $ 773   $ —   $ 7,229  
Operating cost:
Depreciation, depletion, and amortization (2)
1,411   625   239   —   2,275  
Asset retirement obligation accretion 41   —   117   —   158  
Lease operating expenses 724   447   333   —   1,504  
Gathering, processing, and transmission 346   24   54   —   424  
Exploration expenses 9   101   1   20   131  
Impairments related to oil and gas properties —   18   —   —   18  
Production taxes (3)
227   —   —   —   227  
Income tax 234   640   23   —   897  
2,992   1,855   767   20   5,634  
Results of operations $ 827   $ 782   $ 6   $ ( 20 ) $ 1,595  
2024
Oil and gas production revenues $ 4,315   $ 2,933   $ 948   $ —   $ 8,196  
Operating cost:
Depreciation, depletion, and amortization (2)
1,314   621   300   —   2,235  
Asset retirement obligation accretion 42   —   106   —   148  
Lease operating expenses 820   464   406   —   1,690  
Gathering, processing, and transmission 354   25   53   —   432  
Exploration expenses 134   112   1   66   313  
Impairments related to oil and gas properties 315   —   796   —   1,111  
Production taxes (3)
268   —   —   —   268  
Income tax 235   770   ( 536 ) —   469  
3,482   1,992   1,126   66   6,666  
Results of operations $ 833   $ 941   $ ( 178 ) $ ( 66 ) $ 1,530  
2023
Oil and gas production revenues $ 3,018   $ 3,029   $ 1,338   $ —   $ 7,385  
Operating cost:
Depreciation, depletion, and amortization (2)
709   521   270   —   1,500  
Asset retirement obligation accretion 40   —   76   —   116  
Lease operating expenses 593   474   369   —   1,436  
Gathering, processing, and transmission 249   33   52   —   334  
Exploration expenses 14   119   19   43   195  

Production taxes (3)
204   —   —   —   204  
Income tax 254   828   414   —   1,496  
2,063   1,975   1,200   43   5,281  
Results of operations $ 955   $ 1,054   $ 138   $ ( 43 ) $ 2,104  

(1) Includes a noncontrolling interest in Egypt.
(2) Reflects DD&A of capitalized costs of oil and gas properties and, therefore, does not agree with DD&A reflected on Note 16—Business Segment Information .
(3) Reflects only amounts directly related to oil and gas producing properties and, therefore, does not agree with taxes other than income reflected on Note 16—Business Segment Information .
F-51

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Costs Incurred in Oil and Gas Property Acquisitions, Exploration, and Development Activities

United
States Egypt (2)
North Sea Other
International Total (2)

  (In millions)
2025
Acquisitions
$ 23   $ 10   $ —   $ —   $ 33  

Exploration 76   244   1   31   352  
Development 1,558   530   96   288   2,472  
Costs incurred (1)
$ 1,657   $ 784   $ 97   $ 319   $ 2,857  
(1) Includes capitalized interest and asset retirement costs:

Capitalized interest $ 6   $ —   $ —   $ 39   $ 45  
Asset retirement costs 51   —   84   —   135  
2024
Acquisitions (3)
$ 4,561   $ 3   $ —   $ —   $ 4,564  

Exploration 150   227   1   61   439  
Development 2,067   559   186   47   2,859  
Costs incurred (1)
$ 6,778   $ 789   $ 187   $ 108   $ 7,862  
(1) Includes capitalized interest and asset retirement costs:

Capitalized interest $ 3   $ —   $ —   $ 26   $ 29  
Asset retirement costs 171   —   145   —   316  

2023
Acquisitions
$ 21   $ 4   $ —   $ —   $ 25  

Exploration 31   226   44   131   432  
Development 1,148   646   468   —   2,262  
Costs incurred (1)
$ 1,200   $ 876   $ 512   $ 131   $ 2,719  
(1) Includes capitalized interest, asset retirement costs, and Egypt modernization impacts as follows:

Capitalized interest $ —   $ —   $ —   $ 24   $ 24  
Asset retirement costs ( 4 ) —   375   —   371  

(2) Includes a noncontrolling interest in Egypt.

