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Gold/Mining/Energy : APA: Apache Corporation
APA 34.84+4.9%Aug 11 4:00 PM EDT

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From: Lance Bredvold4/8/2022 8:38:24 PM
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I've wondered if Apache might not be an exceptional value relative to other oil drillers for a couple of reasons. I don't follow the competitors, however and have only APA now that Oasis and WLL went to bankruptcy.

First there is the work in the North Sea and also Egypt which must mean the high price for Brent crude would be advantageous.

Second, the discovery of gas at Alpine High which was both unprofitable when gas was at $3 and also had inadequate pipelines for delivery to the coast. Now with higher prices and pipelines added, I would think profits would be flowing.

Thirdly, oil demand from all producers is going through the roof and I believe APA has a reasonably large backlog of undrilled inventory as well as some wells awaiting completion. I hope they restrain capex somewhat.

Fourth is the new find off the S. American coast which awaits takeaway capacity and which ought to be well into the planning stages by now.

Finally, APA is small enough that I doubt they will feel much effect from government jawboning. Demand will only grow as Russian supplies are restrained somewhat though China and India and a couple of other autocracies seem to be willing to keep buying from them. Thus I don't expect a huge additional effect on prices (above $110 or so) though Apache seems to be in the proper places to benefit from whatever price increases do develop.

Investors seem to jack the price of APA stock up or down with listed prices for WTI but my idea is that even without any additional increase in prices APA should show large EPS growth this year.
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