The global oil market is a complicated beast, a planet-spanning contraption stuffed with a dizzying array of gears in every size,  each moving at its own speed.

Production declines from wells already tapped take a steady toll on supply. Demand has been growing just as steadily for decades, and after a long period of relative scarcity was finally overwhelmed with dramatic increases in output from new sources.

The resulting price slump means that, even as large-scale investments made long ago start bearing fruit, the next generation of mega-projects remains on the drawing board.

Instead, capital has been flowing into production basins with the quickest payoff, notably the Permian in West Texas. There, many drillers have rushed to tap their best prospects so that they can sell their peak output at $40 a barrel, continuing to bleed cash while showing strong growth rates. The stock market has rewarded this behavior with high valuations and strong demand for dilutive equity offerings. It remains to be seen whether the oil market will prove as obliging.

One company largely sitting out the Permian drilling frenzy happens to be the basin’s second-largest producer and leaseholder. In fact, Apache (NYSE: APA) is running just five drilling rigs on land in North America, all in the Permian, down from 93 two years ago. And it’s in no particular hurry to ramp up the pace, having budgeted not to outspend its operating cash flow at an assumed 2016 average oil price of $35 a barrel.

Source: Apache

In fact, Apache got $43 per barrel in the second quarter, generating $744 million in cash from operations while holding capital spending to $505 million. Quite a lot of that is being spent not on drilling new wells but on “ strategic testing initiatives” meant to identify the best growth prospects within the portfolio for the time when higher oil prices permit more drilling.

This frugality comes at a price: production is forecast to drop 6-10% this year. But most of that decline will take place at peripheral and lower-margin operations, so the cash flow drag will be much more modest.

“We have protected our balance sheet and chosen to invest within our cash flows while maintaining our dividend and avoiding equity issuances,” CEO John Christmann said earlier this month. “This approach has paid off, as we have maintained our investment-grade credit rating and reduced our net debt level by 38% since early 2015.”

Capital spending is down 85% since 2014, and 30% of the workforce was let go last year.

Christmann has been on the job for 18 months, replacing a predecessor who served for 14 years. Before that, Apache was run for 39 years by one of its founders. Christmann has put in 19 years at Apache, including four heading up its Permian operations during the last boom. His ascent to the top job after the previous CEO retired with no advance public notice marked just one of several recent transitions for the company.

Spurred by the promise of shale drilling on its home soil and the hazards of operating overseas, Apache aggressively divested far-flung assets at attractive prices for several years in the run-up to the oil crash. It sold a third of the lucrative Egyptian concession it operates to China’s Sinopec in 2013, and has also exited Australia, Argentina and shallow Gulf of Mexico. In 2014, near the oil market’s peak, it sold its interests in two liquefied natural gas projects.

But while the latest capital plans has shifted spending to the Permian from overseas, the two core foreign assets Apache has retained show plenty of promise. In Egypt, when Apache has only recently begun using hydraulic fracturing, it recently realized a margin of $27 per barrel. In the North Sea, the margin was $21/bbl in the most recent quarter. Those two regions account for nearly half of Apache’s output, more than half its profits and none of the production decline anticipated this year.

The Permian, which accounts for nearly a third of Apache’s output, produced a margin of $17/bbl, while other North American land wells were even less lucrative at a net $8/bbl.

Source: Apache

Apache consistently ranks at or near the top of our financial metrics screens and perhaps unsurprisingly has featured prominently in merger speculation. Last year it rejected an all-equity merger bid from Anadarko Petroleum (NYSE: APC), as disclosed by that company.

The stock rallied 67% from its February lows by late April, then hung around those highs until mid-July, before pulling back 15% over the last month. This provides an attractive entry point on a conservatively managed and geographically diversified producer still just scratching the surface of its shale opportunity set in Texas. And Apache will have more financial flexibility than most rivals to capitalize on those opportunities as oil prices improve.

The dividend currently yields a modest 2% but is being paid out of cash earnings left over after investment, a better proposition than a 5% yield financed with debt.

We’re adding APA to the Growth Portfolio. Buy below $60.