(3) Includes acquisitions of unproved properties of $ 955 million for the U.S. related to the Callon acquisition.

Capitalized Costs
The following table sets forth the capitalized costs and associated accumulated depreciation, depletion, and amortization relating to the Company’s oil and gas acquisition, exploration, and development activities:

United
States Egypt (1)
North
Sea Other
International Total (1)

  (In millions)
2025
Proved properties $ 19,690   $ 14,724   $ 9,757   $ 721   $ 44,892  
Unproved properties 384   99   —   132   615  
20,074   14,823   9,757   853   45,507  
Accumulated DD&A ( 11,220 ) ( 12,558 ) ( 9,189 ) —   ( 32,967 )
$ 8,854   $ 2,265   $ 568   $ 853   $ 12,540  

2024
Proved properties $ 19,246   $ 14,458   $ 9,661   $ 434   $ 43,799  
Unproved properties 711   67   —   121   899  
19,957   14,525   9,661   555   44,698  
Accumulated DD&A ( 11,053 ) ( 12,299 ) ( 8,952 ) —   ( 32,304 )
$ 8,904   $ 2,226   $ 709   $ 555   $ 12,394  

(1) Includes a noncontrolling interest in Egypt.
F-52

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Oil and Gas Reserve Information
Proved oil and gas reserves are those quantities of natural gas, crude oil, condensate, and NGLs, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations. Estimated proved developed oil and gas reserves can be expected to be recovered through existing wells with existing equipment and operating methods. The Company reports all estimated proved reserves held under production-sharing arrangements utilizing the “economic interest” method, which excludes the host country’s share of reserves.
Estimated reserves that can be produced economically through application of improved recovery techniques are included in the “proved” classification when successful testing by a pilot project or the operation of an active, improved recovery program using reliable technology establishes the reasonable certainty for the engineering analysis on which the project or program is based. Economically producible means a resource that generates revenue that exceeds, or is reasonably expected to exceed, the costs of the operation. Reasonable certainty means a high degree of confidence that the quantities will be recovered. Reliable technology is a grouping of one or more technologies (including computational methods) that has been field-tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation. In estimating its proved reserves, the Company uses several different traditional methods that can be classified in three general categories: (1) performance-based methods; (2) volumetric-based methods; and (3) analogy with similar properties. The Company will, at times, utilize additional technical analysis such as computer reservoir models, petrophysical techniques, and proprietary 3-D seismic interpretation methods to provide additional support for more complex reservoirs. Information from this additional analysis is combined with traditional methods outlined above to enhance the certainty of the Company’s reserve estimates.
F-53

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

There are numerous uncertainties inherent in estimating quantities of proved reserves and projecting future rates of production and timing of development expenditures. The reserve data in the following tables only represent estimates and should not be construed as being exact.

  Crude Oil and Condensate
  United
States Egypt (1)
North
Sea Suriname
Total (1)

(Thousands of barrels)
Proved developed reserves:
December 31, 2022
177,708   108,050   82,580   —   368,338  
December 31, 2023
179,542   102,305   61,076   —   342,923  
December 31, 2024
184,744   95,990   30,436   —   311,170  
December 31, 2025
182,300   101,750   22,136   —   306,186  
Proved undeveloped reserves:
December 31, 2022 22,239   8,557   2,873   —   33,669  
December 31, 2023 30,948   5,254   —   —   36,202  
December 31, 2024 107,283   7,621   —   73,637   188,541  
December 31, 2025 121,079   7,578   —   73,789   202,446  

