* Company's Q2 production declines 12%

* Increases full-year US production

* Pays down $2.3 billion of debt since year-end 2024

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Aug 5 (Reuters) - Oil and gas producer APA beat Wall

Street estimates for second-quarter profit on Wednesday, as

higher crude prices outweighed a decline in output.

The U.S.-Israeli conflict with Iran, now in its sixth month,

has raised concerns about disruptions to Middle East oil

supplies and shipping through the Strait of Hormuz, pushing

benchmark Brent crude prices up 19.2% from a year earlier to

average at $89.62 a barrel during the quarter.

The Houston, Texas-based company said its realized price for

each barrel of oil produced rose to $98.24 from $65.58 a year

ago.

Most of APA's operations are based in the U.S., followed by

Egypt, the North Sea and Suriname. The energy company is still

exposed to changes in commodity prices due to geopolitical

events.

APA's quarterly production declined nearly 12% to 410,000

barrels of oil equivalent per day (boepd), as lower volumes from

its U.S., Egypt and North Sea operations weighed.

Although oil prices rose sharply this year following the

Middle East conflict, U.S. shale producers largely refrained

from boosting output, prioritizing spending discipline in the

face of geopolitical uncertainty.

The company, however, increased its full-year U.S. oil

production forecast to 123,000 bpd from 122,000 bpd.

APA said it expects to achieve about $500 million in

annualized savings by the end of 2026, up from its earlier

target of $450 million, as it broadens cost-reduction measures.

The oil producer said it has paid down $2.3 billion of debt

since year-end 2024, resulting in annualized interest savings of

more than $155 million. Net debt at the end of the quarter was

$3.3 billion.

APA posted an adjusted profit of $1.89 per share for the

three months ended June 30, compared with analysts' average

estimate of $1.87, according to data compiled by LSEG.