APA Corporation Common Stock

Supply chain and procurement · Raw material availability and cost volatility

The costs of drilling, completing, and operating wells are often uncertain, and drilling operations are subject to a variety of risks, including unexpected drilling conditions (such as pressure or formation irregularities), equipment failures or accidents, catastrophic events, marine risks, adverse weather conditions, and increases in the cost of or shortages or delays in the availability of drilling rigs, equipment, and labor.

Core operations · Operational disruption and business continuity

A portion of the Company's crude oil, natural gas, and NGL production in any region may be, and previously have been, interrupted, limited, or shut in from time to time for numerous reasons, including as a result of weather conditions, accidents, loss of pipeline or gathering system access, field labor issues or strikes, cyberattacks or terrorist events.

Supply chain and procurement · Supplier operation and dependance

The Company's ability to sell crude oil, natural gas, or NGLs, receive market prices for these commodities, meet volume commitments under transportation services agreements, and/or economically market third-party volumes may be adversely affected by pipeline and gathering system capacity changes, the inability to procure and resell volumes economically, various transportation interruptions or expansions, and the financial distress or insolvency of midstream or transportation providers.

Industry regulation · Safety and environmental regulations

The Company may incur significant costs related to environmental matters. As an owner or lessee and operator of oil and gas properties, the Company is subject to various federal, state, local, and foreign laws and regulations relating to the discharge of materials into and protection of the environment.

Legal and litigation · Litigation and legal proceedings

In certain jurisdictions, governmental authorities may be exercised by multiple ministries, agencies, state-owned or government-controlled entities, or other governmental bodies with overlapping or evolving mandates. In addition, certain of the Company's frontier exploration activities may be subject to legal or administrative challenges in host jurisdictions.

Customer and revenue · Changing customer preferences and behavior

Further developments could adversely impact the demand for products powered by or manufactured with hydrocarbons and the demand for, and in turn the prices the Company receives for, its crude oil, natural gas, and NGL products, which could materially and adversely affect the Company's business and financial performance.

Strategic execution · Geographic expansion and market entry

Frontier exploration and development projects, including those in new or re-entered jurisdictions, involve heightened operational, regulatory, and execution risks that could adversely affect the Company's results of operations and financial condition. Operations in new countries or areas where the Company has limited recent operating history may also require the establishment or reestablishment of local relationships, workforce and supply chains.

Reputation and brand · Brand damage and negative publicity

Actions by advocacy groups to advance climate change and energy transition initiatives, unfavorable ESG ratings, and funding limitation initiatives may lead to negative investor and public sentiment toward the Company and to the diversion of capital from companies in the oil and gas industry.

Social and demographic · Public perception and reputation

Enhanced focus on ESG matters related to, among other things, concerns raised by advocacy groups about climate change, hydraulic fracturing, waste disposal, oil spills, and explosions of natural gas transmission pipelines may lead to increased regulatory review, which may, in turn, lead to new state and federal safety and environmental laws, regulations, guidelines, and enforcement interpretations.

Economic and market conditions · Inflation and deflation pressures

The overall economic environment, including rates of growth, trade tensions, and increasing inflationary pressure, are factors beyond the Company's control that may impact commodity prices. Additionally, inflation, supply constraints, and limited contractor and vessel availability have raised decommissioning costs in recent periods.

Economic and market conditions · Consumer spending and confidence

The market prices for crude oil, natural gas, and NGLs depend on factors beyond the Company's control, including: demand, which fluctuates with changes in market and economic conditions.

International and currency · Currency hedging and derivatives

To the extent that the Company enters into derivative contracts to manage exposure to interest rate or foreign exchange risk or enters into contracts priced in a foreign currency, it may be limited in its ability to benefit from favorable movements in interest rates or currency exchange rates or may incur additional expense converting to a foreign currency to fund contractual obligations.

International and currency · International operations and emerging markets

The Company's operations outside the U.S. are based primarily in Egypt and the U.K., with significant exploration, appraisal, and development activities offshore Suriname, which involve long-cycle projects with significant capital requirements and are subject to host-government approvals and fiscal and contractual frameworks that may evolve over time.

Market and investment · Asset valuation and impairment

Sustained low prices of crude oil, natural gas, and NGLs could also further adversely impact the Company's business, including by reducing the carrying value of the Company's oil and gas properties, resulting in additional non-cash impairments.

Capital structure and performance · Financial performance volatility

The Company's commodity price and other risk management and trading activities, including interest rate and foreign exchange hedging, and contracts priced in foreign currencies may prevent it from benefiting fully from price increases and market movements and may expose it to other risks.

Capital structure and performance · Debt management and refinancing

The Company's syndicated revolving credit facilities currently mature in January 2030. There is no assurance of the terms upon which potential lenders under future agreements will make loans or other extensions of credit available to the Company or its subsidiaries.

Credit and liquidity · Credit risk and customer defaults

The Company is exposed to risk of financial loss from trade, joint venture, joint interest billing, and other receivables. As a result of previous severe declines in commodity prices, some of the Company's customers and non-operating partners experienced severe financial problems.

Capital structure and performance · Credit rating and cost of capital

A downgrade in the Company's credit rating could negatively impact its cost of and ability to access capital. A ratings downgrade could adversely impact the Company's ability to access debt markets in the future and increase the cost of future debt.

Cybersecurity and data protection · Data breaches and cyber attacks

A cyberattack targeting systems and infrastructure used by the Company or others in the oil and gas industry may adversely impact the Company's operations. Unauthorized access to the Company's data, technology, and information systems could lead to operational disruption, communication interruption, disruption in access to financial reporting systems, and loss, misuse, or corruption of data and proprietary information.

Technology infrastructure · Disaster recovery and business continuity

The Company's planning for normal climatic variation, insurance programs, and emergency recovery plans may inadequately mitigate the effects of such weather conditions, and not all such effects can be predicted, eliminated, or insured against.