Total proved reserves:
Balance December 31, 2022 199,947   116,607   85,453   —   402,007  
Extensions, discoveries and other additions 43,613   12,979   301   —   56,893  
Purchases of minerals in-place 20   —   —   —   20  
Revisions of previous estimates ( 3,520 ) 10,505   ( 12,002 ) —   ( 5,017 )
Production ( 28,795 ) ( 32,532 ) ( 12,676 ) —   ( 74,003 )
Sales of minerals in-place ( 775 ) —   —   —   ( 775 )
Balance December 31, 2023 210,490   107,559   61,076   —   379,125  
Extensions, discoveries and other additions 100,778   18,115   —   73,637   192,530  
Purchases of minerals in-place 124,112   —   —   —   124,112  
Revisions of previous estimates ( 9,642 ) 10,521   ( 21,000 ) —   ( 20,121 )
Production ( 47,043 ) ( 32,584 ) ( 9,640 ) —   ( 89,267 )
Sales of minerals in-place ( 86,668 ) —   —   —   ( 86,668 )
Balance December 31, 2024 292,027   103,611   30,436   73,637   499,711  
Extensions, discoveries and other additions 39,804   17,646   —   —   57,450  

Revisions of previous estimates 24,942   20,088   528   152   45,710  
Production ( 45,817 ) ( 32,017 ) ( 8,828 ) —   ( 86,662 )
Sales of minerals in-place ( 7,577 ) —   —   —   ( 7,577 )
Balance December 31, 2025 303,379   109,328   22,136   73,789   508,632  

(1) Includes proved reserves of 36 MMbbls, 35 MMbbls, 36 MMbbls, and 39 MMbbls as of December 31, 2025, 2024, 2023, and 2022, respectively, attributable to a noncontrolling interest in Egypt.
F-54

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

  Natural Gas Liquids
  United
States North
Sea Total (1)

(Thousands of barrels)
Proved developed reserves:
December 31, 2022
158,745   2,230   160,975  
December 31, 2023
153,486   1,460   154,946  
December 31, 2024
153,523   744   154,267  
December 31, 2025
180,690   899   181,589  
Proved undeveloped reserves:
December 31, 2022 19,004   76   19,080  
December 31, 2023 18,401   —   18,401  
December 31, 2024 54,674   —   54,674  
December 31, 2025 58,438   —   58,438  

Total proved reserves:
Balance December 31, 2022 177,749   2,306   180,055  
Extensions, discoveries and other additions 25,711   371   26,082  
Purchases of minerals in-place 21   —   21  
Revisions of previous estimates ( 8,568 ) ( 764 ) ( 9,332 )
Production ( 22,993 ) ( 453 ) ( 23,446 )
Sales of minerals in-place ( 33 ) —   ( 33 )
Balance December 31, 2023 171,887   1,460   173,347  
Extensions, discoveries and other additions 62,988   —   62,988  
Purchases of minerals in-place 51,406   —   51,406  
Revisions of previous estimates ( 20,167 ) ( 277 ) ( 20,444 )
Production ( 27,039 ) ( 439 ) ( 27,478 )
Sales of minerals in-place ( 30,878 ) —   ( 30,878 )
Balance December 31, 2024 208,197   744   208,941  
Extensions, discoveries and other additions 16,232   —   16,232  

Revisions of previous estimates 47,852   614   48,466  
Production ( 27,836 ) ( 459 ) ( 28,295 )
Sales of minerals in-place ( 5,317 ) —   ( 5,317 )
Balance December 31, 2025 239,128   899   240,027  

F-55

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

  Natural Gas
  United
States Egypt (1)
North
Sea Total (1)

(Millions of cubic feet)
Proved developed reserves:
December 31, 2022 1,166,218   399,502   66,292   1,632,012  
December 31, 2023 1,003,956   377,144   46,839   1,427,939  
December 31, 2024 866,460   332,905   28,028   1,227,393  
December 31, 2025 1,095,395   371,335   12,741   1,479,471  
Proved undeveloped reserves:
December 31, 2022 210,862   1,068   2,304   214,234  
December 31, 2023 99,495   2,612   —   102,107  
December 31, 2024 307,775   27,499   —   335,274  
December 31, 2025 338,100   27,780   —   365,880  

