Analysts at RBC Capital provided an update on APA Corporation (NASDAQ:APA), post Q4 results. According to the analysts, the company has among the highest potential for incremental shareholder returns (focused on buybacks) given its high free cash flow yield and upside exposure to oil prices. The company’s shares have lagged peers year-to-date, and the analysts think it is largely related to a clear direction on the Suriname assets.

Last month, the company announced its Q4/22 earnings and reiterated its previously announced 2023 capital budget target and provided the 2023 operations outlook. The $2.0-2.1 billion budget is primarily focused on the Permian, Egypt, and Suriname. Lower Q1/23 US production related to well completion timing is largely the variance to the analysts’ model in the early part of the year. Their 399 Mboe/d production forecast is below the company guidance related to their current higher commodity price outlook that causes a greater amount of tax barrels in Egypt.