APA APA Corporation

On April 29, 2022, APA Corporation, a Delaware corporation (“APA”), entered into two syndicated credit agreements for general corporate purposes that replaced and refinanced a syndicated credit agreement of its wholly owned subsidiary, Apache Corporation, a Delaware corporation (“Apache”), as further described below.

APA’s first new credit agreement, which is denominated in US dollars, is a Credit Agreement, dated as of April 29, 2022, among APA, the lenders party thereto, the issuing banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, Royal Bank of Canada, HSBC Bank USA, National Association, MUFG Bank, Ltd., Wells Fargo Bank, National Association, Goldman Sachs Bank USA, The Toronto-Dominion Bank, New York Branch, The Bank of Nova Scotia, Houston Branch, Truist Bank, and Mizuho Bank, Ltd., as Co-Documentation Agents (the “USD Agreement”).

APA’s second new credit agreement, which is denominated in pounds sterling, is a Credit Agreement, dated as of April 29, 2022, among APA, the lenders party thereto, the issuing banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, The Toronto-Dominion Bank, London Branch, as Syndication Agent, Bank of America, N.A., Royal Bank of Canada, HSBC Bank USA, National Association, MUFG Bank, Ltd., Wells Fargo Bank, N.A. London Branch, Goldman Sachs Bank USA, The Bank of Nova Scotia, Houston Branch, Truist Bank, and Mizuho Bank, Ltd., as Co-Documentation Agents (the “GBP Agreement”).

In connection with APA’s entry into the USD Agreement and the GBP Agreement (each, a “New Agreement”), Apache terminated US$4.0 billion of commitments under the Credit Agreement, dated as of March 14, 2018, among Apache, the lenders and issuing banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and other agents party thereto (the “Former Facility”). Apache has guaranteed obligations under each New Agreement effective until the aggregate principal amount of indebtedness under senior notes and debentures outstanding under Apache’s existing indentures is less than US$1.0 billion.

The USD Agreement provides for an unsecured five-year revolving credit facility, with aggregate commitments of US$1.8 billion (including a letter of credit subfacility of up to US$750 million, of which US$150 million currently is committed). APA may increase commitments up to an aggregate US$2.3 billion by adding new lenders or obtaining the consent of any increasing existing lenders.

Borrowings under the USD Agreement may be made only in US dollars. The aggregate amount of borrowings and the US dollar equivalent of undrawn letters of credit and unreimbursed drawings under issued letters of credit may not exceed total commitments at any given time. As of April 29, 2022, an aggregate US$680 million in borrowings under the Former Facility were deemed borrowings by APA outstanding under the USD Agreement.

The GBP Agreement provides for an unsecured five-year revolving credit facility, with aggregate commitments of £1.5 billion for loans and letters of credit. Borrowings under the GBP Agreement may be made only in pounds sterling. The aggregate amount of borrowings and pounds sterling equivalent of undrawn letters of credit and unreimbursed drawings under issued letters of credit may not exceed total commitments at any given time.

Letters of credit are available under each New Agreement for credit support needs of APA and its subsidiaries, including in respect of North Sea decommissioning obligations. Letters of credit under each New Agreement may be denominated in US dollars, pounds sterling, Canadian dollars, and any other foreign currency consented to by an issuing bank. As of April 29, 2022, (i) a letter of credit for US$20 million originally issued under the Former Facility is deemed issued and outstanding under the USD Agreement and (ii) letters of credit aggregating £748 million originally issued under the Former Facility are deemed issued and outstanding under the GBP Agreement.

All amounts outstanding under each New Agreement are due April 29, 2027, provided that APA twice may request that the maturity date under either or both of the New Agreements be extended for successive one-year periods expiring one year from the then scheduled maturity date. No lender is obligated to consent to any extension. APA can replace a non-consenting lender and its commitment or repay a non-consenting lender and let its commitment expire upon scheduled maturity. APA can proceed with the extension as to remaining commitments if lenders having at least 51% of total commitments agree.

Borrowers under each New Agreement may include APA and certain subsidiaries organized under the laws of, resident of, or domiciled in, the United States, Canada, England and Wales, the United Kingdom, or the Cayman Islands. Apache may borrow under the USD Agreement up to an aggregate principal amount of US$300 million outstanding at any given time.

All borrowings under the USD Agreement bear interest at one of the following two rate options, as selected by the borrower, plus the indicated margin:

All borrowings under the GBP Agreement bear interest with respect to any business day at an adjusted rate per annum determined by reference to the Sterling Overnight Index Average with respect to such business day published by the Bank of England, plus the Applicable Margin.

Each New Agreement also requires the borrower to pay quarterly a facility fee equal to a per annum rate that varies from 0.15% to 0.325% of the full amount of the commitments based on the Long-Term Debt Rating.

Currently, the Base Rate Margin is 0.60%, the Applicable Margin is 1.60%, and the facility fee is 0.275%.

A commission is payable quarterly to lenders under each New Agreement on the face amount of each outstanding letter of credit at a per annum rate equal to the Applicable Margin then in effect. Customary letter of credit fronting fees and other charges are payable to issuing banks.

Borrowers under each New Agreement may borrow, prepay, and reborrow loans and obtain letters of credit, and APA may obtain letters of credit for the account of its subsidiaries, in each case subject to representations and warranties, covenants, and events of default substantially similar to those in the Former Facility, such as:

The New Agreements do not permit lenders to accelerate maturity or refuse to lend based on unspecified material adverse changes and do not have borrowing restrictions or prepayment obligations in the event of a decline in credit ratings.

The foregoing summary of the USD Agreement and the GBP Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of such New Agreement, a copy of which is filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this report and incorporated herein by reference.

Each New Agreement has been filed with this report to provide investors and security holders with information regarding its terms; it is not intended to provide any other factual information about APA or Apache. Representations, warranties, and covenants in each New Agreement were made only for purposes of such New Agreement, were solely for the benefit of the parties to such New Agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of such New Agreement. Representations and warranties in each New Agreement may have been made as of specific dates and for purposes of allocating contractual risk between the parties instead of establishing matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under either of the New Agreements and should not rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of APA or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of each New Agreement, which subsequent information may or may not be fully reflected in APA’s public disclosures.