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APA Corp.'s latest acquisition and production results have Roth MKM giving it a Buy rating.

APA Corp. (APA:NASDAQ) reported the closing of its Callon Petroleum (CPE) acquisition, noted Roth MKM analyst Leo Mariani in an April 1 research note. Two board members came on as a result of this deal: Matthew Bob and Anya Weaving.

Mariani stated that Bob, an independent director and board chair for CPE, was a founding and managing partner of MB Exploration. Weaving had previously worked as the vice chairman of Global Natural Resources at Bank of America Merrill Lynch in 2022. She was also the CFO of SOCO International Plc.

"APA seems quite confident that it can deliver at least the US$150 million of synergies it identified with the CPE acquisition," Mariani commented, adding that historical financials from CPE show this is a likely outcome; however, it may take a few quarters before these results become apparent in APA's numbers. Mariani stated that achieving these numbers would catalyze the stock.

Along with this acquisition,  Mariani shared that APA Corp. has better than expected production results after this deal.

APA announced production results of 500,000 Boepd, going higher than Mariani's estimate of 495,000 Boepd. Two-thirds of the volumes reported came from the Permian Basin.

Mariani stated, "We are raising our 2024 CFPS estimate by about 0.7% on slightly higher than expected production post the CPE acquisition. We are also raising our price target by 5% to US$39."

With this, Mariani rated APA Corp. as a Buy. 

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Important Disclosures:

  1.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Disclosures for Roth MKM, APA Corp., April 1, 2024

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Disclosures: The price target and rating history for APA Corporation prior to February 1, 2023 reflect MKM’s published opinion prior to the acquisition of MKM Partners, LLC by Roth Capital Partners, LLC.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2024. Member: FINRA/SIPC.

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