We expect APA to maintain its earnings profile through new projects and we take comfort from the stable regulated revenue stream. However, de-leveraging will be restricted given the lack of free cash flow generation (negative free cash flow means dividends are effectively being paid through debt issuance). We are uncertain about the long term value of APA’s interest in acquiring the other two Curtis Island LNG pipelines but given the substantial EBITDA generation from the Wallumbilla Gladstone Pipeline we expect credit metrics to revert back to levels seen prior to the sale of Envestra over the coming periods. Our reports for APA Group:
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