Total proved reserves:
Balance December 31, 2022 1,377,080   400,570   68,596   1,846,246  
Extensions, discoveries and other additions 158,118   14,188   3,335   175,641  
Purchases of minerals in-place 136   —   —   136  
Revisions of previous estimates ( 266,664 ) 83,907   ( 6,739 ) ( 189,496 )
Production ( 165,083 ) ( 118,909 ) ( 18,353 ) ( 302,345 )
Sales of minerals in-place ( 136 ) —   —   ( 136 )
Balance December 31, 2023 1,103,451   379,756   46,839   1,530,046  
Extensions, discoveries and other additions 354,267   60,366   —   414,633  
Purchases of minerals in-place 279,615   —   —   279,615  
Revisions of previous estimates ( 224,118 ) 26,792   ( 4,176 ) ( 201,502 )
Production ( 176,941 ) ( 106,510 ) ( 14,635 ) ( 298,086 )
Sales of minerals in-place ( 162,039 ) —   —   ( 162,039 )
Balance December 31, 2024 1,174,235   360,404   28,028   1,562,667  
Extensions, discoveries and other additions 95,264   65,514   —   160,778  

Revisions of previous estimates 386,166   101,230   ( 3,856 ) 483,540  
Production ( 187,793 ) ( 128,033 ) ( 11,431 ) ( 327,257 )
Sales of minerals in-place ( 34,377 ) —   —   ( 34,377 )
Balance December 31, 2025 1,433,495   399,115   12,741   1,845,351  

(1) Includes proved reserves of 133 Bcf, 120 Bcf, 127 Bcf, and 134 Bcf as of December 31, 2025, 2024, 2023, and 2022, respectively, attributable to a noncontrolling interest in Egypt.

F-56

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

  Total Equivalent Reserves
  United
States Egypt (1)
North
Sea Suriname
Total (1)

(Thousands barrels of oil equivalent)
Proved developed reserves:
December 31, 2022 530,823   174,633   95,859   —   801,315  
December 31, 2023 500,354   165,162   70,343   —   735,859  
December 31, 2024 482,677   151,474   35,852   —   670,003  
December 31, 2025 545,555   163,639   25,159   —   734,353  
Proved undeveloped reserves:
December 31, 2022 76,386   8,735   3,333   —   88,454  
December 31, 2023 65,931   5,690   —   —   71,621  
December 31, 2024 213,253   12,204   —   73,637   299,094  
December 31, 2025 235,867   12,208   —   73,789   321,864  

Total proved reserves:
Balance December 31, 2022 607,209   183,368   99,192   —   889,769  
Extensions, discoveries and other additions 95,677   15,344   1,228   —   112,249  
Purchases of minerals in-place 64   —   —   —   64  
Revisions of previous estimates ( 56,532 ) 24,490   ( 13,889 ) —   ( 45,931 )
Production ( 79,302 ) ( 52,350 ) ( 16,188 ) —   ( 147,840 )
Sales of minerals in-place ( 831 ) —   —   —   ( 831 )
Balance December 31, 2023 566,285   170,852   70,343   —   807,480  
Extensions, discoveries and other additions 222,811   28,176   —   73,637   324,624  
Purchases of minerals in-place 222,121   —   —   —   222,121  
Revisions of previous estimates ( 67,162 ) 14,986   ( 21,973 ) —   ( 74,149 )
Production ( 103,572 ) ( 50,336 ) ( 12,518 ) —   ( 166,426 )
Sales of minerals in-place ( 144,553 ) —   —   —   ( 144,553 )
Balance December 31, 2024 695,930   163,678   35,852   73,637   969,097  
Extensions, discoveries and other additions 71,913   28,565   —   —   100,478  

Revisions of previous estimates 137,155   36,960   499   152   174,766  
Production ( 104,952 ) ( 53,356 ) ( 11,192 ) —   ( 169,500 )
Sales of minerals in-place ( 18,624 ) —   —   —   ( 18,624 )
Balance December 31, 2025 781,422   175,847   25,159   73,789   1,056,217  

