UPDATE 3-APA Corp raises annual production forecast, misses profit estimates

(Adds analyst comment in paragraph 5)

By Saikeerthi .

May 1 (Reuters) - APA Corp missed first-quarter profit estimates on Wednesday, weighed down by lower production during the period but boosted its full year production forecast.

The Houston-based company recently closed its acquisition of Callon Petroleum, which would strengthen its asset base in the Permian Basin.

"We have increased our expected annual cost synergies from the transaction by 50% to $225 million", said CEO John Christmann.

Following the deal, the company now plans to invest $2.7 billion in upstream oil and gas and expects to average about 10 rigs for the remainder of the year in the U.S. The company had previously planned to invest $1.9 billion to $2.0 billion in 2024.

"APA is now suggesting $225mm of annual run-rate synergies versus $150mm prior, with the increase driven by higher expected operational (LOE+DC&F) savings with expectations to keep ten Permian rigs running", says analysts at Truist Securities in a note.

Natural gas producers such as APA, with high exposure to declining natural gas prices, had resorted to curtailing production and reduce spending to offset the price fall.

But the company now sees total reported production for the year between 458,000 barrels of oil equivalent per day (boepd) and 460,000 boepd. It had previously forecast production for 2024 between 391,000 boepd and 393,000 boepd.

The company announced in April that it had already put in place output cuts of about 35 million cubic feet per day of natural gas production during the first quarter after disclosing that it expects oil and gas production to be relatively flat year-over-year.

APA reported total production of 389,157 barrels of oil equivalent per day (boepd), compared with 394,249 boepd in the year-ago quarter.

The company's adjusted profit was 78 cents per share for the three months ended March 31, compared with analysts' average estimate of 94 cents per share, according to LSEG data.

(Reporting by Saikeerthi in Bengaluru; Editing by Alan Barona)