APA (APA) should deliver another quarter of steady operations in Q3, with share repurchases expected to rise in Q4 as the company works toward its commitment to return 60% of annual free cash flow to shareholders, RBC Capital Markets said.

The investment firm raised its Q3 estimates to $1.67 in earnings per share and $3.80 in cash flow per share, above consensus estimates of $1.47 and $3.65, respectively, following APA's pre-earnings supplement, which included strong commodity price realizations.

RBC forecasts production of 445,000 barrels of oil equivalent per day, above the 436,000 consensus and 439,000 company guidance. It expects capital spending of $625 million, below the $630 million guidance, and estimates free cash flow of $544 million.

Q4 share repurchases are expected to reach $575 million to $600 million as APA works toward its annual return commitment. For 2027, RBC expects production to remain broadly flat while capital spending rises to $2.75 billion to $2.8 billion from $2.4 billion in 2026, mainly on increased US rig activity and exploration spending.

APA's 2027 exploration program includes two wells in Alaska, two in Suriname and a first well in Uruguay. More impactful exploration newsflow is expected later in the year, while APA's partner TotalEnergies (TTE) has highlighted four Suriname prospects that could be targeted in 2027 and 2028.

RBC has a sector perform rating and a $47 price target on APA.

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