(1) Includes total proved reserves of 59 MMboe, 55 MMboe, 57 MMboe, and 61 MMboe as of December 31, 2025, 2024, 2023, and 2022, respectively, attributable to a noncontrolling interest in Egypt.
During 2025, the Company added approximately 100 MMboe from extensions, discoveries, and other additions. The Company recorded 72 MMboe of exploration and development adds in the U.S., derived from drilling activity in the Permian Basin primarily focused on the Spraberry, Bone Spring, and Wolfcamp producing horizons. International operations contributed 28 MMboe of exploration and development additions occurring in Egypt primarily from gas-focused onshore exploration and appraisal.
The Company realized combined upward revision of previously estimated reserves of 175 MMboe. Upward revisions related to pricing and interest totaled 37 MMboe, driven primarily by an increase in Permian Basin gas pricing. Engineering and well performance adjustments totaled 138 MMboe in the U.S. and Egypt. Upward revisions of 100 MMboe in the U.S. is related to changes to development plans and updates due to reservoir performance. Egypt realized positive revisions of 38 MMboe from gas infrastructure optimization and improved recovery projects.
During 2024, the Company added approximately 325 MMboe from extensions, discoveries, and other additions. The Company recorded 223 MMboe of exploration and development adds in the U.S., derived from drilling activity in the Permian Basin targeting the Wolfcamp, Bone Spring and Spraberry producing horizons. International operations contributed 102 MMboe of exploration and development adds, with Egypt contributing 28 MMboe from onshore exploration and appraisal and 74 MMboe from the Suriname final investment decision.
F-57

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

During 2023, the Company added approximately 112 MMboe from extensions, discoveries, and other additions. The Company recorded 96 MMboe of exploration and development adds in the U.S., comprising 67 MMboe in the Permian Basin, 27 MMboe in the Delaware Basin, and 2 MMboe in the Texas Gulf Coast. Drilling programs for the Permian and Delaware Basins include the Wolfcamp, Bone Spring and Spraberry with the Austin Chalk as the primary focus for the Texas Gulf Coast. International operations contributed 16 MMboe of exploration and development adds, with Egypt contributing 15 MMboe from onshore exploration and appraisal activity primarily in the Khalda Area and 1 MMboe from the North Sea. The Company had combined downward revisions of previously estimated reserves of 46 MMboe, primarily driven by revisions in the U.S. Downward revisions for price and interest changes accounted for 83 MMboe, partially offset by engineering and performance upward revisions of 37 MMboe.
Approximately 8 percent of the Company’s year-end 2025 estimated proved developed reserves are classified as proved not producing. These reserves relate to zones that are either behind pipe, or that have been completed but not yet produced, or zones that have been produced in the past, but are not now producing because of mechanical reasons. These reserves are considered to be a lower tier of reserves than producing reserves because they are frequently based on volumetric calculations rather than performance data. Future production associated with behind pipe reserves is scheduled to follow depletion of the currently producing zones in the same wellbores. Additional capital may have to be spent to access these reserves. The capital and economic impact of production timing are reflected in this Note 16, under “Future Net Cash Flows.”

Future Net Cash Flows
Future cash inflows as of December 31, 2025, 2024, and 2023 were calculated using an unweighted arithmetic average of oil and gas prices in effect on the first day of each month in the respective year, except where prices are defined by contractual arrangements. Operating costs, production and ad valorem taxes and future development costs are based on current costs with no escalation. Future development costs include abandonment and dismantlement costs.
F-58

APA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table sets forth unaudited information concerning future net cash flows for proved oil and gas reserves, net of income tax expense. Income tax expense has been computed using expected future tax rates and giving effect to tax deductions and credits available, under laws in effect as of December 31, 2025, and which relate to oil and gas producing activities. This information does not purport to present the fair market value of the Company’s oil and gas assets, but does present a standardized disclosure concerning possible future net cash flows that would result under the assumptions used.

