APA Corp.’s Revised Egypt Terms Worth $8 Per Share, Says BofA

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Investing.com — APA Corporation (NASDAQ:APA) revised Egypt terms are worth $8 a shares, BofA said.

BofA analyst Doug Leggate told investors on Tuesday that APA Corp.’s revised production sharing contract terms with Egypt have “an incremental uplift value.”

The analyst noted that the $8 beat his base case assumption of $6 a share. The beat is because of an oil production profile that increases over 12% on a gross basis in 2022, the analyst said in a research note.

On Monday, APA Corporation — formerly known as Apache — announced revised terms for its current production sharing contracts with Egypt. The news saw its shares gain 7.3%.

The company’s CEO John Christmann told investors that “the modernized PSC incentivizes increased investment and production growth and places Egypt at the top of many attractive investment opportunities in APA’s global portfolio.”

Leggate updated his forecasts on APA’s earnings to factor in gross production being 40% higher by 2025. The analyst currently has a buy rating and a $44 price target on the stock.