...Apache Corporation's (APA) ratings reflect the company's size and diversification; high liquids exposure (as calculated by Fitch Ratings, 67% of proved reserves and 65% of 2017 production); moderate leverage during the downturn; robust unit economics, including cash netbacks that compare favorably to peers; good liquidity; modest but steady actions to delever its balance sheet; and good line of sight on production growth in the Permian basin, particularly in the low-cost Alpine High play, which is expected to transform the company's profile over the next few years. Offsetting considerations include material reductions in APA's proved asset base after several years of restructuring; modest negative FCF, which reflects the incremental capex required to build out Alpine High midstream infrastructure; and increased longer-term exposure to natural gas, including to depressed Waha hub basis differentials, although Fitch expects this to improve as takeaway capacity is put in place....