United
States Egypt (1)
North
Sea Suriname
Total (1)

  (In millions)
2025
Cash inflows $ 25,957   $ 9,208   $ 1,769   $ 5,033   $ 41,967  
Production costs ( 9,192 ) ( 1,978 ) ( 1,077 ) ( 1,294 ) ( 13,541 )
Development costs ( 3,640 ) ( 1,477 ) ( 2,756 ) ( 1,658 ) ( 9,531 )
Income tax expense ( 587 ) ( 1,686 ) 565   ( 578 ) ( 2,286 )
Net cash flows 12,538   4,067   ( 1,499 ) 1,503   16,609  
10 percent discount rate ( 4,563 ) ( 971 ) 630   ( 867 ) ( 5,771 )
Discounted future net cash flows (2)
$ 7,975   $ 3,096   $ ( 869 ) $ 636   $ 10,838  
2024
Cash inflows $ 27,534   $ 9,342   $ 2,828   $ 5,881   $ 45,585  
Production costs ( 9,665 ) ( 1,716 ) ( 1,399 ) ( 1,436 ) ( 14,216 )
Development costs ( 4,124 ) ( 1,517 ) ( 2,538 ) ( 1,096 ) ( 9,275 )
Income tax expense ( 921 ) ( 1,923 ) 85   ( 822 ) ( 3,581 )
Net cash flows 12,824   4,186   ( 1,024 ) 2,527   18,513  
10 percent discount rate ( 4,317 ) ( 872 ) 535   ( 2,280 ) ( 6,934 )
Discounted future net cash flows (2)
$ 8,507   $ 3,314   $ ( 489 ) $ 247   $ 11,579  
2023
Cash inflows $ 21,417   $ 9,921   $ 5,761   $ —   $ 37,099  
Production costs ( 8,328 ) ( 1,690 ) ( 2,773 ) —   ( 12,791 )
Development costs ( 2,238 ) ( 1,235 ) ( 2,461 ) —   ( 5,934 )
Income tax expense ( 949 ) ( 2,222 ) ( 946 ) —   ( 4,117 )
Net cash flows 9,902   4,774   ( 419 ) —   14,257  
10 percent discount rate ( 3,749 ) ( 943 ) 476   —   ( 4,216 )
Discounted future net cash flows (2)
$ 6,153   $ 3,831   $ 57   $ —   $ 10,041  

(1) Includes discounted future net cash flows of approximately $ 1.0  billion , $ 1.1  billion, and $ 1.3  billion as of December 31, 2025, 2024, and 2023, respectively, attributable to a noncontrolling interest in Egypt.
(2) Estimated future net cash flows before income tax expense, discounted at 10 percent per annum, totaled approximately $ 12.6 billion , $ 14.4  billion, and $ 13.6  billion as of December 31, 2025, 2024, and 2023, respectively.
The following table sets forth the principal sources of change in the discounted future net cash flows:

  For the Year Ended December 31,
  2025 2024 2023

  (In millions)
Sales, net of production costs $ ( 5,073 ) $ ( 5,806 ) $ ( 5,408 )
Net change in prices and production costs ( 2,859 ) 269   ( 7,089 )
Discoveries and improved recovery, net of related costs 762   3,557   1,869  
Change in future development costs ( 993 ) ( 695 ) ( 413 )
Previously estimated development costs incurred during the period 1,592   793   825  
Revision of quantities 3,718   ( 428 ) ( 262 )
Purchases of minerals in-place —   4,166   1  
Accretion of discount 1,438   1,357   2,260  
Change in income taxes 999   737   1,467  
Sales of minerals in-place ( 312 ) ( 1,865 ) ( 18 )
Change in production rates and other ( 13 ) ( 547 ) ( 793 )
$ ( 741 ) $ 1,538   $ ( 7,561 )

F-59