Sam Boughedda

Investing.com — Houston-based oil and gas firm APA Corporation (NASDAQ:) shares have risen 6% on the back of news that APA-Sinopec — its joint venture with Chinese partner Sinopec — will recover nearly $900 million in backlogged costs under a new drilling contract with Egypt.

North African Nation has signedThe agreement previously announced to consolidate and modernize APA’s existing production sharing contracts with Egypt’s Ministry of Petroleum and Mineral Resources and Egypt’s General Petroleum Corporation.

APA and Sinopec collect costs for 5 years beginning April 1.

APA — previously named Apache — said the new agreement will see the joint venture further increase its rig count to 15 rigs in 2022 after more than doubling it to 11 in 2021. The new agreement will increase production, consolidate 90% gross output and create a single concession.

The APA/Sinopec joint venture will increase Egypt’s investment by $235 million during 2022. It also forecasts a 13%- 15% increase in Egypt’s total oil production year over year. The joint venture will pay $100 million in signing bonuses to the Egyptian General Petroleum Corporation.

The agreement benefits both Egypt and the APA/Sinopec Joint Venture. Modernized PSC encourages investment and production growth. It also places Egypt among the most attractive investments in APA’s global portfolio. John Christmann, APA President and CEO said it also reinforced Egypt’s commitment towards responsible economic development.

With up 2.5% to provide a further tailwind, APA Corp is the top performer on the S&P 500 Monday in mid-day trading.