APA Corp Terminates Former Credit Agreements and Enters New Syndicated Credit Agreements

On January 15, 2025, APA Corporation, a Delaware corporation (“APA”), announced the termination of US$1.8 billion of commitments under the Former USD Facility and £1.5 billion of commitments under the Former GBP Facility. In place of these terminations, APA entered into two new syndicated credit agreements on January 15, 2025, with terms akin to the former facilities.

The first agreement, denominated in US dollars, is an unsecured five-year revolving credit facility named the USD Agreement, providing aggregate commitments of US$2.0 billion, extendable up to US$2.5 billion. The second agreement, denominated in pounds sterling, is the GBP Agreement, offering aggregate commitments of £1.5 billion for loans and letters of credit.

Under both credit agreements, loans and letters of credit can be utilized for general corporate purposes. Apache Corporation, a wholly owned subsidiary of APA, guaranteed obligations under these agreements up to the point when Apache’s outstanding indebtedness under senior notes drops below US$1.0 billion.

Additionally, each Credit Agreement is subject to specific conditions. Borrowings under the USD Agreement can only be made in US dollars, while borrowings under the GBP Agreement must be in pounds sterling. The agreements enable letters of credit in various currencies to support APA and its subsidiaries, extending to commitments such as North Sea decommissioning obligations.

The maturity date for all amounts under the Credit Agreements is January 15, 2030, with provisions allowing for potential extensions for successive one-year periods subject to lender consent. Notably, a borrower’s financial covenant includes maintaining an adjusted debt-to-capital ratio not exceeding 65% at the end of any fiscal quarter.

Furthermore, the Credit Agreements contain provisions permitting lenders to accelerate payment maturity and terminate commitments for certain defaults, insolvency events, or changes in control, should they occur. However, the agreements do not allow lenders to accelerate maturity based on unspecified adverse changes or impose borrowing restrictions due to credit rating declines.

The agreements were filed to provide detailed terms for investors and security holders, but the representations, warranties, and covenants within them are solely for the benefit of involved parties and may be subject to limitations. Investors should not rely on the agreements as characterizations of APA’s factual condition. The financial obligations described meet the requirements of Items 1.01 and 2.03, with related financial statements and exhibits filed as required under Item 9.01.

In conclusion, APA Corporation’s recent actions underline its strategic financial decisions and commitments to prudent financial management practices.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read APA’s 8K filing here.

APA Company Profile

APA Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids. It has oil and gas operations in the United States, Egypt, and North Sea. The company also has exploration and appraisal activities in Suriname, as well as holds interests in projects located in Uruguay and internationally.